# EDGAR Filing Document

**Accession Number:** 0000898745
**File Stem:** 0001683863-23-001574
**Filing Date:** 2023-2
**Character Count:** 4704461
**Document Hash:** 3e53f3f232334ab1d66be4a5bf194663
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001683863-23-001574.hdr.sgml**: 20230227

**ACCESSION NUMBER**: 0001683863-23-001574

**CONFORMED SUBMISSION TYPE**: 485BPOS

**PUBLIC DOCUMENT COUNT**: 311

**FILED AS OF DATE**: 20230227

**DATE AS OF CHANGE**: 20230227

**EFFECTIVENESS DATE**: 20230301

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PRINCIPAL FUNDS, INC.
- **CENTRAL INDEX KEY:** 0000898745
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 1031

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-07572
- **FILM NUMBER:** 23672795

**BUSINESS ADDRESS:**
- **STREET 1:** 711 HIGH STREET
- **CITY:** DES MOINES
- **STATE:** IA
- **ZIP:** 50392
- **BUSINESS PHONE:** 515-235-1209

**MAIL ADDRESS:**
- **STREET 1:** PRINCIPAL FINANCIAL GROUP
- **CITY:** DES MOINES
- **STATE:** IA
- **ZIP:** 50392

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PRINCIPAL FUNDS, INC
- **DATE OF NAME CHANGE:** 20211220

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PRINCIPAL FUNDS INC
- **DATE OF NAME CHANGE:** 20080616

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PRINCIPAL INVESTORS FUND INC
- **DATE OF NAME CHANGE:** 20001012
**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PRINCIPAL FUNDS, INC.
- **CENTRAL INDEX KEY:** 0000898745
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 1031

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 033-59474
- **FILM NUMBER:** 23672794

**BUSINESS ADDRESS:**
- **STREET 1:** 711 HIGH STREET
- **CITY:** DES MOINES
- **STATE:** IA
- **ZIP:** 50392
- **BUSINESS PHONE:** 515-235-1209

**MAIL ADDRESS:**
- **STREET 1:** PRINCIPAL FINANCIAL GROUP
- **CITY:** DES MOINES
- **STATE:** IA
- **ZIP:** 50392

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PRINCIPAL FUNDS, INC
- **DATE OF NAME CHANGE:** 20211220

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PRINCIPAL FUNDS INC
- **DATE OF NAME CHANGE:** 20080616

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PRINCIPAL INVESTORS FUND INC
- **DATE OF NAME CHANGE:** 20001012

## Series and Classes Contracts Data

### Core Plus Bond Fund fka Bond & Mortgage Securities Fund (Series ID: S000006952)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000018956 | R-1                 | PBOMX           |
| C000018958 | R-3                 | PBMMX           |
| C000018959 | R-5                 | PBMPX           |
| C000018960 | R-4                 | PBMSX           |
| C000018961 | Institutional Class | PMSIX           |
| C000018962 | J Class             | PBMJX           |
| C000018963 | A Class             | PRBDX           |

### Diversified International Fund (Series ID: S000006992)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019052 | R-1                 | PDVIX           |
| C000019054 | R-3                 | PINRX           |
| C000019055 | R-5                 | PINPX           |
| C000019056 | R-4                 | PINLX           |
| C000019057 | Institutional Class | PIIIX           |
| C000019058 | Class J             | PIIJX           |
| C000019059 | Class A             | PRWLX           |
| C000210673 | Class R-6           | PDIFX           |

### High Income Fund (f/k/a High Yield Fund I) (Series ID: S000006996)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019079 | Institutional Class | PYHIX           |

### Inflation Protection Fund (Series ID: S000006997)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019081 | R-3                 | PIFPX           |
| C000019082 | R-5                 | PBPPX           |
| C000019083 | R-4                 | PIFSX           |
| C000019084 | R-1                 | PISPX           |
| C000019085 | Class J             | PIPJX           |
| C000019086 | Institutional Class | PIPIX           |

### Global Emerging Markets Fund (f/k/a International Emerging Markets Fund) (Series ID: S000007013)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019140 | R-3                 | PEAPX           |
| C000019141 | R-4                 | PESSX           |
| C000019142 | R-5                 | PEPSX           |
| C000019143 | R-1                 | PIXEX           |
| C000019144 | Institutional Class | PIEIX           |
| C000019145 | Class J             | PIEJX           |
| C000019146 | Class A             | PRIAX           |
| C000175481 | R-6                 | PIIMX           |

### LargeCap S&P 500 Index Fund (Series ID: S000007016)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019167 | R-1                 | PLPIX           |
| C000019169 | R-3                 | PLFMX           |
| C000019170 | R-5                 | PLFPX           |
| C000019171 | R-4                 | PLFSX           |
| C000019172 | Institutional Class | PLFIX           |
| C000019173 | Class J             | PSPJX           |
| C000019174 | Class A             | PLSAX           |
| C000038779 | Class C             | PLICX           |

### MidCap Fund (f/k/a MidCap Blend Fund) (Series ID: S000007075)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019310 | R-1                 | PMSBX           |
| C000019312 | R-3                 | PMBMX           |
| C000019313 | R-5                 | PMBPX           |
| C000019314 | R-4                 | PMBSX           |
| C000019315 | Institutional Class | PCBIX           |
| C000019316 | Class J             | PMBJX           |
| C000019317 | Class A             | PEMGX           |
| C000038781 | Class C             | PMBCX           |
| C000175482 | R-6                 | PMAQX           |

### LargeCap Growth Fund I (Series ID: S000007077)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019326 | R-1                 | PCRSX           |
| C000019328 | R-3                 | PPUMX           |
| C000019329 | R-5                 | PPUPX           |
| C000019330 | R-4                 | PPUSX           |
| C000019331 | Institutional Class | PLGIX           |
| C000019332 | Class J             | PLGJX           |
| C000019333 | Class A             | PLGAX           |
| C000149257 | R-6                 | PLCGX           |

### MidCap Growth Fund (Series ID: S000007078)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019336 | R-3                 | PFPPX           |
| C000019337 | R-5                 | PHPPX           |
| C000019338 | R-4                 | PIPPX           |
| C000019339 | R-1                 | PMSGX           |
| C000019340 | Institutional Class | PGWIX           |
| C000019341 | Class J             | PMGJX           |

### MidCap S&P 400 Index Fund (Series ID: S000007079)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019342 | R-1                 | PMSSX           |
| C000019343 | Institutional Class | MPSIX           |
| C000019345 | R-3                 | PMFMX           |
| C000019346 | R-5                 | PMFPX           |
| C000019347 | R-4                 | PMFSX           |
| C000019348 | Class J             | PMFJX           |
| C000175483 | R-6                 | PMAPX           |

### Money Market Fund (Series ID: S000007081)

| Class ID   | Class Name   | Ticker Symbol   |
|:---|:---|:---|
| C000019362 | Class J      | PMJXX           |
| C000019363 | Class A      | PCSXX           |

### International Fund I (Series ID: S000007083)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019372 | R-3                 | PRPPX           |
| C000019373 | R-5                 | PTPPX           |
| C000019374 | R-4                 | PUPPX           |
| C000019375 | R-1                 | PPISX           |
| C000019376 | Institutional Class | PINIX           |
| C000175484 | R-6                 | PIIDX           |

### LargeCap Value Fund III (Series ID: S000007122)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019458 | R-1                 | PESAX           |
| C000019460 | R-3                 | PPSFX           |
| C000019461 | R-5                 | PPSRX           |
| C000019462 | R-4                 | PPSSX           |
| C000019463 | Institutional Class | PLVIX           |
| C000019464 | Class J             | PLVJX           |

### MidCap Growth Fund III (Series ID: S000007125)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019479 | R-1                 | PHASX           |
| C000019481 | R-3                 | PPQMX           |
| C000019482 | R-5                 | PPQPX           |
| C000019483 | R-4                 | PPQSX           |
| C000019484 | Institutional Class | PPIMX           |
| C000019485 | Class J             | PPQJX           |

### SmallCap Value Fund II (Series ID: S000007169)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019585 | R-3                 | PJARX           |
| C000019586 | R-5                 | PLARX           |
| C000019587 | R-4                 | PSTWX           |
| C000019588 | R-1                 | PCPTX           |
| C000019589 | Institutional Class | PPVIX           |
| C000076717 | Class J             | PSMJX           |
| C000149259 | R-6                 | PSMVX           |

### MidCap Value Fund I (Series ID: S000007173)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019614 | R-3                 | PMPRX           |
| C000019615 | R-5                 | PABVX           |
| C000019616 | R-4                 | PABWX           |
| C000019617 | R-1                 | PLASX           |
| C000019618 | Institutional Class | PVMIX           |
| C000076718 | Class J             | PVEJX           |
| C000210674 | A                   | PCMVX           |
| C000210675 | Class R-6           | PCMSX           |

### SmallCap Growth Fund I (Series ID: S000007175)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019625 | R-1                 | PNASX           |
| C000019627 | R-3                 | PPNMX           |
| C000019628 | R-5                 | PPNPX           |
| C000019629 | R-4                 | PPNSX           |
| C000019630 | Institutional Class | PGRTX           |
| C000019631 | Class J             | PSIJX           |
| C000149260 | R-6                 | PCSMX           |

### Principal LifeTime 2010 Fund (Series ID: S000007201)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019699 | R-1                 | PVASX           |
| C000019701 | R-3                 | PTAMX           |
| C000019702 | R-5                 | PTAPX           |
| C000019703 | R-4                 | PTASX           |
| C000019704 | Institutional Class | PTTIX           |
| C000019705 | Class J             | PTAJX           |
| C000019706 | Class A             | PENAX           |

### SmallCap S&P 600 Index Fund (Series ID: S000007203)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019714 | R-1                 | PSAPX           |
| C000019716 | R-3                 | PSSMX           |
| C000019717 | R-5                 | PSSPX           |
| C000019718 | R-4                 | PSSSX           |
| C000019719 | Institutional Class | PSSIX           |
| C000019720 | Class J             | PSSJX           |
| C000175485 | R-6                 | PSPIX           |

### Principal LifeTime 2020 Fund (Series ID: S000007207)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019740 | R-1                 | PWASX           |
| C000019742 | R-3                 | PTBMX           |
| C000019743 | R-5                 | PTBPX           |
| C000019744 | R-4                 | PTBSX           |
| C000019745 | Institutional Class | PLWIX           |
| C000019746 | Class J             | PLFJX           |
| C000019747 | Class A             | PTBAX           |

### Principal LifeTime 2030 Fund (Series ID: S000007208)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019749 | R-1                 | PXASX           |
| C000019751 | R-3                 | PTCMX           |
| C000019752 | R-5                 | PTCPX           |
| C000019753 | R-4                 | PTCSX           |
| C000019754 | Institutional Class | PMTIX           |
| C000019755 | Class J             | PLTJX           |
| C000019756 | Class A             | PTCAX           |

### Principal LifeTime 2040 Fund (Series ID: S000007209)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019758 | R-1                 | PYASX           |
| C000019760 | R-3                 | PTDMX           |
| C000019761 | R-5                 | PTDPX           |
| C000019762 | R-4                 | PTDSX           |
| C000019763 | Institutional Class | PTDIX           |
| C000019764 | Class J             | PTDJX           |
| C000019765 | Class A             | PTDAX           |

### Principal LifeTime 2050 Fund (Series ID: S000007210)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019767 | R-1                 | PZASX           |
| C000019770 | R-3                 | PTERX           |
| C000019771 | R-5                 | PTEFX           |
| C000019772 | R-4                 | PTESX           |
| C000019773 | Institutional Class | PPLIX           |
| C000019774 | Class J             | PFLJX           |
| C000019775 | Class A             | PPEAX           |

### Principal LifeTime Strategic Income Fund (Series ID: S000007211)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019776 | R-1                 | PLAIX           |
| C000019779 | R-3                 | PLSMX           |
| C000019780 | R-5                 | PLSPX           |
| C000019781 | R-4                 | PLSSX           |
| C000019782 | Institutional Class | PLSIX           |
| C000019783 | Class J             | PLSJX           |
| C000019784 | Class A             | PALTX           |

### Real Estate Securities Fund (Series ID: S000007212)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019785 | R-1                 | PRAEX           |
| C000019787 | R-3                 | PRERX           |
| C000019788 | R-5                 | PREPX           |
| C000019789 | R-4                 | PRETX           |
| C000019790 | Institutional Class | PIREX           |
| C000019791 | Class J             | PREJX           |
| C000019792 | Class A             | PRRAX           |
| C000038802 | Class C             | PRCEX           |
| C000175486 | R-6                 | PFRSX           |

### SmallCap Fund (fka SmallCap Blend Fund) (Series ID: S000007214)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000019802 | R-1                 | PSABX           |
| C000019804 | R-3                 | PSBMX           |
| C000019805 | R-5                 | PSBPX           |
| C000019806 | R-4                 | PSBSX           |
| C000019807 | Institutional Class | PSLIX           |
| C000019808 | Class J             | PSBJX           |
| C000019809 | Class A             | PLLAX           |
| C000038804 | Class C             | PSMCX           |
| C000175487 | R-6                 | PSMLX           |

### California Municipal Fund (Series ID: S000014232)

| Class ID   | Class Name    | Ticker Symbol   |
|:---|:---|:---|
| C000038715 | Class A       | SRCMX           |
| C000038717 | Class C       | SRCCX           |
| C000153061 | Institutional | PCMFX           |

### Strategic Asset Management Conservative Balanced Portfolio (Series ID: S000014233)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000038718 | Class A             | SAIPX           |
| C000038720 | Class C             | SCIPX           |
| C000038721 | Institutional Class | PCCIX           |
| C000039337 | R-3                 | PCBPX           |
| C000039338 | R-1                 | PCSSX           |
| C000039339 | R-4                 | PCBLX           |
| C000039340 | R-5                 | PCBFX           |
| C000039341 | Class J             | PCBJX           |

### Strategic Asset Management Conservative Growth Portfolio (Series ID: S000014234)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000038722 | Class A             | SAGPX           |
| C000038724 | Class C             | SCGPX           |
| C000038725 | Institutional Class | PCWIX           |
| C000039342 | R-4                 | PCWSX           |
| C000039343 | R-5                 | PCWPX           |
| C000039344 | Class J             | PCGJX           |
| C000039346 | R-3                 | PCGPX           |
| C000039347 | R-1                 | PCGGX           |

### Strategic Asset Management Flexible Income Portfolio (Series ID: S000014235)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000038726 | Class A             | SAUPX           |
| C000038728 | Class C             | SCUPX           |
| C000038729 | Institutional Class | PIFIX           |
| C000039349 | R-3                 | PFIPX           |
| C000039350 | R-1                 | PFIGX           |
| C000039351 | R-4                 | PFILX           |
| C000039352 | R-5                 | PFIFX           |
| C000039353 | Class J             | PFIJX           |

### Strategic Asset Management Strategic Growth Portfolio (Series ID: S000014236)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000038730 | Class A             | SACAX           |
| C000038732 | Class C             | SWHCX           |
| C000038733 | Institutional Class | PSWIX           |
| C000039355 | R-3                 | PSGPX           |
| C000039356 | R-1                 | PSGGX           |
| C000039357 | R-4                 | PSGLX           |
| C000039358 | R-5                 | PSGFX           |
| C000039359 | Class J             | PSWJX           |

### Tax-Exempt Bond Fund formerly Tax-Exempt Bond Fund I (Series ID: S000014237)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000038734 | Class A             | PTEAX           |
| C000038736 | Class C             | PTBCX           |
| C000158782 | Institutional Class | PITEX           |

### Principal Capital Appreciation Fund (fka West Coast Equity Fund) (Series ID: S000014238)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000038737 | Class A             | CMNWX           |
| C000038739 | Class C             | CMNCX           |
| C000038740 | Institutional Class | PWCIX           |
| C000085758 | R-1                 | PCAMX           |
| C000085760 | R-3                 | PCAOX           |
| C000085761 | R-4                 | PCAPX           |
| C000085762 | R-5                 | PCAQX           |

### Equity Income Fund formerly Equity Income Fund I (Series ID: S000014240)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000038744 | Class A             | PQIAX           |
| C000038746 | Class C             | PEUCX           |
| C000038747 | Institutional Class | PEIIX           |
| C000085763 | R-1                 | PIEMX           |
| C000085765 | R-3                 | PEIOX           |
| C000085766 | R-4                 | PEIPX           |
| C000085767 | R-5                 | PEIQX           |
| C000204702 | Class J             | PEIJX           |

### High Yield Fund (Series ID: S000014241)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000038748 | Class A             | CPHYX           |
| C000038750 | Class C             | CCHIX           |
| C000038751 | Institutional Class | PHYTX           |
| C000175488 | R-6                 | PHYFX           |

### Core Fixed Income Fund (f/k/a Income Fund) (Series ID: S000014242)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000038752 | Class A             | CMPIX           |
| C000038754 | Class C             | CNMCX           |
| C000038755 | Institutional Class | PIOIX           |
| C000080382 | Class J             | PIOJX           |
| C000085768 | R-5                 | PIOQX           |
| C000085769 | R-1                 | PIOMX           |
| C000085771 | R-3                 | PIOOX           |
| C000085772 | R-4                 | PIOPX           |
| C000149261 | R-6                 | PICNX           |

### Government & High Quality Bond Fund (f/k/a Mortgage Securities Fund) (Series ID: S000014244)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000038760 | Class A             | CMPGX           |
| C000038763 | Institutional Class | PMRIX           |
| C000113840 | R-1                 | PMGRX           |
| C000113842 | R-3                 | PRCMX           |
| C000113843 | R-4                 | PMRDX           |
| C000113844 | R-5                 | PMREX           |
| C000113845 | Class J             | PMRJX           |

### Short-Term Income Fund (Series ID: S000014245)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000038764 | Class A             | SRHQX           |
| C000038766 | Class C             | STCCX           |
| C000038767 | Institutional Class | PSHIX           |
| C000090493 | Class J             | PSJIX           |
| C000090494 | R-1                 | PSIMX           |
| C000090496 | R-3                 | PSIOX           |
| C000090497 | R-4                 | PSIPX           |
| C000090498 | R-5                 | PSIQX           |

### Strategic Asset Management Balanced Portfolio (Series ID: S000014246)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000038768 | Class A             | SABPX           |
| C000038770 | Class C             | SCBPX           |
| C000038771 | Institutional Class | PSBIX           |
| C000039361 | R-3                 | PBAPX           |
| C000039362 | R-1                 | PSBGX           |
| C000039363 | R-4                 | PSBLX           |
| C000039364 | R-5                 | PSBFX           |
| C000039365 | Class J             | PSAJX           |

### Global Real Estate Securities Fund (Series ID: S000019119)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000052887 | Class A             | POSAX           |
| C000052889 | Institutional Class | POSIX           |
| C000149262 | R-6                 | PGRSX           |
| C000167005 | R-3                 | PGRKX           |
| C000167006 | R-4                 | PGRVX           |
| C000167007 | R-5                 | PGRUX           |

### Principal LifeTime 2015 Fund (Series ID: S000022103)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000063423 | Institutional Class | LTINX           |
| C000063424 | R-3                 | LTAPX           |
| C000063425 | R-1                 | LTSGX           |
| C000063426 | R-5                 | LTPFX           |
| C000063427 | R-4                 | LTSLX           |

### Principal LifeTime 2025 Fund (Series ID: S000022104)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000063428 | R-4                 | LTEEX           |
| C000063429 | Institutional Class | LTSTX           |
| C000063431 | R-3                 | LTVPX           |
| C000063432 | R-1                 | LTSNX           |
| C000063433 | R-5                 | LTPDX           |

### Principal LifeTime 2035 Fund (Series ID: S000022105)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000063435 | R-3                 | LTAOX           |
| C000063436 | R-1                 | LTANX           |
| C000063437 | R-5                 | LTPEX           |
| C000063438 | R-4                 | LTSEX           |
| C000063439 | Institutional Class | LTIUX           |

### Principal LifeTime 2045 Fund (Series ID: S000022106)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000063441 | R-3                 | LTRVX           |
| C000063442 | R-1                 | LTRGX           |
| C000063443 | R-5                 | LTRDX           |
| C000063444 | R-4                 | LTRLX           |
| C000063445 | Institutional Class | LTRIX           |

### Principal LifeTime 2055 Fund (Series ID: S000022107)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000063447 | R-3                 | LTFDX           |
| C000063448 | R-1                 | LTFGX           |
| C000063449 | R-5                 | LTFPX           |
| C000063450 | R-4                 | LTFLX           |
| C000063451 | Institutional Class | LTFIX           |

### Overseas Fund (f/k/a International Value Fund I) (Series ID: S000023512)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000069149 | Institutional Class | PINZX           |
| C000111521 | R-3 Class           | PINTX           |
| C000111522 | R-4 Class           | PINUX           |

### Diversified Income Fund (f/k/a Global Diversified Income Fund) (Series ID: S000024296)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000071805 | Institutional Class | PGDIX           |
| C000071807 | Class A             | PGBAX           |
| C000071808 | Class C             | PGDCX           |
| C000190075 | R-6                 | PGBLX           |

### Principal LifeTime 2060 Fund (Series ID: S000039873)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000123721 | Class J             | PLTAX           |
| C000123722 | R-1                 | PLTRX           |
| C000123724 | R-3                 | PLTCX           |
| C000123725 | R-4                 | PLTMX           |
| C000123726 | R-5                 | PLTOX           |
| C000123727 | Institutional Class | PLTZX           |

### Principal LifeTime Hybrid Income Fund (Series ID: S000046553)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000145302 | Institutional Class | PHTFX           |
| C000159884 | R-6                 | PLTYX           |
| C000199315 | Class J             | PHJFX           |

### Principal LifeTime Hybrid 2055 Fund (Series ID: S000046554)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000145305 | Institutional Class | PLTNX           |
| C000159885 | R-6                 | PLHTX           |
| C000199316 | Class J             | PHJBX           |

### Principal LifeTime Hybrid 2060 Fund (Series ID: S000046555)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000145308 | Institutional Class | PLTHX           |
| C000159886 | R-6                 | PLKTX           |
| C000199317 | Class J             | PHJGX           |

### Principal LifeTime Hybrid 2015 Fund (Series ID: S000046556)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000145311 | Institutional Class | PHTMX           |
| C000159887 | R-6                 | PLRRX           |
| C000199318 | Class J             | PHJMX           |

### Principal LifeTime Hybrid 2020 Fund (Series ID: S000046557)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000145314 | Institutional Class | PHTTX           |
| C000159888 | R-6                 | PLTTX           |
| C000199319 | Class J             | PHJTX           |

### Principal LifeTime Hybrid 2025 Fund (Series ID: S000046558)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000145317 | Institutional Class | PHTQX           |
| C000159889 | R-6                 | PLFTX           |
| C000199320 | Class J             | PHJQX           |

### Principal LifeTime Hybrid 2030 Fund (Series ID: S000046559)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000145320 | Institutional Class | PHTNX           |
| C000159890 | R-6                 | PLZTX           |
| C000199321 | Class J             | PHJNX           |

### Principal LifeTime Hybrid 2035 Fund (Series ID: S000046560)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000145323 | Institutional Class | PHTJX           |
| C000159891 | R-6                 | PLRTX           |
| C000199322 | Class J             | PHJJX           |

### Principal LifeTime Hybrid 2040 Fund (Series ID: S000046561)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000145326 | Institutional Class | PLTQX           |
| C000159892 | R-6                 | PLMTX           |
| C000199323 | Class J             | PHJEX           |

### Principal LifeTime Hybrid 2045 Fund (Series ID: S000046562)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000145329 | Institutional Class | PHTYX           |
| C000159893 | R-6                 | PLNTX           |
| C000199324 | Class J             | PHJYX           |

### Principal LifeTime Hybrid 2050 Fund (Series ID: S000046563)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000145332 | Institutional Class | PHTUX           |
| C000159894 | R-6                 | PLJTX           |
| C000199325 | Class J             | PHJUX           |

### Finisterre Emerging Markets Total Return Bond Fund (Series ID: S000054330)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000170736 | Institutional Class | PFUMX           |

### Principal LifeTime 2065 (Series ID: S000058847)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000193001 | Institutional Class | PLJIX           |
| C000193002 | R-1                 | PLJAX           |
| C000193004 | R-3                 | PLJCX           |
| C000193005 | R-4                 | PLJDX           |
| C000193006 | R-5                 | PLJEX           |

### Principal LifeTime Hybrid 2065 (Series ID: S000058848)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000193007 | Institutional Class | PLHHX           |
| C000193008 | R-6                 | PLHRX           |
| C000199326 | Class J             | PHJDX           |

### Government Money Market Fund (Series ID: S000060089)

| Class ID   | Class Name    | Ticker Symbol   |
|:---|:---|:---|
| C000196721 | Institutional | PGVXX           |
| C000239771 | Class R-6     | PGWXX           |

### Principal LifeTime Hybrid 2070 Fund (Series ID: S000079798)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000241172 | Class J             | PLKJX           |
| C000241173 | R-6                 | PLKRX           |
| C000241174 | Institutional Class | PLKSX           |

### Principal LifeTime 2070 Fund (Series ID: S000079799)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000241175 | R-1                 | PLTSX           |
| C000241176 | Institutional Class | PLTGX           |
| C000241177 | R-4                 | PLTBX           |
| C000241178 | R-5                 | PLTFX           |
| C000241179 | R-3                 | PLTDX           |
| C000241180 | Class J             | PLTLX           |

?xml version='1.0' encoding='ASCII'? PFI 1031 Annual Update 030123

Registration No. 033-59474

------

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

------

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

POST-EFFECTIVE AMENDMENT NO. 284

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

AMENDMENT NO. 284

------

PRINCIPAL FUNDS, INC.

(Exact name of Registrant as specified in Charter)

711 High Street

Des Moines, IA 50392

(Address of principal executive offices)

------

Telephone Number (515) 878-0460

------

Deanna Y. Pellack

The Principal Financial Group

Des Moines, Iowa 50392

(Name and address of agent for service)

------

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)

☐ immediately upon filing pursuant to paragraph (b)

☒ on March 1, 2023 pursuant to paragraph (b) 

☐ 60 days after filing pursuant to paragraph (a)

☐ on (date) pursuant to paragraph (a)

☐ 75 days after filing pursuant to paragraph (a)(2) 

☐ on (date) pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box:

☐ This post-effective amendment designates a new effective date for a previously filed post-effective amendment.

Title of Securities Being Registered: Classes A, C, J, Institutional, R-1, R-3, R-4, R-5, and R-6 Shares

**EXPLANATORY NOTE**

Principal Funds, Inc. (the "Registrant") is filing this amendment as an annual update to the Registrant's registration statement for series with an October 31 fiscal year end and to add two new series (Principal LifeTime 2070 Fund and Principal LifeTime Hybrid 2070 Fund). The Amendment includes the following: (1) facing page; (2) Part A (prospectus for Classes A, C, J, Institutional, R-1, R-3, R-4, R-5, and R-6 Shares); (3) Part B (a statement of additional information for series with an October 31 fiscal year end in the share classes listed previously); (4) Part C; and (5) signature pages.

------

**PRINCIPAL FUNDS, INC.** 

**("PFI" or the "Registrant")**

**Class A Shares**

**Class C Shares**

**Class J Shares**

**Institutional Class Shares**

**Class R-1 Shares**

**Class R-3 Shares**

**Class R-4 Shares**

**Class R-5 Shares**

**Class R-6 Shares**

The date of this Prospectus is March 1, 2023.

The ticker symbols for series and share classes begin on the next page.

------

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

------

**FUNDS OF THE REGISTRANT**

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

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** |
| **Fund/Portfolio** | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| California Municipal | SRCMX | SRCCX |  | PCMFX |  |  |  |  |  |
| Core Fixed Income | CMPIX | CNMCX | PIOJX | PIOIX | PIOMX | PIOOX | PIOPX | PIOQX | PICNX |
| Core Plus Bond | PRBDX |  | PBMJX | PMSIX | PBOMX | PBMMX | PBMSX | PBMPX |  |
| Diversified Income | PGBAX | PGDCX |  | PGDIX |  |  |  |  | PGBLX |
| Diversified International | PRWLX |  | PIIJX | PIIIX | PDVIX | PINRX | PINLX | PINPX | PDIFX |
| Equity Income | PQIAX | PEUCX | PEIJX | PEIIX | PIEMX | PEIOX | PEIPX | PEIQX |  |
| Finisterre Emerging Markets Total Return Bond |  |  |  | PFUMX |  |  |  |  |  |
| Global Emerging Markets | PRIAX |  | PIEJX | PIEIX | PIXEX | PEAPX | PESSX | PEPSX | PIIMX |
| Global Real Estate Securities | POSAX |  |  | POSIX |  | PGRKX | PGRVX | PGRUX | PGRSX |
| Government & High Quality Bond | CMPGX |  | PMRJX | PMRIX | PMGRX | PRCMX | PMRDX | PMREX |  |
| Government Money Market |  |  |  | PGVXX |  |  |  |  | PGWXX |
| High Income |  |  |  | PYHIX |  |  |  |  |  |
| High Yield | CPHYX | CCHIX |  | PHYTX |  |  |  |  | PHYFX |
| Inflation Protection |  |  | PIPJX | PIPIX | PISPX | PIFPX | PIFSX | PBPPX |  |
| International I |  |  |  | PINIX | PPISX | PRPPX | PUPPX | PTPPX | PIIDX |
| LargeCap Growth I | PLGAX |  | PLGJX | PLGIX | PCRSX | PPUMX | PPUSX | PPUPX | PLCGX |
| LargeCap S&P 500 Index | PLSAX | PLICX | PSPJX | PLFIX | PLPIX | PLFMX | PLFSX | PLFPX |  |
| LargeCap Value III |  |  | PLVJX | PLVIX | PESAX | PPSFX | PPSSX | PPSRX |  |
| MidCap | PEMGX | PMBCX | PMBJX | PCBIX | PMSBX | PMBMX | PMBSX | PMBPX | PMAQX |
| MidCap Growth |  |  | PMGJX | PGWIX | PMSGX | PFPPX | PIPPX | PHPPX |  |
| MidCap Growth III |  |  | PPQJX | PPIMX | PHASX | PPQMX | PPQSX | PPQPX |  |
| MidCap S&P 400 Index |  |  | PMFJX | MPSIX | PMSSX | PMFMX | PMFSX | PMFPX | PMAPX |
| MidCap Value I | PCMVX |  | PVEJX | PVMIX | PLASX | PMPRX | PABWX | PABVX | PCMSX |
| Money Market | PCSXX |  | PMJXX |  |  |  |  |  |  |
| Overseas |  |  |  | PINZX |  | PINTX | PINUX |  |  |
| Principal Capital Appreciation | CMNWX | CMNCX |  | PWCIX | PCAMX | PCAOX | PCAPX | PCAQX |  |
| Principal LifeTime Strategic Income | PALTX |  | PLSJX | PLSIX | PLAIX | PLSMX | PLSSX | PLSPX |  |
| Principal LifeTime 2010 | PENAX |  | PTAJX | PTTIX | PVASX | PTAMX | PTASX | PTAPX |  |
| Principal LifeTime 2015 |  |  |  | LTINX | LTSGX | LTAPX | LTSLX | LTPFX |  |
| Principal LifeTime 2020 | PTBAX |  | PLFJX | PLWIX | PWASX | PTBMX | PTBSX | PTBPX |  |
| Principal LifeTime 2025 |  |  |  | LTSTX | LTSNX | LTVPX | LTEEX | LTPDX |  |
| Principal LifeTime 2030 | PTCAX |  | PLTJX | PMTIX | PXASX | PTCMX | PTCSX | PTCPX |  |
| Principal LifeTime 2035 |  |  |  | LTIUX | LTANX | LTAOX | LTSEX | LTPEX |  |
| Principal LifeTime 2040 | PTDAX |  | PTDJX | PTDIX | PYASX | PTDMX | PTDSX | PTDPX |  |
| Principal LifeTime 2045 |  |  |  | LTRIX | LTRGX | LTRVX | LTRLX | LTRDX |  |
| Principal LifeTime 2050 | PPEAX |  | PFLJX | PPLIX | PZASX | PTERX | PTESX | PTEFX |  |
| Principal LifeTime 2055 |  |  |  | LTFIX | LTFGX | LTFDX | LTFLX | LTFPX |  |
| Principal LifeTime 2060 |  |  | PLTAX | PLTZX | PLTRX | PLTCX | PLTMX | PLTOX |  |
| Principal LifeTime 2065 |  |  |  | PLJIX | PLJAX | PLJCX | PLJDX | PLJEX |  |
| Principal LifeTime 2070 |  |  | PLTLX | PLTGX | PLTSX | PLTDX | PLTBX | PLTFX |  |
| Principal LifeTime Hybrid Income |  |  | PHJFX | PHTFX |  |  |  |  | PLTYX |
| Principal LifeTime Hybrid 2015 |  |  | PHJMX | PHTMX |  |  |  |  | PLRRX |
| Principal LifeTime Hybrid 2020 |  |  | PHJTX | PHTTX |  |  |  |  | PLTTX |
| Principal LifeTime Hybrid 2025 |  |  | PHJQX | PHTQX |  |  |  |  | PLFTX |
| Principal LifeTime Hybrid 2030 |  |  | PHJNX | PHTNX |  |  |  |  | PLZTX |
| Principal LifeTime Hybrid 2035 |  |  | PHJJX | PHTJX |  |  |  |  | PLRTX |
| Principal LifeTime Hybrid 2040 |  |  | PHJEX | PLTQX |  |  |  |  | PLMTX |
| Principal LifeTime Hybrid 2045 |  |  | PHJYX | PHTYX |  |  |  |  | PLNTX |
| Principal LifeTime Hybrid 2050 |  |  | PHJUX | PHTUX |  |  |  |  | PLJTX |
| Principal LifeTime Hybrid 2055 |  |  | PHJBX | PLTNX |  |  |  |  | PLHTX |

---

------

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** |
| **Fund/Portfolio** | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Principal LifeTime Hybrid 2060 |  |  | PHJGX | PLTHX |  |  |  |  | PLKTX |
| Principal LifeTime Hybrid 2065 |  |  | PHJDX | PLHHX |  |  |  |  | PLHRX |
| Principal LifeTime Hybrid 2070 |  |  | PLKJX | PLKSX |  |  |  |  | PLKRX |
| Real Estate Securities | PRRAX | PRCEX | PREJX | PIREX | PRAEX | PRERX | PRETX | PREPX | PFRSX |
| SAM Balanced | SABPX | SCBPX | PSAJX | PSBIX | PSBGX | PBAPX | PSBLX | PSBFX |  |
| SAM Conservative Balanced | SAIPX | SCIPX | PCBJX | PCCIX | PCSSX | PCBPX | PCBLX | PCBFX |  |
| SAM Conservative Growth | SAGPX | SCGPX | PCGJX | PCWIX | PCGGX | PCGPX | PCWSX | PCWPX |  |
| SAM Flexible Income | SAUPX | SCUPX | PFIJX | PIFIX | PFIGX | PFIPX | PFILX | PFIFX |  |
| SAM Strategic Growth | SACAX | SWHCX | PSWJX | PSWIX | PSGGX | PSGPX | PSGLX | PSGFX |  |
| Short-Term Income | SRHQX | STCCX | PSJIX | PSHIX | PSIMX | PSIOX | PSIPX | PSIQX |  |
| SmallCap | PLLAX | PSMCX | PSBJX | PSLIX | PSABX | PSBMX | PSBSX | PSBPX | PSMLX |
| SmallCap Growth I |  |  | PSIJX | PGRTX | PNASX | PPNMX | PPNSX | PPNPX | PCSMX |
| SmallCap S&P 600 Index |  |  | PSSJX | PSSIX | PSAPX | PSSMX | PSSSX | PSSPX | PSPIX |
| SmallCap Value II |  |  | PSMJX | PPVIX | PCPTX | PJARX | PSTWX | PLARX | PSMVX |
| Tax-Exempt Bond | PTEAX | PTBCX |  | PITEX |  |  |  |  |  |

---

------

**Table of Contents** 

---

| | |
|:---|:---|
| [Fund Summaries](#xx_900f0952-4d08-4baf-9467-1f57e68eaa22_1) <br>|  |
| [California Municipal Fund](#xx_900f0952-4d08-4baf-9467-1f57e68eaa22_1) | 4  |
| [Core Fixed Income Fund](#xx_140b9fe5-eea6-4014-bb17-4bba4cd149cb_1) | 9  |
| [Core Plus Bond Fund](#xx_00194dd2-6087-474b-916c-ef1684f686d1_1) | 14  |
| [Diversified Income Fund](#xx_fe93b9f2-1214-4c72-ae5e-a1cb1aab0692_1) | 20  |
| [Diversified International Fund](#xx_0f33ae17-aee9-4e9f-94e4-d90dc6691b99_1) | 26  |
| [Equity Income Fund](#xx_ed1ca572-a665-4d26-8444-d52464465fc7_1) | 31  |
| [Finisterre Emerging Markets Total Return Bond Fund](#xx_87e22616-89ae-4588-b8ee-3ae2d5b57014_1) | 35  |
| [Global Emerging Markets Fund](#xx_091f7ee2-eb09-42bc-be92-4cb8f06e4de3_1) | 41  |
| [Global Real Estate Securities Fund](#xx_081d5e9e-ba30-4609-99b9-6dd80fba2dad_1) | 46  |
| [Government & High Quality Bond Fund](#xx_286607db-73ba-4fcc-85fb-d233a2aa8038_1) | 51  |
| [Government Money Market Fund](#xx_8c14c34a-8386-4db5-8604-544e23a68b54_1) | 56  |
| [High Income Fund](#xx_c3f69aed-85ae-4540-b3f5-9a800994dab9_1) | 60  |
| [High Yield Fund](#xx_bdaded31-6fae-4fd0-951e-203e0d398ab9_1) | 65  |
| [Inflation Protection Fund](#xx_f76850c2-b111-4ef5-a16c-16f415020ee6_1) | 69  |
| [International Fund I](#xx_bc23ee58-d90d-4c88-8d51-49925b44cf2a_1) | 74  |
| [LargeCap Growth Fund I](#xx_77e91a7f-b638-4b25-b584-c4ba999312bc_1) | 79  |
| [LargeCap S&P 500 Index Fund](#xx_7cf5af7a-1a6a-4d6d-8411-3d80ddcc12c7_1) | 84  |
| [LargeCap Value Fund III](#xx_996f9ecb-7220-4b9c-9cce-0bdacaa2af6c_1) | 89  |
| [MidCap Fund](#xx_806016a2-0f7e-41e9-af59-abbc3c67cc78_1) | 93  |
| [MidCap Growth Fund](#xx_c590de29-8954-4bd2-8c93-d8fbf8701462_1) | 98  |
| [MidCap Growth Fund III](#xx_7cf470ce-d520-4c6c-adbe-2453ceddecb8_1) | 102  |
| [MidCap S&P 400 Index Fund](#xx_526b1dd2-97b2-4959-a8cf-5b82c3da819b_1) | 106  |
| [MidCap Value Fund I](#xx_9a32af95-7ba1-46c8-b5c9-0dec50f949e3_1) | 111  |
| [Money Market Fund](#xx_670a53ab-367b-4839-abbf-fc66ebf7eb7c_1) | 116  |
| [Overseas Fund](#xx_a933a26d-8a6e-44c9-8e1f-3191cae1046b_1) | 120  |
| [Principal Capital Appreciation Fund](#xx_4104fbb5-5098-4ec8-b89a-7180f920953c_1) | 125  |
| [Principal LifeTime Strategic Income Fund](#xx_dd9bb7c1-6805-422f-95ca-c76c2de7b524_1) | 129  |
| [Principal LifeTime 2010 Fund](#xx_8aed0820-4eb6-492c-a5b9-5dac558676db_1) | 135  |
| [Principal LifeTime 2015 Fund](#xx_6f9b8bae-c810-42a3-be45-b4e5379a101b_1) | 141  |
| [Principal LifeTime 2020 Fund](#xx_084e9164-95cd-470f-a63b-2fcb548b0185_1) | 147  |
| [Principal LifeTime 2025 Fund](#xx_fb47b0bc-e073-40a2-a100-a737aa272260_1) | 153  |
| [Principal LifeTime 2030 Fund](#xx_d2b33da7-8a56-46ee-8c28-689fa53b478b_1) | 159  |
| [Principal LifeTime 2035 Fund](#xx_b0e913e7-2252-43c4-bacb-98467c60dc34_1) | 165  |
| [Principal LifeTime 2040 Fund](#xx_a6b94c5a-1a4a-4bd1-bb16-e93580327b57_1) | 171  |
| [Principal LifeTime 2045 Fund](#xx_5c9553f6-ad82-44d0-9f71-e0b0a1f60a99_1) | 177  |
| [Principal LifeTime 2050 Fund](#xx_107303f3-8924-49f7-a8b5-28fd0237e022_1) | 182  |
| [Principal LifeTime 2055 Fund](#xx_12483935-c7af-4540-90b4-f84a60951452_1) | 188  |
| [Principal LifeTime 2060 Fund](#xx_34777798-afe3-4989-98db-d230b8551a5a_1) | 193  |
| [Principal LifeTime 2065 Fund](#xx_316c9d64-af7e-483a-87c8-dfda1b61bf28_1) | 199  |
| [Principal LifeTime 2070 Fund](#xx_ff70f731-e465-4b4a-8b8e-858a8aa54d87_1) | 204  |
| [Principal LifeTime Hybrid Income Fund](#xx_70ea62cc-a74e-4f70-b15a-f189e610e4c5_1) | 209  |
| [Principal LifeTime Hybrid 2015 Fund](#xx_c7950349-e76a-48d5-b90f-d36254c05c44_1) | 215  |
| [Principal LifeTime Hybrid 2020 Fund](#xx_85d2ee73-31a1-44b4-ae02-76e0e6b76656_1) | 221  |
| [Principal LifeTime Hybrid 2025 Fund](#xx_dd32e29d-7465-45a4-a09d-25c6c2a7055d_1) | 227  |
| [Principal LifeTime Hybrid 2030 Fund](#xx_012cbb67-2ce9-4234-bc43-1e5b95e952b3_1) | 233  |
| [Principal LifeTime Hybrid 2035 Fund](#xx_d3c4610e-f103-44f4-90c1-3ce07d61bf2a_1) | 239  |
| [Principal LifeTime Hybrid 2040 Fund](#xx_7a9135cc-fa8e-40f4-a622-ab95784335cd_1) | 245  |

---

------

---

| | |
|:---|:---|
| [Principal LifeTime Hybrid 2045 Fund](#xx_9b69095d-3d0e-4860-a59a-ad28fda96b6d_1) | 251  |
| [Principal LifeTime Hybrid 2050 Fund](#xx_03ed0c0f-27dc-434e-b892-8dc5d9c4eff1_1) | 257  |
| [Principal LifeTime Hybrid 2055 Fund](#xx_dad19503-daff-419e-898a-da8d9de82da4_1) | 263  |
| [Principal LifeTime Hybrid 2060 Fund](#xx_f9d85997-1f6e-4863-979f-5a5edc64266d_1) | 269  |
| [Principal LifeTime Hybrid 2065 Fund](#xx_d95ba395-0c39-420c-bf53-dff4f6bc569e_1) | 275  |
| [Principal LifeTime Hybrid 2070 Fund](#xx_e1a7c771-0ddb-4828-91a3-6a5b87e50a48_1) | 281  |
| [Real Estate Securities Fund](#xx_464af126-dec 0-489c-828e-4006aacc2a87_1) | 286  |
| [SAM (Strategic Asset Management) Balanced Portfolio](#xx_bf746df8-992f-4964-8e41-af80ec7eac10_1) | 292  |
| [SAM (Strategic Asset Management) Conservative Balanced Portfolio](#xx_c2107924-c701-4276-9cad-02e5149ed8cb_1) | 298  |
| [SAM (Strategic Asset Management) Conservative Growth Portfolio](#xx_e1aa6db6-e40e-43a6-a945-e3d8dc42f7a8_1) | 304  |
| [SAM (Strategic Asset Management) Flexible Income Portfolio](#xx_b77d52c9-0001-4e80-9735-0a51eaf3e494_1) | 310  |
| [SAM (Strategic Asset Management) Strategic Growth Portfolio](#xx_e1fbf5c9-bcd3-44d0-aa95-e73540ff44a1_1) | 316  |
| [Short-Term Income Fund](#xx_34e42a3e-18be-4a72-8062-40a4133fd112_1) | 321  |
| [SmallCap Fund](#xx_57c3e6cd-8a91-4439-832e-93239ef074a2_1) | 326  |
| [SmallCap Growth Fund I](#xx_decd57b5-d384-4385-962d-08f987accfa0_1) | 330  |
| [SmallCap S&P 600 Index Fund](#xx_2e1c16c9-730b-4b68-a4f9-4ff835a0497a_1) | 334  |
| [SmallCap Value Fund II](#xx_74e52f41-2887-44c5-b440-5242a8cd2f10_1) | 339  |
| [Tax-Exempt Bond Fund](#xx_237c86f1-9942-4f6a-9b25-e6e044529e20_1) | 344  |
| [ADDITIONAL INFORMATION ABOUT INVESTMENT STRATEGIES AND RISKS](#xx_beb31cee-1bcb-4fce-acd3-58479091971d_1) | 349  |
| [PORTFOLIO HOLDINGS INFORMATION](#xx_beb31cee-1bcb-4fce-acd3-58479091971d_32) | 380  |
| [MANAGEMENT OF THE FUNDS](#xx_beb31cee-1bcb-4fce-acd3-58479091971d_32) | 380  |
| [PRICING OF FUND SHARES](#xx_beb31cee-1bcb-4fce-acd3-58479091971d_41) | 389  |
| [CONTACT PRINCIPAL FUNDS, INC.](#xx_beb31cee-1bcb-4fce-acd3-58479091971d_42) | 390  |
| [PURCHASE OF FUND SHARES](#xx_beb31cee-1bcb-4fce-acd3-58479091971d_42) | 390  |
| [Redemption of Fund Shares](#xx_beb31cee-1bcb-4fce-acd3-58479091971d_47) | 395  |
| [EXCHANGE OF FUND SHARES](#xx_beb31cee-1bcb-4fce-acd3-58479091971d_51) | 399  |
| [DIVIDENDS AND DISTRIBUTIONS](#xx_beb31cee-1bcb-4fce-acd3-58479091971d_53) | 401  |
| [FREQUENT PURCHASES AND REDEMPTIONS](#xx_beb31cee-1bcb-4fce-acd3-58479091971d_54) | 402  |
| [TAX CONSIDERATIONS](#xx_beb31cee-1bcb-4fce-acd3-58479091971d_55) | 403  |
| [Choosing a Share Class and the Costs of Investing](#xx_beb31cee-1bcb-4fce-acd3-58479091971d_56) | 404  |
| [DISTRIBUTION PLANS AND INTERMEDIARY COMPENSATION](#xx_beb31cee-1bcb-4fce-acd3-58479091971d_63) | 411  |
| [FUND ACCOUNT INFORMATION](#xx_beb31cee-1bcb-4fce-acd3-58479091971d_65) | 413  |
| [APPENDIX A—DESCRIPTION OF BOND RATINGS](#xx_0d3ff350-3ecc-4f9f-b752-617d50d8818f_1) | A-1  |
| [APPENDIX B—INTERMEDIARY-SPECIFIC SALES CHARGE WAIVERS AND REDUCTIONS](#xx_44dac819-3c97-4e13-b94f-612c5e007af5_1) | B-1  |
| [APPENDIX C — FINANCIAL HIGHLIGHTS](#xx_8a088770-f014-4203-93d5-c81e7c1ce9f4_1) | C-1  |
| [ADDITIONAL INFORMATION](#xx_d5bd34de-fce9-4e9f-b3c7-21165f86b2e5_1) | D |

---

------

**California Municipal Fund**

**Objective**

The Fund seeks to provide as high a level of current income that is exempt from federal and state personal income tax as is consistent with prudent investment management and preservation of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **Inst.** |
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) | 3.75% |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage of the offering price or NAV when Sales Load is paid, <br> whichever is less)<br>| 1.00% | 1.00% |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **Inst.** |
| Management Fees<sup>(1)</sup> <br>| 0.40% | 0.40% | 0.40% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 1.00% | N/A |
| Other Expenses: |  |  |  |
| Interest Expense | 0.06% | 0.06% | 0.06% |
| Remainder of Other Expenses | 0.06% | 0.13% | 0.08% |
| Total Other Expenses | 0.12% | 0.19% | 0.14% |
| **Total Annual Fund Operating Expenses** | **0.77%** | **1.59%** | **0.54%** |
| Expense Reimbursement<sup>(2)</sup> <br>| N/A | N/A | (0.02)% |
| **Total Annual Fund Operating Expenses after Expense Reimbursement** | **0.77%** | **1.59%** | **0.52%** |

---

<sup>(1)</sup>

Fees have been restated to reflect current fees.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.46% for Institutional Class shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end of those periods. The Example assumes conversion of the Class C shares to Class A shares after the eighth year. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $451 | $612 | $787 | $1293 |
| **Class C** | 262 | 502 | 866 | 1669 |
| **Institutional Class** | 53 | 171 | 300 | 675 |

---

With respect to Class C shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class C** | $162 | $502 | $866 | $1669 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 38.90% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in California municipal obligations (securities issued by or on behalf of state or local governments and other public authorities) at the time of purchase. Generally, these municipal obligations pay interest that is exempt from state personal income tax and federal income tax. These obligations may include bonds that generate interest payments that are subject to the federal individual alternative minimum tax. The Fund's investment in municipal obligations include industrial revenue bonds. The Fund invests up to 20% of its assets in below investment grade bonds (sometimes called "high yield bonds" or "junk bonds"), which are rated at the time of purchase Ba1 or lower by Moody's Investors Service, Inc. ("Moody's") and BB+ or lower by S&P Global Ratings ("S&P Global") (if the bond has been rated by only one of those agencies, that rating will determine whether the bond is below investment grade; if the bond has not been rated by either of those agencies, those selecting such investments will determine whether the bond is of a quality comparable to those rated below investment grade). The Fund also invests in inverse floating rate obligations (variable rate debt instruments that pay interest at rates that move in the opposite direction of prevailing interest rates), which are generally more volatile than other types of municipal obligations and may involve leverage.

Under normal circumstances, the Fund maintains an average portfolio duration that is within ±50% of the duration of the Bloomberg California Municipal Bond Index, which as of January 31, 2023 was 5.24 years. The Fund is not managed to a particular maturity.

**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.

**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.

**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.

------

**Geographic Concentration Risk.** A fund that invests significant portions of its assets in municipal obligations and bonds in particular geographic areas (a particular state, such as California, or a particular country or region) has greater exposure than other funds to economic conditions and developments in those areas.

**High Yield Securities Risk.** High yield fixed-income securities (commonly referred to as "junk bonds") are subject to greater credit quality risk than higher rated fixed-income securities and should be considered speculative.

**Industrial Revenue Bond Risk.** The Fund will be sensitive to, and its performance will depend to a greater extent on, the overall condition and performance of industrial revenue bonds. These revenue bonds are issued by or on behalf of public authorities to obtain funds to finance various public and/or privately operated facilities, including those for business and manufacturing, housing, sports, pollution control, airport, mass transit, port, and parking facilities. These bonds are normally secured only by the revenues from the project and not by state or local government tax payments. Consequently, the credit quality of these bonds is dependent upon the ability of the user of the facilities financed by the bonds and any guarantor to meet its financial obligations.

**Inverse Floating Rate Investments Risk.** Inverse floating rate investments are extremely sensitive to changes in interest rates and, in some cases, their market value may be extremely volatile.

**Municipal Obligations Risk.** Principal and interest payments on municipal securities may not be guaranteed by the issuing body and may be payable only from a particular source. That source may not perform as expected, and payment obligations may not be made or made on time.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

For periods prior to the inception date of Institutional Class shares (March 1, 2015), the performance shown in the table for Institutional Class shares is that of the Fund's Class A shares, adjusted to reflect the fees and expenses of Institutional Class shares. However, where the adjustment for fees and expenses results in performance for Institutional Class shares that is higher than the historical performance of the Class A shares, the historical performance of Class A shares is used (without respect to sales charges, which are not applicable to Institutional Class shares). These adjustments result in performance for such periods that is no higher than the historical performance of the Class A shares.

------

**Total Returns as of December 31**

![](camuni.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q1 2014** | **5.67%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2022** | **(7.07)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(14.04)%** | **(0.13)%** | **1.96%** |
| **Class A Return After Taxes on Distributions** | **(14.04)%** | **(0.13)%** | **1.96%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(7.39)%** | **0.50%** | **2.23%** |
| **Class C Return Before Taxes** | **(12.29)%** | **(0.19)%** | **1.63%** |
| **Institutional Class Return Before Taxes** | **(10.39)%** | **0.91%** | **2.55%** |
| Bloomberg California Municipal Bond Index (reflects no deduction for fees, expenses, or taxes) | (8.17)% | 1.25% | 2.30% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James Noble (since 2013), Portfolio Manager

<sup>•</sup>

James Welch (since 2014), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A and C shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Class C shares are subject to an 8-year automatic conversion plan whereby Class C shares held for eight years after purchase will automatically convert to Class A shares of the same Fund.

------

See Purchase of Fund Shares for more information.

**Tax Information**

While the Fund intends to distribute income that is exempt from regular federal and California income taxes, a portion of the Fund's distributions may be subject to California or federal income taxes or to the federal individual alternative minimum tax.

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

If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Core Fixed Income Fund**

**SHARE CLASS CONVERSION NOTICE**: On December 13, 2022, the Fund's Board of Directors approved the conversion of the Fund's Class C shares into Class A shares. Following the close of business on May 19, 2023, Class C shares of the Fund will automatically convert into Class A shares of the Fund on the basis of the share classes' relative net asset values on such date. The conversion will not result in the imposition of a sales charge or any other charge. As a result of the conversion, the affected shareholders will be in a better position with respect to expenses, as expenses are lower for Class A shares than for the current Class C shares. The Fund expects these share class conversions will not constitute taxable sales or exchanges to shareholders. Effective as of the close of the New York Stock Exchange on March 24, 2023, Class C shares will no longer be available for purchase except in limited circumstances.

*On or about May 19, 2023, delete references to Class C shares of this Fund, including information regarding the conversion plan, from the Prospectus.* 

**Objective**

The Fund seeks to provide a high level of current income consistent with preservation of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Maximum Sales Charge (Load) Imposed on <br> Purchases (as a percentage of offering price)<br>| 2.25% |  |  |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a <br> percentage of the offering price or NAV when <br> Sales Load is paid, whichever is less)<br>| 1.00% | 1.00% | 1.00% |  |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Management Fees<sup>(1)</sup> <br>| 0.37% | 0.37% | 0.37% | 0.37% | 0.37% | 0.37% | 0.37% | 0.37% | 0.37% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 1.00% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A | N/A |
| Other Expenses | 0.13% | 0.24% | 0.11% | 0.13% | 0.53% | 0.32% | 0.28% | 0.26% | 0.00% |
| Acquired Fund Fees and Expenses | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.76%** | **1.62%** | **0.64%** | **0.51%** | **1.26%** | **0.95%** | **0.76%** | **0.64%** | **0.38%** |
| Expense Reimbursement<sup>(2)</sup> <br>| N/A | N/A | N/A | (0.04)% | N/A | N/A | N/A | N/A | N/A |
| **Total Annual Fund Operating Expenses** <br> **after Expense Reimbursement**<br>| **0.76%** | **1.62%** | **0.64%** | **0.47%** | **1.26%** | **0.95%** | **0.76%** | **0.64%** | **0.38%** |

---

<sup>(1)</sup>

Fees have been restated to reflect current fees.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.46% for Institutional Class shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end of those periods. The Example assumes conversion of the Class C shares to Class A shares after the eighth year. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $301 | $462 | $638 | $1146 |
| **Class C** | 265 | 511 | 881 | 1692 |
| **Class J** | 165 | 205 | 357 | 798 |
| **Institutional Class** | 48 | 160 | 281 | 637 |
| **Class R-1** | 128 | 400 | 692 | 1523 |
| **Class R-3** | 97 | 303 | 525 | 1166 |
| **Class R-4** | 78 | 243 | 422 | 942 |
| **Class R-5** | 65 | 205 | 357 | 798 |
| **Class R-6** | 39 | 122 | 213 | 480 |

---

With respect to Classes C and J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class C** | $165 | $511 | $881 | $1692 |
| **Class J** | 65 | 205 | 357 | 798 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 13.70% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in fixed-income securities. The Fund invests primarily in a diversified pool of investment-grade fixed-income securities, including corporate securities, U.S. government securities, asset-backed securities and mortgage-backed securities (securitized products) (including collateralized mortgage obligations), and foreign securities. "Investment grade" securities are rated BBB- or higher by S&P Global Ratings ("S&P Global") or Baa3 or higher by Moody's Investors Service, Inc. ("Moody's") or, if unrated, of comparable quality in the opinion of those selecting such investments. If the security has been rated by only one of those agencies, that rating will determine whether the security is investment grade. If securities are rated differently by the rating agencies, the highest rating is used. The Fund is not managed to a particular maturity. Under normal circumstances, the Fund maintains an average portfolio duration that is within ±25% of the duration of the Bloomberg U.S. Aggregate Bond Index, which as of January 31, 2023 was 6.43 years.

**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.

**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.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

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**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.

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

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

For periods prior to the inception date of Class R-6 shares (November 25, 2014), the performance shown in the table for Class R-6 shares is that of the Fund's Class A shares, adjusted to reflect the fees and expenses of Class R-6 shares. However, where the adjustment for fees and expenses results in performance for Class R-6 shares that is higher than the historical performance of the Class A shares, the historical performance of the Class A shares is used (without respect to sales charges, which are not applicable to Class R-6 shares). These adjustments result in performance for such periods that is no higher than the historical performance of the Class A shares.

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**Total Returns as of December 31**

![](cfi.jpg)

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| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **5.87%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2022** | **(5.80)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(14.99)%** | **(0.54)%** | **0.96%** |
| **Class A Return After Taxes on Distributions** | **(15.81)%** | **(1.53)%** | **(0.24)%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(8.85)%** | **(0.78)%** | **0.22%** |
| **Class C Return Before Taxes** | **(14.66)%** | **(0.93)%** | **0.55%** |
| **Class J Return Before Taxes** | **(13.72)%** | **0.05%** | **1.28%** |
| **Institutional Class Return Before Taxes** | **(12.82)%** | **0.17%** | **1.51%** |
| **Class R-1 Return Before Taxes** | **(13.41)%** | **(0.58)%** | **0.69%** |
| **Class R-3 Return Before Taxes** | **(13.22)%** | **(0.29)%** | **1.00%** |
| **Class R-4 Return Before Taxes** | **(12.96)%** | **(0.08)%** | **1.20%** |
| **Class R-5 Return Before Taxes** | **(12.88)%** | **0.04%** | **1.32%** |
| **Class R-6 Return Before Taxes** | **(12.66)%** | **0.30%** | **1.50%** |
| Bloomberg U.S. Aggregate Bond Index (reflects no deduction for fees, expenses, or taxes) | (13.02)% | 0.02% | 1.06% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

John R. Friedl (since 2005), Portfolio Manager

<sup>•</sup>

Scott J. Peterson (since 2010), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A, C, and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, R-6, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

------

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

Class C shares are subject to an 8-year automatic conversion plan whereby Class C shares held for eight years after purchase will automatically convert to Class A shares of the same Fund.

Effective as of the close of the New York Stock Exchange on March 24, 2023, Class C shares will no longer be available for purchase except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Core Plus Bond Fund**

**Objective**

The Fund seeks to provide current income and, as a secondary objective, capital appreciation.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Sales Charge (Load) Imposed on Purchases (as a <br> percentage of offering price)<br>| 3.75% |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage of the <br> offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% | 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees<sup>(1)</sup> <br>| 0.49% | 0.49% | 0.49% | 0.49% | 0.49% | 0.49% | 0.49% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.23% | 0.23% | 0.15% | 0.54% | 0.33% | 0.29% | 0.27% |
| Acquired Fund Fees and Expenses | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.98%** | **0.88%** | **0.65%** | **1.39%** | **1.08%** | **0.89%** | **0.77%** |
| Expense Reimbursement<sup>(2)</sup> <br>| (0.13)% | N/A | (0.08)% | N/A | N/A | N/A | N/A |
| **Total Annual Fund Operating Expenses after Expense** <br> **Reimbursement**<br>| **0.85%** | **0.88%** | **0.57%** | **1.39%** | **1.08%** | **0.89%** | **0.77%** |

---

<sup>(1)</sup>

Fees have been restated to reflect current fees.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.84% for Class A and 0.56% for Institutional Class shares. It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $459 | $663 | $884 | $1520 |
| **Class J** | 190 | 281 | 488 | 1084 |
| **Institutional Class** | 58 | 200 | 354 | 803 |
| **Class R-1** | 142 | 440 | 761 | 1669 |
| **Class R-3** | 110 | 343 | 595 | 1317 |
| **Class R-4** | 91 | 284 | 493 | 1096 |
| **Class R-5** | 79 | 246 | 428 | 954 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $90 | $281 | $488 | $1084 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 160.70% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in bonds or other debt securities at the time of purchase. Such investments include securities issued or guaranteed by the U.S. government or its agencies or instrumentalities (including collateralized mortgage obligations); asset-backed securities and mortgage-backed securities (securitized products); corporate bonds; and foreign securities, including emerging market securities. The Fund invests in investment-grade securities and, with respect to up to 25% of its assets, in below investment grade securities (sometimes called "high yield" or "junk"), which are rated at the time of purchase Ba1 or lower by Moody's Investors Service, Inc. ("Moody's") and BB+ or lower by S&P Global Ratings ("S&P Global") (if the security has been rated by only one of those agencies, that rating will determine whether the security is below investment grade; if the security has not been rated by either of those agencies, those selecting such investments will determine whether the security is of a quality comparable to those rated below investment grade; if securities are rated differently by the rating agencies, the highest rating is used). The Fund is not managed to a particular maturity. Under normal circumstances, the Fund maintains an average portfolio duration that is within ±25% of the duration of the Bloomberg U.S. Aggregate Bond Index, which as of January 31, 2023 was 6.43 years. The Fund's strategies may result in the active and frequent trading of the Fund's portfolio securities.

The Fund enters into dollar roll transactions, which may involve leverage. The Fund invests in derivatives, including Treasury futures and interest rate swaps to manage the fixed-income exposure (including for hedging purposes) and credit default swaps to increase or decrease, in an efficient manner, exposures to certain sectors or individual issuers. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index.

**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.

**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.

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**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.

**•** **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.

**•** **Currency Contracts.** Derivatives related to currency contracts involve the specific risk of government action through exchange controls that would restrict the ability of the fund to deliver or receive currency.

**•** **Futures and Swaps.** These derivative instruments 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 instruments; possible lack of a liquid secondary market for an instrument and the resulting inability to close it when desired; counterparty risk; and if the fund has insufficient cash, it may have to sell securities from its portfolio to meet any applicable daily variation margin requirements.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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.

**High Yield Securities Risk.** High yield fixed-income securities (commonly referred to as "junk bonds") are subject to greater credit quality risk than higher rated fixed-income securities and should be considered speculative.

**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.

------

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

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

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**Total Returns as of December 31**

![](cpb.jpg)

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| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **5.34%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q2 2022** | **(6.07)%** |

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(17.59)%** | **(0.91)%** | **0.58%** |
| **Class A Return After Taxes on Distributions** | **(18.32)%** | **(2.33)%** | **(0.62)%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(10.39)%** | **(1.18)%** | **(0.02)%** |
| **Class J Return Before Taxes** | **(15.32)%** | **(0.13)%** | **0.98%** |
| **Institutional Class Return Before Taxes** | **(14.25)%** | **0.19%** | **1.33%** |
| **Class R-1 Return Before Taxes** | **(14.86)%** | **(0.64)%** | **0.47%** |
| **Class R-3 Return Before Taxes** | **(14.60)%** | **(0.31)%** | **0.78%** |
| **Class R-4 Return Before Taxes** | **(14.48)%** | **(0.15)%** | **0.96%** |
| **Class R-5 Return Before Taxes** | **(14.33)%** | **(0.03)%** | **1.09%** |
| Bloomberg U.S. Aggregate Bond Index (reflects no deduction for fees, expenses, or taxes) | (13.02)% | 0.02% | 1.06% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

William C. Armstrong (since 2000), Portfolio Manager

<sup>•</sup>

Bryan C. Davis (since 2022), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

------

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Diversified Income Fund**

**Objective**

The Fund seeks income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **Inst.** | **R-6** |
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) | 3.75% |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage of the offering price or NAV when Sales <br> Load is paid, whichever is less)<br>| 1.00% | 1.00% |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **Inst.** | **R-6** |
| Management Fees<sup>(1)</sup> <br>| 0.64% | 0.64% | 0.64% | 0.64% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 1.00% | N/A | N/A |
| Other Expenses | 0.11% | 0.12% | 0.11% | 0.04% |
| Acquired Fund Fees and Expenses | 0.01% | 0.01% | 0.01% | 0.01% |
| **Total Annual Fund Operating Expenses** | **1.01%** | **1.77%** | **0.76%** | **0.69%** |
| Expense Reimbursement<sup>(2)</sup> <br>| N/A | N/A | (0.07)% | (0.02)% |
| **Total Annual Fund Operating Expenses after Expense Reimbursement** | **1.01%** | **1.77%** | **0.69%** | **0.67%** |

---

<sup>(1)</sup>

Fees have been restated to reflect current fees.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.68% for Institutional Class shares. In addition, for Class R-6, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.02% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end of those periods. The Example assumes conversion of the Class C shares to Class A shares after the eighth year. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $474 | $684 | $912 | $1565 |
| **Class C** | 280 | 557 | 959 | 1883 |
| **Institutional Class** | 70 | 236 | 415 | 936 |
| **Class R-6** | 68 | 219 | 382 | 857 |

---

With respect to Class C shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class C** | $180 | $557 | $959 | $1883 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 72.10% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund generally invests a majority of its assets in fixed-income securities, such as investment-grade corporate bonds, high yield bonds (also known as "junk" bonds), preferred securities, commercial mortgage-backed securities, and emerging market debt securities, in an effort to provide incremental yields over a portfolio of government securities. Such securities include instruments with variable or floating interest rates. The fixed-income portion of the Fund is not managed to a particular maturity or duration. The Fund invests in foreign, including emerging market, securities. The Fund uses derivative strategies. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index.

In managing the Fund, Principal Global Investors, LLC ("PGI"), the Fund's investment advisor, determines the Fund's strategic asset allocation among actively managed and passively managed (index) strategies that are executed by PGI and multiple sub-advisors. PGI has considerable latitude in allocating the Fund's assets among the general investment categories listed below. The Fund uses strategies and sub-advisors to varying degrees and may change allocations, add new or eliminate existing strategies and sub-advisors, and temporarily or permanently reduce allocations from time to time such that the Fund would have little or no assets allocated to a particular strategy or sub-advisor.

<sup>•</sup>

Investment-grade corporate securities, which are rated at the time of purchase Baa3 or higher by Moody's Investors Service ("Moody's") or BBB- or higher by S&P Global Ratings ("S&P Global").

<sup>•</sup>

High yield and other income-producing securities, including bank loans and corporate bonds. "High yield" securities are below investment grade securities (sometimes called "junk"), which are rated at the time of purchase Ba1 or lower by Moody's and BB+ or lower by S&P Global. These securities offer a higher yield than other, higher rated securities, but they carry a greater degree of risk and are considered speculative with respect to the issuer's ability to pay interest and to repay principal. This portion of the Fund also invests in currency forwards and currency options to hedge currency risk.

<sup>•</sup>

Preferred securities, focusing primarily on the financial services and utility industries.

<sup>•</sup>

Diversified portfolio of fixed-income securities, including those issued by governments and their agencies and corporate entities in emerging markets. This portion of the Fund also invests in interest rate swaps or Treasury futures to manage fixed-income exposure; credit default swaps to increase or decrease in an efficient manner exposures to certain sectors or individual issuers; total return swaps to increase or decrease in an efficient manner exposures to certain sectors; and currency forwards and currency options to hedge currency risk and express views on the direction of currency.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

<sup>•</sup>

Securitized products such as asset-backed securities and mortgage-based securities, including commercial mortgage-backed securities, which are bonds secured by first mortgages on commercial real estate.

**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.

**Asset Allocation Risk.** A fund's selection and weighting of asset classes may cause it to underperform other funds with a similar investment objective.

**Bank Loans Risk.** Changes in economic conditions are likely to cause issuers of bank loans (also known as senior floating rate interests) to be unable to meet their obligations. In addition, the value of the collateral securing the loan (if any) may decline, causing a loan to be substantially unsecured. Underlying credit agreements governing the bank loans, reliance on market makers, priority of repayment, and overall market volatility may harm the liquidity of loans.

**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.

**•** **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.

**•** **Currency Contracts.** Derivatives related to currency contracts involve the specific risk of government action through exchange controls that would restrict the ability of the fund to deliver or receive currency.

**•** **Forward Contracts, Futures, and Swaps.** Forward contracts, futures, and 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 forward contract, future, or swap; possible lack of a liquid secondary market for a forward contract, future, or swap and the resulting inability to close a forward contract, future, or 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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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 Yield Securities Risk.** High yield fixed-income securities (commonly referred to as "junk bonds") are subject to greater credit quality risk than higher rated fixed-income securities and should be considered speculative.

**Index (Passive) Strategy Risk.** An index (passive) fund (or passive strategy that is part of a fund) has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between an index strategy's performance and index performance may also be affected by the type of passive investment approach used (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of shares.

**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.

**Preferred Securities Risk.** Because preferred securities have a lower priority claim on assets or earnings than senior bonds and other debt instruments in a company's capital structure, they are subject to greater credit and liquidation risk than more senior debt instruments. In addition, preferred securities are subject to other risks, such as limited or no voting rights, deferring or skipping distributions, interest rate risk, and redeeming the security prior to any stated maturity date.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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).

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

------

For periods prior to the inception date of Class R-6 shares (June 12, 2017), the performance shown in the table for Class R-6 shares is that of the Fund's Institutional Class shares, adjusted to reflect the fees and expenses of Class R-6 shares. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares.

**Total Returns as of December 31**

![](diversinc.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q4 2020** | **8.39%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(17.02)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(14.82)%** | **0.03%** | **2.79%** |
| **Class A Return After Taxes on Distributions** | **(16.33)%** | **(1.63)%** | **0.92%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(8.65)%** | **(0.56)%** | **1.41%** |
| **Class C Return Before Taxes** | **(13.04)%** | **0.05%** | **2.56%** |
| **Institutional Class Return Before Taxes** | **(11.20)%** | **1.14%** | **3.52%** |
| **Class R-6 Return Before Taxes** | **(11.20)%** | **1.14%** | **3.52%** |
| Bloomberg U.S. Aggregate Bond Index (reflects no deduction for fees, expenses, or taxes) | (13.02)% | 0.02% | 1.06% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Jessica S. Bush (since 2014), Portfolio Manager

<sup>•</sup>

Benjamin E. Rotenberg (since 2014), Portfolio Manager

<sup>•</sup>

May Tong (since 2021), Portfolio Manager

**Sub-Advisors**

Nuveen Asset Management LLC

PineBridge Investments LLC

Polen Capital Credit, LLC (f/k/a DDJ Capital Management, LLC)

Post Advisory Group, LLC

Principal Real Estate Investors, LLC

Spectrum Asset Management, Inc.

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**Purchase and Sale of Fund Shares**

For Classes A and C shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Class R-6 and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Class C shares are subject to an 8-year automatic conversion plan whereby Class C shares held for eight years after purchase will automatically convert to Class A shares of the same Fund.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Diversified International Fund**

**Objective**

The Fund seeks long-term growth of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Maximum Sales Charge (Load) Imposed on Purchases <br> (as a percentage of offering price)<br>| 5.50% |  |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage <br> of the offering price or NAV when Sales Load is paid, <br> whichever is less)<br>| 1.00% | 1.00% |  |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Management Fees | 0.74% | 0.74% | 0.74% | 0.74% | 0.74% | 0.74% | 0.74% | 0.74% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A | N/A |
| Other Expenses | 0.24% | 0.25% | 0.17% | 0.57% | 0.36% | 0.32% | 0.30% | 0.04% |
| **Total Annual Fund Operating Expenses** | **1.23%** | **1.14%** | **0.91%** | **1.66%** | **1.35%** | **1.16%** | **1.04%** | **0.78%** |
| Expense Reimbursement<sup>(1)</sup> <br>| N/A | N/A | (0.03)% | N/A | N/A | N/A | N/A | N/A |
| **Total Annual Fund Operating Expenses after Expense** <br> **Reimbursement**<br>| **1.23%** | **1.14%** | **0.88%** | **1.66%** | **1.35%** | **1.16%** | **1.04%** | **0.78%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.85% for Institutional Class shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $668 | $919 | $1188 | $1957 |
| **Class J** | 216 | 362 | 628 | 1386 |
| **Institutional Class** | 90 | 287 | 501 | 1117 |
| **Class R-1** | 169 | 523 | 902 | 1965 |
| **Class R-3** | 137 | 428 | 739 | 1624 |
| **Class R-4** | 118 | 368 | 638 | 1409 |
| **Class R-5** | 106 | 331 | 574 | 1271 |
| **Class R-6** | 80 | 249 | 433 | 966 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $116 | $362 | $628 | $1386 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 57.00% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund invests primarily in foreign equity securities. The Fund has no limitation on the percentage of assets that are invested in any one country or denominated in any one currency, but the Fund typically invests in foreign securities of at least 20 countries. Primary consideration is given to securities of issuers of developed areas (for example, Japan, Western Europe, Canada, Australia, Hong Kong, and Singapore); however, the Fund also invests in emerging market securities. The Fund invests in equity securities regardless of market capitalization size (small, medium or large) and style (growth or value).

**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.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

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**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

For periods prior to the inception date of Class R-6 shares (March 1, 2019), the performance shown in the table for Class R-6 shares is that of the Fund's Class R-3 shares, adjusted to reflect the fees and expenses of Class R-6 shares. However, where the adjustment for fees and expenses results in performance for Class R-6 shares that is higher than the historical performance of the Class R-3 shares, the historical performance of the Class R-3 shares is used. These adjustments result in performance for such periods that is no higher than the historical performance of the Class R-3 shares.

------

**Total Returns as of December 31**

![](diversitntl.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **17.41%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(22.11)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(24.49)%** | **(0.57)%** | **3.44%** |
| **Class A Return After Taxes on Distributions** | **(24.60)%** | **(1.52)%** | **2.88%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(14.42)%** | **(0.30)%** | **2.84%** |
| **Class J Return Before Taxes** | **(20.82)%** | **0.67%** | **4.15%** |
| **Institutional Class Return Before Taxes** | **(19.82)%** | **0.94%** | **4.48%** |
| **Class R-1 Return Before Taxes** | **(20.43)%** | **0.12%** | **3.61%** |
| **Class R-3 Return Before Taxes** | **(20.26)%** | **0.43%** | **3.93%** |
| **Class R-4 Return Before Taxes** | **(20.05)%** | **0.63%** | **4.14%** |
| **Class R-5 Return Before Taxes** | **(19.96)%** | **0.76%** | **4.27%** |
| **Class R-6 Return Before Taxes** | **(19.73)%** | **0.89%** | **4.17%** |
| MSCI ACWI Ex USA Index NTR (reflects withholding taxes on foreign dividends, but no deduction <br> for fees, expenses, or other taxes)<br>| (16.01)% | 0.88% | 3.80% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Paul H. Blankenhagen (since 2003), Portfolio Manager

<sup>•</sup>

Juliet Cohn (since 2004), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, R-6, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

------

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Equity Income Fund**

**Objective**

The Fund seeks to provide current income and long-term growth of income and capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Sales Charge (Load) Imposed on Purchases <br> (as a percentage of offering price)<br>| 5.50% |  |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage <br> of the offering price or NAV when Sales Load is paid, <br> whichever is less)<br>| 1.00% | 1.00% | 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees<sup>(1)</sup> <br>| 0.50% | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 1.00% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.11% | 0.12% | 0.14% | 0.04% | 0.54% | 0.33% | 0.29% | 0.27% |
| **Total Annual Fund Operating Expenses** | **0.86%** | **1.62%** | **0.79%** | **0.54%** | **1.39%** | **1.08%** | **0.89%** | **0.77%** |
| Expense Reimbursement<sup>(2)</sup> <br>| N/A | N/A | N/A | (0.02)% | N/A | N/A | N/A | N/A |
| **Total Annual Fund Operating Expenses after Expense** <br> **Reimbursement**<br>| **0.86%** | **1.62%** | **0.79%** | **0.52%** | **1.39%** | **1.08%** | **0.89%** | **0.77%** |

---

<sup>(1)</sup>

Fees have been restated to reflect current fees.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.52% for Institutional Class shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end of those periods. The Example assumes conversion of the Class C shares to Class A shares after the eighth year. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $633 | $809 | $1001 | $1552 |
| **Class C** | 265 | 511 | 881 | 1719 |
| **Class J** | 181 | 252 | 439 | 978 |
| **Institutional Class** | 53 | 171 | 300 | 675 |
| **Class R-1** | 142 | 440 | 761 | 1669 |
| **Class R-3** | 110 | 343 | 595 | 1317 |
| **Class R-4** | 91 | 284 | 493 | 1096 |
| **Class R-5** | 79 | 246 | 428 | 954 |

---

With respect to Classes C and J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class C** | $165 | $511 | $881 | $1719 |
| **Class J** | 81 | 252 | 439 | 978 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 16.90% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in dividend-paying equity securities at the time of purchase. The Fund usually invests in equity securities of companies with large and medium market capitalizations. The Fund invests in value equity securities, an investment strategy that emphasizes buying equity securities that appear to be undervalued. The Fund also invests in securities of foreign issuers.

**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.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

------

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

For periods prior to the inception date of Class J shares (October 9, 2018), the performance shown in the table for Class J shares is that of the Fund's Class A shares, adjusted to reflect the fees and expenses of Class J shares. However, where the adjustment for fees and expenses results in performance for Class J shares that is higher than the historical performance of the Class A shares, the historical performance of the Class A shares is used without respect to sales charges. These adjustments result in performance for such periods that is no higher than the historical performance of Class A shares.

**Total Returns as of December 31**

![](equityinc.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q4 2020** | **15.59%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(25.44)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(15.74)%** | **5.79%** | **9.61%** |
| **Class A Return After Taxes on Distributions** | **(16.75)%** | **4.58%** | **8.57%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(8.57)%** | **4.36%** | **7.70%** |
| **Class C Return Before Taxes** | **(12.34)%** | **6.20%** | **9.59%** |
| **Class J Return Before Taxes** | **(11.59)%** | **7.06%** | **10.27%** |
| **Institutional Class Return Before Taxes** | **(10.51)%** | **7.38%** | **10.65%** |
| **Class R-1 Return Before Taxes** | **(11.30)%** | **6.45%** | **9.69%** |
| **Class R-3 Return Before Taxes** | **(11.02)%** | **6.78%** | **10.03%** |
| **Class R-4 Return Before Taxes** | **(10.85)%** | **6.99%** | **10.24%** |
| **Class R-5 Return Before Taxes** | **(10.73)%** | **7.12%** | **10.37%** |
| Russell 1000 Value Index (reflects no deduction for fees, expenses, or taxes) | (7.54)% | 6.67% | 10.29% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Daniel R. Coleman (since 2010), Portfolio Manager

<sup>•</sup>

Sarah E. Radecki (since 2021), Portfolio Manager

<sup>•</sup>

Nedret Vidinli (since 2017), Associate Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A, C, and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

Class C shares are subject to an 8-year automatic conversion plan whereby Class C shares held for eight years after purchase will automatically convert to Class A shares of the same Fund.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Finisterre Emerging Markets Total Return Bond Fund**

**Objective**

The Fund seeks to generate total returns from current income and capital appreciation.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

---

| | |
|:---|:---|
| **Shareholder Fees (fees paid directly from your investment):** | **None** |

---

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
|  | **Share Class** |
|  | **Inst.** |
| Management Fees | 0.75% |
| Distribution and/or Service (12b-1) Fees | N/A |
| Other Expenses | 0.09% |
| Acquired Fund Fees and Expenses | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.85%** |
| Expense Reimbursement<sup>(1)</sup> <br>| 0.00% |
| **Total Annual Fund Operating Expenses after Expense Reimbursement** | **0.85%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.85% for Institutional Class shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Institutional Class** | $87 | $271 | $471 | $1049 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 117.40% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in bonds and other fixed-income securities that are tied economically to an emerging market, and in derivatives on such investments. The types of fixed-income securities in which the Fund invests include convertible bonds, credit- and index-linked securities, non-registered and restricted securities (including those issued in reliance on Rule 144A and Regulation S), securities issued by distressed or bankrupt issuers, and securities issued by the U.S government or U.S. government-sponsored enterprises. The Fund's strategies may result in the active and frequent trading of the Fund's portfolio securities.

The Fund considers a security to be tied economically to an emerging market if the issuer or guarantor of the security has its principal place of business or principal office in an emerging market, has its principal securities trading market in an emerging market, or derives a majority of its revenue from emerging markets. Emerging markets include frontier markets.

The Fund uses derivatives to enhance return and to hedge and manage investment risks. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. Specifically, the Fund uses forward contracts, futures, options, and swaps. The Fund invests in cash and cash equivalents to support certain of these investments, as well as for other purposes.

The Fund's investment process focuses primarily on market level analysis of global markets and political developments and their impact on individual countries and companies in emerging markets. The Fund uses a top-down portfolio construction process, blending both fundamental and technical considerations. The investment strategy provides considerable flexibility to invest in various asset classes, capital structures, maturities, and currencies.

The Fund invests, without limitation, in high yield securities (also known as "junk") rated at the time of purchase Ba1 or lower by Moody's Investors Services, Inc., and BB+ or lower by S&P Global Ratings ("S&P Global") (if the security has been rated by only one of these agencies, that rating will determine whether the security is below investment grade; if the security has not been rated by either of those agencies, those selecting such investments will determine whether the security is of a quality comparable to those rated below investment grade). The Fund's holdings range in maturity from overnight to 30 years or more and are not subject to any minimum credit rating standard.

**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.

**Convertible Securities Risk.** Convertible securities are securities that are convertible into common stock. Convertible securities are subject to credit and interest rate risks associated with fixed-income securities and to stock market risk associated with equity securities.

**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.

**•** **Currency Contracts.** Derivatives related to currency contracts involve the specific risk of government action through exchange controls that would restrict the ability of the fund to deliver or receive currency.

**•** **Forward Contracts, Futures, and Swaps.** Forward contracts, futures, and 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 forward contract, future, or swap; possible lack of a liquid secondary market for a forward contract, future, or swap and the resulting inability to close a forward contract, future, or 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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Distressed Investments Risk.** A fund's investment in instruments involving loans, loan participations, bonds, notes, non-performing and sub-performing mortgage loans, many of which are not publicly traded, may involve a substantial degree of risk for the following reasons. These instruments may become illiquid and the prices of such instruments may be extremely volatile. Valuing such instruments may be difficult and a fund may lose all of its investment, or it may be required to accept cash or securities with a value less than the fund's original investment. Issuers of distressed securities are typically in a weak financial condition and may default, in which case the fund may lose its entire investment.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**•** **Defensive Strategy Risk.** Because emerging market debt markets are particularly susceptible to adverse market, economic, political, and other conditions, the Fund is more prone to take a defensive position and invest a significant portion of its assets in cash and cash equivalents in response to abnormal market conditions. In taking a large cash position, the Fund's performance may be adversely affected as the Fund may not be able to benefit from an upswing in the market. Further, the Fund may be unable to pursue or achieve its investment objective when employing such a defensive strategy.

**•** **Frontier Markets Risk.** Frontier markets are emerging markets, but generally have small economies or less mature capital markets than more developed emerging markets, and, as a result, the risks of investing in emerging markets are magnified in frontier markets. Frontier markets typically have low trading volumes and the potential for extreme price volatility and illiquidity.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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.

------

**High Yield Securities Risk.** High yield fixed-income securities (commonly referred to as "junk bonds") are subject to greater credit quality risk than higher rated fixed-income securities and should be considered speculative.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**U.S. Government Securities Risk.** Yields available from U.S. government securities are generally lower than yields from many other fixed-income securities.

**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.

**Volatility Mitigation Risk.** Volatility mitigation strategies may increase the Fund's transaction costs, which could increase losses or reduce gains. These strategies may not protect the Fund from market declines and may reduce the Fund's participation in market gains.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

Life of Fund returns are measured from the date the Fund's shares were first sold (July 11, 2016).

------

**Total Returns as of December 31**

![](femtrb.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **9.76%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q2 2022** | **(11.00)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **Life of Fund** |
|  |  |  | **07/11/16** |
| **Institutional Class Return Before Taxes** | **(9.30)%** | **1.39%** | **2.99%** |
| **Institutional Class Return After Taxes on Distributions** | **(12.13)%** | **(0.53)%** | **0.77%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(5.52)%** | **0.31%** | **1.38%** |
| JPM CEMBI Broad Diversified Index (reflects no deduction for fees, expenses, or taxes) | (12.27)% | 1.08% | 2.12% |
| JPM EMBI Global Diversified Index (reflects no deduction for fees, expenses, or taxes) | (17.79)% | (1.31)% | 0.16% |
| JPM GBI-EM Global Diversified Index (reflects no deduction for fees, expenses, or taxes) | (11.69)% | (2.51)% | (0.43)% |
| Finisterre Emerging Markets Total Return Bond Blended Index (reflects no deduction for fees, <br> expenses, or taxes)<br>| (13.90)% | (0.86)% | 0.67% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

Performance of the blended index shows how the Fund's performance compares to a blend of indices with similar investment objectives. Performance of each component of the blended index is also shown. The weightings for the Finisterre Emerging Markets Total Return Bond Blended Index are: 33.33% JPM CEMBI Broad Diversified Index; 33.33% JPM EMBI Global Diversified Index; and 33.33% JPM GBI-EM Global Diversified Index.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Damien Buchet (since 2016), Portfolio Manager

<sup>•</sup>

Christopher Watson (since 2016), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Global Emerging Markets Fund**

**Objective**

The Fund seeks long-term growth of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Maximum Sales Charge (Load) Imposed on Purchases <br> (as a percentage of offering price)<br>| 5.50% |  |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage <br> of the offering price or NAV when Sales Load is paid, <br> whichever is less)<br>| 1.00% | 1.00% |  |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Management Fees<sup>(1)</sup> <br>| 0.99% | 0.99% | 0.99% | 0.99% | 0.99% | 0.99% | 0.99% | 0.99% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A | N/A |
| Other Expenses | 0.33% | 0.32% | 0.26% | 0.60% | 0.39% | 0.35% | 0.33% | 0.53% |
| Acquired Fund Fees and Expenses | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% |
| **Total Annual Fund Operating Expenses** | **1.58%** | **1.47%** | **1.26%** | **1.95%** | **1.64%** | **1.45%** | **1.33%** | **1.53%** |
| Expense Reimbursement<sup>(2)</sup> <br>| (0.12)% | (0.16)% | (0.15)% | N/A | N/A | N/A | N/A | (0.49)% |
| **Total Annual Fund Operating Expenses after Expense** <br> **Reimbursement**<br>| **1.46%** | **1.31%** | **1.11%** | **1.95%** | **1.64%** | **1.45%** | **1.33%** | **1.04%** |

---

<sup>(1)</sup>

Fees have been restated to reflect current fees.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 1.45% for Class A, 1.30% for Class J and 1.10% for Institutional Class shares. In addition, for Class R-6, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.04% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $690 | $1010 | $1352 | $2315 |
| **Class J** | 233 | 449 | 788 | 1744 |
| **Institutional Class** | 113 | 385 | 677 | 1509 |
| **Class R-1** | 198 | 612 | 1052 | 2275 |
| **Class R-3** | 167 | 517 | 892 | 1944 |
| **Class R-4** | 148 | 459 | 792 | 1735 |
| **Class R-5** | 135 | 421 | 729 | 1601 |
| **Class R-6** | 106 | 435 | 788 | 1782 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $133 | $449 | $788 | $1744 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 34.70% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of emerging market companies at the time of purchase. The Fund considers a security to be tied economically to an emerging market if the issuer of the security has its principal place of business or principal office in an emerging market, has its principal securities trading market in an emerging market, or derives a majority of its revenue from emerging markets.

Here, "emerging market" means any market that is considered to be an emerging market by the international financial community (including the MSCI Emerging Markets Index or Bloomberg Emerging Markets USD Aggregate Bond Index). Emerging markets generally exclude the United States, Canada, Japan, Australia, Hong Kong, Singapore, New Zealand, and most nations located in Western Europe. The Fund invests in equity securities regardless of market capitalization (small, medium or large) and style (growth or value).

**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.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**•** **China Investment Risk.** The Fund invests a significant portion of its assets in securities of issuers located or operating in China. Investing in China involves certain heightened risks and considerations, including, among others: frequent trading suspensions and government interventions (including by nationalizing assets); currency exchange rate fluctuations or blockages; limits on using brokers and on foreign ownership; different financial reporting standards;

------

higher dependence on exports and international trade; political and social instability; infectious disease outbreaks; regional and global conflicts; increased trade tariffs, embargoes, and other trade limitations; custody and other risks associated with programs used to access Chinese securities; and uncertainties in tax rules that could result in unexpected tax liabilities for the Fund. Significant portions of the Chinese securities markets may become rapidly illiquid, as Chinese issuers have the ability to suspend the trading of their equity securities. Moreover, actions by the U.S. government, such as delisting of certain Chinese companies from U.S. securities exchanges or otherwise restricting their operations in the U.S., may negatively impact the value of such securities held by the Fund.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

For periods prior to the inception date of Class R-6 shares (November 22, 2016), the performance shown in the table for Class R-6 shares is that of the Fund's Class R-3 shares, adjusted to reflect the fees and expenses of Class R-6 shares. However, where the adjustment for fees and expenses results in performance for Class R-6 shares that is higher than the historical performance of the Class R-3 shares, the historical performance of the Class R-3 shares is used. These adjustments result in performance for such periods that is no higher than the historical performance of the Class R-3 shares.

------

During 2019, the Fund experienced a significant one-time gain of approximately $0.11/share as the result of a settlement in a litigation proceeding. If such gain had not been recognized, the total return amounts expressed herein would have been lower.

**Total Returns as of December 31**

![](globalem.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **19.56%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(24.38)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes**<sup>1</sup> <br>| **(27.13)%** | **(4.18)%** | **(0.40)%** |
| **Class A Return After Taxes on Distributions**<sup>1</sup> <br>| **(27.20)%** | **(4.63)%** | **(0.62)%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares**<sup>1</sup> <br>| **(15.81)%** | **(2.89)%** | **(0.09)%** |
| **Class J Return Before Taxes**<sup>1</sup> <br>| **(23.55)%** | **(2.95)%** | **0.29%** |
| **Institutional Class Return Before Taxes**<sup>1</sup> <br>| **(22.65)%** | **(2.77)%** | **0.57%** |
| **Class R-1 Return Before Taxes**<sup>1</sup> <br>| **(23.23)%** | **(3.54)%** | **(0.26)%** |
| **Class R-3 Return Before Taxes**<sup>1</sup> <br>| **(23.01)%** | **(3.25)%** | **0.05%** |
| **Class R-4 Return Before Taxes**<sup>1</sup> <br>| **(22.85)%** | **(3.07)%** | **0.24%** |
| **Class R-5 Return Before Taxes**<sup>1</sup> <br>| **(22.76)%** | **(2.95)%** | **0.36%** |
| **Class R-6 Return Before Taxes**<sup>1</sup> <br>| **(22.57)%** | **(2.69)%** | **0.40%** |
| MSCI Emerging Markets Index NTR (reflects withholding taxes on foreign dividends, but no <br> deduction for fees, expenses, or other taxes)<br>| (20.10)% | (1.40)% | 1.44% |

---

<sup>1</sup>

During 2019, the Fund experienced a significant one-time gain of approximately $0.11 per share as a result of a settlement in a litigation proceeding. If such gain had not been recognized, the total return amounts shown for periods that include the year ended December 31, 2019 would have been lower.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Jeffrey Kilkenny (since 2020), Portfolio Manager

------

**Purchase and Sale of Fund Shares**

For Classes A and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, R-6, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Global Real Estate Securities Fund**

**Objective**

The Fund seeks to generate a total return.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **Inst.** | **R-3** | **R-4** | **R-5** | **R-6** |
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of <br> offering price)<br>| 5.50% |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage of the offering price <br> or NAV when Sales Load is paid, whichever is less)<br>| 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **Inst.** | **R-3** | **R-4** | **R-5** | **R-6** |
| Management Fees | 0.86% | 0.86% | 0.86% | 0.86% | 0.86% | 0.86% |
| Distribution and/or Service (12b-1) Fees | 0.25% | N/A | 0.25% | 0.10% | N/A | N/A |
| Other Expenses | 0.20% | 0.13% | 0.34% | 0.30% | 0.28% | 0.02% |
| **Total Annual Fund Operating Expenses** | **1.31%** | **0.99%** | **1.45%** | **1.26%** | **1.14%** | **0.88%** |
| Expense Reimbursement<sup>(1)</sup> <br>| N/A | (0.05)% | N/A | N/A | N/A | N/A |
| **Total Annual Fund Operating Expenses after Expense Reimbursement** | **1.31%** | **0.94%** | **1.45%** | **1.26%** | **1.14%** | **0.88%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.94% for Institutional Class shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $676 | $942 | $1229 | $2042 |
| **Institutional Class** | 96 | 310 | 542 | 1208 |
| **Class R-3** | 148 | 459 | 792 | 1735 |
| **Class R-4** | 128 | 400 | 692 | 1523 |
| **Class R-5** | 116 | 362 | 628 | 1386 |
| **Class R-6** | 90 | 281 | 488 | 1084 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 16.80% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of U.S. and non-U.S. companies principally engaged in the real estate industry at the time of purchase. For the Fund's investment policies, a real estate company has at least 50% of its assets, income, or profits derived from products or services related to the real estate industry. Real estate companies include real estate investment trusts ("REITs") and companies with substantial real estate holdings such as paper, lumber, hotel, and entertainment companies, as well as those whose products and services relate to the real estate industry, such as building supply manufacturers, mortgage lenders, and mortgage servicing companies. The Fund invests in equity securities regardless of market capitalization (small, medium or large). The Fund invests in value equity securities and growth equity securities.

The Fund invests a significant percentage of its portfolio in REITs and foreign REIT-like entities. REITs are pooled investment vehicles that invest in income producing real estate, real estate related loans, or other types of real estate interests. REITs in the U.S. are corporations or business trusts that are permitted to eliminate corporate-level federal income taxes by meeting certain requirements of the Internal Revenue Code. Some foreign countries have adopted REIT structures that are very similar to those in the U.S. Similarities include pass-through tax treatment and portfolio diversification. Other countries have REIT structures that are significantly different than the structure in the U.S., while some countries have not adopted a REIT-like structure at all.

Under normal market conditions, the Fund holds investments tied economically to at least 3 countries and invests a percentage of its net assets in securities of foreign issuers equal to at least the lesser of 40% or the percentage foreign issuers in FTSE EPRA/NAREIT Developed Markets Index minus 10%.

The Fund concentrates its investments (invest more than 25% of its net assets) in securities in the real estate industry.

**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.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Industry Concentration Risk.** A fund that concentrates investments in a particular industry or group of industries has greater exposure than other funds to market, economic, and other factors affecting that industry or group of industries.

**•** **Real Estate.** A fund concentrating in the real estate industry is subject to the risks associated with direct ownership of real estate, securities of companies in the real estate industry, and/or real estate investment trusts. These risks are explained more fully below in Real Estate Investment Trusts (REITs) Risk and Real Estate Securities Risk.

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

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

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

------

For periods prior to the inception date of Class R-6 shares (November 25, 2014) and Classes R-3, R-4, and R-5 shares (March 1, 2016), the performance shown in the table for these newer classes is that of the Fund's Institutional Class shares, adjusted to reflect the respective fees and expenses of each class. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares.

**Total Returns as of December 31**

![](globalresec.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q1 2019** | **14.95%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(25.65)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(31.07)%** | **(0.62)%** | **3.18%** |
| **Class A Return After Taxes on Distributions** | **(31.19)%** | **(1.45)%** | **2.00%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(18.30)%** | **(0.59)%** | **2.13%** |
| **Institutional Class Return Before Taxes** | **(26.73)%** | **0.91%** | **4.18%** |
| **Class R-3 Return Before Taxes** | **(27.16)%** | **0.38%** | **3.65%** |
| **Class R-4 Return Before Taxes** | **(26.99)%** | **0.60%** | **3.84%** |
| **Class R-5 Return Before Taxes** | **(26.89)%** | **0.71%** | **3.98%** |
| **Class R-6 Return Before Taxes** | **(26.73)%** | **0.97%** | **4.20%** |
| FTSE EPRA/NAREIT Developed Markets Index NTR (reflects withholding taxes on foreign <br> dividends, but no deduction for fees, expenses, or other taxes)<br>| (25.10)% | (0.23)% | 2.99% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor** 

Principal Global Investors, LLC

**Sub-Advisor and Portfolio Managers**

Principal Real Estate Investors, LLC

<sup>•</sup>

Simon Hedger (since 2007), Portfolio Manager

<sup>•</sup>

Anthony Kenkel (since 2010), Portfolio Manager

<sup>•</sup>

Kelly D. Rush (since 2007), Portfolio Manager

------

**Purchase and Sale of Fund Shares**

For Class A shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-3, R-4, R-5, R-6, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Government & High Quality Bond Fund**

**Objective**

The Fund seeks to provide a high level of current income consistent with safety and liquidity.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Sales Charge (Load) Imposed on Purchases (as a <br> percentage of offering price)<br>| 2.25% |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage of the <br> offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% | 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.48% | 0.48% | 0.48% | 0.48% | 0.48% | 0.48% | 0.48% |
| Distribution and/or Service (12b-1) Fees | 0.15% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.15% | 0.21% | 0.04% | 0.53% | 0.32% | 0.28% | 0.26% |
| Acquired Fund Fees and Expenses | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.79%** | **0.85%** | **0.53%** | **1.37%** | **1.06%** | **0.87%** | **0.75%** |
| Expense Reimbursement<sup>(1)</sup> <br>| N/A | N/A | 0.00% | (0.07)% | (0.07)% | (0.07)% | (0.07)% |
| **Total Annual Fund Operating Expenses after Expense** <br> **Reimbursement**<br>| **0.79%** | **0.85%** | **0.53%** | **1.30%** | **0.99%** | **0.80%** | **0.68%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.53% for Institutional Class, 1.29% for Class R-1, 0.98% for Class R-3, 0.79% for Class R-4, and 0.67% for Class R-5 shares. It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $304 | $472 | $654 | $1181 |
| **Class J** | 187 | 271 | 471 | 1049 |
| **Institutional Class** | 54 | 170 | 296 | 665 |
| **Class R-1** | 132 | 427 | 743 | 1640 |
| **Class R-3** | 101 | 330 | 578 | 1288 |
| **Class R-4** | 82 | 271 | 475 | 1066 |
| **Class R-5** | 69 | 233 | 410 | 924 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $87 | $271 | $471 | $1049 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 352.10% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in debt securities issued by the U.S. government, its agencies, or instrumentalities or debt securities that are rated, at the time of purchase, AAA by S&P Global Ratings ("S&P Global") or Aaa by Moody's Investors Service, Inc. ("Moody's") (if securities are rated differently by S&P Global and Moody's, the highest rating is used; or, if unrated, in the opinion of those selecting such investments, are of comparable quality), including, but not limited to, asset-backed securities ("ABS"), mortgage securities such as agency and non-agency collateralized mortgage obligations, and other obligations that are secured by mortgages or mortgage-backed securities ("MBS") (also referred to as securitized products). The Fund also invests in ABS and MBS that are rated lower than AAA by S&P Global or Aaa by Moody's (or of comparable quality), including collateralized mortgage obligations, and in other obligations that are secured by mortgages or MBS. The MBS in which the Fund invests include MBS trading in the to-be-announced ("TBA") markets.

Under normal circumstances, the Fund maintains an average portfolio duration that is within ±50% of the duration of the Bloomberg U.S. Agency Fixed Rate MBS Index, which as of January 31, 2023 was 6.27 years. The Fund is not managed to a particular maturity. The Fund's strategies may result in the active and frequent trading of the Fund's portfolio securities.

The Fund invests in derivatives, including Treasury futures and securities delivered in TBA transactions, to manage the fixed-income exposure. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index.

**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.

**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;&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.

**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.

**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.

**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.

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

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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). With respect to securities that are delivered in TBA transactions, there is a risk that the actual securities received by the Fund may be less favorable than what was anticipated when entering into the transaction.

**U.S. Government Securities Risk.** Yields available from U.S. government securities are generally lower than yields from many other fixed-income securities.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

------

**Total Returns as of December 31**

![](govhiqualbnd.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q1 2016** | **2.13%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q3 2022** | **(5.49)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(14.14)%** | **(1.61)%** | **(0.17)%** |
| **Class A Return After Taxes on Distributions** | **(14.68)%** | **(2.38)%** | **(1.23)%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(8.36)%** | **(1.50)%** | **(0.56)%** |
| **Class J Return Before Taxes** | **(13.02)%** | **(1.19)%** | **0.00%** |
| **Institutional Class Return Before Taxes** | **(11.88)%** | **(0.88)%** | **0.32%** |
| **Class R-1 Return Before Taxes** | **(12.55)%** | **(1.64)%** | **(0.44)%** |
| **Class R-3 Return Before Taxes** | **(12.27)%** | **(1.33)%** | **(0.13)%** |
| **Class R-4 Return Before Taxes** | **(12.11)%** | **(1.14)%** | **0.06%** |
| **Class R-5 Return Before Taxes** | **(11.99)%** | **(1.02)%** | **0.18%** |
| Bloomberg U.S. Agency Fixed Rate MBS Index (reflects no deduction for fees, expenses, or taxes) | (11.82)% | (0.53)% | 0.75% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Bryan C. Davis (since 2019), Portfolio Manager

<sup>•</sup>

Zach Gassmann (since 2019), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

------

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Government Money Market Fund**

**Objective**

The Fund seeks as high a level of current income as is considered consistent with preservation of principal and maintenance of liquidity.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

---

| | |
|:---|:---|
| **Shareholder Fees (fees paid directly from your investment):** | **None** |

---

**Annual Fund Operating Expenses**

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

---

| | | |
|:---|:---|:---|
|  | **Share Class** | **Share Class** |
|  | **Inst.** | **R-6** |
| Management Fees | 0.15% | 0.15% |
| Distribution and/or Service (12b-1) Fees | N/A | N/A |
| Other Expenses<sup>(1)</sup> <br>| 0.06% | 0.01% |
| Acquired Fund Fees and Expenses | 0.01% | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.22%** | **0.17%** |
| Fee Waiver and Expense Reimbursement<sup>(2),(3)</sup> <br>| (0.02)% | (0.02)% |
| **Total Annual Operating Expenses after Fee Waiver and Expense Reimbursement** | **0.20%** | **0.15%** |

---

<sup>(1)</sup>

Based on estimated amounts for the current fiscal year.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to reduce the Fund's management fees through the period ending February 29, 2024. The fee waiver will reduce the Fund's management fees in an amount equal to all Acquired Fund Fees and Expenses. It is expected that the fee waiver will continue through the period disclosed; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the fee waiver prior to the end of the period.

<sup>(3)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.20% for Institutional Class Shares. In addition, for Class R-6, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.00% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Institutional Class** | $20 | $69 | $122 | $278 |
| **Class R-6** | 15 | 53 | 94 | 215 |

---

**Principal Investment Strategies**

The Fund will invest at least 99.5% of its total assets in cash, government securities, and/or repurchase agreements that are collateralized fully by cash or government securities (government securities can include shares of other government money market funds). The Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in government securities and repurchase agreements that are collateralized by government securities. Specifically, the Fund will invest in U.S. treasury bills, bonds, and other obligations issued or guaranteed by the U.S. government or its agencies or instrumentalities (which will include instruments with variable or floating interest rates), as well as shares of other government money market funds. The Fund seeks to maintain a stable net asset value of $1.00 per share. The Fund maintains a dollar weighted average portfolio maturity of 60 days or less. As with all mutual funds, the value of the Fund's assets may rise or fall.

**Principal Risks**

You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. 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 Fund's sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time. The principal risks of investing in the Fund are listed below in alphabetical order and not in order of significance.

**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.

**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.

**Investment Company Securities Risk.** A fund that invests in another investment company (for example, another fund or an exchange-traded fund (or ETF)) 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.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

------

**Repurchase Agreement Risk.** If the other party to a repurchase agreement defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security and the market value of the security declines, the Fund may lose money.

**U.S. Government Securities Risk.** Yields available from U.S. government securities are generally lower than yields from many other fixed-income securities.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

For periods prior to the inception date of Class R-6 shares (December 12, 2022), the performance shown in the table for Class R-6 shares is that of the Fund's Institutional Class shares.

Life of Fund returns are measured from the date the Fund's shares were first sold (December 20, 2017).

**Total Returns as of December 31**

![](govmm.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q4 2022** | **0.86%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2022** | **0.00%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **Life of Fund** |
|  |  |  | **12/20/17** |
| **Institutional Class Return Before Taxes** | **1.45%** | **1.11%** | **1.11%** |
| **Class R-6 Return Before Taxes** | **1.46%** | **1.11%** | **1.11%** |
| Bloomberg U.S. Treasury Bellwethers 3 Month Index (reflects no deduction for fees, expenses, or <br> taxes)<br>| 1.51% | 1.28% | 1.28% |

---

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Erika Isley (since 2017), Portfolio Manager

<sup>•</sup>

Tracy Reeg (since 2017), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Institutional Class and Class R-6 shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**High Income Fund**

**Objective**

The Fund seeks high current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

---

| | |
|:---|:---|
| **Shareholder Fees (fees paid directly from your investment):** | **None** |

---

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
|  | **Share Class** |
|  | **Inst.** |
| Management Fees | 0.61% |
| Distribution and/or Service (12b-1) Fees | N/A |
| Other Expenses | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.62%** |
| Fee Waiver<sup>(1)</sup> <br>| (0.02)% |
| **Total Annual Fund Operating Expenses after Fee Waiver** | **0.60%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to waive a portion of the Fund's management fees through the period ending February 29, 2024. The fee waiver will reduce the Fund's management fees by 0.015% (expressed as a percent of average net assets on an annualized basis). It is expected that the fee waiver will continue through the period disclosed; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the fee waiver prior to the end of the period.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Institutional Class** | $61 | $197 | $344 | $772 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 48.10% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests primarily in below investment grade bonds and bank loans (sometimes called "high yield" or "junk"), which are rated, at the time of purchase, Ba1 or lower by Moody's Investors Service, Inc. ("Moody's") and BB+ or lower by S&P Global Ratings ("S&P Global") (if the bond or bank loan has been rated by only one of those agencies, that rating will determine whether it is below investment grade; if the bond or bank loan has not been rated by either of those agencies, those selecting such investments will determine whether it is of a quality comparable to those rated below investment grade). The Fund also invests in investment grade bank loans (also known as senior floating rate interests), securities of foreign issuers, and exchange-traded funds ("ETFs"). The Fund utilizes derivative strategies for managing fixed-income exposure. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. Specifically, the Fund invests in credit default swaps to increase or decrease, in an efficient manner, exposures to certain sectors or individual issuers.

In managing the Fund, Principal Global Investors, LLC ("PGI"), the Fund's investment advisor, allocates the Fund's assets among multiple sub-advisors that use differing approaches in making their investment decisions, which include actively managed and more passive investment strategies. With respect to the passive strategy, the Fund uses a sampling methodology to purchase securities with generally the same risk and return characteristics as the Bloomberg U.S. Corporate High Yield 2% Issuer Capped Index (the "Index") in an attempt to match or exceed the performance of the Index.

Under normal circumstances, the Fund maintains an average portfolio duration that is within ±25% of the duration of the Index, which as of January 31, 2023 was 3.97 years. The Fund is not managed to a particular maturity.

**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.

**Bank Loans Risk.** Changes in economic conditions are likely to cause issuers of bank loans (also known as senior floating rate interests) to be unable to meet their obligations. In addition, the value of the collateral securing the loan (if any) may decline, causing a loan to be substantially unsecured. Underlying credit agreements governing the bank loans, reliance on market makers, priority of repayment, and overall market volatility may harm the liquidity of loans.

**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.

**•** **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.

**•** **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.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**High Yield Securities Risk.** High yield fixed-income securities (commonly referred to as "junk bonds") are subject to greater credit quality risk than higher rated fixed-income securities and should be considered speculative.

**Investment Company Securities Risk.** A fund that invests in another investment company (for example, another fund or an exchange-traded fund (or ETF)) 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.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

------

**Total Returns as of December 31**

![](highinc.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **8.47%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(12.72)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Institutional Class Return Before Taxes** | **(10.97)%** | **1.39%** | **3.04%** |
| **Institutional Class Return After Taxes on Distributions** | **(13.20)%** | **(1.05)%** | **0.50%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(6.47)%** | **0.07%** | **1.23%** |
| Bloomberg U.S. Corporate High Yield 2% Issuer Capped Index (reflects no deduction for fees, <br> expenses, or taxes)<br>| (11.19)% | 2.30% | 4.03% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2007), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2007), Portfolio Manager

**Sub-Advisors**

Insight North America LLC

Polen Capital Credit, LLC (f/k/a DDJ Capital Management, LLC)

Post Advisory Group, LLC

**Purchase and Sale of Fund Shares**

For Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**High Yield Fund**

**Objective**

The Fund seeks to provide a high level of current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **Inst.** | **R-6** |
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) | 3.75% |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage of the offering price or NAV when Sales <br> Load is paid, whichever is less)<br>| 1.00% | 1.00% |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **Inst.** | **R-6** |
| Management Fees | 0.51% | 0.51% | 0.51% | 0.51% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 1.00% | N/A | N/A |
| Other Expenses | 0.15% | 0.18% | 0.12% | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.91%** | **1.69%** | **0.63%** | **0.52%** |
| Expense Reimbursement<sup>(1)</sup> <br>| N/A | N/A | (0.02)% | N/A |
| **Total Annual Fund Operating Expenses after Expense Reimbursement** | **0.91%** | **1.69%** | **0.61%** | **0.52%** |

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<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expense and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.61% for Institutional Class shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end of those periods. The Example assumes conversion of the Class C shares to Class A shares after the eighth year. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $464 | $654 | $860 | $1453 |
| **Class C** | 272 | 533 | 918 | 1791 |
| **Institutional Class** | 62 | 200 | 349 | 784 |
| **Class R-6** | 53 | 167 | 291 | 653 |

---

With respect to Class C shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class C** | $172 | $533 | $918 | $1791 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 33.10% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in below investment grade bonds and bank loans (sometimes called "high yield" or "junk"), which are rated, at the time of purchase, Ba1 or lower by Moody's Investors Service, Inc. ("Moody's") and BB+ or lower by S&P Global Ratings ("S&P Global") (if the bond or bank loan has been rated by only one of those agencies, that rating will determine whether it is below investment grade; if the bond or bank loan has not been rated by either of those agencies, those selecting such investments will determine whether it is of a quality comparable to those rated below investment grade). The Fund also invests in investment grade bank loans (also known as senior floating rate interests) and securities of foreign issuers. Under normal circumstances, the Fund maintains an average portfolio duration that is within ±20% of the duration of the Bloomberg U.S. Corporate High Yield 2% Issuer Capped Index, which as of January 31, 2023 was 3.97 years. The Fund is not managed to a particular maturity.

**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.

**Bank Loans Risk.** Changes in economic conditions are likely to cause issuers of bank loans (also known as senior floating rate interests) to be unable to meet their obligations. In addition, the value of the collateral securing the loan (if any) may decline, causing a loan to be substantially unsecured. Underlying credit agreements governing the bank loans, reliance on market makers, priority of repayment, and overall market volatility may harm the liquidity of loans.

**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.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

------

**High Yield Securities Risk.** High yield fixed-income securities (commonly referred to as "junk bonds") are subject to greater credit quality risk than higher rated fixed-income securities and should be considered speculative.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

For periods prior to the inception date of Class R-6 shares (November 22, 2016), the performance shown in the table for Class R-6 shares is that of the Fund's Class A shares, adjusted to reflect the fees and expenses of Class R-6 shares. However, where the adjustment for fees and expenses results in performance for Class R-6 shares that is higher than the historical performance of the Class A shares, the historical performance of the Class A shares is used (without respect to sales charges, which are not applicable to Class R-6). These adjustments result in performance for such periods that is no higher than the historical performance of the Class A shares.

**Total Returns as of December 31**

![](highyld.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **8.73%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(12.01)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(12.03)%** | **1.21%** | **3.35%** |
| **Class A Return After Taxes on Distributions** | **(13.88)%** | **(0.94)%** | **0.90%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(7.10)%** | **0.03%** | **1.48%** |
| **Class C Return Before Taxes** | **(10.30)%** | **1.23%** | **3.14%** |
| **Institutional Class Return Before Taxes** | **(8.34)%** | **2.28%** | **4.05%** |
| **Class R-6 Return Before Taxes** | **(8.26)%** | **2.40%** | **3.99%** |
| Bloomberg U.S. Corporate High Yield 2% Issuer Capped Index (reflects no deduction for fees, <br> expenses, or taxes)<br>| (11.19)% | 2.30% | 4.03% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Mark P. Denkinger (since 2009), Portfolio Manager

<sup>•</sup>

Josh Rank (since 2015), Portfolio Manager

<sup>•</sup>

Darrin E. Smith (since 2009), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A and C shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Class R-6 and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Class C shares are subject to an 8-year automatic conversion plan whereby Class C shares held for eight years after purchase will automatically convert to Class A shares of the same Fund.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Inflation Protection Fund**

**Objective**

The Fund seeks to provide current income and real (after inflation) total returns.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Deferred Sales Charge (Load) (as a percentage of the offering price <br> or NAV when Sales Load is paid, whichever is less)<br>| 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.38% | 0.38% | 0.38% | 0.38% | 0.38% | 0.38% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.22% | 0.01% | 0.54% | 0.33% | 0.29% | 0.27% |
| **Total Annual Fund Operating Expenses** | **0.75%** | **0.39%** | **1.27%** | **0.96%** | **0.77%** | **0.65%** |

---

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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** | **5 years** | **10 years** |
| **Class J** | $177 | $240 | $417 | $930 |
| **Institutional Class** | 40 | 125 | 219 | 493 |
| **Class R-1** | 129 | 403 | 697 | 1534 |
| **Class R-3** | 98 | 306 | 531 | 1178 |
| **Class R-4** | 79 | 246 | 428 | 954 |
| **Class R-5** | 66 | 208 | 362 | 810 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $77 | $240 | $417 | $930 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 108.30% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund invests primarily in inflation-indexed bonds of varying maturities issued by the U.S. and non-U.S. governments, their agencies, or instrumentalities, and U.S. and non-U.S. corporations. Inflation-indexed bonds are fixed-income securities that are structured to provide protection against inflation. The value of the bond's principal or the interest income paid on the bond is adjusted to track changes in an official inflation measure. The U.S. Treasury uses the Consumer Price Index for Urban Consumers as the inflation measure. Inflation-indexed bonds issued by a foreign government are generally adjusted to reflect a comparable inflation index, calculated by that government. The Fund also invests in foreign securities, U.S. Treasuries, and agency securities. The Fund utilizes derivative strategies (specifically, futures, swaps, and options) for purposes of managing the risk profile of the Fund. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index.

Under normal circumstances, the Fund maintains an average portfolio duration that is within ±20% of the duration of the Bloomberg U.S. Treasury Inflation Protected Securities ("TIPS") Index, which as of January 31, 2023 was 6.88 years. The Fund is not managed to a particular maturity. 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.

**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.

**•** **Futures and Swaps.** These derivative instruments 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 instruments; possible lack of a liquid secondary market for an instrument and the resulting inability to close it when desired; counterparty risk; and if the fund has insufficient cash, it may have to sell securities from its portfolio to meet any applicable daily variation margin requirements.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**U.S. Government Securities Risk.** Yields available from U.S. government securities are generally lower than yields from many other fixed-income securities.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

------

**Total Returns as of December 31**

![](inflprot.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **4.72%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q2 2013** | **(6.64)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Institutional Class Return Before Taxes** | **(12.08)%** | **1.73%** | **0.76%** |
| **Institutional Class Return After Taxes on Distributions** | **(14.23)%** | **0.24%** | **(0.25)%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(7.15)%** | **0.78%** | **0.19%** |
| **Class J Return Before Taxes** | **(13.15)%** | **1.16%** | **0.15%** |
| **Class R-1 Return Before Taxes** | **(12.77)%** | **0.85%** | **(0.11)%** |
| **Class R-3 Return Before Taxes** | **(12.48)%** | **1.18%** | **0.20%** |
| **Class R-4 Return Before Taxes** | **(12.37)%** | **1.37%** | **0.39%** |
| **Class R-5 Return Before Taxes** | **(12.25)%** | **1.48%** | **0.49%** |
| Bloomberg U.S. Treasury TIPS Index (reflects no deduction for fees, expenses, or taxes) | (11.85)% | 2.11% | 1.12% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor** 

Principal Global Investors, LLC

**Sub-Advisor and Portfolio Manager**

BlackRock Financial Management, Inc.

<sup>•</sup>

Akiva Dickstein (since 2018), Managing Director

<sup>•</sup>

David Rogal (since 2022), Managing Director

**Sub-Sub-Advisor and Portfolio Manager**

BlackRock International Limited

<sup>•</sup>

Chris Allen (since 2017), Managing Director

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

------

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**International Fund I**

**Objective**

The Fund seeks long-term growth of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

---

| | |
|:---|:---|
| **Shareholder Fees (fees paid directly from your investment):** | **None** |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Management Fees<sup>(1)</sup> <br>| 0.65% | 0.65% | 0.65% | 0.65% | 0.65% | 0.65% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.35% | 0.25% | 0.10% | N/A | N/A |
| Other Expenses | 0.17% | 0.57% | 0.36% | 0.32% | 0.30% | 0.05% |
| **Total Annual Fund Operating Expenses** | **0.82%** | **1.57%** | **1.26%** | **1.07%** | **0.95%** | **0.70%** |
| Expense Reimbursement<sup>(2)</sup> <br>| (0.03)% | N/A | N/A | N/A | N/A | (0.01)% |
| **Total Annual Fund Operating Expenses after Expense Reimbursement** | **0.79%** | **1.57%** | **1.26%** | **1.07%** | **0.95%** | **0.69%** |

---

<sup>(1)</sup>

Fees have been restated to reflect current fees.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.79% for Institutional Class shares. In addition, for Class R-6, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.04% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Institutional Class** | $81 | $259 | $452 | $1011 |
| **Class R-1** | 160 | 496 | 855 | 1867 |
| **Class R-3** | 128 | 400 | 692 | 1523 |
| **Class R-4** | 109 | 340 | 590 | 1306 |
| **Class R-5** | 97 | 303 | 525 | 1166 |
| **Class R-6** | 70 | 223 | 389 | 870 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 60.50% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund invests primarily in foreign equity securities, including emerging market securities. The Fund typically invests in foreign securities of at least ten countries. The Fund invests in equity securities of small, medium, and large market capitalization companies.

The Fund invests in value equity securities, an investment strategy that emphasizes buying equity securities that appear to be undervalued. The Fund also invests in growth equity securities, an investment strategy that emphasizes buying equity securities of companies whose potential for growth of capital and earnings is expected to be above average.

**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.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**•** **China Investment Risk.** The Fund invests a significant portion of its assets in securities of issuers located or operating in China. Investing in China involves certain heightened risks and considerations, including, among others: frequent trading suspensions and government interventions (including by nationalizing assets); currency exchange rate fluctuations or blockages; limits on using brokers and on foreign ownership; different financial reporting standards; higher dependence on exports and international trade; political and social instability; infectious disease outbreaks; regional and global conflicts; increased trade tariffs, embargoes, and other trade limitations; custody and other risks associated with programs used to access Chinese securities; and uncertainties in tax rules that could result in unexpected tax liabilities for the Fund. Significant portions of the Chinese securities markets may become rapidly illiquid, as Chinese issuers have the ability to suspend the trading of their equity securities. Moreover, actions by the U.S. government, such as delisting of certain Chinese companies from U.S. securities exchanges or otherwise restricting their operations in the U.S., may negatively impact the value of such securities held by the Fund.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

For periods prior to the inception date of Class R-6 shares (November 22, 2016), the performance shown in the table for Class R-6 shares is that of the Fund's Institutional Class shares, adjusted to reflect the fees and expenses of Class R-6 shares. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares.

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**Total Returns as of December 31**

![](intnl.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **22.05%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(22.85)%** |

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Institutional Class Return Before Taxes** | **(25.27)%** | **(0.65)%** | **4.68%** |
| **Institutional Class Return After Taxes on Distributions** | **(26.11)%** | **(2.13)%** | **3.74%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(14.91)%** | **(0.31)%** | **3.82%** |
| **Class R-1 Return Before Taxes** | **(25.81)%** | **(1.43)%** | **3.83%** |
| **Class R-3 Return Before Taxes** | **(25.65)%** | **(1.14)%** | **4.14%** |
| **Class R-4 Return Before Taxes** | **(25.45)%** | **(0.93)%** | **4.35%** |
| **Class R-5 Return Before Taxes** | **(25.36)%** | **(0.81)%** | **4.46%** |
| **Class R-6 Return Before Taxes** | **(25.20)%** | **(0.55)%** | **4.70%** |
| MSCI ACWI Ex USA Index NTR (reflects withholding taxes on foreign dividends, but no deduction <br> for fees, expenses, or other taxes)<br>| (16.01)% | 0.88% | 3.80% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor** 

Principal Global Investors, LLC

**Sub-Advisor and Portfolio Managers**

Origin Asset Management LLP

<sup>•</sup>

Chris Carter (since 2014), Partner

<sup>•</sup>

Tarlock Randhawa (since 2014), Managing Partner

<sup>•</sup>

Nerys Weir (since 2021), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes R-1, R-3, R-4, R-5, R-6, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

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Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

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**LargeCap Growth Fund I**

**Objective**

The Fund seeks long-term growth of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Maximum Sales Charge (Load) Imposed on Purchases <br> (as a percentage of offering price)<br>| 5.50% |  |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage <br> of the offering price or NAV when Sales Load is paid, <br> whichever is less)<br>| 1.00% | 1.00% |  |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Management Fees | 0.60% | 0.60% | 0.60% | 0.60% | 0.60% | 0.60% | 0.60% | 0.60% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A | N/A |
| Other Expenses | 0.13% | 0.08% | 0.10% | 0.54% | 0.33% | 0.29% | 0.27% | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.98%** | **0.83%** | **0.70%** | **1.49%** | **1.18%** | **0.99%** | **0.87%** | **0.61%** |
| Fee Waiver<sup>(1)</sup> <br>| (0.02)% | (0.02)% | (0.02)% | (0.02)% | (0.02)% | (0.02)% | (0.02)% | (0.02)% |
| **Total Annual Fund Operating Expenses after Fee** <br> **Waiver**<br>| **0.96%** | **0.81%** | **0.68%** | **1.47%** | **1.16%** | **0.97%** | **0.85%** | **0.59%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to waive a portion of the Fund's management fees through the period ending February 29, 2024. The fee waiver will reduce the Fund's management fees by 0.016% (expressed as a percent of average net assets on an annualized basis). It is expected that the fee waiver will continue through the period disclosed; however, Principal Funds, Inc. and PGI, the parties to the agreement may mutually agree to terminate the fee waiver prior to the end of the period.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $643 | $843 | $1060 | $1684 |
| **Class J** | 183 | 263 | 459 | 1023 |
| **Institutional Class** | 69 | 222 | 388 | 869 |
| **Class R-1** | 150 | 469 | 811 | 1778 |
| **Class R-3** | 118 | 373 | 647 | 1430 |
| **Class R-4** | 99 | 313 | 545 | 1211 |
| **Class R-5** | 87 | 276 | 480 | 1071 |
| **Class R-6** | 60 | 193 | 338 | 760 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $83 | $263 | $459 | $1023 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 28.40% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies with large market capitalizations at the time of purchase. For this Fund, companies with large market capitalizations are those with market capitalizations within the range of companies comprising the Russell 1000<sup>®</sup> Growth Index (as of January 31, 2023, this range was between approximately $852.4 million and $2.3 trillion). The Fund invests in growth equity securities, an investment strategy that emphasizes buying equity securities of companies whose potential for growth of capital and earnings is expected to be above average. The Fund invested significantly in industries within the consumer discretionary, health care, and information technology sectors as of January 31, 2023.

The Fund is primarily actively managed by the sub-advisors. In addition, Principal Global Investors, LLC may invest up to 30% of the Fund's assets using an index sampling strategy designed to match the performance of the Russell 1000<sup>®</sup> Growth Index.

The Fund is considered non-diversified, which means it can invest a higher percentage of assets in securities of individual issuers than a diversified fund. As a result, changes in the value of a single investment could cause greater fluctuations in the Fund's share price than would occur in a more diversified fund.

**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.

**Consumer Goods and Consumer Services Sector Risk.** The Fund invests in securities of companies in the consumer services and consumers goods sectors. Such companies are particularly subject to risks related to performance of the overall global economy, interest rates, competition, government regulation, and consumer confidence. Success depends

------

heavily on disposable income and consumer spending, and is also impacted by consumer interest and marketing campaigns. Companies in these sectors may be subject to severe competition, which may have an adverse impact on their profitability. Changes in demographics and consumer tastes can affect the demand for, and success of, consumer goods and services in the marketplace.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**Healthcare Sector Risk.** A fund that invests in securities of companies in the healthcare sector (which includes companies involved in several industries, including biotechnology research and production, drugs and pharmaceuticals and health care facilities and services) is subject to the direct risks of investing in such companies. These companies are subject to extensive competition (due to, among others, generic drug sales or the loss of patent protection), product liability litigation and increased government regulation. Research and development costs of bringing new drugs to market are substantial, and there is no guarantee that a proposed product will ever come to market. Such companies are heavily dependent on patent and intellectual property rights, the loss or impairment of which may adversely affect profitability. Healthcare facility operators may be affected by the demand for services, efforts by government or insurers to limit rates, restriction of government financial assistance and competition from other providers.

**Information Technology Sector Risk.** Companies in the information technology sector may face dramatic and often unpredictable changes in growth rates and are particularly vulnerable to changes in technology product cycles, product obsolescence, government regulation, and competition, both domestically and internationally. Such companies are heavily dependent on patent and intellectual property rights, the loss or impairment of which may adversely affect profitability.

**Non-Diversification Risk.** A non-diversified fund may invest a high percentage of its assets in the securities of a small number of issuers and is more likely than diversified funds to be significantly affected by a specific security's poor performance.

**Passive Strategy Risk.** A portion of the Fund seeks to match the performance of a specified index. However, the correlation between the performance of this portion of the fund and index performance may be affected by many factors, such as fund expenses, the timing of cash flows into and out of the fund, changes in securities markets, and changes in the composition of the index.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

Using the historical performance of the Fund's Institutional Class shares, adjusted as described below, the bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

For periods prior to the inception date of Class A shares (March 1, 2013) and Class R-6 shares (November 25, 2014), the performance shown in the bar chart for Class A shares and the table for Classes A and R-6 shares is that of the Fund's Institutional Class shares, adjusted to reflect the respective fees and expenses of each class. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares.

------

**Total Returns as of December 31**

![](lcgrowth.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **27.72%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q2 2022** | **(21.61)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(37.87)%** | **7.24%** | **11.57%** |
| **Class A Return After Taxes on Distributions** | **(39.50)%** | **4.56%** | **9.17%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(21.26)%** | **5.68%** | **9.22%** |
| **Class J Return Before Taxes** | **(34.71)%** | **8.68%** | **12.46%** |
| **Institutional Class Return Before Taxes** | **(34.05)%** | **8.83%** | **12.72%** |
| **Class R-1 Return Before Taxes** | **(34.61)%** | **7.96%** | **11.78%** |
| **Class R-3 Return Before Taxes** | **(34.35)%** | **8.30%** | **12.14%** |
| **Class R-4 Return Before Taxes** | **(34.25)%** | **8.50%** | **12.35%** |
| **Class R-5 Return Before Taxes** | **(34.17)%** | **8.64%** | **12.49%** |
| **Class R-6 Return Before Taxes** | **(33.99)%** | **8.92%** | **12.76%** |
| Russell 1000 Growth Index (reflects no deduction for fees, expenses, or taxes) | (29.15)% | 10.96% | 14.10% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2009), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2009), Portfolio Manager

**Sub-Advisors**

Brown Advisory, LLC

T. Rowe Price Associates, Inc.

**Purchase and Sale of Fund Shares**

For Classes A and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

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For Classes R-1, R-3, R-4, R-5, R-6, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**LargeCap S&P 500 Index Fund**

**SHARE CLASS CONVERSION NOTICE**: On December 13, 2022, the Fund's Board of Directors approved the conversion of the Fund's Class C shares into Class A shares. Following the close of business on May 19, 2023, Class C shares of the Fund will automatically convert into Class A shares of the Fund on the basis of the share classes' relative net asset values on such date. The conversion will not result in the imposition of a sales charge or any other charge. As a result of the conversion, the affected shareholders will be in a better position with respect to expenses, as expenses are lower for Class A shares than for the current Class C shares. The Fund expects these share class conversions will not constitute taxable sales or exchanges to shareholders. Effective as of the close of the New York Stock Exchange on March 24, 2023, Class C shares will no longer be available for purchase except in limited circumstances.

*On or about May 19, 2023, delete references to Class C shares of this Fund, including information regarding the conversion plan, from the Prospectus.* 

**Objective**

The Fund seeks long-term growth of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Sales Charge (Load) Imposed on Purchases <br> (as a percentage of offering price)<br>| 1.50% |  |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage <br> of the offering price or NAV when Sales Load is paid, <br> whichever is less)<br>| 0.25% | 1.00% | 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees<sup>(1)</sup> <br>| 0.14% | 0.14% | 0.14% | 0.14% | 0.14% | 0.14% | 0.14% | 0.14% |
| Distribution and/or Service (12b-1) Fees | 0.15% | 1.00% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.10% | 0.15% | 0.07% | 0.02% | 0.53% | 0.32% | 0.28% | 0.26% |
| **Total Annual Fund Operating Expenses** | **0.39%** | **1.29%** | **0.36%** | **0.16%** | **1.02%** | **0.71%** | **0.52%** | **0.40%** |
| Expense Reimbursement<sup>(2)</sup> <br>| N/A | 0.00% | N/A | N/A | N/A | N/A | N/A | N/A |
| **Total Annual Fund Operating Expenses after Expense** <br> **Reimbursement**<br>| **0.39%** | **1.29%** | **0.36%** | **0.16%** | **1.02%** | **0.71%** | **0.52%** | **0.40%** |

---

<sup>(1)</sup>

Fees have been restated to reflect current fees.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 1.30% for Class C shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end of those periods. The Example assumes conversion of the Class C shares to Class A shares after the eighth year. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $189 | $273 | $365 | $635 |
| **Class C** | 231 | 409 | 708 | 1308 |
| **Class J** | 137 | 116 | 202 | 456 |
| **Institutional Class** | 16 | 52 | 90 | 205 |
| **Class R-1** | 104 | 325 | 563 | 1248 |
| **Class R-3** | 73 | 227 | 395 | 883 |
| **Class R-4** | 53 | 167 | 291 | 653 |
| **Class R-5** | 41 | 128 | 224 | 505 |

---

With respect to Classes C and J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class C** | $131 | $409 | $708 | $1308 |
| **Class J** | 37 | 116 | 202 | 456 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 3.70% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies that compose the Standard & Poor's ("S&P") 500 Index (the "Index") at the time of purchase. The Index is designed to represent U.S. equities with risk/return characteristics of the large cap universe. As of January 31, 2023, the market capitalization range of the companies comprising the Index was between approximately $4.0 billion and $2.3 trillion. Each component stock of the Index is weighted in proportion to its total market value. The Index is balanced quarterly.

The Fund employs a passive investment approach designed to attempt to track the performance of the Index. In seeking its objective, the Fund typically employs a replication strategy, which involves investing in all the securities that make up the Index, in the same proportions as the Index.

The Fund uses derivative strategies and invests in exchange-traded funds ("ETFs"). A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. Specifically, the Fund invests in index futures and equity ETFs on a daily basis to gain exposure to the Index in an effort to minimize tracking error relative to the benchmark.

The Fund will not concentrate (i.e., invest more than 25% of its assets) its investments in a particular industry except to the extent the Index is so concentrated. As of January 31, 2023, the Index was not concentrated in any industry.

**Note**: "Standard & Poor's 500" and "S&P 500" are trademarks of S&P Global and have been licensed by Principal. The Fund is not sponsored, endorsed, sold, or promoted by S&P Global, and S&P Global makes no representation regarding the advisability of investing in the Fund.

------

**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.

**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.

**•** **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.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**Industry Concentration Risk.** A fund that concentrates investments in a particular industry or group of industries has greater exposure than other funds to market, economic, and other factors affecting that industry or group of industries.

**Investment Company Securities Risk.** A fund that invests in another investment company (for example, another fund or an exchange-traded fund (or ETF)) 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.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

------

**Total Returns as of December 31**

![](lcsp500.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **20.38%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(19.67)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(19.65)%** | **8.62%** | **11.87%** |
| **Class A Return After Taxes on Distributions** | **(20.16)%** | **6.92%** | **10.61%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(11.27)%** | **6.71%** | **9.73%** |
| **Class C Return Before Taxes** | **(19.95)%** | **8.01%** | **11.30%** |
| **Class J Return Before Taxes** | **(19.21)%** | **9.02%** | **12.10%** |
| **Institutional Class Return Before Taxes** | **(18.23)%** | **9.23%** | **12.36%** |
| **Class R-1 Return Before Taxes** | **(18.92)%** | **8.30%** | **11.39%** |
| **Class R-3 Return Before Taxes** | **(18.69)%** | **8.64%** | **11.74%** |
| **Class R-4 Return Before Taxes** | **(18.54)%** | **8.84%** | **11.95%** |
| **Class R-5 Return Before Taxes** | **(18.43)%** | **8.97%** | **12.09%** |
| S&P 500 Index (reflects no deduction for fees, expenses, or taxes) | (18.12)% | 9.43% | 12.56% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Jeffrey A. Schwarte (since 2016), Portfolio Manager

<sup>•</sup>

Aaron J. Siebel (since 2018), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A, C, and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

------

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

Class C shares are subject to an 8-year automatic conversion plan whereby Class C shares held for eight years after purchase will automatically convert to Class A shares of the same Fund.

Effective as of the close of the New York Stock Exchange on March 24, 2023, Class C shares will no longer be available for purchase except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**LargeCap Value Fund III**

**Objective**

The Fund seeks long-term growth of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Deferred Sales Charge (Load) (as a percentage of the offering price <br> or NAV when Sales Load is paid, whichever is less)<br>| 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.75% | 0.75% | 0.75% | 0.75% | 0.75% | 0.75% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.16% | 0.02% | 0.54% | 0.33% | 0.29% | 0.27% |
| **Total Annual Fund Operating Expenses** | **1.06%** | **0.77%** | **1.64%** | **1.33%** | **1.14%** | **1.02%** |
| Fee Waiver<sup>(1)</sup> <br>| (0.07)% | (0.07)% | (0.07)% | (0.07)% | (0.07)% | (0.07)% |
| **Total Annual Fund Operating Expenses after Fee Waiver** | **0.99%** | **0.70%** | **1.57%** | **1.26%** | **1.07%** | **0.95%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to waive a portion of the Fund's management fees through the period ending February 29, 2024. The fee waiver will reduce the Fund's management fees by 0.065% (expressed as a percent of average net assets on an annualized basis). It is expected that the fee waiver will continue through the period disclosed; however, Principal Funds, Inc. and PGI, the parties to the agreement may mutually agree to terminate the fee waiver prior to the end of the period.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $201 | $330 | $578 | $1288 |
| **Institutional Class** | 72 | 239 | 421 | 948 |
| **Class R-1** | 160 | 510 | 885 | 1938 |
| **Class R-3** | 128 | 415 | 722 | 1595 |
| **Class R-4** | 109 | 355 | 621 | 1380 |
| **Class R-5** | 97 | 318 | 556 | 1241 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $101 | $330 | $578 | $1288 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 42.60% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in companies with large market capitalizations at the time of purchase. For this Fund, companies with large market capitalizations are those with market capitalizations within the range of companies comprising the Russell 1000<sup>®</sup> Value Index (as of January 31, 2023, this range was between approximately $430.1 million and $1.3 trillion). The Fund invests in value equity securities, an investment strategy that emphasizes buying equity securities that appear to be undervalued.

The Fund is primarily actively managed by the sub-advisors. In addition, Principal Global Investors, LLC may invest up to 30% of the Fund's assets using an index sampling strategy designed to match the performance of the Russell 1000<sup>®</sup> Value Index.

**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.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**Passive Strategy Risk.** A portion of the Fund seeks to match the performance of a specified index. However, the correlation between the performance of this portion of the fund and index performance may be affected by many factors, such as fund expenses, the timing of cash flows into and out of the fund, changes in securities markets, and changes in the composition of the index.

------

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

**Total Returns as of December 31**

![](lcvalueiii.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q4 2020** | **16.32%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(26.91)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Institutional Class Return Before Taxes** | **(5.02)%** | **7.72%** | **10.78%** |
| **Institutional Class Return After Taxes on Distributions** | **(7.15)%** | **5.81%** | **9.22%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(1.49)%** | **5.81%** | **8.60%** |
| **Class J Return Before Taxes** | **(6.16)%** | **7.39%** | **10.41%** |
| **Class R-1 Return Before Taxes** | **(5.83)%** | **6.79%** | **9.81%** |
| **Class R-3 Return Before Taxes** | **(5.61)%** | **7.10%** | **10.15%** |
| **Class R-4 Return Before Taxes** | **(5.37)%** | **7.31%** | **10.37%** |
| **Class R-5 Return Before Taxes** | **(5.25)%** | **7.44%** | **10.49%** |
| Russell 1000 Value Index (reflects no deduction for fees, expenses, or taxes) | (7.54)% | 6.67% | 10.29% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

------

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2009), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2009), Portfolio Manager

**Sub-Advisors**

Barrow, Hanley, Mewhinney & Strauss, LLC

Westwood Management Corp.

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**MidCap Fund**

**Objective**

The Fund seeks long-term growth of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Maximum Sales Charge (Load) Imposed on <br> Purchases (as a percentage of offering price)<br>| 5.50% |  |  |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a <br> percentage of the offering price or NAV when <br> Sales Load is paid, whichever is less)<br>| 1.00% | 1.00% | 1.00% |  |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Management Fees<sup>(1)</sup> <br>| 0.58% | 0.58% | 0.58% | 0.58% | 0.58% | 0.58% | 0.58% | 0.58% | 0.58% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 1.00% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A | N/A |
| Other Expenses | 0.11% | 0.14% | 0.08% | 0.09% | 0.53% | 0.32% | 0.28% | 0.26% | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.94%** | **1.72%** | **0.81%** | **0.67%** | **1.46%** | **1.15%** | **0.96%** | **0.84%** | **0.59%** |

---

<sup>(1)</sup>

Fees have been restated to reflect current fees.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end of those periods. The Example assumes conversion of the Class C shares to Class A shares after the eighth year. 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** | **5 years** | **10 years** |
| **Class A** | $641 | $833 | $1041 | $1641 |
| **Class C** | 275 | 542 | 933 | 1823 |
| **Class J** | 183 | 259 | 450 | 1002 |
| **Institutional Class** | 68 | 214 | 373 | 835 |
| **Class R-1** | 149 | 462 | 797 | 1746 |
| **Class R-3** | 117 | 365 | 633 | 1398 |
| **Class R-4** | 98 | 306 | 531 | 1178 |
| **Class R-5** | 86 | 268 | 466 | 1037 |
| **Class R-6** | 60 | 189 | 329 | 738 |

---

With respect to Classes C and J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class C** | $175 | $542 | $933 | $1823 |
| **Class J** | 83 | 259 | 450 | 1002 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 14.10% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies with medium market capitalizations at the time of purchase. For this Fund, companies with medium market capitalizations are those with market capitalizations within the range of companies comprising the Russell MidCap<sup>®</sup> Index (as of January 31, 2023, this range was between approximately $430.1 million and $54.2 billion). The Fund also invests in foreign 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.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

------

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

For periods prior to the inception date of Class R-6 shares (November 22, 2016), the performance shown in the table for Class R-6 shares is that of the Fund's Class R-3 shares, adjusted to reflect the fees and expenses of Class R-6 shares. However, where the adjustment for fees and expenses results in performance for Class R-6 shares that is higher than the historical performance of the Class R-3 shares, the historical performance of the Class R-3 shares is used. These adjustments result in performance for such periods that is no higher than the historical performance of the Class R-3 shares.

**Total Returns as of December 31**

![](midcap.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **24.72%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(23.89)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(27.58)%** | **7.19%** | **11.39%** |
| **Class A Return After Taxes on Distributions** | **(28.11)%** | **5.78%** | **10.17%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(15.92)%** | **5.54%** | **9.23%** |
| **Class C Return Before Taxes** | **(24.73)%** | **7.61%** | **11.36%** |
| **Class J Return Before Taxes** | **(23.99)%** | **8.58%** | **12.18%** |
| **Institutional Class Return Before Taxes** | **(23.18)%** | **8.71%** | **12.35%** |
| **Class R-1 Return Before Taxes** | **(23.78)%** | **7.86%** | **11.47%** |
| **Class R-3 Return Before Taxes** | **(23.55)%** | **8.20%** | **11.82%** |
| **Class R-4 Return Before Taxes** | **(23.39)%** | **8.41%** | **12.02%** |
| **Class R-5 Return Before Taxes** | **(23.28)%** | **8.54%** | **12.16%** |
| **Class R-6 Return Before Taxes** | **(23.11)%** | **8.81%** | **12.20%** |
| Russell MidCap Index (reflects no deduction for fees, expenses, or taxes) | (17.33)% | 7.10% | 10.96% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

&nbsp;&nbsp;&nbsp;&nbsp;K. William Nolin (since 2000), Portfolio Manager

<sup>•</sup>

Tom Rozycki (since 2013), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A, C, and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, R-6, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

For retail investors (i.e., non-employer sponsored retirement plan investors), effective as of the close of the New York Stock Exchange on June 14, 2013, and for employer-sponsored retirement plan investors, effective as of the close of the New York Stock Exchange on August 15, 2013, the MidCap Fund is no longer available for purchases from new investors, except in limited circumstances.

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

Class C shares are subject to an 8-year automatic conversion plan whereby Class C shares held for eight years after purchase will automatically convert to Class A shares of the same Fund.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**MidCap Growth Fund**

**Objective**

The Fund seeks long-term growth of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is paid, <br> whichever is less)<br>| 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.65% | 0.65% | 0.65% | 0.65% | 0.65% | 0.65% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.12% | 0.12% | 0.54% | 0.33% | 0.29% | 0.27% |
| Acquired Fund Fees and Expenses | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.93%** | **0.78%** | **1.55%** | **1.24%** | **1.05%** | **0.93%** |
| Expense Reimbursement<sup>(1)</sup> <br>| N/A | (0.02)% | N/A | N/A | N/A | N/A |
| **Total Annual Fund Operating Expenses after Expense Reimbursement** | **0.93%** | **0.76%** | **1.55%** | **1.24%** | **1.05%** | **0.93%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.75% for Institutional Class shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $195 | $296 | $515 | $1143 |
| **Institutional Class** | 78 | 247 | 431 | 964 |
| **Class R-1** | 158 | 490 | 845 | 1845 |
| **Class R-3** | 126 | 393 | 681 | 1500 |
| **Class R-4** | 107 | 334 | 579 | 1283 |
| **Class R-5** | 95 | 296 | 515 | 1143 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $95 | $296 | $515 | $1143 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 165.50% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies with medium market capitalizations at the time of purchase. For this Fund, companies with medium market capitalizations are those with market capitalizations within the range of companies comprising the Russell MidCap<sup>®</sup> Growth Index (as of January 31, 2023, this range was between approximately $852.4 million and $54.2 billion). The Fund invests in growth equity securities, an investment strategy that emphasizes buying equity securities of companies whose potential for growth of capital and earnings is expected to be above average. 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.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

------

**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.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

**Total Returns as of December 31**

![](mcgrowth.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **38.05%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q4 2018** | **(22.62)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Institutional Class Return Before Taxes** | **(32.28)%** | **8.42%** | **11.93%** |
| **Institutional Class Return After Taxes on Distributions** | **(32.28)%** | **6.02%** | **8.76%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(19.11)%** | **6.50%** | **8.64%** |
| **Class J Return Before Taxes** | **(33.08)%** | **8.22%** | **11.64%** |
| **Class R-1 Return Before Taxes** | **(32.83)%** | **7.54%** | **11.04%** |
| **Class R-3 Return Before Taxes** | **(32.57)%** | **7.88%** | **11.38%** |
| **Class R-4 Return Before Taxes** | **(32.45)%** | **8.08%** | **11.60%** |
| **Class R-5 Return Before Taxes** | **(32.38)%** | **8.20%** | **11.74%** |
| Russell MidCap Growth Index (reflects no deduction for fees, expenses, or taxes) | (26.74)% | 7.64% | 11.41% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Christopher T. Corbett (since 2017), Portfolio Manager

<sup>•</sup>

Marc R. Shapiro (since 2020), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**MidCap Growth Fund III**

**Objective**

The Fund seeks long-term growth of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is paid, <br> whichever is less)<br>| 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees<sup>(1)</sup> <br>| 0.81% | 0.81% | 0.81% | 0.81% | 0.81% | 0.81% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.17% | 0.01% | 0.54% | 0.33% | 0.29% | 0.27% |
| **Total Annual Fund Operating Expenses** | **1.13%** | **0.82%** | **1.70%** | **1.39%** | **1.20%** | **1.08%** |
| Fee Waiver<sup>(2)</sup> <br>| (0.02)% | (0.02)% | (0.02)% | (0.02)% | (0.02)% | (0.02)% |
| **Total Annual Fund Operating Expenses after Fee Waiver** | **1.11%** | **0.80%** | **1.68%** | **1.37%** | **1.18%** | **1.06%** |

---

<sup>(1)</sup>

Fees have been restated to reflect current fees.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to waive a portion of the Fund's management fees through the period ending February 29 2024. The fee waiver will reduce the Fund's management fees by 0.02% (expressed as a percent of average net assets on an annualized basis). It is expected that the fee waiver will continue through the period disclosed; however, Principal Funds, Inc. and PGI, the parties to the agreement may mutually agree to terminate the fee waiver prior to the end of the period.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $213 | $357 | $620 | $1373 |
| **Institutional Class** | 82 | 260 | 453 | 1012 |
| **Class R-1** | 171 | 534 | 921 | 2007 |
| **Class R-3** | 139 | 438 | 759 | 1667 |
| **Class R-4** | 120 | 379 | 658 | 1453 |
| **Class R-5** | 108 | 341 | 594 | 1315 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $113 | $357 | $620 | $1373 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 44.00% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies with medium market capitalizations at the time of purchase. For this Fund, companies with medium market capitalizations are those with market capitalizations within the range of companies comprising the Russell MidCap<sup>®</sup> Growth Index (as of January 31, 2023, this range was between approximately $852.4 million and $54.2 billion). The Fund invests in growth equity securities, an investment strategy that emphasizes buying equity securities of companies whose potential for growth of capital and earnings is expected to be above average.

The Fund is primarily actively managed by the sub-advisors. In addition, Principal Global Investors, LLC may invest up to 30% of the Fund's assets using an index sampling strategy designed to match the performance of the Russell MidCap<sup>®</sup> Growth Index.

**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.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**Passive Strategy Risk.** A portion of the Fund seeks to match the performance of a specified index. However, the correlation between the performance of this portion of the fund and index performance may be affected by many factors, such as fund expenses, the timing of cash flows into and out of the fund, changes in securities markets, and changes in the composition of the index.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

**Total Returns as of December 31**

![](mcgrowthiii.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **30.62%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(20.02)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Institutional Class Return Before Taxes** | **(26.73)%** | **8.47%** | **10.83%** |
| **Institutional Class Return After Taxes on Distributions** | **(27.05)%** | **5.95%** | **7.75%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(15.60)%** | **6.59%** | **8.03%** |
| **Class J Return Before Taxes** | **(27.63)%** | **8.12%** | **10.43%** |
| **Class R-1 Return Before Taxes** | **(27.43)%** | **7.49%** | **9.85%** |
| **Class R-3 Return Before Taxes** | **(27.17)%** | **7.84%** | **10.20%** |
| **Class R-4 Return Before Taxes** | **(27.02)%** | **8.06%** | **10.41%** |
| **Class R-5 Return Before Taxes** | **(26.93)%** | **8.18%** | **10.54%** |
| Russell MidCap Growth Index (reflects no deduction for fees, expenses, or taxes) | (26.74)% | 7.64% | 11.41% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2009), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2009), Portfolio Manager

**Sub-Advisors**

Eagle Asset Management, Inc.

Robert W. Baird & Co. Incorporated

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**MidCap S&P 400 Index Fund**

**Objective**

The Fund seeks long-term growth of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is <br> paid, whichever is less)<br>| 1.00% |  |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Management Fees | 0.15% | 0.15% | 0.15% | 0.15% | 0.15% | 0.15% | 0.15% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A | N/A |
| Other Expenses | 0.11% | 0.08% | 0.54% | 0.33% | 0.29% | 0.27% | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.41%** | **0.23%** | **1.04%** | **0.73%** | **0.54%** | **0.42%** | **0.16%** |

---

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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** | **5 years** | **10 years** |
| **Class J** | $142 | $132 | $230 | $518 |
| **Institutional Class** | 24 | 74 | 130 | 293 |
| **Class R-1** | 106 | 331 | 574 | 1271 |
| **Class R-3** | 75 | 233 | 406 | 906 |
| **Class R-4** | 55 | 173 | 302 | 677 |
| **Class R-5** | 43 | 135 | 235 | 530 |
| **Class R-6** | 16 | 52 | 90 | 205 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $42 | $132 | $230 | $518 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 20.90% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies that compose the Standard & Poor's ("S&P") MidCap 400 Index (the "Index") at the time of purchase. The Index is designed to represent U.S. equities with risk/return characteristics of the mid cap universe. As of January 31, 2023, the market capitalization range of the companies comprising the Index was between approximately $1.8 billion and $16.6 billion. Each component stock of the Index is weighted in proportion to its total market value. The Index is rebalanced quarterly.

The Fund employs a passive investment approach designed to attempt to track the performance of the Index. In seeking its objective, the Fund typically employs a replication strategy, which involves investing in all the securities that make up the Index, in the same proportions as the Index.

The Fund uses derivative strategies and invests in exchange-traded funds ("ETFs"). A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. Specifically, the Fund invests in index futures and equity ETFs on a daily basis to gain exposure to the Index in an effort to minimize tracking error relative to the benchmark.

The Fund will not concentrate (i.e., invest more than 25% of its assets) its investments in a particular industry except to the extent the Index is so concentrated. As of January 31, 2023, the Index was not concentrated in any industry.

**Note**: "Standard & Poor's MidCap 400" and "S&P MidCap 400" are trademarks of S&P Global and have been licensed by Principal. The Fund is not sponsored, endorsed, sold, or promoted by S&P Global, and S&P Global makes no representation regarding the advisability of investing in the Fund.

**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.

**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;&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.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**Industry Concentration Risk.** A fund that concentrates investments in a particular industry or group of industries has greater exposure than other funds to market, economic, and other factors affecting that industry or group of industries.

**Investment Company Securities Risk.** A fund that invests in another investment company (for example, another fund or an exchange-traded fund (or ETF)) 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.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

For periods prior to the inception date of Class R-6 shares (November 22, 2016), the performance shown in the table for Class R-6 shares is that of the Fund's Class R-3 shares, adjusted to reflect the fees and expenses of Class R-6 shares. However, where the adjustment for fees and expenses results in performance for Class R-6 shares that is higher than the historical performance of the Class R-3 shares, the historical performance of the Class R-3 shares is used. These adjustments result in performance for such periods that is no higher than the historical performance of the Class R-3 shares.

------

**Total Returns as of December 31**

![](mcsp400.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q4 2020** | **24.32%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(29.79)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Institutional Class Return Before Taxes** | **(13.22)%** | **6.47%** | **10.52%** |
| **Institutional Class Return After Taxes on Distributions** | **(14.68)%** | **4.43%** | **8.65%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(6.81)%** | **4.80%** | **8.28%** |
| **Class J Return Before Taxes** | **(14.19)%** | **6.28%** | **10.24%** |
| **Class R-1 Return Before Taxes** | **(13.93)%** | **5.61%** | **9.62%** |
| **Class R-3 Return Before Taxes** | **(13.64)%** | **5.95%** | **9.96%** |
| **Class R-4 Return Before Taxes** | **(13.53)%** | **6.14%** | **10.16%** |
| **Class R-5 Return Before Taxes** | **(13.41)%** | **6.27%** | **10.30%** |
| **Class R-6 Return Before Taxes** | **(13.21)%** | **6.53%** | **10.33%** |
| S&P MidCap 400 Index (reflects no deduction for fees, expenses, or taxes) | (13.07)% | 6.71% | 10.78% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Jeffrey A. Schwarte (since 2016), Portfolio Manager

<sup>•</sup>

Aaron J. Siebel (since 2018), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, R-6, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

------

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**MidCap Value Fund I**

**Objective**

The Fund seeks long-term growth of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Maximum Sales Charge (Load) Imposed on Purchases <br> (as a percentage of offering price)<br>| 5.50% |  |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales <br> Load is paid, whichever is less)<br>| 1.00% | 1.00% |  |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Management Fees | 0.64% | 0.64% | 0.64% | 0.64% | 0.64% | 0.64% | 0.64% | 0.64% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A | N/A |
| Other Expenses | 0.22% | 0.13% | 0.11% | 0.53% | 0.32% | 0.28% | 0.26% | 0.00% |
| Acquired Fund Fees and Expenses | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% |
| **Total Annual Fund Operating Expenses** | **1.12%** | **0.93%** | **0.76%** | **1.53%** | **1.22%** | **1.03%** | **0.91%** | **0.65%** |
| Fee Waiver and Expense Reimbursement<sup>(1),(2)</sup> <br>| (0.02)% | (0.02)% | (0.06)% | (0.02)% | (0.02)% | (0.02)% | (0.02)% | (0.02)% |
| **Total Annual Fund Operating Expenses after Fee** <br> **Waiver and Expense Reimbursement**<br>| **1.10%** | **0.91%** | **0.70%** | **1.51%** | **1.20%** | **1.01%** | **0.89%** | **0.63%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to waive a portion of the Fund's management fees through the period ending February 29, 2024. The fee waiver will reduce the Fund's management fees by 0.02% (expressed as a percent of average net assets on an annualized basis). It is expected that the fee waiver will continue through the period disclosed; however, Principal Funds, Inc. and PGI, the parties to the agreement may mutually agree to terminate the fee waiver prior to the end of the period.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.69% for Institutional Class shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $656 | $885 | $1131 | $1837 |
| **Class J** | 193 | 294 | 513 | 1141 |
| **Institutional Class** | 72 | 237 | 416 | 937 |
| **Class R-1** | 154 | 481 | 832 | 1822 |
| **Class R-3** | 122 | 385 | 668 | 1476 |
| **Class R-4** | 103 | 326 | 567 | 1258 |
| **Class R-5** | 91 | 288 | 502 | 1118 |
| **Class R-6** | 64 | 206 | 360 | 809 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $93 | $294 | $513 | $1141 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 51.10% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies with medium market capitalizations at the time of purchase. For this Fund, companies with medium market capitalizations are those with market capitalizations within the range of companies comprising the Russell MidCap<sup>®</sup> Value Index (as of January 31, 2023, this range was between approximately $430.1 million and $49.6 billion). The Fund invests in value equity securities, an investment strategy that emphasizes buying equity securities that appear to be undervalued. The Fund also invests in real estate investment trusts.

The Fund is primarily actively managed by the sub-advisors. In addition, Principal Global Investors, LLC may invest up to 30% of the Fund's assets using an index sampling strategy designed to match the performance of the Russell MidCap<sup>®</sup> Value Index.

**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.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

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

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

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

For periods prior to the inception date of Classes A and R-6 shares (April 2, 2019), the performance shown in the table for these newer classes is that of the Fund's Institutional Class shares, adjusted to reflect the fees and expenses of the newer class. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares.

------

**Total Returns as of December 31**

![](mcvaluei.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **20.14%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(29.46)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Institutional Class Return Before Taxes** | **(6.00)%** | **8.19%** | **10.68%** |
| **Institutional Class Return After Taxes on Distributions** | **(7.51)%** | **6.18%** | **7.88%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(2.49)%** | **6.04%** | **7.72%** |
| **Class A Return Before Taxes** | **(11.54)%** | **6.55%** | **9.70%** |
| **Class J Return Before Taxes** | **(7.07)%** | **7.97%** | **10.36%** |
| **Class R-1 Return Before Taxes** | **(6.72)%** | **7.35%** | **9.77%** |
| **Class R-3 Return Before Taxes** | **(6.44)%** | **7.68%** | **10.11%** |
| **Class R-4 Return Before Taxes** | **(6.27)%** | **7.88%** | **10.32%** |
| **Class R-5 Return Before Taxes** | **(6.13)%** | **8.01%** | **10.45%** |
| **Class R-6 Return Before Taxes** | **(5.93)%** | **8.29%** | **10.73%** |
| Russell MidCap Value Index (reflects no deduction for fees, expenses, or taxes) | (12.04)% | 5.72% | 10.11% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2009), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2009), Portfolio Manager

**Sub-Advisors**

Los Angeles Capital Management LLC

Victory Capital Management Inc.

**Purchase and Sale of Fund Shares**

For Classes A and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

------

For Classes R-1, R-3, R-4, R-5, R-6, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Money Market Fund**

**Objective**

The Fund seeks as high a level of current income as is considered consistent with preservation of principal and maintenance of liquidity.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | |
|:---|:---|:---|
|  | **Share Class** | **Share Class** |
|  | **A** | **J** |
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage of the offering price or NAV when Sales Load is paid, whichever <br> is less)<br>| 1.00% | 1.00% |

---

**Annual Fund Operating Expenses**

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

---

| | | |
|:---|:---|:---|
|  | **Share Class** | **Share Class** |
|  | **A** | **J** |
| Management Fees | 0.40% | 0.40% |
| Distribution and/or Service (12b-1) Fees | 0.00% | 0.15% |
| Other Expenses | 0.14% | 0.09% |
| **Total Annual Fund Operating Expenses** | **0.54%** | **0.64%** |
| Fee Waiver and Expense Reimbursement<sup>(1),(2)</sup> <br>| (0.04)% | (0.15)% |
| **Total Annual Fund Operating Expenses after Fee Waiver and Expense Reimbursement** | **0.50%** | **0.49%** |

---

<sup>(1)</sup>

Principal Funds Distributor, Inc. (the "Distributor") has contractually agreed to limit the distribution fees attributable to Class J. The waiver will reduce the Fund's distribution fees by 0.15%. It is expected that the fee waiver will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and the Distributor, the parties to the agreement, may mutually agree to terminate the fee waiver prior to the end of the period.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.50% for Class A shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $151 | $169 | $298 | $673 |
| **Class J** | 150 | 190 | 342 | 784 |

---

With respect to Classes A and J shares, you would pay the following expenses if you did not redeem your shares:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $51 | $169 | $298 | $673 |
| **Class J** | 50 | 190 | 342 | 784 |

---

**Principal Investment Strategies**

The Fund seeks to maintain a stable net asset value of $1.00 per share by investing its assets in a portfolio of high quality, short-term money market instruments such as those issued by banks, corporations (U.S. and non-U.S.), municipalities, and the U.S. government. Such instruments include certificates of deposit, banker's acceptances, commercial paper, treasury bills, bonds, repurchase agreements, and shares of other money market funds. The Fund maintains a dollar-weighted average portfolio maturity of 60 days or less. As with all mutual funds, the value of the Fund's assets may rise or fall.

**Principal Risks**

You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The Fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the Fund's liquidity falls below required minimums because of market conditions or other factors. 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 Fund's sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time. The principal risks of investing in the Fund are listed below in alphabetical order and not in order of significance.

**Commercial Paper Risk.** The value of the Fund's investment in commercial paper, which is generally unsecured, is susceptible to changes in interest rates and the issuer's financial condition or credit quality. Commercial paper is usually repaid at maturity by the issuer from the proceeds of the issuance of new commercial paper. As a result, investments in commercial paper are subject to the risk that the issuer cannot issue enough new commercial paper to satisfy its outstanding obligations. In addition, under certain circumstances commercial paper may become illiquid or may suffer from reduced liquidity.

**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.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

------

**Repurchase Agreement Risk.** If the other party to a repurchase agreement defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security and the market value of the security declines, the Fund may lose money.

**U.S. Government Securities Risk.** Yields available from U.S. government securities are generally lower than yields from many other fixed-income securities.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

**Total Returns as of December 31**

![](mm.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q4 2022** | **0.83%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q2 2022** | **0.00%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **1.24%** | **1.01%** | **0.57%** |
| **Class J Return Before Taxes** | **0.26%** | **0.97%** | **0.55%** |
| Bloomberg U.S. Treasury Bellwethers 3 Month Index (reflects no deduction for fees, expenses, or <br> taxes)<br>| 1.51% | 1.28% | 0.78% |

---

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Erika Isley (since 2017), Portfolio Manager

<sup>•</sup>

Tracy Reeg (since 2004), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

The Money Market Fund is operated as a retail money market fund, and as such, has adopted policies and procedures reasonably designed to limit all beneficial owners to natural persons. See Purchase of Fund Shares for additional information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Overseas Fund**

**Objective**

The Fund seeks long-term growth of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

---

| | |
|:---|:---|
| **Shareholder Fees (fees paid directly from your investment):** | **None** |

---

**Annual Fund Operating Expenses**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **Inst.** | **R-3** | **R-4** |
| Management Fees<sup>(1)</sup> <br>| 0.90% | 0.90% | 0.90% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.25% | 0.10% |
| Other Expenses | 0.05% | 0.35% | 0.31% |
| **Total Annual Fund Operating Expenses** | **0.95%** | **1.50%** | **1.31%** |
| Fee Waiver<sup>(2)</sup> <br>| (0.02)% | (0.02)% | (0.02)% |
| **Total Annual Fund Operating Expenses after Fee Waiver** | **0.93%** | **1.48%** | **1.29%** |

---

<sup>(1)</sup>

Fees have been restated to reflect current fees.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI") has contractually agreed to waive a portion of the Fund's management fees through the period ending February 29, 2024. The fee waiver will reduce the Fund's management fees by 0.02% (expressed as a percent of average net assets on an annualized basis). It is expected that the fee waiver will continue through the period disclosed; however, Principal Funds, Inc. and PGI, the parties to the agreement may mutually agree to terminate the fee waiver prior to the end of the period.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Institutional Class** | $95 | $301 | $524 | $1165 |
| **Class R-3** | 151 | 472 | 817 | 1789 |
| **Class R-4** | 131 | 413 | 716 | 1577 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 62.20% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities that are tied economically to countries outside the U.S. at the time of purchase. The Fund considers a security to be tied economically to countries outside the U.S. (a "foreign security") if the issuer of the security has its principal place of business or principal office outside the U.S., has its principal securities trading market outside the U.S., or derives a majority of its revenue from outside the U.S.

The Fund invests in emerging market securities. The Fund invests in value equity securities, an investment strategy that emphasizes buying equity securities that appear to be undervalued. The Fund invests in equity securities of small, medium, and large market capitalization companies.

The Fund is primarily actively managed by the sub-advisors. In addition, Principal Global Investors, LLC may invest up to 30% of the Fund's assets using an index sampling strategy designed to match the performance of the MSCI EAFE Value Index.

**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.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies). The Schedule of Investments included in the Fund's annual and semi-annual reports identify the countries in which the Fund had invested, as of the date of the reports; to the extent a Fund has significant investments in issuers or securities tied to a certain country or region, it will be particularly susceptible to economic, political, regulatory or other events or conditions affecting such country or region.

**•** **Brexit Risk.** The United Kingdom's departure from the European Union, commonly known as "Brexit," has resulted in significant uncertainties and instability in the financial markets. Brexit may have significant political and financial consequences in the United Kingdom, as well as in European markets and the broader global economy. As a result, the fund's performance may be more volatile than the performance of a more geographically diversified fund.

**Passive Strategy Risk.** A portion of the Fund seeks to match the performance of a specified index. However, the correlation between the performance of this portion of the fund and index performance may be affected by many factors, such as fund expenses, the timing of cash flows into and out of the fund, changes in securities markets, and changes in the composition of the index.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

------

**Total Returns as of December 31**

![](overseas.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q4 2020** | **23.03%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(31.40)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Institutional Class Return Before Taxes** | **(4.89)%** | **1.78%** | **4.33%** |
| **Institutional Class Return After Taxes on Distributions** | **(6.60)%** | **0.35%** | **3.10%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(1.62)%** | **1.25%** | **3.34%** |
| **Class R-3 Return Before Taxes** | **(5.44)%** | **1.22%** | **3.75%** |
| **Class R-4 Return Before Taxes** | **(5.21)%** | **1.42%** | **3.95%** |
| MSCI EAFE Value Index NTR (reflects withholding taxes on foreign dividends, but no deduction for <br> fees, expenses, or other taxes)<br>| (5.59)% | 0.17% | 3.51% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2009), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2009), Portfolio Manager

**Sub-Advisors**

Barrow, Hanley, Mewhinney & Strauss, LLC (doing business as Barrow Hanley Global Investors)

Causeway Capital Management LLC

**Purchase and Sale of Fund Shares**

For Classes R-3, R-4, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

See Purchase of Fund Shares for more information.

------

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Principal Capital Appreciation Fund**

**SHARE CLASS CONVERSION NOTICE**: On December 13, 2022, the Fund's Board of Directors approved the conversion of the Fund's Class C shares into Class A shares. Following the close of business on May 19, 2023, Class C shares of the Fund will automatically convert into Class A shares of the Fund on the basis of the share classes' relative net asset values on such date. The conversion will not result in the imposition of a sales charge or any other charge. As a result of the conversion, the affected shareholders will be in a better position with respect to expenses, as expenses are lower for Class A shares than for the current Class C shares. The Fund expects these share class conversions will not constitute taxable sales or exchanges to shareholders. Effective as of the close of the New York Stock Exchange on March 24, 2023, Class C shares will no longer be available for purchase except in limited circumstances.

*On or about May 19, 2023, delete references to Class C shares of this Fund, including information regarding the conversion plan, from the Prospectus.* 

**Objective**

The Fund seeks to provide long-term growth of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Sales Charge (Load) Imposed on Purchases (as a <br> percentage of offering price)<br>| 5.50% |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage of the <br> offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% | 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.44% | 0.44% | 0.44% | 0.44% | 0.44% | 0.44% | 0.44% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 1.00% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.08% | 0.19% | 0.02% | 0.53% | 0.32% | 0.28% | 0.26% |
| **Total Annual Fund Operating Expenses** | **0.77%** | **1.63%** | **0.46%** | **1.32%** | **1.01%** | **0.82%** | **0.70%** |

---

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**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end of those periods. The Example assumes conversion of the Class C shares to Class A shares after the eighth year. 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:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $624 | $782 | $954 | $1452 |
| **Class C** | 266 | 514 | 887 | 1703 |
| **Institutional Class** | 47 | 148 | 258 | 579 |
| **Class R-1** | 134 | 418 | 723 | 1590 |
| **Class R-3** | 103 | 322 | 558 | 1236 |
| **Class R-4** | 84 | 262 | 455 | 1014 |
| **Class R-5** | 72 | 224 | 390 | 871 |

---

With respect to Class C shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class C** | $166 | $514 | $887 | $1703 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 49.50% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund invests primarily in equity securities of companies with any market capitalization, but it has a greater exposure to large market capitalization companies than small or medium market capitalization companies. Those managing the Fund's investments seek to invest in securities of businesses that they believe are trading at a discount to their private market value (i.e., the value of the business if it was sold), have a competitive advantage, and/or that have barriers to entry in their respective industries.

**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.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

**Total Returns as of December 31**

![](pcapappr.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **19.69%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(19.46)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(20.96)%** | **8.77%** | **11.73%** |
| **Class A Return After Taxes on Distributions** | **(21.09)%** | **5.81%** | **9.44%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(12.32)%** | **6.28%** | **9.13%** |
| **Class C Return Before Taxes** | **(17.91)%** | **9.07%** | **11.62%** |
| **Institutional Class Return Before Taxes** | **(16.12)%** | **10.38%** | **12.77%** |
| **Class R-1 Return Before Taxes** | **(16.82)%** | **9.42%** | **11.79%** |
| **Class R-3 Return Before Taxes** | **(16.57)%** | **9.75%** | **12.14%** |
| **Class R-4 Return Before Taxes** | **(16.41)%** | **9.96%** | **12.35%** |
| **Class R-5 Return Before Taxes** | **(16.31)%** | **10.10%** | **12.49%** |
| Russell 3000 Index (reflects no deduction for fees, expenses, or taxes) | (19.22)% | 8.79% | 12.13% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

------

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Daniel R. Coleman (since 2010), Portfolio Manager

<sup>•</sup>

Theodore Jayne (since 2015), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A and C shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

Class C shares are subject to an 8-year automatic conversion plan whereby Class C shares held for eight years after purchase will automatically convert to Class A shares of the same Fund.

Effective as of the close of the New York Stock Exchange on March 24, 2023, Class C shares will no longer be available for purchase except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Principal LifeTime Strategic Income Fund**

**Objective**

The Fund seeks current income, and as a secondary objective, capital appreciation.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Sales Charge (Load) Imposed on Purchases (as a <br> percentage of offering price)<br>| 3.75% |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage of the <br> offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% | 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.23% | 0.10% | 0.02% | 0.54% | 0.33% | 0.29% | 0.27% |
| Acquired Fund Fees and Expenses | 0.51% | 0.51% | 0.51% | 0.51% | 0.51% | 0.51% | 0.51% |
| **Total Annual Fund Operating Expenses** | **0.99%** | **0.76%** | **0.53%** | **1.40%** | **1.09%** | **0.90%** | **0.78%** |
| Expense Reimbursement<sup>(1)</sup> <br>| (0.10)% | N/A | N/A | N/A | N/A | N/A | N/A |
| **Total Annual Fund Operating Expenses after Expense** <br> **Reimbursement**<br>| **0.89%** | **0.76%** | **0.53%** | **1.40%** | **1.09%** | **0.90%** | **0.78%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.38% for Class A shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $462 | $669 | $892 | $1534 |
| **Class J** | 178 | 243 | 422 | 942 |
| **Institutional Class** | 54 | 170 | 296 | 665 |
| **Class R-1** | 143 | 443 | 766 | 1680 |
| **Class R-3** | 111 | 347 | 601 | 1329 |
| **Class R-4** | 92 | 287 | 498 | 1108 |
| **Class R-5** | 80 | 249 | 433 | 966 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $78 | $243 | $422 | $942 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying funds' performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 33.60% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund invests according to an asset allocation strategy designed for investors primarily seeking current income and secondarily capital appreciation. The Fund's asset allocation is designed for investors who are approximately 10 years beyond the normal retirement age of 65. The Fund is a fund of funds and invests in underlying funds of Principal Funds, Inc. ("PFI"). Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of large market capitalization companies, fixed-income securities, domestic and foreign securities, securities denominated in foreign currencies, investment companies, securitized products, U.S. government and U.S. government-sponsored securities, and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use futures, options, swaps (including, for example, credit default, interest rate, and currency swaps), and forwards in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

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![](glidepath_plt2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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.

**•** **Forward Contracts, Futures, and Swaps.** Forward contracts, futures, and 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 forward contract, future, or swap; possible lack of a liquid secondary market for a forward contract, future, or swap and the resulting inability to close a forward contract, future, or 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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

**Total Returns as of December 31**

![](plfstrat.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **8.31%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q2 2022** | **(8.45)%** |

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(16.68)%** | **0.64%** | **2.36%** |
| **Class A Return After Taxes on Distributions** | **(17.92)%** | **(0.99)%** | **1.10%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(9.54)%** | **0.18%** | **1.50%** |
| **Class J Return Before Taxes** | **(14.18)%** | **1.56%** | **2.87%** |
| **Institutional Class Return Before Taxes** | **(13.10)%** | **1.78%** | **3.12%** |
| **Class R-1 Return Before Taxes** | **(13.92)%** | **0.88%** | **2.23%** |
| **Class R-3 Return Before Taxes** | **(13.56)%** | **1.22%** | **2.55%** |
| **Class R-4 Return Before Taxes** | **(13.38)%** | **1.41%** | **2.74%** |
| **Class R-5 Return Before Taxes** | **(13.40)%** | **1.51%** | **2.85%** |
| S&P Target Date Retirement Income Index (reflects no deduction for fees, expenses, or taxes) | (11.18)% | 2.33% | 3.59% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

------

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2007), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2007), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Principal LifeTime 2010 Fund**

On September 13, 2022, the Board of Directors of Principal Funds, Inc. approved the acquisition of the assets of the Principal LifeTime 2010 Fund (the "Fund") by the Principal LifeTime Strategic Income Fund (the "Proposed Merger"). Additional information about the Proposed Merger was provided in the Information Statement/Prospectus that was mailed to record date shareholders of the Fund in November 2022. The record date for the determination of shareholders entitled to receive notice of the Proposed Merger was October 5, 2022, and the Proposed Merger is expected to occur on or about May 12, 2023. The Fund's officers, however, have the discretion to change these dates. In preparation for the Proposed Merger, the Fund may deviate from its stated investment objective and strategies.

*On or about May 12, 2023, delete all references to the Principal LifeTime 2010 Fund from the Prospectus*.*** 

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Sales Charge (Load) Imposed on Purchases (as a <br> percentage of offering price)<br>| 3.75% |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage of the <br> offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% | 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.18% | 0.06% | 0.01% | 0.54% | 0.33% | 0.29% | 0.27% |
| Acquired Fund Fees and Expenses | 0.51% | 0.51% | 0.51% | 0.51% | 0.51% | 0.51% | 0.51% |
| **Total Annual Fund Operating Expenses** | **0.94%** | **0.72%** | **0.52%** | **1.40%** | **1.09%** | **0.90%** | **0.78%** |
| Expense Reimbursement<sup>(1)</sup> <br>| (0.05)% | N/A | N/A | N/A | N/A | N/A | N/A |
| **Total Annual Fund Operating Expenses after Expense** <br> **Reimbursement**<br>| **0.89%** | **0.72%** | **0.52%** | **1.40%** | **1.09%** | **0.90%** | **0.78%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.38% for Class A shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $462 | $659 | $871 | $1482 |
| **Class J** | 174 | 230 | 401 | 894 |
| **Institutional Class** | 53 | 167 | 291 | 653 |
| **Class R-1** | 143 | 443 | 766 | 1680 |
| **Class R-3** | 111 | 347 | 601 | 1329 |
| **Class R-4** | 92 | 287 | 498 | 1108 |
| **Class R-5** | 80 | 249 | 433 | 966 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $74 | $230 | $401 | $894 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 26.70% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds and invests in underlying funds of Principal Funds, Inc. ("PFI"). Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of large market capitalization companies, fixed-income securities, domestic and foreign securities, securities denominated in foreign currencies, investment companies, securitized products, U.S. government and U.S. government-sponsored securities, and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use futures, options, swaps (including, for example, credit default, interest rate, and currency swaps), and forwards in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Strategic Income Fund. At that

------

time, the Fund may be combined with the Principal LifeTime Strategic Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

![](glidepath_plt2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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;&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.

**•** **Forward Contracts, Futures, and Swaps.** Forward contracts, futures, and 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 forward contract, future, or swap; possible lack of a liquid secondary market for a forward contract, future, or swap and the resulting inability to close a forward contract, future, or 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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

------

**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.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

**Total Returns as of December 31**

![](plft2010.jpg)

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| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **9.50%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q2 2022** | **(8.43)%** |

---

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(16.70)%** | **1.14%** | **3.44%** |
| **Class A Return After Taxes on Distributions** | **(18.00)%** | **(0.77)%** | **1.94%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(9.43)%** | **0.55%** | **2.36%** |
| **Class J Return Before Taxes** | **(14.09)%** | **2.12%** | **4.00%** |
| **Institutional Class Return Before Taxes** | **(13.12)%** | **2.30%** | **4.22%** |
| **Class R-1 Return Before Taxes** | **(13.95)%** | **1.40%** | **3.31%** |
| **Class R-3 Return Before Taxes** | **(13.60)%** | **1.71%** | **3.64%** |
| **Class R-4 Return Before Taxes** | **(13.47)%** | **1.91%** | **3.83%** |
| **Class R-5 Return Before Taxes** | **(13.38)%** | **2.04%** | **3.95%** |
| S&P Target Date 2010 Index (reflects no deduction for fees, expenses, or taxes) | (11.45)% | 2.82% | 4.37% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2007), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2007), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Principal LifeTime 2015 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

---

| | |
|:---|:---|
| **Shareholder Fees (fees paid directly from your investment):** | **None** |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.02% | 0.54% | 0.33% | 0.29% | 0.27% |
| Acquired Fund Fees and Expenses | 0.52% | 0.52% | 0.52% | 0.52% | 0.52% |
| **Total Annual Fund Operating Expenses** | **0.54%** | **1.41%** | **1.10%** | **0.91%** | **0.79%** |

---

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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** | **5 years** | **10 years** |
| **Institutional Class** | $55 | $173 | $302 | $677 |
| **Class R-1** | 144 | 446 | 771 | 1691 |
| **Class R-3** | 112 | 350 | 606 | 1340 |
| **Class R-4** | 93 | 290 | 504 | 1120 |
| **Class R-5** | 81 | 252 | 439 | 978 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 29.20% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds and invests in underlying funds of Principal Funds, Inc. ("PFI"). Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

------

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign securities, securities denominated in foreign currencies, investment companies, securitized products, U.S. government and U.S. government-sponsored securities, and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use futures, options, swaps (including, for example, credit default, interest rate, and currency swaps), and forwards in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Strategic Income Fund. At that time, the Fund may be combined with the Principal LifeTime Strategic Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

![](glidepath_plt2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives.

------

Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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.

**•** **Forward Contracts, Futures, and Swaps.** Forward contracts, futures, and 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 forward contract, future, or swap; possible lack of a liquid secondary market for a forward contract, future, or swap and the resulting inability to close a forward contract, future, or 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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

------

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

------

**Total Returns as of December 31**

![](plt2015.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **11.02%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(9.54)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Institutional Class Return Before Taxes** | **(13.60)%** | **2.85%** | **4.95%** |
| **Institutional Class Return After Taxes on Distributions** | **(15.46)%** | **0.39%** | **2.79%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(7.27)%** | **1.75%** | **3.42%** |
| **Class R-1 Return Before Taxes** | **(14.33)%** | **1.95%** | **4.03%** |
| **Class R-3 Return Before Taxes** | **(14.14)%** | **2.26%** | **4.35%** |
| **Class R-4 Return Before Taxes** | **(13.90)%** | **2.46%** | **4.55%** |
| **Class R-5 Return Before Taxes** | **(13.77)%** | **2.57%** | **4.67%** |
| S&P Target Date 2015 Index (reflects no deduction for fees, expenses, or taxes) | (12.17)% | 3.07% | 5.01% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2008), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2008), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

------

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Principal LifeTime 2020 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Sales Charge (Load) Imposed on Purchases (as a <br> percentage of offering price)<br>| 3.75% |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage of the <br> offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% | 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.11% | 0.04% | 0.01% | 0.53% | 0.32% | 0.28% | 0.26% |
| Acquired Fund Fees and Expenses | 0.53% | 0.53% | 0.53% | 0.53% | 0.53% | 0.53% | 0.53% |
| **Total Annual Fund Operating Expenses** | **0.89%** | **0.72%** | **0.54%** | **1.41%** | **1.10%** | **0.91%** | **0.79%** |

---

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $462 | $648 | $850 | $1430 |
| **Class J** | 174 | 230 | 401 | 894 |
| **Institutional Class** | 55 | 173 | 302 | 677 |
| **Class R-1** | 144 | 446 | 771 | 1691 |
| **Class R-3** | 112 | 350 | 606 | 1340 |
| **Class R-4** | 93 | 290 | 504 | 1120 |
| **Class R-5** | 81 | 252 | 439 | 978 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $74 | $230 | $401 | $894 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 25.20% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds and invests in underlying funds of Principal Funds, Inc. ("PFI"). Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign securities, securities denominated in foreign currencies, investment companies, U.S. government and U.S. government-sponsored securities, and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use futures, options, swaps (including, for example, credit default, interest rate, and currency swaps), and forwards in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Strategic Income Fund. At that time, the Fund may be combined with the Principal LifeTime Strategic Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

------

![](glidepath_plt2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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.

**•** **Forward Contracts, Futures, and Swaps.** Forward contracts, futures, and 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 forward contract, future, or swap; possible lack of a liquid secondary market for a forward contract, future, or swap and the resulting inability to close a forward contract, future, or 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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

------

**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.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

**Total Returns as of December 31**

![](plt2020.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **12.29%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(11.66)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(17.92)%** | **2.13%** | **4.86%** |
| **Class A Return After Taxes on Distributions** | **(19.84)%** | **(0.05)%** | **3.01%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(9.64)%** | **1.26%** | **3.43%** |
| **Class J Return Before Taxes** | **(15.30)%** | **3.13%** | **5.43%** |
| **Institutional Class Return Before Taxes** | **(14.35)%** | **3.29%** | **5.63%** |
| **Class R-1 Return Before Taxes** | **(15.15)%** | **2.38%** | **4.72%** |
| **Class R-3 Return Before Taxes** | **(14.88)%** | **2.70%** | **5.04%** |
| **Class R-4 Return Before Taxes** | **(14.74)%** | **2.90%** | **5.24%** |
| **Class R-5 Return Before Taxes** | **(14.58)%** | **3.03%** | **5.36%** |
| S&P Target Date 2020 Index (reflects no deduction for fees, expenses, or taxes) | (12.82)% | 3.14% | 5.51% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2007), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2007), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Principal LifeTime 2025 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

---

| | |
|:---|:---|
| **Shareholder Fees (fees paid directly from your investment):** | **None** |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.01% | 0.53% | 0.32% | 0.28% | 0.26% |
| Acquired Fund Fees and Expenses | 0.55% | 0.55% | 0.55% | 0.55% | 0.55% |
| **Total Annual Fund Operating Expenses** | **0.56%** | **1.43%** | **1.12%** | **0.93%** | **0.81%** |

---

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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** | **5 years** | **10 years** |
| **Institutional Class** | $57 | $179 | $313 | $701 |
| **Class R-1** | 146 | 452 | 782 | 1713 |
| **Class R-3** | 114 | 356 | 617 | 1363 |
| **Class R-4** | 95 | 296 | 515 | 1143 |
| **Class R-5** | 83 | 259 | 450 | 1002 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 22.60% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds and invests in underlying funds of Principal Funds, Inc. ("PFI"). Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

------

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign securities, securities denominated in foreign currencies, investment companies, U.S. government and U.S. government-sponsored securities, and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use futures, options, swaps (including, for example, credit default, interest rate, and currency swaps), and forwards in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Strategic Income Fund. At that time, the Fund may be combined with the Principal LifeTime Strategic Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

![](glidepath_plt2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives.

------

Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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.

**•** **Forward Contracts, Futures, and Swaps.** Forward contracts, futures, and 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 forward contract, future, or swap; possible lack of a liquid secondary market for a forward contract, future, or swap and the resulting inability to close a forward contract, future, or 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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

------

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

------

**Total Returns as of December 31**

![](plt2025.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **14.07%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(13.80)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Institutional Class Return Before Taxes** | **(15.22)%** | **3.82%** | **6.26%** |
| **Institutional Class Return After Taxes on Distributions** | **(17.01)%** | **1.93%** | **4.45%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(8.20)%** | **2.68%** | **4.58%** |
| **Class R-1 Return Before Taxes** | **(16.04)%** | **2.89%** | **5.32%** |
| **Class R-3 Return Before Taxes** | **(15.78)%** | **3.21%** | **5.65%** |
| **Class R-4 Return Before Taxes** | **(15.64)%** | **3.41%** | **5.86%** |
| **Class R-5 Return Before Taxes** | **(15.56)%** | **3.52%** | **5.98%** |
| S&P Target Date 2025 Index (reflects no deduction for fees, expenses, or taxes) | (13.14)% | 3.75% | 6.23% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2008), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2008), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

------

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Principal LifeTime 2030 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Sales Charge (Load) Imposed on Purchases (as a <br> percentage of offering price)<br>| 3.75% |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage of the <br> offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% | 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.12% | 0.05% | 0.01% | 0.53% | 0.32% | 0.28% | 0.26% |
| Acquired Fund Fees and Expenses | 0.57% | 0.57% | 0.57% | 0.57% | 0.57% | 0.57% | 0.57% |
| **Total Annual Fund Operating Expenses** | **0.94%** | **0.77%** | **0.58%** | **1.45%** | **1.14%** | **0.95%** | **0.83%** |

---

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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** | **5 years** | **10 years** |
| **Class A** | $467 | $663 | $876 | $1486 |
| **Class J** | 179 | 246 | 428 | 954 |
| **Institutional Class** | 59 | 186 | 324 | 726 |
| **Class R-1** | 148 | 459 | 792 | 1735 |
| **Class R-3** | 116 | 362 | 628 | 1386 |
| **Class R-4** | 97 | 303 | 525 | 1166 |
| **Class R-5** | 85 | 265 | 460 | 1025 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $79 | $246 | $428 | $954 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 31.10% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds and invests in underlying funds of Principal Funds, Inc. ("PFI"). Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign securities, securities denominated in foreign currencies, investment companies (including index funds), U.S. government and U.S. government-sponsored securities, and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use futures, options, swaps (including, for example, credit default, interest rate, and currency swaps), and forwards in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Strategic Income Fund. At that time, the Fund may be combined with the Principal LifeTime Strategic Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

------

![](glidepath_plt2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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.

**•** **Forward Contracts, Futures, and Swaps.** Forward contracts, futures, and 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 forward contract, future, or swap; possible lack of a liquid secondary market for a forward contract, future, or swap and the resulting inability to close a forward contract, future, or 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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

**Total Returns as of December 31**

![](plt2030.jpg)

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| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **15.42%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(15.80)%** |

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

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| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(20.25)%** | **2.86%** | **5.90%** |
| **Class A Return After Taxes on Distributions** | **(22.09)%** | **0.92%** | **4.12%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(10.94)%** | **2.03%** | **4.37%** |
| **Class J Return Before Taxes** | **(17.75)%** | **3.88%** | **6.48%** |
| **Institutional Class Return Before Taxes** | **(16.80)%** | **4.05%** | **6.70%** |
| **Class R-1 Return Before Taxes** | **(17.61)%** | **3.13%** | **5.77%** |
| **Class R-3 Return Before Taxes** | **(17.31)%** | **3.45%** | **6.10%** |
| **Class R-4 Return Before Taxes** | **(17.15)%** | **3.66%** | **6.30%** |
| **Class R-5 Return Before Taxes** | **(17.07)%** | **3.77%** | **6.43%** |
| S&P Target Date 2030 Index (reflects no deduction for fees, expenses, or taxes) | (13.97)% | 4.17% | 6.84% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2007), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2007), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

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**Principal LifeTime 2035 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

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| | |
|:---|:---|
| **Shareholder Fees (fees paid directly from your investment):** | **None** |

---

**Annual Fund Operating Expenses**

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

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.01% | 0.53% | 0.32% | 0.28% | 0.26% |
| Acquired Fund Fees and Expenses | 0.61% | 0.61% | 0.61% | 0.61% | 0.61% |
| **Total Annual Fund Operating Expenses** | **0.62%** | **1.49%** | **1.18%** | **0.99%** | **0.87%** |

---

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Institutional Class** | $63 | $199 | $346 | $774 |
| **Class R-1** | 152 | 471 | 813 | 1779 |
| **Class R-3** | 120 | 375 | 649 | 1432 |
| **Class R-4** | 101 | 315 | 547 | 1213 |
| **Class R-5** | 89 | 278 | 482 | 1073 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 19.60% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds and invests in underlying funds of Principal Funds, Inc. ("PFI"). Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

------

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign securities, securities denominated in foreign currencies, investment companies (including index funds), U.S. government and U.S. government-sponsored securities, and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use futures, options, swaps (including, for example, credit default, interest rate, and currency swaps), and forwards in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Strategic Income Fund. At that time, the Fund may be combined with the Principal LifeTime Strategic Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

![](glidepath_plt2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives.

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Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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.

**•** **Forward Contracts, Futures, and Swaps.** Forward contracts, futures, and 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 forward contract, future, or swap; possible lack of a liquid secondary market for a forward contract, future, or swap and the resulting inability to close a forward contract, future, or 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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

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**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

------

**Total Returns as of December 31**

![](plt2035.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **17.13%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(17.37)%** |

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

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| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Institutional Class Return Before Taxes** | **(17.47)%** | **4.51%** | **7.19%** |
| **Institutional Class Return After Taxes on Distributions** | **(18.98)%** | **2.46%** | **5.35%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(9.47)%** | **3.08%** | **5.30%** |
| **Class R-1 Return Before Taxes** | **(18.26)%** | **3.58%** | **6.26%** |
| **Class R-3 Return Before Taxes** | **(17.98)%** | **3.90%** | **6.59%** |
| **Class R-4 Return Before Taxes** | **(17.81)%** | **4.09%** | **6.79%** |
| **Class R-5 Return Before Taxes** | **(17.71)%** | **4.24%** | **6.93%** |
| S&P Target Date 2035 Index (reflects no deduction for fees, expenses, or taxes) | (15.00)% | 4.63% | 7.42% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2008), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2008), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

------

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Principal LifeTime 2040 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Sales Charge (Load) Imposed on Purchases (as a <br> percentage of offering price)<br>| 5.50% |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage of the <br> offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% | 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.13% | 0.05% | 0.01% | 0.53% | 0.32% | 0.28% | 0.26% |
| Acquired Fund Fees and Expenses | 0.63% | 0.63% | 0.63% | 0.63% | 0.63% | 0.63% | 0.63% |
| **Total Annual Fund Operating Expenses** | **1.01%** | **0.83%** | **0.64%** | **1.51%** | **1.20%** | **1.01%** | **0.89%** |
| Expense Reimbursement<sup>(1)</sup> <br>| 0.00% | N/A | N/A | N/A | N/A | N/A | N/A |
| **Total Annual Fund Operating Expenses after Expense** <br> **Reimbursement**<br>| **1.01%** | **0.83%** | **0.64%** | **1.51%** | **1.20%** | **1.01%** | **0.89%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.38% for Class A shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $647 | $854 | $1077 | $1718 |
| **Class J** | 185 | 265 | 460 | 1025 |
| **Institutional Class** | 65 | 205 | 357 | 798 |
| **Class R-1** | 154 | 477 | 824 | 1802 |
| **Class R-3** | 122 | 381 | 660 | 1455 |
| **Class R-4** | 103 | 322 | 558 | 1236 |
| **Class R-5** | 91 | 284 | 493 | 1096 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $85 | $265 | $460 | $1025 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 23.80% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds and invests in underlying funds of Principal Funds, Inc. ("PFI"). Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign (including those in emerging markets) securities, securities denominated in foreign currencies, investment companies (including index funds), U.S. government and U.S. government-sponsored securities, and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use equity index futures and options in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Strategic Income Fund. At that

------

time, the Fund may be combined with the Principal LifeTime Strategic Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

![](glidepath_plt2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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;&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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

**Total Returns as of December 31**

![](plt2040.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **17.96%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(18.87)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(22.90)%** | **3.20%** | **6.54%** |
| **Class A Return After Taxes on Distributions** | **(24.38)%** | **1.25%** | **4.78%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(12.57)%** | **2.32%** | **4.94%** |
| **Class J Return Before Taxes** | **(19.01)%** | **4.58%** | **7.28%** |
| **Institutional Class Return Before Taxes** | **(18.13)%** | **4.75%** | **7.54%** |
| **Class R-1 Return Before Taxes** | **(18.83)%** | **3.85%** | **6.59%** |
| **Class R-3 Return Before Taxes** | **(18.55)%** | **4.18%** | **6.93%** |
| **Class R-4 Return Before Taxes** | **(18.38)%** | **4.38%** | **7.13%** |
| **Class R-5 Return Before Taxes** | **(18.32)%** | **4.49%** | **7.26%** |
| S&P Target Date 2040 Index (reflects no deduction for fees, expenses, or taxes) | (15.57)% | 4.97% | 7.84% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2007), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2007), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Principal LifeTime 2045 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

---

| | |
|:---|:---|
| **Shareholder Fees (fees paid directly from your investment):** | **None** |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.01% | 0.53% | 0.32% | 0.28% | 0.26% |
| Acquired Fund Fees and Expenses | 0.65% | 0.65% | 0.65% | 0.65% | 0.65% |
| **Total Annual Fund Operating Expenses** | **0.66%** | **1.53%** | **1.22%** | **1.03%** | **0.91%** |

---

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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** | **5 years** | **10 years** |
| **Institutional Class** | $67 | $211 | $368 | $822 |
| **Class R-1** | 156 | 483 | 834 | 1824 |
| **Class R-3** | 124 | 387 | 670 | 1477 |
| **Class R-4** | 105 | 328 | 569 | 1259 |
| **Class R-5** | 93 | 290 | 504 | 1120 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 23.80% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds and invests in underlying funds of Principal Funds, Inc. ("PFI"). Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

------

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign (including those in emerging markets) securities, securities denominated in foreign currencies, investment companies (including index funds), and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use equity index futures and options in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Strategic Income Fund. At that time, the Fund may be combined with the Principal LifeTime Strategic Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

![](glidepath_plt2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives.

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Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

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**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

**Total Returns as of December 31**

![](plt2045.jpg)

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| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **18.90%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(19.94)%** |

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

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| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Institutional Class Return Before Taxes** | **(18.52)%** | **4.98%** | **7.81%** |
| **Institutional Class Return After Taxes on Distributions** | **(20.12)%** | **3.20%** | **6.04%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(9.88)%** | **3.70%** | **5.86%** |
| **Class R-1 Return Before Taxes** | **(19.27)%** | **4.04%** | **6.85%** |
| **Class R-3 Return Before Taxes** | **(19.02)%** | **4.37%** | **7.19%** |
| **Class R-4 Return Before Taxes** | **(18.86)%** | **4.57%** | **7.40%** |
| **Class R-5 Return Before Taxes** | **(18.78)%** | **4.70%** | **7.52%** |
| S&P Target Date 2045 Index (reflects no deduction for fees, expenses, or taxes) | (15.85)% | 5.16% | 8.11% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2008), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2008), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

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**Principal LifeTime 2050 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Sales Charge (Load) Imposed on Purchases (as a <br> percentage of offering price)<br>| 5.50% |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage of the <br> offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% | 1.00% |  |  |  |  |  |

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**Annual Fund Operating Expenses**

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

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.18% | 0.09% | 0.01% | 0.53% | 0.32% | 0.28% | 0.26% |
| Acquired Fund Fees and Expenses | 0.66% | 0.66% | 0.66% | 0.66% | 0.66% | 0.66% | 0.66% |
| **Total Annual Fund Operating Expenses** | **1.09%** | **0.90%** | **0.67%** | **1.54%** | **1.23%** | **1.04%** | **0.92%** |
| Expense Reimbursement<sup>(1)</sup> <br>| (0.05)% | N/A | N/A | N/A | N/A | N/A | N/A |
| **Total Annual Fund Operating Expenses after Expense** <br> **Reimbursement**<br>| **1.04%** | **0.90%** | **0.67%** | **1.54%** | **1.23%** | **1.04%** | **0.92%** |

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<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.38% for Class A shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

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**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $650 | $873 | $1113 | $1801 |
| **Class J** | 192 | 287 | 498 | 1108 |
| **Institutional Class** | 68 | 214 | 373 | 835 |
| **Class R-1** | 157 | 486 | 839 | 1834 |
| **Class R-3** | 125 | 390 | 676 | 1489 |
| **Class R-4** | 106 | 331 | 574 | 1271 |
| **Class R-5** | 94 | 293 | 509 | 1131 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $92 | $287 | $498 | $1108 |

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**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 26.90% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds and invests in underlying funds of Principal Funds, Inc. ("PFI"). Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign (including those in emerging markets) securities, securities denominated in foreign currencies, investment companies (including index funds), and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use equity index futures and options in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Strategic Income Fund. At that

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time, the Fund may be combined with the Principal LifeTime Strategic Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

![](glidepath_plt2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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.

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**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

**Total Returns as of December 31**

![](plt2050.jpg)

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| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **19.45%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(20.88)%** |

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

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| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(23.56)%** | **3.52%** | **6.99%** |
| **Class A Return After Taxes on Distributions** | **(25.07)%** | **1.73%** | **5.36%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(12.88)%** | **2.61%** | **5.34%** |
| **Class J Return Before Taxes** | **(19.72)%** | **4.88%** | **7.69%** |
| **Institutional Class Return Before Taxes** | **(18.79)%** | **5.09%** | **8.00%** |
| **Class R-1 Return Before Taxes** | **(19.55)%** | **4.18%** | **7.06%** |
| **Class R-3 Return Before Taxes** | **(19.30)%** | **4.51%** | **7.39%** |
| **Class R-4 Return Before Taxes** | **(19.10)%** | **4.71%** | **7.60%** |
| **Class R-5 Return Before Taxes** | **(19.06)%** | **4.83%** | **7.72%** |
| S&P Target Date 2050 Index (reflects no deduction for fees, expenses, or taxes) | (15.98)% | 5.26% | 8.33% |

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After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2007), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2007), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

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**Principal LifeTime 2055 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

---

| | |
|:---|:---|
| **Shareholder Fees (fees paid directly from your investment):** | **None** |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.01% | 0.54% | 0.33% | 0.29% | 0.27% |
| Acquired Fund Fees and Expenses | 0.66% | 0.66% | 0.66% | 0.66% | 0.66% |
| **Total Annual Fund Operating Expenses** | **0.67%** | **1.55%** | **1.24%** | **1.05%** | **0.93%** |

---

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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** | **5 years** | **10 years** |
| **Institutional Class** | $68 | $214 | $373 | $835 |
| **Class R-1** | 158 | 490 | 845 | 1845 |
| **Class R-3** | 126 | 393 | 681 | 1500 |
| **Class R-4** | 107 | 334 | 579 | 1283 |
| **Class R-5** | 95 | 296 | 515 | 1143 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 22.60% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds and invests in underlying funds of Principal Funds, Inc. ("PFI"). Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

------

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign (including those in emerging markets) securities, securities denominated in foreign currencies, investment companies (including index funds), and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use equity index futures and options in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Strategic Income Fund. At that time, the Fund may be combined with the Principal LifeTime Strategic Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

![](glidepath_plt2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives.

------

Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

------

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

**Total Returns as of December 31**

![](plt2055.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **19.93%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(21.46)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Institutional Class Return Before Taxes** | **(18.85)%** | **5.21%** | **8.11%** |
| **Institutional Class Return After Taxes on Distributions** | **(20.40)%** | **3.63%** | **6.59%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(10.07)%** | **3.93%** | **6.22%** |
| **Class R-1 Return Before Taxes** | **(19.51)%** | **4.30%** | **7.18%** |
| **Class R-3 Return Before Taxes** | **(19.24)%** | **4.62%** | **7.51%** |
| **Class R-4 Return Before Taxes** | **(19.15)%** | **4.81%** | **7.71%** |
| **Class R-5 Return Before Taxes** | **(18.99)%** | **4.95%** | **7.85%** |
| S&P Target Date 2055 Index (reflects no deduction for fees, expenses, or taxes) | (15.98)% | 5.31% | 8.46% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2008), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2008), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Principal LifeTime 2060 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is paid, <br> whichever is less)<br>| 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.28% | 0.01% | 0.54% | 0.33% | 0.29% | 0.27% |
| Acquired Fund Fees and Expenses | 0.66% | 0.66% | 0.66% | 0.66% | 0.66% | 0.66% |
| **Total Annual Fund Operating Expenses** | **1.09%** | **0.67%** | **1.55%** | **1.24%** | **1.05%** | **0.93%** |
| Expense Reimbursement<sup>(1)</sup> <br>| (0.05)% | N/A | N/A | N/A | N/A | N/A |
| **Total Annual Fund Operating Expenses after Expense Reimbursement** | **1.04%** | **0.67%** | **1.55%** | **1.24%** | **1.05%** | **0.93%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.38% for Class J shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $206 | $342 | $596 | $1324 |
| **Institutional Class** | 68 | 214 | 373 | 835 |
| **Class R-1** | 158 | 490 | 845 | 1845 |
| **Class R-3** | 126 | 393 | 681 | 1500 |
| **Class R-4** | 107 | 334 | 579 | 1283 |
| **Class R-5** | 95 | 296 | 515 | 1143 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $106 | $342 | $596 | $1324 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 21.70% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds and invests in underlying funds of Principal Funds, Inc. ("PFI"). Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign (including those in emerging markets) securities, securities denominated in foreign currencies, investment companies (including index funds), and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use equity index futures and options in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Strategic Income Fund. At that time, the Fund may be combined with the Principal LifeTime Strategic Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

------

![](glidepath_plt2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

Life of Fund returns are measured from the date the Fund's shares were first sold (March 1, 2013).

**Total Returns as of December 31**

![](plt2060.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **20.12%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(21.80)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **Life of Fund** |
|  |  |  | **03/01/13** |
| **Institutional Class Return Before Taxes** | **(18.82)%** | **5.30%** | **7.90%** |
| **Institutional Class Return After Taxes on Distributions** | **(20.35)%** | **3.83%** | **6.70%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(10.07)%** | **4.02%** | **6.18%** |
| **Class J Return Before Taxes** | **(19.86)%** | **4.92%** | **7.53%** |
| **Class R-1 Return Before Taxes** | **(19.52)%** | **4.40%** | **6.98%** |
| **Class R-3 Return Before Taxes** | **(19.26)%** | **4.72%** | **7.33%** |
| **Class R-4 Return Before Taxes** | **(19.12)%** | **4.92%** | **7.52%** |
| **Class R-5 Return Before Taxes** | **(19.03)%** | **5.05%** | **7.64%** |
| S&P Target Date 2060 Index (reflects no deduction for fees, expenses, or taxes) | (16.02)% | 5.35% | 8.13% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

------

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2013), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2013), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Principal LifeTime 2065 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

---

| | |
|:---|:---|
| **Shareholder Fees (fees paid directly from your investment):** | **None** |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.05% | 0.55% | 0.34% | 0.30% | 0.28% |
| Acquired Fund Fees and Expenses | 0.66% | 0.66% | 0.66% | 0.66% | 0.66% |
| **Total Annual Fund Operating Expenses** | **0.71%** | **1.56%** | **1.25%** | **1.06%** | **0.94%** |

---

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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** | **5 years** | **10 years** |
| **Institutional Class** | $73 | $227 | $395 | $883 |
| **Class R-1** | 159 | 493 | 850 | 1856 |
| **Class R-3** | 127 | 397 | 686 | 1511 |
| **Class R-4** | 108 | 337 | 585 | 1294 |
| **Class R-5** | 96 | 300 | 520 | 1155 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 28.40% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds and invests in underlying funds of Principal Funds, Inc. ("PFI"). Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

------

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign (including those in emerging markets) securities, securities denominated in foreign currencies, investment companies (including index funds), and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use equity index futures and options in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Strategic Income Fund. At that time, the Fund may be combined with the Principal LifeTime Strategic Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

![](glidepath_plt2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives.

------

Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

------

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

Life of Fund returns are measured from the date the Fund's shares were first sold (September 6, 2017).

**Total Returns as of December 31**

![](plt2065.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **20.50%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(21.97)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **Life of Fund** |
|  |  |  | **09/06/17** |
| **Institutional Class Return Before Taxes** | **(18.83)%** | **5.29%** | **6.46%** |
| **Institutional Class Return After Taxes on Distributions** | **(20.03)%** | **4.21%** | **5.31%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(10.30)%** | **3.99%** | **4.89%** |
| **Class R-1 Return Before Taxes** | **(19.48)%** | **4.45%** | **5.60%** |
| **Class R-3 Return Before Taxes** | **(19.30)%** | **4.75%** | **5.90%** |
| **Class R-4 Return Before Taxes** | **(19.11)%** | **4.95%** | **6.11%** |
| **Class R-5 Return Before Taxes** | **(19.01)%** | **5.09%** | **6.25%** |
| S&P Target Date 2065+ Index (reflects no deduction for fees, expenses, or taxes) | (15.96)% | 5.38% | 6.59% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2017), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2017), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Principal LifeTime 2070 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is paid, <br> whichever is less)<br>| 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses<sup>(1)</sup> <br>| 2.42% | 0.80% | 0.86% | 0.65% | 0.61% | 0.59% |
| Acquired Fund Fees and Expenses<sup>(1)</sup> <br>| 0.67% | 0.67% | 0.67% | 0.67% | 0.67% | 0.67% |
| **Total Annual Fund Operating Expenses** | **3.24%** | **1.47%** | **1.88%** | **1.57%** | **1.38%** | **1.26%** |
| Expense Reimbursement<sup>(2)</sup> <br>| (2.27)% | (0.75)% | (0.28)% | (0.28)% | (0.28)% | (0.28)% |
| **Total Annual Fund Operating Expenses after Expense Reimbursement** | **0.97%** | **0.72%** | **1.60%** | **1.29%** | **1.10%** | **0.98%** |

---

<sup>(1)</sup>

Based on estimated amounts for the current fiscal year.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund, (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.30% for Class J, 0.05% for Institutional Class, 0.93% for Class R-1, 0.62% for Class R-3, 0.43% for Class R-4 and 0.31% for Class R-5 shares. It is expected that the expense limits will continue through the period ending February 28, 2025; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | |
|:---|:---|:---|
|  | **1 year** | **3 years** |
| **Class J** | $199  | $785  |
| **Institutional Class** | 74  | 391  |
| **Class R-1** | 163  | 564  |
| **Class R-3** | 131  | 468  |
| **Class R-4** | 112  | 409  |
| **Class R-5** | 100  | 372 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | |
|:---|:---|:---|
|  | **1 year** | **3 years** |
| **Class J** | $99  | $785 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying fund's performance. This is a new fund and does not yet have a portfolio turnover rate to disclose.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds and invests in underlying funds of Principal Funds, Inc. ("PFI"). Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, Principal Global Investors, LLC ("PGI"), the Fund's investment advisor, considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign (including those in emerging markets) securities, securities denominated in foreign currencies, investment companies (including index funds), and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use equity index futures and options in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Strategic Income Fund. At that time, the Fund may be combined with the Principal LifeTime Strategic Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

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![](glidepath_plt2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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

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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.

**Performance**

No performance information is shown below because the Fund has not yet had a calendar year of performance. The Fund's performance is benchmarked against the S&P Target Date 2065+ Index. Performance information provides an indication of the risks of investing in the Fund. Past performance is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information at www.PrincipalAM.com.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2023), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2023), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2023), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

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**Principal LifeTime Hybrid Income Fund**

**Objective**

The Fund seeks current income, and as a secondary objective, capital appreciation.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

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| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% |  |  |

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**Annual Fund Operating Expenses**

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

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| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Management Fees | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | N/A |
| Other Expenses | 0.13% | 0.16% | 0.08% |
| Acquired Fund Fees and Expenses | 0.33% | 0.33% | 0.33% |
| **Total Annual Fund Operating Expenses** | **0.61%** | **0.49%** | **0.41%** |
| Expense Reimbursement<sup>(1)</sup> <br>| N/A | (0.11)% | (0.06)% |
| **Total Annual Fund Operating Expenses After Expense Reimbursement** | **0.61%** | **0.38%** | **0.35%** |

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<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.05% for Institutional Class shares. In addition, for Class R-6 shares, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.02% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

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**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $162 | $195 | $340 | $762 |
| **Institutional Class** | 39 | 146 | 263 | 605 |
| **Class R-6** | 36 | 126 | 224 | 512 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $62 | $195 | $340 | $762 |

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**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying funds' performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 31.50% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund invests according to an asset allocation strategy designed for investors primarily seeking current income and secondarily capital appreciation. The Fund's asset allocation is designed for investors who are approximately 10 years beyond the normal retirement age of 65. The Fund is a fund of funds that invests in underlying funds of Principal Funds, Inc. ("PFI"), with a majority of the Fund's assets invested in index funds. Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of large market capitalization companies, fixed-income securities, domestic and foreign securities, securities denominated in foreign currencies, investment companies (including index funds), securitized products, U.S. government and U.S. government-sponsored securities, and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use futures, options, swaps (including, for example, credit default, interest rate, and currency swaps), and forwards in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

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![](glidepath_plth2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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.

**•** **Forward Contracts, Futures, and Swaps.** Forward contracts, futures, and 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 forward contract, future, or swap; possible lack of a liquid secondary market for a forward contract, future, or swap and the resulting inability to close a forward contract, future, or 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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

Life of Fund returns are measured from the date the Fund's shares were first sold (September 30, 2014).

For periods prior to the inception date of Class R-6 shares (August 24, 2015) and Class J shares (March 1, 2018), the performance shown in the table for these newer classes is that of the Fund's Institutional Class shares, adjusted to reflect the respective fees and expenses of each class. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares, which were first sold on September 30, 2014.

**Total Returns as of December 31**

![](plthyinc.jpg)

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| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **7.43%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q2 2022** | **(8.44)%** |

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **Life of Fund** |
|  |  |  | **09/30/14** |
| **Institutional Class Return Before Taxes** | **(13.20)%** | **1.79%** | **2.72%** |
| **Institutional Class Return After Taxes on Distributions** | **(14.48)%** | **0.44%** | **1.44%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(7.33)%** | **1.04%** | **1.70%** |
| **Class J Return Before Taxes** | **(14.21)%** | **1.56%** | **2.48%** |
| **Class R-6 Return Before Taxes** | **(13.15)%** | **1.82%** | **2.75%** |
| S&P Target Date Retirement Income Index (reflects no deduction for fees, expenses, or taxes) | (11.18)% | 2.33% | 3.19% |

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After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2014), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2014), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Class R-6 and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

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**Principal LifeTime Hybrid 2015 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Management Fees | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | N/A |
| Other Expenses | 0.10% | 0.13% | 0.05% |
| Acquired Fund Fees and Expenses | 0.33% | 0.33% | 0.33% |
| **Total Annual Fund Operating Expenses** | **0.58%** | **0.46%** | **0.38%** |
| Expense Reimbursement<sup>(1)</sup> <br>| N/A | (0.08)% | (0.03)% |
| **Total Annual Fund Operating Expenses After Expense Reimbursement** | **0.58%** | **0.38%** | **0.35%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.05% for Institutional Class shares. In addition, for Class R-6 shares, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.02% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $159 | $186 | $324 | $726 |
| **Institutional Class** | 39 | 140 | 250 | 571 |
| **Class R-6** | 36 | 119 | 210 | 477 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $59 | $186 | $324 | $726 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying funds' performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 18.10% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds that invests in underlying funds of Principal Funds, Inc. ("PFI"), with a majority of the Fund's assets invested in index funds. Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign securities, securities denominated in foreign currencies, investment companies (including index funds), securitized products, U.S. government and U.S. government-sponsored securities, and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use futures, options, swaps (including, for example, credit default, interest rate, and currency swaps), and forwards in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Hybrid Income Fund. At that time, the Fund may be combined with the Principal LifeTime Hybrid Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

------

![](glidepath_plth2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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.

**•** **Forward Contracts, Futures, and Swaps.** Forward contracts, futures, and 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 forward contract, future, or swap; possible lack of a liquid secondary market for a forward contract, future, or swap and the resulting inability to close a forward contract, future, or 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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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.

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**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

Life of Fund returns are measured from the date the Fund's shares were first sold (September 30, 2014).

For periods prior to the inception date of Class R-6 shares (August 24, 2015) and Class J shares (March 1, 2018), the performance shown in the table for these newer classes is that of the Fund's Institutional Class shares, adjusted to reflect the respective fees and expenses of each class. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares, which were first sold on September 30, 2014.

**Total Returns as of December 31**

![](plthy2015.jpg)

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| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **9.79%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q2 2022** | **(8.93)%** |

---

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **Life of Fund** |
|  |  |  | **09/30/14** |
| **Institutional Class Return Before Taxes** | **(13.61)%** | **2.81%** | **4.06%** |
| **Institutional Class Return After Taxes on Distributions** | **(14.86)%** | **1.47%** | **2.79%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(7.55)%** | **1.86%** | **2.81%** |
| **Class J Return Before Taxes** | **(14.57)%** | **2.59%** | **3.83%** |
| **Class R-6 Return Before Taxes** | **(13.63)%** | **2.83%** | **4.09%** |
| S&P Target Date 2015 Index (reflects no deduction for fees, expenses, or taxes) | (12.17)% | 3.07% | 4.19% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2014), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2014), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Class R-6 and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Principal LifeTime Hybrid 2020 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

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| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Management Fees | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | N/A |
| Other Expenses | 0.05% | 0.08% | 0.02% |
| Acquired Fund Fees and Expenses | 0.33% | 0.33% | 0.33% |
| **Total Annual Fund Operating Expenses** | **0.53%** | **0.41%** | **0.35%** |
| Expense Reimbursement<sup>(1)</sup> <br>| N/A | (0.03)% | 0.00% |
| **Total Annual Fund Operating Expenses After Expense Reimbursement** | **0.53%** | **0.38%** | **0.35%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.05% for Institutional Class shares. In addition, for Class R-6 shares, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.02% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $154 | $170 | $296 | $665 |
| **Institutional Class** | 39 | 129 | 227 | 515 |
| **Class R-6** | 36 | 113 | 197 | 443 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $54 | $170 | $296 | $665 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying funds' performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 20.40% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds that invests in underlying funds of Principal Funds, Inc. ("PFI"), with a majority of the Fund's assets invested in index funds. Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign securities, securities denominated in foreign currencies, investment companies (including index funds), securitized products, U.S. government and U.S. government-sponsored securities, and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use futures, options, swaps (including, for example, credit default, interest rate, and currency swaps), and forwards in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Hybrid Income Fund. At that time, the Fund may be combined with the Principal LifeTime Hybrid Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

------

![](glidepath_plth2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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.

**•** **Forward Contracts, Futures, and Swaps.** Forward contracts, futures, and 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 forward contract, future, or swap; possible lack of a liquid secondary market for a forward contract, future, or swap and the resulting inability to close a forward contract, future, or 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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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.

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**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

Life of Fund returns are measured from the date the Fund's shares were first sold (September 30, 2014).

For periods prior to the inception date of Class R-6 shares (August 24, 2015) and Class J shares (March 1, 2018), the performance shown in the table for these newer classes is that of the Fund's Institutional Class shares, adjusted to reflect the respective fees and expenses of each class. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares, which were first sold on September 30, 2014.

**Total Returns as of December 31**

![](plthy2020.jpg)

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| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **11.16%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(10.35)%** |

---

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **Life of Fund** |
|  |  |  | **09/30/14** |
| **Institutional Class Return Before Taxes** | **(14.35)%** | **3.28%** | **4.70%** |
| **Institutional Class Return After Taxes on Distributions** | **(15.93)%** | **1.84%** | **3.37%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(7.76)%** | **2.26%** | **3.34%** |
| **Class J Return Before Taxes** | **(15.23)%** | **3.10%** | **4.48%** |
| **Class R-6 Return Before Taxes** | **(14.32)%** | **3.32%** | **4.72%** |
| S&P Target Date 2020 Index (reflects no deduction for fees, expenses, or taxes) | (12.82)% | 3.14% | 4.49% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2014), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2014), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Class R-6 and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

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**Principal LifeTime Hybrid 2025 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

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| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Management Fees | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | N/A |
| Other Expenses | 0.05% | 0.07% | 0.02% |
| Acquired Fund Fees and Expenses | 0.33% | 0.33% | 0.33% |
| **Total Annual Fund Operating Expenses** | **0.53%** | **0.40%** | **0.35%** |
| Expense Reimbursement<sup>(1)</sup> <br>| N/A | (0.02)% | 0.00% |
| **Total Annual Fund Operating Expenses After Expense Reimbursement** | **0.53%** | **0.38%** | **0.35%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.05% for Institutional Class shares. In addition, for Class R-6 shares, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.02% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

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**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $154 | $170 | $296 | $665 |
| **Institutional Class** | 39 | 126 | 222 | 503 |
| **Class R-6** | 36 | 113 | 197 | 443 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $54 | $170 | $296 | $665 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying funds' performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 13.60% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds that invests in underlying funds of Principal Funds, Inc. ("PFI"), with a majority of the Fund's assets invested in index funds. Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign securities, securities denominated in foreign currencies, investment companies (including index funds), securitized products, U.S. government and U.S. government-sponsored securities, and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use futures, options, swaps (including, for example, credit default, interest rate, and currency swaps), and forwards in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Hybrid Income Fund. At that time, the Fund may be combined with the Principal LifeTime Hybrid Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

------

![](glidepath_plth2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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.

**•** **Forward Contracts, Futures, and Swaps.** Forward contracts, futures, and 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 forward contract, future, or swap; possible lack of a liquid secondary market for a forward contract, future, or swap and the resulting inability to close a forward contract, future, or 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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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.

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**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

Life of Fund returns are measured from the date the Fund's shares were first sold (September 30, 2014).

For periods prior to the inception date of Class R-6 shares (August 24, 2015) and Class J shares (March 1, 2018), the performance shown in the table for these newer classes is that of the Fund's Institutional Class shares, adjusted to reflect the respective fees and expenses of each class. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares, which were first sold on September 30, 2014.

**Total Returns as of December 31**

![](plthy2025.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **12.56%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(12.50)%** |

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **Life of Fund** |
|  |  |  | **09/30/14** |
| **Institutional Class Return Before Taxes** | **(15.17)%** | **3.76%** | **5.29%** |
| **Institutional Class Return After Taxes on Distributions** | **(16.64)%** | **2.41%** | **4.01%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(8.25)%** | **2.67%** | **3.83%** |
| **Class J Return Before Taxes** | **(16.10)%** | **3.57%** | **5.07%** |
| **Class R-6 Return Before Taxes** | **(15.21)%** | **3.79%** | **5.31%** |
| S&P Target Date 2025 Index (reflects no deduction for fees, expenses, or taxes) | (13.14)% | 3.75% | 5.11% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2014), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2014), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Class R-6 and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

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**Principal LifeTime Hybrid 2030 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

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| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Management Fees | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | N/A |
| Other Expenses | 0.06% | 0.07% | 0.02% |
| Acquired Fund Fees and Expenses | 0.31% | 0.31% | 0.31% |
| **Total Annual Fund Operating Expenses** | **0.52%** | **0.38%** | **0.33%** |
| Expense Reimbursement<sup>(1)</sup> <br>| N/A | (0.02)% | 0.00% |
| **Total Annual Fund Operating Expenses After Expense Reimbursement** | **0.52%** | **0.36%** | **0.33%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.05% for Institutional Class shares. In addition, for Class R-6 shares, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.02% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $153 | $167 | $291 | $653 |
| **Institutional Class** | 37 | 120 | 211 | 478 |
| **Class R-6** | 34 | 106 | 185 | 418 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $53 | $167 | $291 | $653 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying funds' performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 16.70% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds that invests in underlying funds of Principal Funds, Inc. ("PFI"), with a majority of the Fund's assets invested in index funds. Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign securities, securities denominated in foreign currencies, investment companies (including index funds), U.S. government and U.S. government-sponsored securities, and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use futures, options, swaps (including, for example, credit default, interest rate, and currency swaps), and forwards in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Hybrid Income Fund. At that time, the Fund may be combined with the Principal LifeTime Hybrid Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

------

![](glidepath_plth2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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.

**•** **Forward Contracts, Futures, and Swaps.** Forward contracts, futures, and 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 forward contract, future, or swap; possible lack of a liquid secondary market for a forward contract, future, or swap and the resulting inability to close a forward contract, future, or 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.

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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.

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**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

Life of Fund returns are measured from the date the Fund's shares were first sold (September 30, 2014).

For periods prior to the inception date of Class R-6 shares (August 24, 2015) and Class J shares (March 1, 2018), the performance shown in the table for these newer classes is that of the Fund's Institutional Class shares, adjusted to reflect the respective fees and expenses of each class. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares, which were first sold on September 30, 2014.

**Total Returns as of December 31**

![](plthy2030.jpg)

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| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **14.20%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(14.39)%** |

---

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **Life of Fund** |
|  |  |  | **09/30/14** |
| **Institutional Class Return Before Taxes** | **(16.75)%** | **4.05%** | **5.72%** |
| **Institutional Class Return After Taxes on Distributions** | **(18.36)%** | **2.53%** | **4.33%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(8.97)%** | **2.84%** | **4.15%** |
| **Class J Return Before Taxes** | **(17.64)%** | **3.83%** | **5.48%** |
| **Class R-6 Return Before Taxes** | **(16.73)%** | **4.07%** | **5.73%** |
| S&P Target Date 2030 Index (reflects no deduction for fees, expenses, or taxes) | (13.97)% | 4.17% | 5.62% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2014), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2014), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Class R-6 and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Principal LifeTime Hybrid 2035 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Management Fees | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | N/A |
| Other Expenses | 0.07% | 0.07% | 0.02% |
| Acquired Fund Fees and Expenses | 0.33% | 0.33% | 0.33% |
| **Total Annual Fund Operating Expenses** | **0.55%** | **0.40%** | **0.35%** |
| Expense Reimbursement<sup>(1)</sup> <br>| N/A | (0.02)% | 0.00% |
| **Total Annual Fund Operating Expenses After Expense Reimbursement** | **0.55%** | **0.38%** | **0.35%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.05% for Institutional Class shares. In addition, for Class R-6 shares, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.02% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $156 | $176 | $307 | $689 |
| **Institutional Class** | 39 | 126 | 222 | 503 |
| **Class R-6** | 36 | 113 | 197 | 443 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $56 | $176 | $307 | $689 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying funds' performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 12.60% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds that invests in underlying funds of Principal Funds, Inc. ("PFI"), with a majority of the Fund's assets invested in index funds. Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign securities, securities denominated in foreign currencies, investment companies (including index funds), U.S. government and U.S. government-sponsored securities, and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use equity index futures and options in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Hybrid Income Fund. At that time, the Fund may be combined with the Principal LifeTime Hybrid Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

------

![](glidepath_plth2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

------

**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.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

Life of Fund returns are measured from the date the Fund's shares were first sold (September 30, 2014).

For periods prior to the inception date of Class R-6 shares (August 24, 2015) and Class J shares (March 1, 2018), the performance shown in the table for these newer classes is that of the Fund's Institutional Class shares, adjusted to reflect the respective fees and expenses of each class. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares, which were first sold on September 30, 2014.

**Total Returns as of December 31**

![](plthy2035.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **15.37%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(16.18)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **Life of Fund** |
|  |  |  | **09/30/14** |
| **Institutional Class Return Before Taxes** | **(17.36)%** | **4.42%** | **6.16%** |
| **Institutional Class Return After Taxes on Distributions** | **(18.98)%** | **2.97%** | **4.88%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(9.25)%** | **3.18%** | **4.58%** |
| **Class J Return Before Taxes** | **(18.30)%** | **4.20%** | **5.92%** |
| **Class R-6 Return Before Taxes** | **(17.30)%** | **4.48%** | **6.20%** |
| S&P Target Date 2035 Index (reflects no deduction for fees, expenses, or taxes) | (15.00)% | 4.63% | 6.13% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2014), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2014), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Class R-6 and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Principal LifeTime Hybrid 2040 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Management Fees | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | N/A |
| Other Expenses | 0.08% | 0.07% | 0.02% |
| Acquired Fund Fees and Expenses | 0.35% | 0.35% | 0.35% |
| **Total Annual Fund Operating Expenses** | **0.58%** | **0.42%** | **0.37%** |
| Expense Reimbursement<sup>(1)</sup> <br>| N/A | (0.02)% | 0.00% |
| **Total Annual Fund Operating Expenses After Expense Reimbursement** | **0.58%** | **0.40%** | **0.37%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.05% for Institutional Class shares. In addition, for Class R-6 shares, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.02% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $159 | $186 | $324 | $726 |
| **Institutional Class** | 41 | 133 | 233 | 528 |
| **Class R-6** | 38 | 119 | 208 | 468 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $59 | $186 | $324 | $726 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying funds' performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 13.50% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds that invests in underlying funds of Principal Funds, Inc. ("PFI"), with a majority of the Fund's assets invested in index funds. Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign (including those in emerging markets) securities, securities denominated in foreign currencies, investment companies (including index funds), U.S. government and U.S. government-sponsored securities, and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use equity index futures and options in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Hybrid Income Fund. At that time, the Fund may be combined with the Principal LifeTime Hybrid Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

------

![](glidepath_plth2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

Life of Fund returns are measured from the date the Fund's shares were first sold (September 30, 2014).

For periods prior to the inception date of Class R-6 shares (August 24, 2015) and Class J shares (March 1, 2018), the performance shown in the table for these newer classes is that of the Fund's Institutional Class shares, adjusted to reflect the respective fees and expenses of each class. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares, which were first sold on September 30, 2014.

**Total Returns as of December 31**

![](plthy2040.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **16.41%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(17.67)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **Life of Fund** |
|  |  |  | **09/30/14** |
| **Institutional Class Return Before Taxes** | **(17.90)%** | **4.67%** | **6.49%** |
| **Institutional Class Return After Taxes on Distributions** | **(19.57)%** | **3.28%** | **5.25%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(9.49)%** | **3.49%** | **4.94%** |
| **Class J Return Before Taxes** | **(18.80)%** | **4.43%** | **6.24%** |
| **Class R-6 Return Before Taxes** | **(17.92)%** | **4.69%** | **6.52%** |
| S&P Target Date 2040 Index (reflects no deduction for fees, expenses, or taxes) | (15.57)% | 4.97% | 6.50% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2014), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2014), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Class R-6 and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Principal LifeTime Hybrid 2045 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Management Fees | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | N/A |
| Other Expenses | 0.11% | 0.08% | 0.03% |
| Acquired Fund Fees and Expenses | 0.36% | 0.36% | 0.36% |
| **Total Annual Fund Operating Expenses** | **0.62%** | **0.44%** | **0.39%** |
| Expense Reimbursement<sup>(1)</sup> <br>| N/A | (0.03)% | (0.01)% |
| **Total Annual Fund Operating Expenses After Expense Reimbursement** | **0.62%** | **0.41%** | **0.38%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.05% for Institutional Class shares. In addition, for Class R-6 shares, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.02% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

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**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $163 | $199 | $346 | $774 |
| **Institutional Class** | 42 | 138 | 243 | 552 |
| **Class R-6** | 39 | 124 | 218 | 492 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $63 | $199 | $346 | $774 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying funds' performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 15.90% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds that invests in underlying funds of Principal Funds, Inc. ("PFI"), with a majority of the Fund's assets invested in index funds. Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign (including those in emerging markets) securities, securities denominated in foreign currencies, investment companies (including index funds), and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use equity index futures and options in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Hybrid Income Fund. At that time, the Fund may be combined with the Principal LifeTime Hybrid Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

------

![](glidepath_plth2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

Life of Fund returns are measured from the date the Fund's shares were first sold (September 30, 2014).

For periods prior to the inception date of Class R-6 shares (August 24, 2015) and Class J shares (March 1, 2018), the performance shown in the table for these newer classes is that of the Fund's Institutional Class shares, adjusted to reflect the respective fees and expenses of each class. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares, which were first sold on September 30, 2014.

**Total Returns as of December 31**

![](plthy2045.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **17.28%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(18.83)%** |

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **Life of Fund** |
|  |  |  | **09/30/14** |
| **Institutional Class Return Before Taxes** | **(18.27)%** | **4.92%** | **6.74%** |
| **Institutional Class Return After Taxes on Distributions** | **(20.02)%** | **3.58%** | **5.54%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(9.60)%** | **3.73%** | **5.17%** |
| **Class J Return Before Taxes** | **(19.21)%** | **4.68%** | **6.48%** |
| **Class R-6 Return Before Taxes** | **(18.28)%** | **4.94%** | **6.76%** |
| S&P Target Date 2045 Index (reflects no deduction for fees, expenses, or taxes) | (15.85)% | 5.16% | 6.73% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

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**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2014), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2014), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Class R-6 and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

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**Principal LifeTime Hybrid 2050 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

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| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Management Fees | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | N/A |
| Other Expenses | 0.13% | 0.09% | 0.03% |
| Acquired Fund Fees and Expenses | 0.37% | 0.37% | 0.37% |
| **Total Annual Fund Operating Expenses** | **0.65%** | **0.46%** | **0.40%** |
| Expense Reimbursement<sup>(1)</sup> <br>| N/A | (0.04)% | (0.01)% |
| **Total Annual Fund Operating Expenses After Expense Reimbursement** | **0.65%** | **0.42%** | **0.39%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.05% for Institutional Class shares. In addition, for Class R-6 shares, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.02% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $166 | $208 | $362 | $810 |
| **Institutional Class** | 43 | 144 | 254 | 575 |
| **Class R-6** | 40 | 127 | 223 | 504 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $66 | $208 | $362 | $810 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying funds' performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 16.30% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds that invests in underlying funds of Principal Funds, Inc. ("PFI"), with a majority of the Fund's assets invested in index funds. Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign (including those in emerging markets) securities, securities denominated in foreign currencies, investment companies (including index funds), and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use equity index futures and options in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Hybrid Income Fund. At that time, the Fund may be combined with the Principal LifeTime Hybrid Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

------

![](glidepath_plth2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

Life of Fund returns are measured from the date the Fund's shares were first sold (September 30, 2014).

For periods prior to the inception date of Class R-6 shares (August 24, 2015) and Class J shares (March 1, 2018), the performance shown in the table for these newer classes is that of the Fund's Institutional Class shares, adjusted to reflect the respective fees and expenses of each class. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares, which were first sold on September 30, 2014.

**Total Returns as of December 31**

![](plthy2050.jpg)

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| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **18.00%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(19.78)%** |

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

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| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **Life of Fund** |
|  |  |  | **09/30/14** |
| **Institutional Class Return Before Taxes** | **(18.49)%** | **5.06%** | **6.96%** |
| **Institutional Class Return After Taxes on Distributions** | **(20.20)%** | **3.62%** | **5.66%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(9.74)%** | **3.72%** | **5.26%** |
| **Class J Return Before Taxes** | **(19.38)%** | **4.83%** | **6.71%** |
| **Class R-6 Return Before Taxes** | **(18.46)%** | **5.08%** | **6.97%** |
| S&P Target Date 2050 Index (reflects no deduction for fees, expenses, or taxes) | (15.98)% | 5.26% | 6.88% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

------

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2014), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2014), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Class R-6 and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

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**Principal LifeTime Hybrid 2055 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

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| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Management Fees | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | N/A |
| Other Expenses | 0.24% | 0.14% | 0.06% |
| Acquired Fund Fees and Expenses | 0.37% | 0.37% | 0.37% |
| **Total Annual Fund Operating Expenses** | **0.76%** | **0.51%** | **0.43%** |
| Expense Reimbursement<sup>(1)</sup> <br>| (0.09)% | (0.09)% | (0.04)% |
| **Total Annual Fund Operating Expenses After Expense Reimbursement** | **0.67%** | **0.42%** | **0.39%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.30% for Class J and 0.05% for Institutional Class shares. In addition, for Class R-6 shares, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.02% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $168 | $234 | $414 | $934 |
| **Institutional Class** | 43 | 154 | 276 | 632 |
| **Class R-6** | 40 | 134 | 237 | 538 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $68 | $234 | $414 | $934 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying funds' performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 13.40% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds that invests in underlying funds of Principal Funds, Inc. ("PFI"), with a majority of the Fund's assets invested in index funds. Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign (including those in emerging markets) securities, securities denominated in foreign currencies, investment companies (including index funds), and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use equity index futures and options in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Hybrid Income Fund. At that time, the Fund may be combined with the Principal LifeTime Hybrid Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

------

![](glidepath_plth2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

Life of Fund returns are measured from the date the Fund's shares were first sold (September 30, 2014).

For periods prior to the inception date of Class R-6 shares (August 24, 2015) and Class J shares (March 1, 2018), the performance shown in the table for these newer classes is that of the Fund's Institutional Class shares, adjusted to reflect the respective fees and expenses of each class. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares, which were first sold on September 30, 2014.

**Total Returns as of December 31**

![](plthy2055.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **18.35%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(20.52)%** |

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **Life of Fund** |
|  |  |  | **09/30/14** |
| **Institutional Class Return Before Taxes** | **(18.50)%** | **5.15%** | **7.09%** |
| **Institutional Class Return After Taxes on Distributions** | **(20.33)%** | **3.86%** | **5.94%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(9.98)%** | **3.88%** | **5.46%** |
| **Class J Return Before Taxes** | **(19.48)%** | **4.89%** | **6.82%** |
| **Class R-6 Return Before Taxes** | **(18.44)%** | **5.18%** | **7.12%** |
| S&P Target Date 2055 Index (reflects no deduction for fees, expenses, or taxes) | (15.98)% | 5.31% | 6.96% |

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After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

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**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2014), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2014), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Class R-6 and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

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**Principal LifeTime Hybrid 2060 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

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| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% |  |  |

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**Annual Fund Operating Expenses**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Management Fees | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | N/A |
| Other Expenses | 0.43% | 0.29% | 0.13% |
| Acquired Fund Fees and Expenses | 0.37% | 0.37% | 0.37% |
| **Total Annual Fund Operating Expenses** | **0.95%** | **0.66%** | **0.50%** |
| Expense Reimbursement<sup>(1)</sup> <br>| (0.28)% | (0.24)% | (0.11)% |
| **Total Annual Fund Operating Expenses After Expense Reimbursement** | **0.67%** | **0.42%** | **0.39%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.30% for Class J and 0.05% for Institutional Class shares. In addition, for Class R-6 shares, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.02% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

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**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $168 | $275 | $498 | $1141 |
| **Institutional Class** | 43 | 187 | 344 | 800 |
| **Class R-6** | 40 | 149 | 269 | 618 |

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With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $68 | $275 | $498 | $1141 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying funds' performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 13.80% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds that invests in underlying funds of Principal Funds, Inc. ("PFI"), with a majority of the Fund's assets invested in index funds. Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign (including those in emerging markets) securities, securities denominated in foreign currencies, investment companies (including index funds), and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use equity index futures and options in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Hybrid Income Fund. At that time, the Fund may be combined with the Principal LifeTime Hybrid Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

------

![](glidepath_plth2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

Life of Fund returns are measured from the date the Fund's shares were first sold (September 30, 2014).

For periods prior to the inception date of Class R-6 shares (August 24, 2015) and Class J shares (March 1, 2018), the performance shown in the table for these newer classes is that of the Fund's Institutional Class shares, adjusted to reflect the respective fees and expenses of each class. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares, which were first sold on September 30, 2014.

**Total Returns as of December 31**

![](plthy2060.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **18.71%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(20.90)%** |

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

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| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **Life of Fund** |
|  |  |  | **09/30/14** |
| **Institutional Class Return Before Taxes** | **(18.52)%** | **5.28%** | **7.23%** |
| **Institutional Class Return After Taxes on Distributions** | **(19.97)%** | **4.18%** | **6.09%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(9.95)%** | **4.04%** | **5.53%** |
| **Class J Return Before Taxes** | **(19.52)%** | **4.99%** | **6.95%** |
| **Class R-6 Return Before Taxes** | **(18.48)%** | **5.30%** | **7.26%** |
| S&P Target Date 2060 Index (reflects no deduction for fees, expenses, or taxes) | (16.02)% | 5.35% | 7.01% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

------

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2014), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2014), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Class R-6 and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Principal LifeTime Hybrid 2065 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

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| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Management Fees | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | N/A |
| Other Expenses | 0.74% | 1.26% | 0.56% |
| Acquired Fund Fees and Expenses | 0.36% | 0.36% | 0.36% |
| **Total Annual Fund Operating Expenses** | **1.25%** | **1.62%** | **0.92%** |
| Expense Reimbursement<sup>(1)</sup> <br>| (0.59)% | (1.21)% | (0.54)% |
| **Total Annual Fund Operating Expenses After Expense Reimbursement** | **0.66%** | **0.41%** | **0.38%** |

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<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.30% for Class J and 0.05% for Institutional Class shares. In addition, for Class R-6 shares, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.02% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

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**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $167 | $338 | $630 | $1459 |
| **Institutional Class** | 42 | 392 | 767 | 1820 |
| **Class R-6** | 39 | 239 | 456 | 1082 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $67 | $338 | $630 | $1459 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying funds' performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 28.40% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds that invests in underlying funds of Principal Funds, Inc. ("PFI"), with a majority of the Fund's assets invested in index funds. Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, the Fund considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign (including those in emerging markets) securities, securities denominated in foreign currencies, investment companies (including index funds), and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use equity index futures and options in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Hybrid Income Fund. At that time, the Fund may be combined with the Principal LifeTime Hybrid Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

------

![](glidepath_plth2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

Life of Fund returns are measured from the date the Fund's shares were first sold (September 6, 2017).

For periods prior to the inception date of Class J shares (March 1, 2018), the performance shown in the table for Class J shares is that of the Fund's Institutional Class shares, adjusted to reflect the fees and expenses of Class J shares. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares, which were first sold on September 6, 2017.

During 2018, Class R-6 experienced a one-time loss of approximately $0.33 per share as a result of a large redemption. If such loss had not been recognized, the total return amounts expressed herein would have been higher. During May of 2019, Class R-6 experienced a one-time gain of approximately $0.35 per share as a result of a reimbursement by PGI, the investment advisor. If such gain had not been recognized, the total return amounts expressed herein would have been lower.

**Total Returns as of December 31**

![](plthy2065.jpg)

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| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **19.12%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(21.10)%** |

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **Life of Fund** |
|  |  |  | **09/06/17** |
| **Institutional Class Return Before Taxes** | **(18.54)%** | **5.42%** | **6.58%** |
| **Institutional Class Return After Taxes on Distributions** | **(19.84)%** | **4.55%** | **5.65%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(10.06)%** | **4.13%** | **5.04%** |
| **Class J Return Before Taxes** | **(19.54)%** | **5.12%** | **6.27%** |
| **Class R-6 Return Before Taxes** | **(18.48)%** | **5.46%**<sup>1</sup> <br>| **6.62%**<sup>1,</sup><sup>2</sup> <br>|
| S&P Target Date 2065+ Index (reflects no deduction for fees, expenses, or taxes) | (15.96)% | 5.38% | 6.59% |

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<sup>1</sup>

During 2018, Class R-6 experienced a one-time loss of approximately $0.33 per share as a result of a large redemption. If such loss had not been recognized, the total return amounts expressed herein would have been higher.

<sup>2</sup>

During May of 2019, Class R-6 experienced a one-time gain of approximately $0.35 per share as a result of a reimbursement by PGI, the investment advisor. If such gain had not been recognized, the total return amounts expressed herein would have been lower.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2017), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2017), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2017), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Class R-6 and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

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**Principal LifeTime Hybrid 2070 Fund**

**Objective**

The Fund seeks a total return consisting of long-term growth of capital and current income.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

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| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-6** |
| Management Fees | 0.00% | 0.00% | 0.00% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | N/A |
| Other Expenses<sup>(1)</sup> <br>| 14.67% | 32.80% | 1.38% |
| Acquired Fund Fees and Expenses<sup>(1)</sup> <br>| 0.37% | 0.37% | 0.37% |
| **Total Annual Fund Operating Expenses** | **15.19%** | **33.17%** | **1.75%** |
| Expense Reimbursement<sup>(2)</sup> <br>| (14.52)% | (32.75)% | (1.36)% |
| **Total Annual Fund Operating Expenses after Expense Reimbursement** | **0.67%** | **0.42%** | **0.39%** |

---

<sup>(1)</sup>

Based on estimated amounts for the current fiscal year.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.30% for Class J and 0.05% for Institutional Class shares. In addition, for Class R-6 shares, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.02% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 28, 2025; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

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**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

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| | | |
|:---|:---|:---|
|  | **1 year** | **3 years** |
| **Class J** | $168  | $2923  |
| **Institutional Class** | 43  | 5164  |
| **Class R-6** | 40  | 418 |

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With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | |
|:---|:---|:---|
|  | **1 year** | **3 years** |
| **Class J** | $68  | $2923 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying funds' performance. This is a new fund and does not yet have a portfolio turnover rate to disclose.

**Principal Investment Strategies**

The Fund operates as a "target date fund" that invests according to an asset allocation strategy designed for investors having a retirement investment goal close to the year in the Fund's name. The Fund is a fund of funds that invests in underlying funds of Principal Funds, Inc. ("PFI"), with a majority of the Fund's assets invested in index funds. Its underlying funds consist of domestic and foreign equity funds, fixed-income funds, real asset funds, and other funds that aim to offer diversification beyond traditional equity and fixed-income securities. The asset class diversification of the Fund is designed to moderate overall price volatility. The Fund may add, remove, or substitute underlying funds at any time.

The Fund is managed with strategic or long-term asset class targets and target ranges. There is a rebalancing strategy that aligns with the target weights to identify asset classes that are either overweight or underweight. The Fund may shift asset class targets in response to normal evaluative processes, the shortening time horizon of the Fund, or changes in market forces or Fund circumstances.

In selecting underlying funds and target weights, Principal Global Investors, LLC ("PGI"), the Fund's investment advisor, considers both quantitative measures (e.g., past performance, expected levels of risk and returns, expense levels, diversification, and style consistency) and qualitative factors (e.g., organizational stability, investment experience, investment and risk management processes, and information, trading, and compliance systems). There are no minimum or maximum percentages of assets that the Fund must invest in a specific asset class or underlying fund.

The underlying funds invest in growth and value stocks of small, medium, and large market capitalization companies, fixed-income securities, domestic and foreign (including those in emerging markets) securities, securities denominated in foreign currencies, investment companies (including index funds), and derivatives. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The underlying funds principally use equity index futures and options in order to gain exposure to a variety of securities or asset classes or attempt to reduce risk.

The Fund's asset allocation will become more conservative over time as investment goals near (for example, retirement, which is assumed to begin at age 65) and investors become more risk-averse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Hybrid Income Fund. At that time, the Fund may be combined with the Principal LifeTime Hybrid Income Fund if the Board of Directors determines that the combination is in the best interests of Fund shareholders. It is expected that at the target date in the Fund's name, the shareholder will begin gradually withdrawing the account's value.

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![](glidepath_plth2022.jpg)

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Target Date Fund Risk.** A target date fund should not be selected based solely on age or retirement date because there is no guarantee that this Fund will provide adequate income at or through retirement.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**•** **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.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**•** **Options.** Options involve specific risks, including: imperfect correlation between the change in market value of the instruments held by the Fund and the price of the options, counterparty risk, difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets), and an insufficient liquid secondary market for particular options.

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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

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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.

**Performance**

No performance information is shown below because the Fund has not yet had a calendar year of performance. The Fund's performance is benchmarked against the S&P Target Date 2065+ Index. Performance information provides an indication of the risks of investing in the Fund. Past performance is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information at www.PrincipalAM.com.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2023), Portfolio Manager

<sup>•</sup>

Scott Smith (since 2023), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2023), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Class R-6 and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

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**Real Estate Securities Fund**

**Objective**

The Fund seeks to generate a total return.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Maximum Sales Charge (Load) Imposed on <br> Purchases (as a percentage of offering price)<br>| 5.50% |  |  |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a <br> percentage of the offering price or NAV when <br> Sales Load is paid, whichever is less)<br>| 1.00% | 1.00% | 1.00% |  |  |  |  |  |  |

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**Annual Fund Operating Expenses**

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

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Management Fees<sup>(1)</sup> <br>| 0.79% | 0.79% | 0.79% | 0.79% | 0.79% | 0.79% | 0.79% | 0.79% | 0.79% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 1.00% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A | N/A |
| Other Expenses | 0.16% | 0.20% | 0.15% | 0.11% | 0.54% | 0.33% | 0.29% | 0.27% | 0.01% |
| **Total Annual Fund Operating Expenses** | **1.20%** | **1.99%** | **1.09%** | **0.90%** | **1.68%** | **1.37%** | **1.18%** | **1.06%** | **0.80%** |
| Expense Reimbursement<sup>(2)</sup> <br>| N/A | N/A | N/A | (0.04)% | N/A | N/A | N/A | N/A | N/A |
| **Total Annual Fund Operating Expenses** <br> **after Expense Reimbursement**<br>| **1.20%** | **1.99%** | **1.09%** | **0.86%** | **1.68%** | **1.37%** | **1.18%** | **1.06%** | **0.80%** |

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<sup>(1)</sup>

Fees have been restated to reflect current fees.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.86% for Institutional Class shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

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**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end of those periods. The Example assumes conversion of the Class C shares to Class A shares after the eighth year. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $666 | $910 | $1173 | $1925 |
| **Class C** | 302 | 624 | 1073 | 2113 |
| **Class J** | 211 | 347 | 601 | 1329 |
| **Institutional Class** | 88 | 283 | 495 | 1104 |
| **Class R-1** | 171 | 530 | 913 | 1987 |
| **Class R-3** | 139 | 434 | 750 | 1646 |
| **Class R-4** | 120 | 375 | 649 | 1432 |
| **Class R-5** | 108 | 337 | 585 | 1294 |
| **Class R-6** | 82 | 255 | 444 | 990 |

---

With respect to Classes C and J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class C** | $202 | $624 | $1073 | $2113 |
| **Class J** | 111 | 347 | 601 | 1329 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 18.70% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies principally engaged in the real estate industry at the time of purchase. A real estate company has at least 50% of its assets, income, or profits derived from products or services related to the real estate industry. Real estate companies include real estate investment trusts ("REITs") and companies with substantial real estate holdings such as paper, lumber, hotel, and entertainment companies, as well as those whose products and services relate to the real estate industry, including building supply manufacturers, mortgage lenders, and mortgage servicing companies.

REITs are pooled investment vehicles that invest in income-producing real estate, real estate-related loans, or other types of real estate interests. REITs are corporations or business trusts that are permitted to eliminate corporate level federal income taxes by meeting certain requirements of the Internal Revenue Code.

The Fund invests in equity securities regardless of market capitalization (small, medium, or large). The Fund invests in growth and value equity securities. The Fund concentrates its investments (invest more than 25% of its net assets) in securities in the real estate industry.

The Fund is considered non-diversified, which means it can invest a higher percentage of assets in securities of individual issuers than a diversified fund. As a result, changes in the value of a single investment could cause greater fluctuations in the Fund's share price than would occur in a more diversified fund.

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**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.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**Industry Concentration Risk.** A fund that concentrates investments in a particular industry or group of industries has greater exposure than other funds to market, economic, and other factors affecting that industry or group of industries.

**•** **Real Estate.** A fund concentrating in the real estate industry is subject to the risks associated with direct ownership of real estate, securities of companies in the real estate industry, and/or real estate investment trusts. These risks are explained more fully below in Real Estate Investment Trusts (REITs) Risk and Real Estate Securities Risk.

**Non-Diversification Risk.** A non-diversified fund may invest a high percentage of its assets in the securities of a small number of issuers and is more likely than diversified funds to be significantly affected by a specific security's poor performance.

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

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

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

------

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

For periods prior to the inception date of Class R-6 shares (November 22, 2016), the performance shown in the table for Class R-6 shares is that of the Fund's Class R-3 shares, adjusted to reflect the fees and expenses of Class R-6 shares. However, where the adjustment for fees and expenses results in performance for Class R-6 shares that is higher than the historical performance of the Class R-3 shares, the historical performance of the Class R-3 shares is used. These adjustments result in performance for such periods that is no higher than the historical performance of the Class R-3 shares.

**Total Returns as of December 31**

![](resec.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q1 2019** | **17.29%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(22.76)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(29.54)%** | **3.34%** | **6.71%** |
| **Class A Return After Taxes on Distributions** | **(30.12)%** | **2.38%** | **5.30%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(17.19)%** | **2.40%** | **4.95%** |
| **Class C Return Before Taxes** | **(26.75)%** | **3.70%** | **6.64%** |
| **Class J Return Before Taxes** | **(26.07)%** | **4.65%** | **7.44%** |
| **Institutional Class Return Before Taxes** | **(25.20)%** | **4.87%** | **7.72%** |
| **Class R-1 Return Before Taxes** | **(25.78)%** | **4.05%** | **6.86%** |
| **Class R-3 Return Before Taxes** | **(25.56)%** | **4.37%** | **7.18%** |
| **Class R-4 Return Before Taxes** | **(25.41)%** | **4.56%** | **7.39%** |
| **Class R-5 Return Before Taxes** | **(25.33)%** | **4.69%** | **7.52%** |
| **Class R-6 Return Before Taxes** | **(25.14)%** | **4.96%** | **7.55%** |
| MSCI US REIT Index (reflects no deduction for fees, expenses, or taxes) | (24.53)% | 3.69% | 6.48% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor** 

Principal Global Investors, LLC

**Sub-Advisor and Portfolio Managers**

Principal Real Estate Investors, LLC

<sup>•</sup>

Keith Bokota (since 2013), Portfolio Manager

<sup>•</sup>

Anthony Kenkel (since 2012), Portfolio Manager

<sup>•</sup>

Kelly D. Rush (since 2000), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A, C, and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, R-6, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

Class C shares are subject to an 8-year automatic conversion plan whereby Class C shares held for eight years after purchase will automatically convert to Class A shares of the same Fund.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**SAM (Strategic Asset Management) Balanced Portfolio**

**Objective**

The Portfolio seeks to provide as high a level of total return (consisting of reinvested income and capital appreciation) as is consistent with reasonable risk.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Sales Charge (Load) Imposed on Purchases <br> (as a percentage of offering price)<br>| 5.50% |  |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage <br> of the offering price or NAV when Sales Load is paid, <br> whichever is less)<br>| 1.00% | 1.00% | 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 1.00% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.08% | 0.11% | 0.05% | 0.02% | 0.54% | 0.33% | 0.29% | 0.27% |
| Acquired Fund Fees and Expenses | 0.54% | 0.54% | 0.54% | 0.54% | 0.54% | 0.54% | 0.54% | 0.54% |
| **Total Annual Fund Operating Expenses** | **1.14%** | **1.92%** | **1.01%** | **0.83%** | **1.70%** | **1.39%** | **1.20%** | **1.08%** |

---

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end of those periods. The Example assumes conversion of the Class C shares to Class A shares after the eighth year. 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** | **5 years** | **10 years** |
| **Class A** | $660 | $892 | $1143 | $1860 |
| **Class C** | 295 | 603 | 1037 | 2041 |
| **Class J** | 203 | 322 | 558 | 1236 |
| **Institutional Class** | 85 | 265 | 460 | 1025 |
| **Class R-1** | 173 | 536 | 923 | 2009 |
| **Class R-3** | 142 | 440 | 761 | 1669 |
| **Class R-4** | 122 | 381 | 660 | 1455 |
| **Class R-5** | 110 | 343 | 595 | 1317 |

---

With respect to Classes C and J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class C** | $195 | $603 | $1037 | $2041 |
| **Class J** | 103 | 322 | 558 | 1236 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying funds' performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 50.40% of the average value of its portfolio.

**Principal Investment Strategies**

The SAM Portfolios operate as funds of funds and invest principally in funds and exchange-traded funds ("ETFs") of Principal Funds, Inc. and Principal Exchange-Traded Funds ("Underlying Funds"). Each SAM Portfolio generally categorizes each Underlying Fund as a fixed-income, equity, or specialty fund based on its investment profile. Each SAM Portfolio typically allocates its assets among Underlying Funds, and within predetermined percentage ranges, as determined by the SAM Portfolio in accordance with its outlook for the economy, the financial markets, and the relative market valuations of the Underlying Funds. The asset class diversification of the SAM Portfolio is designed to moderate overall price volatility and cushion severe losses in any one investment sector.

The Portfolio generally invests:

<sup>•</sup>

between 20% and 60% of its assets in fixed-income funds, and less than 40% in any one fixed-income fund; such funds generally invest in fixed-income instruments such as securitized products and corporate bonds;

<sup>•</sup>

between 40% and 80% of its assets in equity funds, and less than 30% in any one equity fund; such funds generally invest in equity securities of domestic and foreign companies (including in emerging markets), including small, medium, and large market capitalization companies, and growth and value stock; and

<sup>•</sup>

less than 20% of its assets in specialty funds, and less than 20% in any one specialty fund; such funds generally offer unique combinations of traditional equity securities and fixed-income securities or use alternative investment strategies that aim to offer diversification beyond traditional equity and fixed-income securities and include investments in such assets as infrastructure, commodities, currencies, and natural resources companies.

The Portfolio may temporarily exceed these percentage ranges and may alter the percentage ranges when it deems appropriate.

------

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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).

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

**Total Returns as of December 31**

![](sambp.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **13.09%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(15.43)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(21.08)%** | **2.30%** | **5.32%** |
| **Class A Return After Taxes on Distributions** | **(22.60)%** | **0.31%** | **3.58%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(11.55)%** | **1.37%** | **3.83%** |
| **Class C Return Before Taxes** | **(17.85)%** | **2.68%** | **5.29%** |
| **Class J Return Before Taxes** | **(17.06)%** | **3.63%** | **6.06%** |
| **Institutional Class Return Before Taxes** | **(16.18)%** | **3.80%** | **6.27%** |
| **Class R-1 Return Before Taxes** | **(16.92)%** | **2.93%** | **5.36%** |
| **Class R-3 Return Before Taxes** | **(16.62)%** | **3.22%** | **5.67%** |
| **Class R-4 Return Before Taxes** | **(16.46)%** | **3.42%** | **5.87%** |
| **Class R-5 Return Before Taxes** | **(16.37)%** | **3.55%** | **6.01%** |
| Russell 3000 Index (reflects no deduction for fees, expenses, or taxes) | (19.22)% | 8.79% | 12.13% |
| Bloomberg U.S. Aggregate Bond Index (reflects no deduction for fees, expenses, or taxes) | (13.02)% | 0.02% | 1.06% |
| MSCI EAFE Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, <br> expenses, or other taxes)<br>| (14.46)% | 1.54% | 4.67% |
| SAM Balanced Blended Index (except as noted for MSCI EAFE Index NTR, reflects no deduction for <br> fees, expenses, or taxes)<br>| (15.74)% | 4.53% | 6.76% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

Performance of a blended index shows how the Portfolio's performance compares to a blend of indices with similar investment objectives. Performance of the components of the blended index is also shown. The weightings for SAM Balanced Blended Index are 45% Russell 3000<sup>®</sup> Index, 40% Bloomberg U.S. Aggregate Bond Index, and 15% MSCI EAFE Index NTR.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Brody Dass (since 2022), Portfolio Manager

<sup>•</sup>

Todd A. Jablonski (since 2010), Portfolio Manager

<sup>•</sup>

Yesim Tokat-Acikel (since 2023), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A, C, and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

Class C shares are subject to an 8-year automatic conversion plan whereby Class C shares held for eight years after purchase will automatically convert to Class A shares of the same Fund.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**SAM (Strategic Asset Management) Conservative Balanced Portfolio**

**Objective**

The Portfolio seeks to provide a high level of total return (consisting of reinvestment of income and capital appreciation), consistent with a moderate degree of principal risk.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Sales Charge (Load) Imposed on Purchases <br> (as a percentage of offering price)<br>| 5.50% |  |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage <br> of the offering price or NAV when Sales Load is paid, <br> whichever is less)<br>| 1.00% | 1.00% | 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 1.00% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.09% | 0.11% | 0.05% | 0.03% | 0.54% | 0.33% | 0.29% | 0.27% |
| Acquired Fund Fees and Expenses | 0.52% | 0.52% | 0.52% | 0.52% | 0.52% | 0.52% | 0.52% | 0.52% |
| **Total Annual Fund Operating Expenses** | **1.13%** | **1.90%** | **0.99%** | **0.82%** | **1.68%** | **1.37%** | **1.18%** | **1.06%** |

---

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end of those periods. The Example assumes conversion of the Class C shares to Class A shares after the eighth year. 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** | **5 years** | **10 years** |
| **Class A** | $659 | $889 | $1138 | $1849 |
| **Class C** | 293 | 597 | 1026 | 2022 |
| **Class J** | 201 | 315 | 547 | 1213 |
| **Institutional Class** | 84 | 262 | 455 | 1014 |
| **Class R-1** | 171 | 530 | 913 | 1987 |
| **Class R-3** | 139 | 434 | 750 | 1646 |
| **Class R-4** | 120 | 375 | 649 | 1432 |
| **Class R-5** | 108 | 337 | 585 | 1294 |

---

With respect to Classes C and J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class C** | $193 | $597 | $1026 | $2022 |
| **Class J** | 101 | 315 | 547 | 1213 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 55.30% of the average value of its portfolio.

**Principal Investment Strategies**

The SAM Portfolios operate as funds of funds and invest principally in funds and exchange-traded funds ("ETFs") of Principal Funds, Inc. and Principal Exchange-Traded Funds ("Underlying Funds"). Each SAM Portfolio generally categorizes each Underlying Fund as a fixed-income, equity, or specialty fund based on its investment profile. Each SAM Portfolio typically allocates its assets among Underlying Funds, and within predetermined percentage ranges, as determined by the SAM Portfolio in accordance with its outlook for the economy, the financial markets, and the relative market valuations of the Underlying Funds. The asset class diversification of the SAM Portfolio is designed to moderate overall price volatility and cushion severe losses in any one investment sector.

The Portfolio generally invests:

<sup>•</sup>

between 40% and 80% of its assets in fixed-income funds, and less than 40% in any one fixed-income fund; such funds generally invest in fixed-income instruments such as high yield securities (or "junk" bonds), securitized products, and corporate bonds;

<sup>•</sup>

between 20% and 60% of its assets in equity funds, and less than 30% in any one equity fund; such funds generally invest in equity securities of domestic and foreign companies (including in emerging markets), including small, medium, and large market capitalization companies, and growth and value stock; and

<sup>•</sup>

less than 20% of its assets in specialty funds, and less than 20% in any one specialty fund; such funds generally offer unique combinations of traditional equity securities and fixed-income securities or use alternative investment strategies that aim to offer diversification beyond traditional equity and fixed-income securities and include investments in such assets as infrastructure, commodities, currencies, and natural resources companies.

The Portfolio may temporarily exceed these percentage ranges and may alter the percentage ranges when it deems appropriate.

------

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**High Yield Securities Risk.** High yield fixed-income securities (commonly referred to as "junk bonds") are subject to greater credit quality risk than higher rated fixed-income securities and should be considered speculative.

------

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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).

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

**Total Returns as of December 31**

![](samcbp.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **10.32%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(11.74)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(19.52)%** | **1.20%** | **3.75%** |
| **Class A Return After Taxes on Distributions** | **(20.57)%** | **(0.34)%** | **2.27%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(11.12)%** | **0.55%** | **2.52%** |
| **Class C Return Before Taxes** | **(16.31)%** | **1.60%** | **3.71%** |
| **Class J Return Before Taxes** | **(15.50)%** | **2.53%** | **4.46%** |
| **Institutional Class Return Before Taxes** | **(14.50)%** | **2.69%** | **4.67%** |
| **Class R-1 Return Before Taxes** | **(15.25)%** | **1.81%** | **3.77%** |
| **Class R-3 Return Before Taxes** | **(14.95)%** | **2.13%** | **4.09%** |
| **Class R-4 Return Before Taxes** | **(14.89)%** | **2.31%** | **4.28%** |
| **Class R-5 Return Before Taxes** | **(14.73)%** | **2.44%** | **4.41%** |
| Bloomberg U.S. Aggregate Bond Index (reflects no deduction for fees, expenses, or taxes) | (13.02)% | 0.02% | 1.06% |
| Russell 3000 Index (reflects no deduction for fees, expenses, or taxes) | (19.22)% | 8.79% | 12.13% |
| MSCI EAFE Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, <br> expenses, or other taxes)<br>| (14.46)% | 1.54% | 4.67% |
| SAM Conservative Balanced Blended Index (except as noted for MSCI EAFE Index NTR, reflects <br> no deduction for fees, expenses, or taxes)<br>| (14.75)% | 3.13% | 4.91% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

Performance of a blended index shows how the Portfolio's performance compares to a blend of indices with similar investment objectives. Performance of the components of the blended index is also shown. The weightings for SAM Conservative Balanced Blended Index are 60% Bloomberg U.S. Aggregate Bond Index, 30% Russell 3000<sup>®</sup> Index, and 10% MSCI EAFE Index NTR.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Brody Dass (since 2022), Portfolio Manager

<sup>•</sup>

Todd A. Jablonski (since 2010), Portfolio Manager

<sup>•</sup>

Yesim Tokat-Acikel (since 2023), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A, C, and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

Class C shares are subject to an 8-year automatic conversion plan whereby Class C shares held for eight years after purchase will automatically convert to Class A shares of the same Fund.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**SAM (Strategic Asset Management) Conservative Growth Portfolio**

**Objective**

The Portfolio seeks to provide long-term capital appreciation.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Sales Charge (Load) Imposed on Purchases <br> (as a percentage of offering price)<br>| 5.50% |  |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage <br> of the offering price or NAV when Sales Load is paid, <br> whichever is less)<br>| 1.00% | 1.00% | 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 1.00% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.08% | 0.10% | 0.05% | 0.02% | 0.54% | 0.33% | 0.29% | 0.27% |
| Acquired Fund Fees and Expenses | 0.55% | 0.55% | 0.55% | 0.55% | 0.55% | 0.55% | 0.55% | 0.55% |
| **Total Annual Fund Operating Expenses** | **1.15%** | **1.92%** | **1.02%** | **0.84%** | **1.71%** | **1.40%** | **1.21%** | **1.09%** |

---

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end of those periods. The Example assumes conversion of the Class C shares to Class A shares after the eighth year. 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** | **5 years** | **10 years** |
| **Class A** | $661 | $895 | $1148 | $1871 |
| **Class C** | 295 | 603 | 1037 | 2043 |
| **Class J** | 204 | 325 | 563 | 1248 |
| **Institutional Class** | 86 | 268 | 466 | 1037 |
| **Class R-1** | 174 | 539 | 928 | 2019 |
| **Class R-3** | 143 | 443 | 766 | 1680 |
| **Class R-4** | 123 | 384 | 665 | 1466 |
| **Class R-5** | 111 | 347 | 601 | 1329 |

---

With respect to Classes C and J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class C** | $195 | $603 | $1037 | $2043 |
| **Class J** | 104 | 325 | 563 | 1248 |

---

**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 52.40% of the average value of its portfolio.

**Principal Investment Strategies**

The SAM Portfolios operate as funds of funds and invest principally in funds and exchange-traded funds ("ETFs") of Principal Funds, Inc. and Principal Exchange-Traded Funds ("Underlying Funds"). Each SAM Portfolio generally categorizes each Underlying Fund as a fixed-income, equity, or specialty fund based on its investment profile. Each SAM Portfolio typically allocates its assets among Underlying Funds, and within predetermined percentage ranges, as determined by the SAM Portfolio in accordance with its outlook for the economy, the financial markets, and the relative market valuations of the Underlying Funds. The asset class diversification of the SAM Portfolio is designed to moderate overall price volatility and cushion severe losses in any one investment sector.

The Portfolio generally invests:

<sup>•</sup>

between 0% and 40% of its assets in fixed-income funds, and less than 30% in any one fixed-income fund; such funds generally invest in fixed-income instruments such as corporate bonds;

<sup>•</sup>

between 60% and 100% of its assets in equity funds, and less than 40% in any one equity fund; such funds generally invest in equity securities of domestic and foreign companies (including in emerging markets), including small, medium, and large market capitalization companies, and growth and value stock; and

<sup>•</sup>

less than 20% of its assets in specialty funds, and less than 20% in any one specialty fund; such funds generally offer unique combinations of traditional equity securities and fixed-income securities or use alternative investment strategies that aim to offer diversification beyond traditional equity and fixed-income securities and include investments in such assets as infrastructure, commodities, currencies, and natural resources companies.

The Portfolio may temporarily exceed these percentage ranges and may alter the percentage ranges when it deems appropriate.

------

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

**Total Returns as of December 31**

![](samcgp.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **15.98%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(19.15)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(22.61)%** | **3.24%** | **6.77%** |
| **Class A Return After Taxes on Distributions** | **(24.58)%** | **1.33%** | **5.01%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(11.99)%** | **2.41%** | **5.18%** |
| **Class C Return Before Taxes** | **(19.40)%** | **3.63%** | **6.72%** |
| **Class J Return Before Taxes** | **(18.72)%** | **4.59%** | **7.51%** |
| **Institutional Class Return Before Taxes** | **(17.84)%** | **4.75%** | **7.73%** |
| **Class R-1 Return Before Taxes** | **(18.56)%** | **3.84%** | **6.80%** |
| **Class R-3 Return Before Taxes** | **(18.27)%** | **4.18%** | **7.12%** |
| **Class R-4 Return Before Taxes** | **(18.13)%** | **4.37%** | **7.33%** |
| **Class R-5 Return Before Taxes** | **(18.04)%** | **4.49%** | **7.45%** |
| Russell 3000 Index (reflects no deduction for fees, expenses, or taxes) | (19.22)% | 8.79% | 12.13% |
| Bloomberg U.S. Aggregate Bond Index (reflects no deduction for fees, expenses, or taxes) | (13.02)% | 0.02% | 1.06% |
| MSCI EAFE Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, <br> expenses, or other taxes)<br>| (14.46)% | 1.54% | 4.67% |
| SAM Conservative Growth Blended Index (except as noted for MSCI EAFE Index NTR, reflects no <br> deduction for fees, expenses, or taxes)<br>| (16.82)% | 5.82% | 8.55% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

Performance of a blended index shows how the Portfolio's performance compares to a blend of indices with similar investment objectives. Performance of the components of the blended index is also shown. The weightings for SAM Conservative Growth Blended Index are 60% Russell 3000<sup>®</sup> Index, 20% Bloomberg U.S. Aggregate Bond Index, and 20% MSCI EAFE Index NTR.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Brody Dass (since 2022), Portfolio Manager

<sup>•</sup>

Todd A. Jablonski (since 2010), Portfolio Manager

<sup>•</sup>

Yesim Tokat-Acikel (since 2023), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A, C, and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

Class C shares are subject to an 8-year automatic conversion plan whereby Class C shares held for eight years after purchase will automatically convert to Class A shares of the same Fund.

See Purchase of Fund Shares for more information.

**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.

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

If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

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**SAM (Strategic Asset Management) Flexible Income Portfolio**

**Objective**

The Portfolio seeks to provide a high level of total return (consisting of reinvestment of income with some capital appreciation).

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Sales Charge (Load) Imposed on Purchases <br> (as a percentage of offering price)<br>| 3.75% |  |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage <br> of the offering price or NAV when Sales Load is paid, <br> whichever is less)<br>| 1.00% | 1.00% | 1.00% |  |  |  |  |  |

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**Annual Fund Operating Expenses**

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

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 1.00% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.08% | 0.11% | 0.04% | 0.04% | 0.54% | 0.33% | 0.29% | 0.27% |
| Acquired Fund Fees and Expenses | 0.48% | 0.48% | 0.48% | 0.48% | 0.48% | 0.48% | 0.48% | 0.48% |
| **Total Annual Fund Operating Expenses** | **1.08%** | **1.86%** | **0.94%** | **0.79%** | **1.64%** | **1.33%** | **1.14%** | **1.02%** |

---

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**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end of those periods. The Example assumes conversion of the Class C shares to Class A shares after the eighth year. 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:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $481 | $706 | $948 | $1643 |
| **Class C** | 289 | 585 | 1006 | 1976 |
| **Class J** | 196 | 300 | 520 | 1155 |
| **Institutional Class** | 81 | 252 | 439 | 978 |
| **Class R-1** | 167 | 517 | 892 | 1944 |
| **Class R-3** | 135 | 421 | 729 | 1601 |
| **Class R-4** | 116 | 362 | 628 | 1386 |
| **Class R-5** | 104 | 325 | 563 | 1248 |

---

With respect to Classes C and J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class C** | $189 | $585 | $1006 | $1976 |
| **Class J** | 96 | 300 | 520 | 1155 |

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**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 57.30% of the average value of its portfolio.

**Principal Investment Strategies**

The SAM Portfolios operate as funds of funds and invest principally in funds and exchange-traded funds ("ETFs") of Principal Funds, Inc. and Principal Exchange-Traded Funds ("Underlying Funds"). Each SAM Portfolio generally categorizes each Underlying Fund as a fixed-income, equity, or specialty fund based on its investment profile. Each SAM Portfolio typically allocates its assets among Underlying Funds, and within predetermined percentage ranges, as determined by the SAM Portfolio in accordance with its outlook for the economy, the financial markets, and the relative market valuations of the Underlying Funds. The asset class diversification of the SAM Portfolio is designed to moderate overall price volatility and cushion severe losses in any one investment sector.

The Portfolio generally invests:

<sup>•</sup>

between 55% and 95% of its assets in fixed-income funds, and less than 40% in any one fixed-income fund; such funds generally invest in fixed-income instruments such as high yield securities (or "junk" bonds), securitized products, and corporate bonds;

<sup>•</sup>

between 5% and 45% of its assets in equity funds, and less than 30% in any one equity fund; such funds generally invest in equity securities of domestic and foreign companies, including small, medium, and large market capitalization companies, and growth and value stock; and

<sup>•</sup>

less than 20% of its assets in specialty funds, and less than 20% in any one specialty fund; such funds generally offer unique combinations of traditional equity securities and fixed-income securities or use alternative investment strategies that aim to offer diversification beyond traditional equity and fixed-income securities and include investments in such assets as infrastructure, commodities, currencies, and natural resources companies.

The Portfolio may temporarily exceed these percentage ranges and may alter the percentage ranges when it deems appropriate.

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**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**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.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**High Yield Securities Risk.** High yield fixed-income securities (commonly referred to as "junk bonds") are subject to greater credit quality risk than higher rated fixed-income securities and should be considered speculative.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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).

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

**Total Returns as of December 31**

![](samfip.jpg)

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| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **7.69%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(8.81)%** |

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

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| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(16.68)%** | **0.81%** | **2.87%** |
| **Class A Return After Taxes on Distributions** | **(17.43)%** | **(0.51)%** | **1.53%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(9.78)%** | **0.33%** | **1.83%** |
| **Class C Return Before Taxes** | **(14.92)%** | **0.81%** | **2.64%** |
| **Class J Return Before Taxes** | **(14.14)%** | **1.76%** | **3.40%** |
| **Institutional Class Return Before Taxes** | **(13.18)%** | **1.88%** | **3.58%** |
| **Class R-1 Return Before Taxes** | **(13.91)%** | **1.03%** | **2.70%** |
| **Class R-3 Return Before Taxes** | **(13.60)%** | **1.35%** | **3.02%** |
| **Class R-4 Return Before Taxes** | **(13.50)%** | **1.53%** | **3.21%** |
| **Class R-5 Return Before Taxes** | **(13.33)%** | **1.66%** | **3.34%** |
| Bloomberg U.S. Aggregate Bond Index (reflects no deduction for fees, expenses, or taxes) | (13.02)% | 0.02% | 1.06% |
| Russell 3000 Index (reflects no deduction for fees, expenses, or taxes) | (19.22)% | 8.79% | 12.13% |
| MSCI EAFE Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, <br> expenses, or other taxes)<br>| (14.46)% | 1.54% | 4.67% |
| SAM Flexible Income Blended Index (except as noted for MSCI EAFE Index NTR, reflects no <br> deduction for fees, expenses, or taxes)<br>| (14.12)% | 2.10% | 3.58% |

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After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

Performance of a blended index shows how the Portfolio's performance compares to a blend of indices with similar investment objectives. Performance of the components of the blended index is also shown. The weightings for SAM Flexible Income Blended Index are 75% Bloomberg U.S. Aggregate Bond Index, 20% Russell 3000<sup>®</sup> Index, and 5% MSCI EAFE Index NTR.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Brody Dass (since 2022), Portfolio Manager

<sup>•</sup>

Todd A. Jablonski (since 2010), Portfolio Manager

<sup>•</sup>

Yesim Tokat-Acikel (since 2023), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A, C, and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

Class C shares are subject to an 8-year automatic conversion plan whereby Class C shares held for eight years after purchase will automatically convert to Class A shares of the same Fund.

See Purchase of Fund Shares for more information.

**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.

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

If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

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**SAM (Strategic Asset Management) Strategic Growth Portfolio**

**Objective**

The Portfolio seeks to provide long-term capital appreciation.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Sales Charge (Load) Imposed on Purchases <br> (as a percentage of offering price)<br>| 5.50% |  |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage <br> of the offering price or NAV when Sales Load is paid, <br> whichever is less)<br>| 1.00% | 1.00% | 1.00% |  |  |  |  |  |

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**Annual Fund Operating Expenses**

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

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% | 0.27% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 1.00% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.09% | 0.14% | 0.07% | 0.02% | 0.54% | 0.33% | 0.29% | 0.27% |
| Acquired Fund Fees and Expenses | 0.56% | 0.56% | 0.56% | 0.56% | 0.56% | 0.56% | 0.56% | 0.56% |
| **Total Annual Fund Operating Expenses** | **1.17%** | **1.97%** | **1.05%** | **0.85%** | **1.72%** | **1.41%** | **1.22%** | **1.10%** |

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**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end of those periods. The Example assumes conversion of the Class C shares to Class A shares after the eighth year. 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:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $663 | $901 | $1158 | $1892 |
| **Class C** | 300 | 618 | 1062 | 2089 |
| **Class J** | 207 | 334 | 579 | 1283 |
| **Institutional Class** | 87 | 271 | 471 | 1049 |
| **Class R-1** | 175 | 542 | 933 | 2030 |
| **Class R-3** | 144 | 446 | 771 | 1691 |
| **Class R-4** | 124 | 387 | 670 | 1477 |
| **Class R-5** | 112 | 350 | 606 | 1340 |

---

With respect to Classes C and J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class C** | $200 | $618 | $1062 | $2089 |
| **Class J** | 107 | 334 | 579 | 1283 |

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**Portfolio Turnover**

The Fund and each underlying 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. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's and the underlying fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 49.50% of the average value of its portfolio.

**Principal Investment Strategies**

The SAM Portfolios operate as funds of funds and invest principally in funds and exchange-traded funds ("ETFs") of Principal Funds, Inc. and Principal Exchange-Traded Funds ("Underlying Funds"). Each SAM Portfolio generally categorizes each Underlying Fund as a fixed-income, equity, or specialty fund based on its investment profile. Each SAM Portfolio typically allocates its assets among Underlying Funds, and within predetermined percentage ranges, as determined by the SAM Portfolio in accordance with its outlook for the economy, the financial markets, and the relative market valuations of the Underlying Funds. The asset class diversification of the SAM Portfolio is designed to moderate overall price volatility and cushion severe losses in any one investment sector.

The Portfolio generally invests:

<sup>•</sup>

between 75% and 100% of its assets in equity funds, and less than 50% in any one equity fund; such funds generally invest in equity securities of domestic and foreign companies (including in emerging markets), including small, medium, and large market capitalization companies, and growth and value stock; and

<sup>•</sup>

less than 20% of its assets in specialty funds, and less than 20% in any one specialty fund; such funds generally offer unique combinations of traditional equity securities or use alternative investment strategies that aim to offer diversification beyond traditional equity securities and include investments in such assets as infrastructure, commodities, currencies, and natural resources companies.

The Portfolio may temporarily exceed these percentage ranges and may alter the percentage ranges when it deems appropriate.

------

**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.

**Principal Risks of Investing in a Fund of Funds**

**Fund of Funds Risk.** Fund shareholders bear indirectly their proportionate share of the expenses of other investment companies (for example, other mutual funds or exchange-traded funds) in which the Fund invests ("underlying funds"). The Fund's selection and weighting of asset classes and allocation of investments in underlying funds may cause it to underperform other funds with a similar investment objective. The Fund's performance and risks correspond directly to the performance and risks of the underlying funds in which it invests, proportionately in accordance with the weightings of such investments, and there is no assurance that the underlying funds will achieve their investment objectives. Management of the Fund entails potential conflicts of interest: the Fund invests in affiliated underlying funds; and PGI and its 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.

**Principal Risks due to the Fund's Investments in Underlying Funds**

**Emerging Markets Risk.** Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**Foreign Currency Risk.** Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

------

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

**Total Returns as of December 31**

![](samsgp.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **19.17%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(22.15)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(23.52)%** | **3.96%** | **7.69%** |
| **Class A Return After Taxes on Distributions** | **(25.06)%** | **1.88%** | **5.81%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(12.79)%** | **2.91%** | **5.93%** |
| **Class C Return Before Taxes** | **(20.46)%** | **4.32%** | **7.64%** |
| **Class J Return Before Taxes** | **(19.68)%** | **5.31%** | **8.44%** |
| **Institutional Class Return Before Taxes** | **(18.83)%** | **5.48%** | **8.67%** |
| **Class R-1 Return Before Taxes** | **(19.53)%** | **4.51%** | **7.70%** |
| **Class R-3 Return Before Taxes** | **(19.27)%** | **4.90%** | **8.07%** |
| **Class R-4 Return Before Taxes** | **(19.12)%** | **5.10%** | **8.27%** |
| **Class R-5 Return Before Taxes** | **(19.00)%** | **5.23%** | **8.40%** |
| Russell 3000 Index (reflects no deduction for fees, expenses, or taxes) | (19.22)% | 8.79% | 12.13% |
| MSCI EAFE Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, <br> expenses, or other taxes)<br>| (14.46)% | 1.54% | 4.67% |
| Bloomberg U.S. Aggregate Bond Index (reflects no deduction for fees, expenses, or taxes) | (13.02)% | 0.02% | 1.06% |
| SAM Strategic Growth Blended Index (except as noted for MSCI EAFE Index NTR, reflects no <br> deduction for fees, expenses, or taxes)<br>| (17.61)% | 6.63% | 9.77% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

------

Performance of a blended index shows how the Portfolio's performance compares to a blend of indices with similar investment objectives. Performance of the components of the blended index is also shown. The weightings for SAM Strategic Growth Blended Index are 70% Russell 3000<sup>®</sup> Index, 25% MSCI EAFE Index NTR, and 5% Bloomberg U.S. Aggregate Bond Index.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Brody Dass (since 2022), Portfolio Manager

<sup>•</sup>

Todd A. Jablonski (since 2010), Portfolio Manager

<sup>•</sup>

Yesim Tokat-Acikel (since 2023), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A, C, and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

Class C shares are subject to an 8-year automatic conversion plan whereby Class C shares held for eight years after purchase will automatically convert to Class A shares of the same Fund.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Short-Term Income Fund**

**Objective**

The Fund seeks to provide as high a level of current income as is consistent with prudent investment management and stability of principal.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Maximum Sales Charge (Load) Imposed on Purchases <br> (as a percentage of offering price)<br>| 2.25% |  |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage <br> of the offering price or NAV when Sales Load is paid, <br> whichever is less)<br>| 1.00% | 1.00% | 1.00% |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** |
| Management Fees<sup>(1)</sup> <br>| 0.37% | 0.37% | 0.37% | 0.37% | 0.37% | 0.37% | 0.37% | 0.37% |
| Distribution and/or Service (12b-1) Fees | 0.15% | 1.00% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A |
| Other Expenses | 0.11% | 0.18% | 0.10% | 0.04% | 0.53% | 0.32% | 0.28% | 0.26% |
| **Total Annual Fund Operating Expenses** | **0.63%** | **1.55%** | **0.62%** | **0.41%** | **1.25%** | **0.94%** | **0.75%** | **0.63%** |

---

<sup>(1)</sup>

Fees have been restated to reflect current fees.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end of those periods. The Example assumes conversion of the Class C shares to Class A shares after the eighth year. 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** | **5 years** | **10 years** |
| **Class A** | $288 | $422 | $568 | $994 |
| **Class C** | 258 | 490 | 845 | 1597 |
| **Class J** | 163 | 199 | 346 | 774 |
| **Institutional Class** | 42 | 132 | 230 | 518 |
| **Class R-1** | 127 | 397 | 686 | 1511 |
| **Class R-3** | 96 | 300 | 520 | 1155 |
| **Class R-4** | 77 | 240 | 417 | 930 |
| **Class R-5** | 64 | 202 | 351 | 786 |

---

With respect to Classes C and J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class C** | $158 | $490 | $845 | $1597 |
| **Class J** | 63 | 199 | 346 | 774 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 28.40% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund seeks to achieve its investment objective by investing in a broad range of high-quality, fixed-income securities. The Fund invests primarily in high-quality short-term bonds and other fixed-income securities that, at the time of purchase, are rated BBB- or higher by S&P Global Ratings ("S&P Global") or Baa3 or higher by Moody's Investors Service, Inc. ("Moody's") (if securities are rated differently by S&P Global and Moody's, the highest rating is used; or, if unrated, in the opinion of those selecting such investments, are of comparable quality). The Fund's investments also include corporate securities, government securities, mortgage-backed and asset-backed securities (securitized products), and foreign securities.

Under normal circumstances, the Fund maintains an effective maturity of five years or less and an average portfolio duration that is within ±15% of the duration of the Bloomberg Credit 1-3 Year Index, which as of January 31, 2023 was 1.87 years.

The Fund invests in derivatives, including Treasury futures, to manage the fixed-income exposure. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index.

**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.

**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.

**•** **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.

------

**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.

**Foreign Securities Risk.** The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

**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.

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

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**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.

**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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

------

**Total Returns as of December 31**

![](shortterminc.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **3.37%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2022** | **(2.48)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(6.11)%** | **0.36%** | **0.85%** |
| **Class A Return After Taxes on Distributions** | **(6.73)%** | **(0.38)%** | **0.15%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(3.62)%** | **(0.02)%** | **0.35%** |
| **Class C Return Before Taxes** | **(5.87)%** | **(0.09)%** | **0.37%** |
| **Class J Return Before Taxes** | **(4.96)%** | **0.84%** | **1.06%** |
| **Institutional Class Return Before Taxes** | **(3.83)%** | **1.06%** | **1.33%** |
| **Class R-1 Return Before Taxes** | **(4.64)%** | **0.20%** | **0.46%** |
| **Class R-3 Return Before Taxes** | **(4.26)%** | **0.51%** | **0.78%** |
| **Class R-4 Return Before Taxes** | **(4.16)%** | **0.69%** | **0.96%** |
| **Class R-5 Return Before Taxes** | **(4.04)%** | **0.82%** | **1.10%** |
| Bloomberg Credit 1-3 Year Index (reflects no deduction for fees, expenses, or taxes) | (3.40)% | 1.31% | 1.37% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

John R. Friedl (since 2010), Portfolio Manager

<sup>•</sup>

Scott J. Peterson (since 2010), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A, C, and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

------

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

Class C shares are subject to an 8-year automatic conversion plan whereby Class C shares held for eight years after purchase will automatically convert to Class A shares of the same Fund.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**SmallCap Fund**

**SHARE CLASS CONVERSION NOTICE**: On December 13, 2022, the Fund's Board of Directors approved the conversion of the Fund's Class C shares into Class A shares. Following the close of business on May 19, 2023, Class C shares of the Fund will automatically convert into Class A shares of the Fund on the basis of the share classes' relative net asset values on such date. The conversion will not result in the imposition of a sales charge or any other charge. As a result of the conversion, the affected shareholders will be in a better position with respect to expenses, as expenses are lower for Class A shares than for the current Class C shares. The Fund expects these share class conversions will not constitute taxable sales or exchanges to shareholders. Effective as of the close of the New York Stock Exchange on March 24, 2023, Class C shares will no longer be available for purchase except in limited circumstances.

*On or about May 19, 2023, delete references to Class C shares of this Fund, including information regarding the conversion plan, from the Prospectus.* 

**Objective**

The Fund seeks long-term growth of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Maximum Sales Charge (Load) Imposed on <br> Purchases (as a percentage of offering price)<br>| 5.50% |  |  |  |  |  |  |  |  |
| Maximum Deferred Sales Charge (Load) (as a <br> percentage of the offering price or NAV when <br> Sales Load is paid, whichever is less)<br>| 1.00% | 1.00% | 1.00% |  |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Management Fees | 0.73% | 0.73% | 0.73% | 0.73% | 0.73% | 0.73% | 0.73% | 0.73% | 0.73% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 1.00% | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A | N/A |
| Other Expenses | 0.16% | 0.27% | 0.13% | 0.13% | 0.54% | 0.33% | 0.29% | 0.27% | 0.02% |
| **Total Annual Fund Operating Expenses** | **1.14%** | **2.00%** | **1.01%** | **0.86%** | **1.62%** | **1.31%** | **1.12%** | **1.00%** | **0.75%** |
| Expense Reimbursement<sup>(1)</sup> <br>| N/A | N/A | N/A | (0.01)% | N/A | N/A | N/A | N/A | 0.00% |
| **Total Annual Fund Operating Expenses** <br> **after Expense Reimbursement**<br>| **1.14%** | **2.00%** | **1.01%** | **0.85%** | **1.62%** | **1.31%** | **1.12%** | **1.00%** | **0.75%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.85% for Institutional Class shares. In addition, for Class R-6, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.02% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end of those periods. The Example assumes conversion of the Class C shares to Class A shares after the eighth year. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $660 | $892 | $1143 | $1860 |
| **Class C** | 303 | 627 | 1078 | 2105 |
| **Class J** | 203 | 322 | 558 | 1236 |
| **Institutional Class** | 87 | 273 | 476 | 1060 |
| **Class R-1** | 165 | 511 | 881 | 1922 |
| **Class R-3** | 133 | 415 | 718 | 1579 |
| **Class R-4** | 114 | 356 | 617 | 1363 |
| **Class R-5** | 102 | 318 | 552 | 1225 |
| **Class R-6** | 77 | 240 | 417 | 930 |

---

With respect to Classes C and J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class C** | $203 | $627 | $1078 | $2105 |
| **Class J** | 103 | 322 | 558 | 1236 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 18.70% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies with small market capitalizations at the time of purchase. For this Fund, companies with small market capitalizations are those with market capitalizations within the range of companies comprising the Russell 2000<sup>®</sup> Index (as of January 31, 2023, this range was between approximately $4.4 million and $10.5 billion). Those managing the Fund's investments seek to invest in securities of companies that they believe have improving and sustainable business fundamentals, rising investor expectations, and attractive relative valuations.

**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.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

------

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

For periods prior to the inception date of Class R-6 shares (November 22, 2016), the performance shown in the table for Class R-6 shares is that of the Fund's Class R-3 shares, adjusted to reflect the fees and expenses of Class R-6 shares. However, where the adjustment for fees and expenses results in performance for Class R-6 shares that is higher than the historical performance of the Class R-3 shares, the historical performance of the Class R-3 shares is used. These adjustments result in performance for such periods that is no higher than the historical performance of the Class R-3 shares.

**Total Returns as of December 31**

![](smcp.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **28.39%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(30.54)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(24.78)%** | **4.35%** | **9.56%** |
| **Class A Return After Taxes on Distributions** | **(24.78)%** | **2.75%** | **7.84%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(14.67)%** | **3.11%** | **7.42%** |
| **Class C Return Before Taxes** | **(21.89)%** | **4.66%** | **9.46%** |
| **Class J Return Before Taxes** | **(21.09)%** | **5.70%** | **10.35%** |
| **Institutional Class Return Before Taxes** | **(20.17)%** | **5.88%** | **10.61%** |
| **Class R-1 Return Before Taxes** | **(20.79)%** | **5.05%** | **9.72%** |
| **Class R-3 Return Before Taxes** | **(20.51)%** | **5.39%** | **10.06%** |
| **Class R-4 Return Before Taxes** | **(20.38)%** | **5.59%** | **10.27%** |
| **Class R-5 Return Before Taxes** | **(20.29)%** | **5.71%** | **10.40%** |
| **Class R-6 Return Before Taxes** | **(20.10)%** | **5.97%** | **10.43%** |
| Russell 2000 Index (reflects no deduction for fees, expenses, or taxes) | (20.45)% | 4.13% | 9.01% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Phil Nordhus (since 2006), Portfolio Manager

<sup>•</sup>

Brian W. Pattinson (since 2011), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A, C, and J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, R-6, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

Class C shares are subject to an 8-year automatic conversion plan whereby Class C shares held for eight years after purchase will automatically convert to Class A shares of the same Fund.

Effective as of the close of the New York Stock Exchange on March 24, 2023, Class C shares will no longer be available for purchase except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**SmallCap Growth Fund I**

**Objective**

The Fund seeks long-term growth of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Maximum Deferred Sales Charge (Load)<br> (as a percentage of the offering price or NAV when Sales Load is <br> paid, whichever is less)<br>| 1.00% |  |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Management Fees | 0.85% | 0.85% | 0.85% | 0.85% | 0.85% | 0.85% | 0.85% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A | N/A |
| Other Expenses | 0.15% | 0.11% | 0.53% | 0.32% | 0.28% | 0.26% | 0.01% |
| Acquired Fund Fees and Expenses | 0.02% | 0.02% | 0.02% | 0.02% | 0.02% | 0.02% | 0.02% |
| **Total Annual Fund Operating Expenses** | **1.17%** | **0.98%** | **1.75%** | **1.44%** | **1.25%** | **1.13%** | **0.88%** |
| Fee Waiver and Expense Reimbursement<sup>(1),(2)</sup> <br>| (0.02)% | (0.02)% | (0.02)% | (0.02)% | (0.02)% | (0.02)% | (0.02)% |
| **Total Annual Fund Operating Expenses after Fee Waiver and** <br> **Expense Reimbursement**<br>| **1.15%** | **0.96%** | **1.73%** | **1.42%** | **1.23%** | **1.11%** | **0.86%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to waive a portion of the Fund's management fees through the period ending February 29, 2024. The fee waiver will reduce the Fund's management fees by 0.02% (expressed as a percent of average net assets on an annualized basis). It is expected that the fee waiver will continue through the period disclosed; however, Principal Funds, Inc. and PGI, the parties to the agreement may mutually agree to terminate the fee waiver prior to the end of the period.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.01% for Class R-6 shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $217 | $370 | $642 | $1419 |
| **Institutional Class** | 98 | 310 | 540 | 1200 |
| **Class R-1** | 176 | 549 | 947 | 2061 |
| **Class R-3** | 145 | 454 | 785 | 1722 |
| **Class R-4** | 125 | 395 | 684 | 1510 |
| **Class R-5** | 113 | 357 | 620 | 1373 |
| **Class R-6** | 88 | 279 | 486 | 1082 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $117 | $370 | $642 | $1419 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 50.70% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies with small market capitalizations at the time of purchase. For this Fund, companies with small market capitalizations are those with market capitalizations equal to or smaller than the greater of: 1) $6.0 billion or 2) the highest market capitalization of the companies comprising the Russell 2000<sup>®</sup> Growth Index (as of January 31, 2023, this range was between approximately $4.4 million and $10.5 billion). The Fund invests in growth equity securities, an investment strategy that emphasizes buying equity securities of companies whose potential for growth of capital and earnings is expected to be above average.

The Fund is primarily actively managed by the sub-advisors. In addition, Principal Global Investors, LLC may invest up to 30% of the Fund's assets using an index sampling strategy designed to match the performance of the Russell 2000<sup>®</sup> Growth Index.

**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.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Growth Style Risk.** Growth investing entails the risk that if growth companies do not increase their earnings at a rate expected by investors, the market price of their stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**Passive Strategy Risk.** A portion of the Fund seeks to match the performance of a specified index. However, the correlation between the performance of this portion of the fund and index performance may be affected by many factors, such as fund expenses, the timing of cash flows into and out of the fund, changes in securities markets, and changes in the composition of the index.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

For periods prior to the inception date of Class R-6 shares (November 25, 2014), the performance shown in the table for Class R-6 shares is that of the Fund's Institutional Class shares, adjusted to reflect the fees and expenses of Class R-6 shares. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares.

**Total Returns as of December 31**

![](smcpgrowth.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **33.84%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(22.08)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Institutional Class Return Before Taxes** | **(28.55)%** | **6.58%** | **10.80%** |
| **Institutional Class Return After Taxes on Distributions** | **(28.69)%** | **4.20%** | **8.31%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(16.80)%** | **4.96%** | **8.32%** |
| **Class J Return Before Taxes** | **(29.45)%** | **6.33%** | **10.44%** |
| **Class R-1 Return Before Taxes** | **(29.12)%** | **5.72%** | **9.87%** |
| **Class R-3 Return Before Taxes** | **(28.86)%** | **6.06%** | **10.22%** |
| **Class R-4 Return Before Taxes** | **(28.77)%** | **6.24%** | **10.42%** |
| **Class R-5 Return Before Taxes** | **(28.70)%** | **6.37%** | **10.55%** |
| **Class R-6 Return Before Taxes** | **(28.48)%** | **6.65%** | **10.82%** |
| Russell 2000 Growth Index (reflects no deduction for fees, expenses, or taxes) | (26.37)% | 3.51% | 9.20% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2009), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2009), Portfolio Manager

**Sub-Advisors**

AllianceBernstein L.P.

Brown Advisory, LLC

Emerald Advisers, LLC

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, R-6, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**SmallCap S&P 600 Index Fund**

**Objective**

The Fund seeks long-term growth of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Maximum Deferred Sales Charge (Load) <br> (as a percentage of the offering price or NAV when Sales Load is <br> paid, whichever is less)<br>| 1.00% |  |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Management Fees | 0.15% | 0.15% | 0.15% | 0.15% | 0.15% | 0.15% | 0.15% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A | N/A |
| Other Expenses | 0.12% | 0.09% | 0.54% | 0.33% | 0.29% | 0.27% | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.42%** | **0.24%** | **1.04%** | **0.73%** | **0.54%** | **0.42%** | **0.16%** |
| Expense Reimbursement<sup>(1)</sup> <br>| N/A | (0.03)% | N/A | N/A | N/A | N/A | N/A |
| **Total Annual Fund Operating Expenses after Expense** <br> **Reimbursement**<br>| **0.42%** | **0.21%** | **1.04%** | **0.73%** | **0.54%** | **0.42%** | **0.16%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.21% for Institutional Class shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $143 | $135 | $235 | $530 |
| **Institutional Class** | 22 | 74 | 132 | 303 |
| **Class R-1** | 106 | 331 | 574 | 1271 |
| **Class R-3** | 75 | 233 | 406 | 906 |
| **Class R-4** | 55 | 173 | 302 | 677 |
| **Class R-5** | 43 | 135 | 235 | 530 |
| **Class R-6** | 16 | 52 | 90 | 205 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $43 | $135 | $235 | $530 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 15.90% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies that compose the Standard & Poor's ("S&P") SmallCap 600 Index (the "Index") at the time of purchase. The Index is designed to represent U.S. equities with risk/return characteristics of the small cap universe. As of January 31, 2023, the market capitalization range of the companies comprising the Index was between approximately $248.6 million and $6.6 billion. Each component stock of the Index is weighted in proportion to its total market value. The Index is rebalanced quarterly.

The Fund employs a passive investment approach designed to attempt to track the performance of the Index. In seeking its objective, the Fund typically employs a replication strategy, which involves investing in all the securities that make up the Index, in the same proportions as the Index.

The Fund uses derivative strategies and invests in exchange-traded funds ("ETFs"). A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. Specifically, the Fund invests in index futures and equity ETFs on a daily basis to gain exposure to the Index in an effort to minimize tracking error relative to the benchmark.

The Fund will not concentrate (i.e., invest more than 25% of its assets) its investments in a particular industry except to the extent the Index is so concentrated. As of January 31, 2023, the Index was not concentrated in any industry.

**Note:** "Standard & Poor's SmallCap 600" and "S&P SmallCap 600" are trademarks of S&P Global and have been licensed by Principal. The Fund is not sponsored, endorsed, sold, or promoted by S&P Global, and S&P Global makes no representation regarding the advisability of investing in the Fund.

------

**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.

**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.

**•** **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.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

**Index Fund Risk.** Index funds use a passive investment approach and generally do not attempt to manage market volatility, use defensive strategies, or reduce the effect of any long-term periods of poor investment performance. Therefore, the Fund may hold securities that present risks that an investment advisor researching individual securities might seek to avoid. An index fund has operating and other expenses while an index does not. As a result, over time, index funds tend to underperform the index. The correlation between fund performance and index performance may also be affected by the type of passive investment approach used by a fund (sampling or replication), changes in securities markets, changes in the composition of the index, and the timing of purchases and sales of fund shares. Errors or delays in compiling or rebalancing the Index may impact the performance of the Fund and increase transaction costs.

**Industry Concentration Risk.** A fund that concentrates investments in a particular industry or group of industries has greater exposure than other funds to market, economic, and other factors affecting that industry or group of industries.

**Investment Company Securities Risk.** A fund that invests in another investment company (for example, another fund or an exchange-traded fund (or ETF)) 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.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

------

For periods prior to the inception date of Class R-6 shares (November 22, 2016), the performance shown in the table for Class R-6 shares is that of the Fund's Class R-3 shares, adjusted to reflect the fees and expenses of Class R-6 shares. However, where the adjustment for fees and expenses results in performance for Class R-6 shares that is higher than the historical performance of the Class R-3 shares, the historical performance of the Class R-3 shares is used. These adjustments result in performance for such periods that is no higher than the historical performance of the Class R-3 shares.

**Total Returns as of December 31**

![](smcpsp600.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q4 2020** | **31.18%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(32.65)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Institutional Class Return Before Taxes** | **(16.33)%** | **5.61%** | **10.54%** |
| **Institutional Class Return After Taxes on Distributions** | **(18.41)%** | **3.48%** | **8.52%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(8.22)%** | **4.13%** | **8.25%** |
| **Class J Return Before Taxes** | **(17.24)%** | **5.41%** | **10.27%** |
| **Class R-1 Return Before Taxes** | **(16.99)%** | **4.76%** | **9.64%** |
| **Class R-3 Return Before Taxes** | **(16.73)%** | **5.08%** | **9.98%** |
| **Class R-4 Return Before Taxes** | **(16.60)%** | **5.28%** | **10.18%** |
| **Class R-5 Return Before Taxes** | **(16.50)%** | **5.41%** | **10.32%** |
| **Class R-6 Return Before Taxes** | **(16.27)%** | **5.68%** | **10.35%** |
| S&P SmallCap 600 Index (reflects no deduction for fees, expenses, or taxes) | (16.11)% | 5.88% | 10.82% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Jeffrey A. Schwarte (since 2016), Portfolio Manager

<sup>•</sup>

Aaron J. Siebel (since 2018), Portfolio Manager

------

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Classes R-1, R-3, R-4, R-5, R-6, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**SmallCap Value Fund II**

**Objective**

The Fund seeks long-term growth of capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

If you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Maximum Deferred Sales Charge (Load) (as a percentage of the <br> offering price or NAV when Sales Load is paid, whichever is less)<br>| 1.00% |  |  |  |  |  |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Management Fees | 0.93% | 0.93% | 0.93% | 0.93% | 0.93% | 0.93% | 0.93% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A | N/A |
| Other Expenses | 0.24% | 0.15% | 0.54% | 0.33% | 0.29% | 0.27% | 0.02% |
| Acquired Fund Fees and Expenses | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% |
| **Total Annual Fund Operating Expenses** | **1.33%** | **1.09%** | **1.83%** | **1.52%** | **1.33%** | **1.21%** | **0.96%** |
| Fee Waiver and Expense Reimbursement<sup>(1),(2)</sup> <br>| (0.02)% | (0.12)% | (0.02)% | (0.02)% | (0.02)% | (0.02)% | (0.02)% |
| **Total Annual Fund Operating Expenses after Fee Waiver and** <br> **Expense Reimbursement**<br>| **1.31%** | **0.97%** | **1.81%** | **1.50%** | **1.31%** | **1.19%** | **0.94%** |

---

<sup>(1)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to waive a portion of the Fund's management fees through the period ending February 29, 2024. The fee waiver will reduce the Fund's management fees by 0.02% (expressed as a percent of average net assets on an annualized basis). It is expected that the fee waiver will continue through the period disclosed; however, Principal Funds, Inc. and PGI, the parties to the agreement may mutually agree to terminate the fee waiver prior to the end of the period.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.96% for Institutional Class shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

------

**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $233 | $419 | $727 | $1600 |
| **Institutional Class** | 99 | 335 | 589 | 1318 |
| **Class R-1** | 184 | 574 | 988 | 2146 |
| **Class R-3** | 153 | 478 | 827 | 1811 |
| **Class R-4** | 133 | 419 | 727 | 1600 |
| **Class R-5** | 121 | 382 | 663 | 1464 |
| **Class R-6** | 96 | 304 | 529 | 1176 |

---

With respect to Class J shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $133 | $419 | $727 | $1600 |

---

**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 55.40% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies with small market capitalizations at the time of purchase. For this Fund, companies with small market capitalizations are those with market capitalizations of one or both of the following: $3.5 billion or less, or within the range of companies composing the Russell 2000<sup>®</sup> Value Index (as of January 31, 2023, this range was between approximately $4.4 million and $7.2 billion). The Fund invests in value equity securities, an investment strategy that emphasizes buying equity securities that appear to be undervalued. The Fund also invests in real estate investment trusts ("REITs").

The Fund is primarily actively managed by the sub-advisors. In addition, Principal Global Investors, LLC may invest up to 30% of the Fund's assets using an index sampling strategy designed to match the performance of the Russell 2000<sup>®</sup> Value Index.

**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.

**Equity Securities Risk.** A variety of factors can negatively impact the value of equity securities held by a fund, including a decline in the issuer's financial condition, unfavorable performance of the issuer's sector or industry, or changes in response to overall market and economic conditions. A fund's principal market segment(s) (such as market capitalization or style) may underperform other market segments or the equity markets as a whole.

**•** **Smaller Companies Risk.** Investments in smaller companies may involve greater risk and price volatility than investments in larger, more mature companies. Smaller companies may have limited product lines, markets, or financial resources; lack the competitive strength of larger companies; have less experienced managers; or depend on a few key employees. Their securities often are less widely held and trade less frequently and in lesser quantities, and their market prices often fluctuate more, than securities of larger companies.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**•** **Value Style Risk.** Value investing entails the risk that value stocks may continue to be undervalued by the market for extended periods, including the entire period during which the stock is held by a fund, or the events that would cause the stock price to increase may not occur as anticipated or at all. Moreover, a stock that appears to be undervalued actually may be appropriately priced at a low level and, therefore, would not be profitable for the fund.

**Passive Strategy Risk.** A portion of the Fund seeks to match the performance of a specified index. However, the correlation between the performance of this portion of the fund and index performance may be affected by many factors, such as fund expenses, the timing of cash flows into and out of the fund, changes in securities markets, and changes in the composition of the index.

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

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

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Institutional Class shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

For periods prior to the inception date of Class R-6 shares (November 25, 2014), the performance shown in the table for Class R-6 shares is that of the Fund's Institutional Class shares, adjusted to reflect the fees and expenses of Class R-6 shares. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares.

------

**Total Returns as of December 31**

![](smcpvalii.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q4 2020** | **31.34%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(35.49)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Institutional Class Return Before Taxes** | **(9.24)%** | **5.59%** | **9.56%** |
| **Institutional Class Return After Taxes on Distributions** | **(13.21)%** | **2.42%** | **6.78%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(5.49)%** | **3.33%** | **6.90%** |
| **Class J Return Before Taxes** | **(10.42)%** | **5.19%** | **9.09%** |
| **Class R-1 Return Before Taxes** | **(10.06)%** | **4.69%** | **8.63%** |
| **Class R-3 Return Before Taxes** | **(9.76)%** | **5.02%** | **8.97%** |
| **Class R-4 Return Before Taxes** | **(9.65)%** | **5.22%** | **9.17%** |
| **Class R-5 Return Before Taxes** | **(9.51)%** | **5.35%** | **9.31%** |
| **Class R-6 Return Before Taxes** | **(9.29)%** | **5.62%** | **9.54%** |
| Russell 2000 Value Index (reflects no deduction for fees, expenses, or taxes) | (14.49)% | 4.13% | 8.48% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James W. Fennessey (since 2009), Portfolio Manager

<sup>•</sup>

Randy L. Welch (since 2009), Portfolio Manager

**Sub-Advisors**

Hotchkis and Wiley Capital Management, LLC

Vaughan Nelson Investment Management, LP

**Purchase and Sale of Fund Shares**

For Class J shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

------

For Classes R-1, R-3, R-4, R-5, R-6, and Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances.

See Purchase of Fund Shares for more information.

**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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.

------

**Tax-Exempt Bond Fund**

**Objective**

The Fund seeks to provide a high level of income that is exempt from federal income tax while protecting investors' capital.

**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. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in Class A Shares of Principal Funds, Inc. More information about these and other discounts is available from your financial intermediary and in "Choosing a Share Class and The Costs of Investing" beginning on page 404 of the Fund's Prospectus, Appendix B to the Prospectus titled "Intermediary-Specific Sales Charge Waivers and Reductions," and "Multiple Class Structure" beginning on page 4 of the Fund's Statement of Additional Information.

If you purchase Institutional Class shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary.

**Shareholder Fees (fees paid directly from your investment)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **Inst.** |
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) | 3.75% |  |  |
| Maximum Deferred Sales Charge (Load) (as a percentage of the offering price or NAV when Sales Load is paid, <br> whichever is less)<br>| 1.00% | 1.00% |  |

---

**Annual Fund Operating Expenses**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** |
|  | **A** | **C** | **Inst.** |
| Management Fees<sup>(1)</sup> <br>| 0.39% | 0.39% | 0.39% |
| Distribution and/or Service (12b-1) Fees | 0.25% | 1.00% | N/A |
| Other Expenses: |  |  |  |
| Interest Expense | 0.04% | 0.04% | 0.04% |
| Remainder of Other Expenses | 0.08% | 0.16% | 0.11% |
| Total Other Expenses | 0.12% | 0.20% | 0.15% |
| **Total Annual Fund Operating Expenses** | **0.76%** | **1.59%** | **0.54%** |
| Expense Reimbursement<sup>(2)</sup> <br>| N/A | N/A | (0.05)% |
| **Total Annual Fund Operating Expenses after Expense Reimbursement** | **0.76%** | **1.59%** | **0.49%** |

---

<sup>(1)</sup>

Fees have been restated to reflect current fees.

<sup>(2)</sup>

Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to limit the Fund's expenses by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.45% for Institutional Class shares. It is expected that the expense limit will continue through the period ending February 29, 2024; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

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**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual 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 end of those periods. The Example assumes conversion of the Class C shares to Class A shares after the eighth year. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class A** | $450 | $609 | $782 | $1282 |
| **Class C** | 262 | 502 | 866 | 1666 |
| **Institutional Class** | 50 | 168 | 297 | 672 |

---

With respect to Class C shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class C** | $162 | $502 | $866 | $1666 |

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**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. During the most recent fiscal year, the Fund's portfolio turnover rate was 59.30% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in tax-exempt bonds (securities issued by or on behalf of state or local governments and other public authorities) at the time of purchase. Many of these are from California, Illinois, and New York. Generally, municipal obligations pay interest that is exempt from federal income tax. The Fund's investment in municipal obligations include industrial revenue bonds. The Fund also invests in inverse floating rate obligations (variable rate debt instruments that pay interest at rates that move in the opposite direction of prevailing interest rates), which are generally more volatile than other types of municipal obligations and may involve leverage. The Fund may invest up to 20% of its assets in below investment grade bonds (sometimes called "high yield bonds" or "junk bonds"), which are rated at the time of purchase Ba1 or lower by Moody's Investors Service, Inc. ("Moody's") and BB+ or lower by S&P Global Ratings ("S&P Global") (if the bond has been rated by only one of those agencies, that rating will determine whether the bond is below investment grade; if the bond has not been rated by either of those agencies, those selecting such investments will determine whether the bond is of a quality comparable to those rated below investment grade). Under normal circumstances, the Fund maintains an average portfolio duration that is within ±50% of the duration of the Bloomberg Municipal Bond Index, which as of January 31, 2023 was 5.48 years. The Fund is not managed to a particular maturity.

**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.

**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.

**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.

**Geographic Concentration Risk.** A fund that invests significant portions of its assets in municipal obligations and bonds in particular geographic areas (a particular state, such as California, or a particular country or region) has greater exposure than other funds to economic conditions and developments in those areas.

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**High Yield Securities Risk.** High yield fixed-income securities (commonly referred to as "junk bonds") are subject to greater credit quality risk than higher rated fixed-income securities and should be considered speculative.

**Industrial Revenue Bond Risk.** The Fund will be sensitive to, and its performance will depend to a greater extent on, the overall condition and performance of industrial revenue bonds. These revenue bonds are issued by or on behalf of public authorities to obtain funds to finance various public and/or privately operated facilities, including those for business and manufacturing, housing, sports, pollution control, airport, mass transit, port, and parking facilities. These bonds are normally secured only by the revenues from the project and not by state or local government tax payments. Consequently, the credit quality of these bonds is dependent upon the ability of the user of the facilities financed by the bonds and any guarantor to meet its financial obligations.

**Inverse Floating Rate Investments Risk.** Inverse floating rate investments are extremely sensitive to changes in interest rates and, in some cases, their market value may be extremely volatile.

**Municipal Obligations Risk.** Principal and interest payments on municipal securities may not be guaranteed by the issuing body and may be payable only from a particular source. That source may not perform as expected, and payment obligations may not be made or made on time.

**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 redeem or purchase shares in large quantities. These transactions may cause the 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.

**Performance**

The following information provides some 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 at www.PrincipalAM.com.

The bar chart shows the investment returns of the Fund's Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund's average annual total returns compare with those of one or more broad measures of market performance.

For periods prior to the inception date of Institutional Class shares (May 18, 2015), the performance shown in the table for Institutional Class shares is that of the Fund's Class A shares, adjusted to reflect the fees and expenses of the Institutional Class shares. However, where the adjustment for fees and expenses results in performance for Institutional Class shares that is higher than the historical performance of the Class A shares, the historical performance of the Class A shares is used (without respect to sales charges, which are not applicable to Institutional Class shares). These adjustments result in performance for such periods that is no higher than the historical performance of the Class A shares.

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**Total Returns as of December 31**

![](taxexbond.jpg)

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| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q1 2014** | **4.35%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2022** | **(7.11)%** |

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**Average Annual Total Returns**

**For the periods ended December 31, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Class A Return Before Taxes** | **(15.09)%** | **(0.01)%** | **1.58%** |
| **Class A Return After Taxes on Distributions** | **(15.09)%** | **(0.01)%** | **1.58%** |
| **Class A Return After Taxes on Distributions and Sale of Fund Shares** | **(7.99)%** | **0.65%** | **1.98%** |
| **Class C Return Before Taxes** | **(13.32)%** | **(0.06)%** | **1.29%** |
| **Institutional Class Return Before Taxes** | **(11.51)%** | **1.01%** | **2.17%** |
| Bloomberg Municipal Bond Index (reflects no deduction for fees, expenses, or taxes) | (8.53)% | 1.25% | 2.13% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

James Noble (since 2013), Portfolio Manager

<sup>•</sup>

James Welch (since 2014), Portfolio Manager

**Purchase and Sale of Fund Shares**

For Classes A and C shares, the required minimum initial investment per Fund is generally $1,000, and the minimum initial investment per Fund for accounts with an Automatic Investment Plan ("AIP") is $100. The required minimum subsequent investment per Fund is generally $100; however, for accounts with an AIP, subsequent automatic investments must total $1,200 annually if the initial $1,000 has not been met. Some exceptions apply; see "Purchase of Fund Shares – Minimum Investments" for more information.

For Institutional Class shares, there are no minimum initial or subsequent investment requirements for eligible purchasers.

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional by sending a written request to Principal Funds at P.O. Box 219971, Kansas City, MO 64121-9971 (regular mail) or 430 W. 7th Street, Ste. 219971, Kansas City, MO 64105-1407 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principal.com).

Class C shares are subject to an 8-year automatic conversion plan whereby Class C shares held for eight years after purchase will automatically convert to Class A shares of the same Fund.

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See Purchase of Fund Shares for more information.

**Tax Information**

While the Fund intends to distribute income that is exempt from regular federal and possibly some state income taxes, a portion of the Fund's distributions may be subject to federal income taxes or to the federal individual alternative minimum tax. A portion of the Fund's distributions likely will be subject to state income taxes depending on your state's rules. Different rules may apply if you are tax exempt or if 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 (such as a bank), 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, or to recommend one share class of the Fund over another share class. 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.

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.

**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 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.

**Passive Management (Index Funds)**

Some funds (including index funds and hybrid funds that include a passive component) use a passive, or indexing, investment approach. Funds that are pure index funds do not attempt to manage market volatility, use defensive strategies or reduce the effect of any long-term periods of poor stock or bond performance. Some index funds attempt to fully replicate their relevant target index by investing primarily in the securities held by the index in approximately the same proportion of the weightings in the index. However, because of the difficulty of executing some relatively small securities trades, other index funds may use a "sampling" approach and may not be invested in the less heavily weighted securities held by the index. Some index funds may invest in index futures, swaps, and/or exchange-traded funds on a daily basis in an effort to minimize tracking error relative to the benchmark.

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It is unlikely that an index fund's performance will perfectly correlate with the performance of the fund's relevant index. An index fund's ability to match the performance of its index may be affected by many factors, such as fund expenses, the timing of cash flows into and out of the fund, changes in securities markets, and changes in the composition of the index.

The providers of the Funds' respective underlying indexes do not provide any warranty or accept any liability for the quality, accuracy, or completeness of any index or its related data. Those managing an index fund's investments manage such fund consistently with the underlying index provided by the index provider and do not provide any warranty or guarantee against the index provider's or its agent's errors. Errors in the quality, accuracy, and completeness of the data used to compile an underlying index may occur and may not be identified and corrected in a timely manner, or at all. Such errors may negatively or positively impact the performance of a fund.

Unusual market conditions may cause an index provider to postpone a scheduled rebalance, which could cause a fund's underlying index to vary from its normal or expected composition. The postponement of a scheduled rebalance, particularly in a time of market volatility, could mean that constituents that would otherwise be removed at rebalance due to changes in market capitalizations, issuer credit ratings, or other reasons may remain, causing the performance and constituents of the underlying index to vary from those expected under normal conditions. Apart from scheduled rebalances, an index provider may carry out additional index rebalances due to unusual market conditions or in order, for example, to correct an error in the selection of index constituents. When an index is rebalanced and an index fund in turn rebalances its portfolio, such fund and its shareholders bear any related transaction costs and market exposure.

**Cash Management**

The Funds 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 in the table below) may invest uninvested cash in derivatives, such as 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' 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 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.

**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.

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

Recent events are impacting the securities markets. Russia's invasion of Ukraine in 2022 has resulted in sanctions being levied by the United States, European Union, and other countries against Russia. Russia's military actions and the resulting sanctions could adversely affect global energy and financial markets and, thus, could affect the value of the fund's investments, even beyond any direct exposure the fund may have to Russian issuers or the adjoining geographic regions. The extent and duration of the military action, sanctions, and resulting market disruptions could be substantial.

Other recent market disruption events include the pandemic spread of the novel coronavirus designated as COVID-19. The transmission of COVID-19 and efforts to contain its spread resulted in border closings and other travel restrictions and disruptions; disruptions to business operations, supply chains, and customer activity; event cancellations and restrictions; service cancellations and reductions; significant challenges in the healthcare industry; and quarantines. As experienced with the COVID-19 pandemic, health crises 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. Certain of those policy changes were implemented or considered in response to the COVID-19 outbreak and inflationary pressures. 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 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 the Principal Funds, Inc. Government Money Market Fund, which is managed by PGI and for which PGI receives a management fee. The 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.

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**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.

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**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 a Fund. The risks described below for each Fund that operates as a fund of funds (as identified in the table) include risks at both the fund of funds level and underlying funds level. 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** <br> **STRATEGIES**<br> **AND RISKS**<br>| &nbsp;&nbsp; **CALIFORNIA**<br> **MUNICIPAL**<br>| &nbsp;&nbsp; **CORE FIXED**<br> **INCOME**<br>| &nbsp;&nbsp; **CORE PLUS**<br> **BOND**<br>| &nbsp;&nbsp; **DIVERSIFIED**<br> **INCOME**<br>| &nbsp;&nbsp; **DIVERSIFIED**<br> **INTERNATIONAL**<br>|
| Bank Loans (also known <br> as Senior Floating Rate <br> Interests)<br>|  |  |  | X |  |
| Convertible Securities |  |  |  |  |  |
| Counterparty Risk | X |  | X  | X |  |
| Derivatives |  |  | X | X |  |
| Emerging Markets |  |  | X | X | X |
| Equity Securities |  |  |  |  | X |
| •Growth Style |  |  |  |  | X |
| •Smaller <br> Companies<br>|  |  |  |  | X |
| •Value Style |  |  |  |  | X |
| Fixed-Income Securities | X | X | X | X |  |
| Foreign Currency |  |  | X  | X | X |
| Foreign Securities |  | X | X | X | X |
| Fund of Funds |  |  |  |  |  |
| Geographic Concentration <br> (Municipal Obligations)<br>| X |  |  |  |  |
| Hedging |  |  | X | X |  |
| High Portfolio Turnover  |  |  | X |  |  |
| High Yield Securities | X |  | X | X |  |
| Industrial Revenue Bond | X |  |  |  |  |
| Industry Concentration |  |  |  |  |  |
| Inverse Floating Rate <br> Investments<br>| X |  |  |  |  |
| Investment Company <br> Securities<br>|  |  |  |  |  |
| Leverage | X |  | X |  |  |
| Municipal Obligations and <br> AMT-Subject Bonds<br>| X |  |  |  |  |
| Portfolio Duration | X | X | X | X |  |
| Preferred Securities |  |  |  | X |  |
| Real Estate Investment <br> Trusts ("REITs")<br>|  |  |  |  |  |
| Real Estate Securities |  | X | X |  |  |
| Redemption and Large <br> Transaction Risk<br>| X | X | X | X | X |
| Repurchase Agreements |  |  |  |  |  |
| Securitized Products |  | X | X | X |  |
| U.S. Government and U.S. <br> Government-Sponsored <br> Securities<br>|  | X | X |  |  |
| Volatility Mitigation |  |  |  |  |  |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **INVESTMENT** <br> **STRATEGIES**<br> **AND RISKS**<br>| &nbsp;&nbsp; **EQUITY**<br> **INCOME**<br>| &nbsp;&nbsp; **FINISTERRE**<br> **EMERGING**<br> **MARKETS TOTAL**<br> **RETURN BOND**<br>| &nbsp;&nbsp; **GLOBAL**<br> **EMERGING**<br> **MARKETS**<br>| &nbsp;&nbsp; **GLOBAL REAL**<br> **ESTATE**<br> **SECURITIES**<br>| &nbsp;&nbsp; **GOVERNMENT &**<br> **HIGH QUALITY**<br> **BOND**<br>|
| Bank Loans (also known <br> as Senior Floating Rate <br> Interests)<br>|  |  |  |  |  |
| Convertible Securities |  | X  |  |  |  |
| Counterparty Risk |  | X |  |  |  |
| Derivatives |  | X |  |  | X |
| Emerging Markets |  | X | X |  |  |
| Equity Securities | X |  | X | X |  |
| •Growth Style |  |  | X | X |  |
| •Smaller <br> Companies<br>| X  |  | X | X |  |
| •Value Style | X |  | X  | X |  |
| Fixed-Income Securities |  | X |  |  | X |
| Foreign Currency |  | X | X | X |  |
| Foreign Securities | X | X | X | X |  |
| Fund of Funds |  |  |  |  |  |
| Geographic Concentration <br> (Municipal Obligations)<br>|  |  |  |  |  |
| Hedging |  | X |  |  |  |
| High Portfolio Turnover  |  | X |  |  | X |
| High Yield Securities |  | X |  |  |  |
| Industrial Revenue Bond |  |  |  |  |  |
| Industry Concentration |  |  |  | X |  |
| Inverse Floating Rate <br> Investments<br>|  |  |  |  |  |
| Investment Company <br> Securities<br>|  |  |  |  |  |
| Leverage |  | X |  |  |  |
| Municipal Obligations and <br> AMT-Subject Bonds<br>|  |  |  |  |  |
| Portfolio Duration |  | X |  |  | X |
| Preferred Securities |  |  |  |  |  |
| Real Estate Investment <br> Trusts ("REITs")<br>|  |  |  | X |  |
| Real Estate Securities |  |  |  | X | X |
| Redemption and Large <br> Transaction Risk<br>| X | X | X | X | X |
| Repurchase Agreements |  |  |  |  |  |
| Securitized Products |  |  |  |  | X |
| U.S. Government and U.S. <br> Government-Sponsored <br> Securities<br>|  | X |  |  | X |
| Volatility Mitigation |  | X |  |  |  |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **INVESTMENT** <br> **STRATEGIES**<br> **AND RISKS**<br>| &nbsp;&nbsp; **GOVERNMENT**<br> **MONEY MARKET**<br>| **HIGH INCOME** | **HIGH YIELD** | &nbsp;&nbsp; **INFLATION**<br> **PROTECTION**<br>| **INTERNATIONAL I** |
| Bank Loans (also known <br> as Senior Floating Rate <br> Interests)<br>|  | X | X |  |  |
| Convertible Securities |  |  |  |  |  |
| Counterparty Risk | X | X |  | X |  |
| Derivatives |  | X |  | X |  |
| Emerging Markets |  |  |  |  | X |
| Equity Securities |  |  |  |  | X |
| •Growth Style |  |  |  |  | X  |
| •Smaller <br> Companies<br>|  |  |  |  | X |
| •Value Style |  |  |  |  | X  |
| Fixed-Income Securities | X | X | X | X |  |
| Foreign Currency |  |  |  | X | X |
| Foreign Securities |  | X | X | X | X |
| Fund of Funds |  |  |  |  |  |
| Geographic Concentration <br> (Municipal Obligations)<br>|  |  |  |  |  |
| Hedging |  |  |  |  |  |
| High Portfolio Turnover  |  |  |  | X |  |
| High Yield Securities |  | X | X |  |  |
| Industrial Revenue Bond |  |  |  |  |  |
| Industry Concentration |  |  |  |  |  |
| Inverse Floating Rate <br> Investments<br>|  |  |  |  |  |
| Investment Company <br> Securities<br>| X | X |  |  |  |
| Leverage |  | X |  |  |  |
| Municipal Obligations and <br> AMT-Subject Bonds<br>|  |  |  |  |  |
| Portfolio Duration |  | X | X | X |  |
| Preferred Securities |  |  |  |  |  |
| Real Estate Investment <br> Trusts ("REITs")<br>|  |  |  |  |  |
| Real Estate Securities |  |  |  |  |  |
| Redemption and Large <br> Transaction Risk<br>| X | X | X | X | X |
| Repurchase Agreements | X |  |  |  |  |
| Securitized Products |  |  |  |  |  |
| U.S. Government and U.S. <br> Government-Sponsored <br> Securities<br>| X |  |  | X |  |
| Volatility Mitigation |  |  |  |  |  |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **INVESTMENT** <br> **STRATEGIES**<br> **AND RISKS**<br>| &nbsp;&nbsp; **LARGECAP**<br> **GROWTH I**<br>| &nbsp;&nbsp; **LARGECAP**<br> **S&P 500 INDEX**<br>| &nbsp;&nbsp; **LARGECAP**<br> **VALUE III**<br>| **MIDCAP** | &nbsp;&nbsp; **MIDCAP**<br> **GROWTH**<br>|
| Bank Loans (also known <br> as Senior Floating Rate <br> Interests)<br>|  |  |  |  |  |
| Convertible Securities |  |  |  |  |  |
| Counterparty Risk |  |  |  |  |  |
| Derivatives |  | X |  |  |  |
| Emerging Markets |  |  |  |  |  |
| Equity Securities | X | X | X | X | X |
| •Growth Style | X |  |  |  | X |
| •Smaller <br> Companies<br>|  |  |  | X | X |
| •Value Style |  |  | X |  |  |
| Fixed-Income Securities |  |  |  |  |  |
| Foreign Currency |  |  |  | X |  |
| Foreign Securities |  |  |  | X |  |
| Fund of Funds |  |  |  |  |  |
| Geographic Concentration <br> (Municipal Obligations)<br>|  |  |  |  |  |
| Hedging |  |  |  |  |  |
| High Portfolio Turnover  |  |  |  |  | X |
| High Yield Securities |  |  |  |  |  |
| Industrial Revenue Bond |  |  |  |  |  |
| Industry Concentration |  | X <sup>(1)</sup> <br>|  |  |  |
| Inverse Floating Rate <br> Investments<br>|  |  |  |  |  |
| Investment Company <br> Securities<br>|  | X |  |  |  |
| Leverage |  |  |  |  |  |
| Municipal Obligations and <br> AMT-Subject Bonds<br>|  |  |  |  |  |
| Portfolio Duration |  |  |  |  |  |
| Preferred Securities |  |  |  |  |  |
| Real Estate Investment <br> Trusts ("REITs")<br>|  |  |  |  |  |
| Real Estate Securities |  |  |  |  |  |
| Redemption and Large <br> Transaction Risk<br>| X | X | X | X | X |
| Repurchase Agreements |  |  |  |  |  |
| Securitized Products |  |  |  |  |  |
| U.S. Government and U.S. <br> Government-Sponsored <br> Securities<br>|  |  |  |  |  |
| Volatility Mitigation |  |  |  |  |  |

---

<sup>(1)</sup>

The Fund will not concentrate (i.e., invest more than 25% of its assets) its investments in a particular industry except to the extent the Index is so concentrated.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **INVESTMENT** <br> **STRATEGIES**<br> **AND RISKS**<br>| &nbsp;&nbsp; **MIDCAP**<br> **GROWTH III**<br>| &nbsp;&nbsp; **MIDCAP S&P 400**<br> **INDEX**<br>| &nbsp;&nbsp; **MIDCAP**<br> **VALUE I**<br>| **MONEY MARKET** | **OVERSEAS** |
| Bank Loans (also known <br> as Senior Floating Rate <br> Interests)<br>|  |  |  |  |  |
| Convertible Securities |  |  |  |  |  |
| Counterparty Risk |  |  |  |  |  |
| Derivatives |  | X |  |  |  |
| Emerging Markets |  |  |  |  | X |
| Equity Securities | X | X | X |  | X |
| •Growth Style | X |  |  |  |  |
| •Smaller <br> Companies<br>| X | X | X |  | X |
| •Value Style |  |  | X |  | X |
| Fixed-Income Securities |  |  |  | X |  |
| Foreign Currency |  |  |  |  | X |
| Foreign Securities |  |  |  | X | X |
| Fund of Funds |  |  |  |  |  |
| Geographic Concentration <br> (Municipal Obligations)<br>|  |  |  |  |  |
| Hedging |  |  |  |  |  |
| High Portfolio Turnover  |  |  |  |  |  |
| High Yield Securities |  |  |  |  |  |
| Industrial Revenue Bond |  |  |  |  |  |
| Industry Concentration |  | X <sup>(1)</sup> <br>|  |  |  |
| Inverse Floating Rate <br> Investments<br>|  |  |  |  |  |
| Investment Company <br> Securities<br>|  | X |  |  |  |
| Leverage |  |  |  |  |  |
| Municipal Obligations and <br> AMT-Subject Bonds<br>|  |  |  |  |  |
| Portfolio Duration |  |  |  |  |  |
| Preferred Securities |  |  |  |  |  |
| Real Estate Investment <br> Trusts ("REITs")<br>|  |  | X |  |  |
| Real Estate Securities |  |  | X |  |  |
| Redemption and Large <br> Transaction Risk<br>| X | X | X | X | X |
| Repurchase Agreements |  |  |  | X |  |
| Securitized Products |  |  |  |  |  |
| U.S. Government and U.S. <br> Government-Sponsored <br> Securities<br>|  |  |  | X |  |
| Volatility Mitigation |  |  |  |  |  |

---

<sup>(1)</sup>

The Fund will not concentrate (i.e., invest more than 25% of its assets) its investments in a particular industry except to the extent the Index is so concentrated.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp; **PRINCIPAL**<br> **CAPITAL**<br> **APPRECIATION**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME**<br> **STRATEGIC**<br> **INCOME**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME 2010**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME 2015**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME 2020**<br>|
| Bank Loans (also known <br> as Senior Floating Rate <br> Interests)<br>|  |  |  |  |  |
| Convertible Securities |  |  |  |  |  |
| Counterparty Risk |  | X | X | X | X |
| Derivatives |  | X | X | X | X |
| Emerging Markets |  |  |  |  |  |
| Equity Securities | X | X | X | X | X |
| •Growth Style |  | X | X | X | X |
| •Smaller <br> Companies<br>| X  |  |  | X | X |
| •Value Style |  | X | X | X | X |
| Fixed-Income Securities |  | X | X | X | X |
| Foreign Currency |  | X | X | X | X |
| Foreign Securities |  | X | X | X | X |
| Fund of Funds |  | X | X | X | X |
| Geographic Concentration <br> (Municipal Obligations)<br>|  |  |  |  |  |
| Hedging |  |  |  |  |  |
| High Portfolio Turnover  |  |  |  |  |  |
| High Yield Securities |  |  |  |  |  |
| Industrial Revenue Bond |  |  |  |  |  |
| Industry Concentration |  |  |  |  |  |
| Inverse Floating Rate <br> Investments<br>|  |  |  |  |  |
| Investment Company <br> Securities<br>|  | X | X | X | X |
| Leverage |  |  |  |  |  |
| Municipal Obligations and <br> AMT-Subject Bonds<br>|  |  |  |  |  |
| Portfolio Duration |  | X  | X | X | X |
| Preferred Securities |  |  |  |  |  |
| Real Estate Investment <br> Trusts ("REITs")<br>|  |  |  |  |  |
| Real Estate Securities |  |  |  |  |  |
| Redemption and Large <br> Transaction Risk<br>| X | X | X | X | X |
| Repurchase Agreements |  |  |  |  |  |
| Securitized Products |  | X | X | X | X |
| U.S. Government and U.S. <br> Government-Sponsored <br> Securities<br>|  | X | X | X | X |
| Volatility Mitigation |  |  |  |  |  |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **INVESTMENT** <br> **STRATEGIES**<br> **AND RISKS**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME 2025**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME 2030**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME 2035**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME 2040**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME 2045**<br>|
| Bank Loans (also known <br> as Senior Floating Rate <br> Interests)<br>|  |  |  |  |  |
| Convertible Securities |  |  |  |  |  |
| Counterparty Risk | X | X | X | X | X |
| Derivatives | X | X | X | X | X |
| Emerging Markets |  |  |  | X | X |
| Equity Securities | X | X | X | X | X |
| •Growth Style | X | X | X | X | X |
| •Smaller <br> Companies<br>| X | X | X | X | X |
| •Value Style | X | X | X | X | X  |
| Fixed-Income Securities | X | X | X | X | X |
| Foreign Currency | X | X | X | X | X |
| Foreign Securities | X | X | X | X | X |
| Fund of Funds | X | X | X | X | X |
| Geographic Concentration <br> (Municipal Obligations)<br>|  |  |  |  |  |
| Hedging |  |  |  |  |  |
| High Portfolio Turnover  |  |  |  |  |  |
| High Yield Securities |  |  |  |  |  |
| Industrial Revenue Bond |  |  |  |  |  |
| Industry Concentration |  |  |  |  |  |
| Inverse Floating Rate <br> Investments<br>|  |  |  |  |  |
| Investment Company <br> Securities<br>| X | X | X | X | X |
| Leverage |  |  |  |  |  |
| Municipal Obligations and <br> AMT-Subject Bonds<br>|  |  |  |  |  |
| Portfolio Duration | X | X | X | X | X |
| Preferred Securities |  |  |  |  |  |
| Real Estate Investment <br> Trusts ("REITs")<br>|  |  |  |  |  |
| Real Estate Securities |  |  |  |  |  |
| Redemption and Large <br> Transaction Risk<br>| X | X | X | X | X |
| Repurchase Agreements |  |  |  |  |  |
| Securitized Products | X | X | X | X |  |
| U.S. Government and U.S. <br> Government-Sponsored <br> Securities<br>| X | X | X | X |  |
| Volatility Mitigation |  |  |  |  |  |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **INVESTMENT** <br> **STRATEGIES**<br> **AND RISKS**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME 2050**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME 2055**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME 2060**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME 2065**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME 2070**<br>|
| Bank Loans (also known <br> as Senior Floating Rate <br> Interests)<br>|  |  |  |  |  |
| Convertible Securities |  |  |  |  |  |
| Counterparty Risk | X | X | X | X | X |
| Derivatives | X | X | X | X | X |
| Emerging Markets | X | X | X | X | X |
| Equity Securities | X | X | X | X | X |
| •Growth Style | X | X | X | X | X |
| •Smaller <br> Companies<br>| X | X | X | X | X |
| •Value Style | X | X | X | X | X |
| Fixed-Income Securities | X | X | X | X | X |
| Foreign Currency | X | X | X | X | X |
| Foreign Securities | X | X | X | X | X |
| Fund of Funds | X | X | X | X | X |
| Geographic Concentration <br> (Municipal Obligations)<br>|  |  |  |  |  |
| Hedging |  |  |  |  |  |
| High Portfolio Turnover  |  |  |  |  |  |
| High Yield Securities |  |  |  |  |  |
| Industrial Revenue Bond |  |  |  |  |  |
| Industry Concentration |  |  |  |  |  |
| Inverse Floating Rate <br> Investments<br>|  |  |  |  |  |
| Investment Company <br> Securities<br>| X | X | X | X | X |
| Leverage |  |  |  |  |  |
| Municipal Obligations and <br> AMT-Subject Bonds<br>|  |  |  |  |  |
| Portfolio Duration | X | X | X | X | X |
| Preferred Securities |  |  |  |  |  |
| Real Estate Investment <br> Trusts ("REITs")<br>|  |  |  |  |  |
| Real Estate Securities |  |  |  |  |  |
| Redemption and Large <br> Transaction Risk<br>| X | X | X | X | X |
| Repurchase Agreements |  |  |  |  |  |
| Securitized Products |  |  |  |  |  |
| U.S. Government and U.S. <br> Government-Sponsored <br> Securities<br>|  |  |  |  |  |
| Volatility Mitigation |  |  |  |  |  |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **INVESTMENT** <br> **STRATEGIES**<br> **AND RISKS**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME**<br> **HYBRID**<br> **INCOME**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME**<br> **HYBRID 2015**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME**<br> **HYBRID 2020**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME**<br> **HYBRID 2025**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME**<br> **HYBRID 2030**<br>|
| Bank Loans (also known <br> as Senior Floating Rate <br> Interests)<br>|  |  |  |  |  |
| Convertible Securities |  |  |  |  |  |
| Counterparty Risk | X | X | X | X | X |
| Derivatives | X | X | X | X | X |
| Emerging Markets |  |  |  |  |  |
| Equity Securities | X | X | X | X | X |
| •Growth Style | X | X | X | X | X |
| •Smaller <br> Companies<br>|  | X | X | X | X |
| •Value Style | X | X | X | X | X |
| Fixed-Income Securities | X | X | X | X | X |
| Foreign Currency | X | X | X | X | X |
| Foreign Securities | X | X | X | X | X |
| Fund of Funds | X | X | X | X | X |
| Geographic Concentration <br> (Municipal Obligations)<br>|  |  |  |  |  |
| Hedging |  |  |  |  |  |
| High Portfolio Turnover  |  |  |  |  |  |
| High Yield Securities |  |  |  |  |  |
| Industrial Revenue Bond |  |  |  |  |  |
| Industry Concentration |  |  |  |  |  |
| Inverse Floating Rate <br> Investments<br>|  |  |  |  |  |
| Investment Company <br> Securities<br>| X | X | X | X | X |
| Leverage |  |  |  |  |  |
| Municipal Obligations and <br> AMT-Subject Bonds<br>|  |  |  |  |  |
| Portfolio Duration | X | X | X | X | X |
| Preferred Securities |  |  |  |  |  |
| Real Estate Investment <br> Trusts ("REITs")<br>|  |  |  |  |  |
| Real Estate Securities |  |  |  |  |  |
| Redemption and Large <br> Transaction Risk<br>| X | X | X | X | X |
| Repurchase Agreements |  |  |  |  |  |
| Securitized Products | X | X | X | X | X |
| U.S. Government and U.S. <br> Government-Sponsored <br> Securities<br>| X | X | X | X | X |
| Volatility Mitigation |  |  |  |  |  |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **INVESTMENT** <br> **STRATEGIES**<br> **AND RISKS**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME**<br> **HYBRID 2035**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME**<br> **HYBRID 2040**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME**<br> **HYBRID 2045**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME**<br> **HYBRID 2050**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME**<br> **HYBRID 2055**<br>|
| Bank Loans (also known <br> as Senior Floating Rate <br> Interests)<br>|  |  |  |  |  |
| Convertible Securities |  |  |  |  |  |
| Counterparty Risk | X | X | X | X | X |
| Derivatives | X | X | X | X | X |
| Emerging Markets |  | X | X | X | X |
| Equity Securities | X | X | X | X | X |
| •Growth Style | X | X | X | X | X |
| •Smaller <br> Companies<br>| X | X | X | X | X |
| •Value Style | X | X | X | X | X |
| Fixed-Income Securities | X | X | X | X | X |
| Foreign Currency | X | X | X | X | X |
| Foreign Securities | X | X | X | X | X |
| Fund of Funds | X | X | X | X | X |
| Geographic Concentration <br> (Municipal Obligations)<br>|  |  |  |  |  |
| Hedging |  |  |  |  |  |
| High Portfolio Turnover  |  |  |  |  |  |
| High Yield Securities |  |  |  |  |  |
| Industrial Revenue Bond |  |  |  |  |  |
| Industry Concentration |  |  |  |  |  |
| Inverse Floating Rate <br> Investments<br>|  |  |  |  |  |
| Investment Company <br> Securities<br>| X | X | X | X | X |
| Leverage |  |  |  |  |  |
| Municipal Obligations and <br> AMT-Subject Bonds<br>|  |  |  |  |  |
| Portfolio Duration | X | X | X | X | X |
| Preferred Securities |  |  |  |  |  |
| Real Estate Investment <br> Trusts ("REITs")<br>|  |  |  |  |  |
| Real Estate Securities |  |  |  |  |  |
| Redemption and Large <br> Transaction Risk<br>| X | X | X | X | X |
| Repurchase Agreements |  |  |  |  |  |
| Securitized Products | X | X |  |  |  |
| U.S. Government and U.S. <br> Government-Sponsored <br> Securities<br>| X | X |  |  |  |
| Volatility Mitigation |  |  |  |  |  |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **INVESTMENT** <br> **STRATEGIES**<br> **AND RISKS**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME**<br> **HYBRID 2060**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME**<br> **HYBRID 2065**<br>| &nbsp;&nbsp; **PRINCIPAL**<br> **LIFETIME**<br> **HYBRID 2070**<br>| &nbsp;&nbsp; **REAL ESTATE**<br> **SECURITIES**<br>| &nbsp;&nbsp; **SAM**<br> **BALANCED**<br>|
| Bank Loans (also known <br> as Senior Floating Rate <br> Interests)<br>|  |  |  |  |  |
| Convertible Securities |  |  |  |  |  |
| Counterparty Risk | X | X | X |  |  |
| Derivatives | X | X | X |  |  |
| Emerging Markets | X | X | X |  | X |
| Equity Securities | X | X | X | X | X |
| •Growth Style | X | X | X | X | X |
| •Smaller <br> Companies<br>| X | X | X | X | X |
| •Value Style | X | X | X | X | X |
| Fixed-Income Securities | X | X | X |  | X |
| Foreign Currency | X | X | X |  | X |
| Foreign Securities | X | X | X |  | X |
| Fund of Funds | X | X | X |  | X |
| Geographic Concentration <br> (Municipal Obligations)<br>|  |  |  |  |  |
| Hedging |  |  |  |  |  |
| High Portfolio Turnover  |  |  |  |  |  |
| High Yield Securities |  |  |  |  |  |
| Industrial Revenue Bond |  |  |  |  |  |
| Industry Concentration |  |  |  | X |  |
| Inverse Floating Rate <br> Investments<br>|  |  |  |  |  |
| Investment Company <br> Securities<br>| X | X | X |  | X |
| Leverage |  |  |  |  |  |
| Municipal Obligations and <br> AMT-Subject Bonds<br>|  |  |  |  |  |
| Portfolio Duration | X | X | X |  | X |
| Preferred Securities |  |  |  |  |  |
| Real Estate Investment <br> Trusts ("REITs")<br>|  |  |  | X |  |
| Real Estate Securities |  |  |  | X |  |
| Redemption and Large <br> Transaction Risk<br>| X | X | X | X | X |
| Repurchase Agreements |  |  |  |  |  |
| Securitized Products |  |  |  |  | X |
| U.S. Government and U.S. <br> Government-Sponsored <br> Securities<br>|  |  |  |  |  |
| Volatility Mitigation |  |  |  |  |  |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **INVESTMENT** <br> **STRATEGIES**<br> **AND RISKS**<br>| &nbsp;&nbsp; **SAM**<br> **CONSERVATIVE**<br> **BALANCED**<br>| &nbsp;&nbsp; **SAM**<br> **CONSERVATIVE**<br> **GROWTH**<br>| &nbsp;&nbsp; **SAM FLEXIBLE**<br> **INCOME**<br>| &nbsp;&nbsp; **SAM STRATEGIC**<br> **GROWTH**<br>| &nbsp;&nbsp; **SHORT-TERM**<br> **INCOME**<br>|
| Bank Loans (also known <br> as Senior Floating Rate <br> Interests)<br>|  |  |  |  |  |
| Convertible Securities |  |  |  |  |  |
| Counterparty Risk |  |  |  |  |  |
| Derivatives |  |  |  |  | X |
| Emerging Markets | X | X |  | X |  |
| Equity Securities | X | X | X | X |  |
| •Growth Style | X | X | X | X |  |
| •Smaller <br> Companies<br>| X | X | X | X |  |
| •Value Style | X | X | X | X |  |
| Fixed-Income Securities | X | X | X |  | X |
| Foreign Currency | X | X |  | X |  |
| Foreign Securities | X | X | X | X | X |
| Fund of Funds | X | X | X | X |  |
| Geographic Concentration <br> (Municipal Obligations)<br>|  |  |  |  |  |
| Hedging |  |  |  |  |  |
| High Portfolio Turnover  |  |  |  |  |  |
| High Yield Securities | X |  | X |  |  |
| Industrial Revenue Bond |  |  |  |  |  |
| Industry Concentration |  |  |  |  |  |
| Inverse Floating Rate <br> Investments<br>|  |  |  |  |  |
| Investment Company <br> Securities<br>| X | X | X | X |  |
| Leverage |  |  |  |  |  |
| Municipal Obligations and <br> AMT-Subject Bonds<br>|  |  |  |  |  |
| Portfolio Duration | X | X | X |  | X |
| Preferred Securities |  |  |  |  |  |
| Real Estate Investment <br> Trusts ("REITs")<br>|  |  |  |  |  |
| Real Estate Securities |  |  |  |  | X |
| Redemption and Large <br> Transaction Risk<br>| X | X | X | X | X |
| Repurchase Agreements |  |  |  |  |  |
| Securitized Products | X |  | X |  | X |
| U.S. Government and U.S. <br> Government-Sponsored <br> Securities<br>|  |  |  |  | X |
| Volatility Mitigation |  |  |  |  |  |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **INVESTMENT** <br> **STRATEGIES**<br> **AND RISKS**<br>| **SMALLCAP** | &nbsp;&nbsp; **SMALLCAP**<br> **GROWTH I**<br>| &nbsp;&nbsp; **SMALLCAP**<br> **S&P 600 INDEX**<br>| &nbsp;&nbsp; **SMALLCAP**<br> **VALUE II**<br>| &nbsp;&nbsp; **TAX-EXEMPT**<br> **BOND**<br>|
| Bank Loans (also known <br> as Senior Floating Rate <br> Interests)<br>|  |  |  |  |  |
| Convertible Securities |  |  |  |  |  |
| Counterparty Risk |  |  |  |  | X |
| Derivatives |  |  | X |  |  |
| Emerging Markets |  |  |  |  |  |
| Equity Securities | X | X | X | X |  |
| •Growth Style |  | X |  |  |  |
| •Smaller <br> Companies<br>| X | X | X | X |  |
| •Value Style |  |  |  | X |  |
| Fixed-Income Securities |  |  |  |  | X |
| Foreign Currency |  |  |  |  |  |
| Foreign Securities |  |  |  |  |  |
| Fund of Funds |  |  |  |  |  |
| Geographic Concentration <br> (Municipal Obligations)<br>|  |  |  |  | X |
| Hedging |  |  |  |  |  |
| High Portfolio Turnover  |  |  |  |  |  |
| High Yield Securities |  |  |  |  | X |
| Industrial Revenue Bond |  |  |  |  | X |
| Industry Concentration |  |  | X <sup>(1)</sup> <br>|  |  |
| Inverse Floating Rate <br> Investments<br>|  |  |  |  | X |
| Investment Company <br> Securities<br>|  |  | X |  |  |
| Leverage |  |  |  |  | X |
| Municipal Obligations and <br> AMT-Subject Bonds<br>|  |  |  |  | X |
| Portfolio Duration |  |  |  |  | X |
| Preferred Securities |  |  |  |  |  |
| Real Estate Investment <br> Trusts ("REITs")<br>|  |  |  | X |  |
| Real Estate Securities |  |  |  | X |  |
| Redemption and Large <br> Transaction Risk<br>| X | X | X | X | X |
| Repurchase Agreements |  |  |  |  |  |
| Securitized Products |  |  |  |  |  |
| U.S. Government and U.S. <br> Government-Sponsored <br> Securities<br>|  |  |  |  |  |
| Volatility Mitigation |  |  |  |  |  |

---

<sup>(1)</sup>

The Fund will not concentrate (i.e., invest more than 25% of its assets) its investments in a particular industry except to the extent the Index is so concentrated.

**Bank Loans (also known as Senior Floating Rate Interests)**

Bank loans typically hold the most senior position in the capital structure of a business entity (the "Borrower"), are secured by specific collateral, and have a claim on the Borrower's assets and/or stock that is senior to that held by the Borrower's unsecured subordinated debtholders and stockholders. The proceeds of bank loans primarily are used to finance leveraged buyouts, recapitalizations, mergers, acquisitions, stock repurchases, dividends, and, to a lesser extent, to finance internal growth and for other corporate purposes. Bank loans are typically structured and administered by a financial institution that acts as the agent of the lenders participating in the bank loan. The Funds may purchase bank loans that are rated below-investment-grade (sometimes called "junk") or will be comparable if unrated, which means they are more likely to default than investment-grade loans. A default could lead to non-payment of income, which would result in a reduction of income to the fund, and there can be no assurance that the liquidation of any collateral would satisfy the Borrower's obligation in the event of non-payment of scheduled interest or principal payments, or that such collateral could be readily liquidated.

------

Most bank loans are not traded on any national securities exchange. Bank loans generally have less liquidity than investment-grade bonds, and there may be less public information available about them. Bank loan interests may not be considered "securities," and purchasers, therefore, may not be entitled to rely on the anti-fraud protections of the federal securities laws.

The primary and secondary market for bank loans may be subject to irregular trading activity, wide bid/ask spreads, and extended trade settlement periods, which may cause a fund to be unable to realize full value and, thus, cause a material decline in a fund's net asset value. Because transactions in bank loans may be subject to extended settlement periods, a fund may not receive proceeds from the sale of a bank loan for a period of time after the sale. As a result, sale proceeds may not be available to make additional investments or to meet a fund's redemption obligations for a period of time after the sale of the bank loans, which could lead to a fund having to sell other investments, borrow to meet obligations, or borrow to remain fully invested while awaiting settlement.

Bank loans pay interest at rates that are periodically reset by reference to a base lending rate plus a spread. These base lending rates are generally the prime rate offered by a designated U.S. bank, the London InterBank Offered Rate (LIBOR), the Secured Overnight Financing Rate (SOFR), a similar reference rate, or the prime rate offered by one or more major U.S. banks.

Bank loans generally are subject to mandatory and/or optional prepayment. Because of these prepayment conditions and because there may be significant economic incentives for the borrower to repay, prepayments may occur.

**Convertible Securities**

Convertible securities are usually fixed-income securities that a fund has the right to exchange for equity securities at a specified conversion price. Convertible securities could also include corporate bonds, notes, or preferred stocks of U.S. or foreign issuers. Convertible securities allow a fund to realize additional returns if the market price of the equity securities exceeds the conversion price. For example, a fund may hold fixed-income securities that are convertible into shares of common stock at a conversion price of $10 per share. If the market value of the shares of common stock reached $12, the fund could realize an additional $2 per share by converting its fixed-income securities.

Convertible securities have lower yields than comparable fixed-income securities. In addition, at the time a convertible security is issued, the conversion price exceeds the market value of the underlying equity securities. Thus, convertible securities may provide lower returns than non-convertible fixed-income securities or equity securities depending upon changes in the price of the underlying equity securities. However, convertible securities permit a fund to realize some of the potential appreciation of the underlying equity securities with less risk of losing its initial investment.

Depending on the features of the convertible security, a fund will treat a convertible security as a fixed-income security, equity security, or preferred security for purposes of investment policies and limitations because of the unique characteristics of convertible securities. Funds that invest in convertible securities may invest in convertible securities that are below investment grade (sometimes referred to as "junk"). Many convertible securities are relatively illiquid.

**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.

**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:

<sup>•</sup>

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

<sup>•</sup>

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;

<sup>•</sup>

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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

<sup>•</sup>

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

<sup>•</sup>

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

<sup>•</sup>

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.

<sup>•</sup>

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.

<sup>•</sup>

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.

<sup>•</sup>

Foreign currency contracts (such as foreign currency options and foreign currency forward and swap agreements) may be used by funds to increase exposure to a foreign currency or to shift exposure to foreign currency fluctuations from one country to another. A forward currency contract involves a privately negotiated obligation to purchase or sell a specific currency at a future date at a price set in the contract. For currency contracts, there is also a risk of government action through exchange controls that would restrict the ability of a fund to deliver or receive currency.

<sup>•</sup>

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 the imperfect correlation between the change in market value of the instruments held by a fund and the price of the derivative instrument. 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 difference in trading hours for the options markets and the markets for the underlying securities (rate movements can take place in the underlying markets that cannot be reflected in the options markets) and an insufficient liquid secondary market for particular options.

<sup>•</sup>

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).

**Emerging Markets**

The Funds consider a security to be tied economically to an emerging market if the issuer of the security has its principal place of business or principal office in an emerging market, has its principal securities trading market in an emerging market, or derives a majority of its revenue from emerging markets.

Usually, the term "emerging market" (also called a "developing market") means any market that is considered to be an emerging market by the international financial community (such as markets tied to securities included in the MSCI Emerging Markets Index or Bloomberg Emerging Markets USD Aggregate Bond Index). Emerging markets generally exclude the U.S., Canada, Japan, Hong Kong, Singapore, Australia, New Zealand, and most nations located in Western Europe.

Investments in companies in emerging markets are subject to higher risks than investments in companies in more developed markets. These risks include:

<sup>•</sup>

increased social, political, and economic instability;

<sup>•</sup>

a smaller market for these securities and low or nonexistent trading volume that results in a lack of liquidity and greater price volatility;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

<sup>•</sup>

lack of publicly available information, including reports of payments of dividends or interest on outstanding securities;

<sup>•</sup>

foreign government policies that may restrict opportunities, including restrictions on investment in issuers or industries deemed sensitive to national interests;

<sup>•</sup>

relatively new capital market structure or market-oriented economy;

<sup>•</sup>

the possibility that recent favorable economic developments may be slowed or reversed by unanticipated political or social events in these countries;

<sup>•</sup>

restrictions that may make it difficult or impossible for a fund to vote proxies, exercise shareholder rights, pursue legal remedies, and obtain judgments in foreign courts; and

<sup>•</sup>

possible losses through the holding of securities in domestic and foreign custodial banks and depositories.

In addition, many developing markets have experienced substantial and, in some periods, extremely high rates of inflation for many years. Inflation and rapid fluctuations in inflation rates have had and may continue to have negative effects on the economies, currencies, interest rates, and securities markets of those markets.

Repatriation of investment income, capital, and proceeds of sales by foreign investors may require governmental registration and/or approval in some developing markets. A fund could be adversely affected by delays in or a refusal to grant any required governmental registration or approval for repatriation.

Further, the economies of developing markets generally are heavily dependent upon international trade and, accordingly, have been and may continue to be adversely affected by trade barriers, exchange controls, managed adjustments in relative currency values, and other protectionist measures imposed or negotiated by the countries with which they trade.

The SEC, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors, including instances of fraud in emerging markets. For example, in certain emerging markets, there are significant legal obstacles to obtaining information needed for investigations or litigation. Similar limitations apply to the pursuit of actions against individuals, including officers, who may have engaged in fraud or wrongdoing. In addition, local authorities often are constrained in their ability to assist U.S. authorities and overseas investors more generally. There are also legal or other obstacles to seeking access to funds in a foreign country.

**Equity Securities**

Equity securities include common stocks, convertible securities, depositary receipts, rights (an offering of common stock to investors who currently own shares, which entitle them to buy subsequent issues at a discount from the offering price), and warrants (the right to purchase securities from the issuer at a specified price, normally higher than the current market price). Common stocks, the most familiar type, represent an equity (ownership) interest in a corporation. The value of a company's stock may fall as a result of factors directly relating to that company, such as decisions made by its management or lower demand for the company's products or services. A stock's value may also fall because of factors affecting not just the company, but also companies in the same industry or in a number of different industries, such as increases in production costs. The value of a company's stock may also be affected by changes in financial markets that are relatively unrelated to the company or its industry, such as changes in interest rates or currency exchange rates. In addition, a company's stock generally pays dividends only after the company invests in its own business and makes required payments to holders of its bonds and other debt. For this reason, the value of a company's stock will usually react more strongly than its bonds and other debt to actual or perceived changes in the company's financial condition or prospects.

Some funds focus their investments on certain market capitalization ranges. Market capitalization is defined as total current market value of a company's outstanding equity securities. The market capitalization of companies in a fund's portfolios and their related indexes will change over time, and, except to the extent consistent with its principal investment strategies (for example, for an index fund that uses a replication strategy), a fund will not automatically sell a security just because it falls outside of the market capitalization range of its index(es).

<u>Growth Style</u>

The prices of growth stocks may be based largely on expectations of future earnings, and their prices can decline rapidly and significantly in reaction to negative news about such factors as earnings, revenues, the economy, political developments, or other news. Growth stocks may underperform value stocks and stocks in other broad style categories (and the stock market as a whole) over any period of time and may shift in and out of favor with investors generally, sometimes rapidly, depending on changes in market, economic, and other factors. As a result, a fund that holds substantial investments in growth stocks may underperform other funds that invest more broadly or favor different investment styles. Because growth companies typically reinvest their earnings, growth stocks typically do not pay dividends at levels associated with other types of stocks, if at all.

------

<u>Smaller Companies</u>

Investments in companies with smaller market capitalizations may involve greater risks and price volatility (wide, rapid fluctuations) than investments in larger, more mature companies. Small company stocks may decline in price as large company stocks rise, or rise in price while larger company stocks decline. The net asset value of a fund that invests a substantial portion of its assets in small company stocks may be more volatile than the net asset value of a fund that invests solely in larger company stocks. Small companies may be less significant within their industries and may be at a competitive disadvantage relative to their larger competitors. Smaller companies may be less mature than larger companies. At this earlier stage of development, the companies may have limited product lines, reduced market liquidity for their shares, limited financial resources, or less depth in management than larger or more established companies. While smaller companies may be subject to these additional risks, they may also realize more substantial growth than larger or more established companies.

Unseasoned issuers are companies with a record of less than three years continuous operation, including the operation of predecessors and parents. Many unseasoned issuers also may be small companies and involve the risks and price volatility associated with smaller companies. Unseasoned issuers by their nature have only a limited operating history that can be used for evaluating the company's growth prospects. As a result, these securities may place a greater emphasis on current or planned product lines and the reputation and experience of the company's management and less emphasis on fundamental valuation factors than would be the case for more mature growth companies.

<u>Value Style</u>

Value stocks present the risk that they may decline in price or never reach their expected full market value because the market fails to recognize the stock's intrinsic worth. Value stocks may underperform growth stocks and stocks in other broad style categories (and the stock market as a whole) over any period of time and may shift in and out of favor with investors generally, sometimes rapidly, depending on changes in market, economic, and other factors. As a result, a fund that holds substantial investments in value stocks may underperform other funds that invest more broadly or favor different investment styles.

**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, 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 holds 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.

As of December 31, 2021, the United Kingdom's Financial Conduct Authority, which regulates the London InterBank Offered Rate ("LIBOR"), no longer publishes non-U.S. dollar LIBOR, 1-week U.S. dollar LIBOR, or 2-month U.S. dollar LIBOR rates. The remaining, most widely used U.S. dollar LIBOR rates will no longer be published after June 30, 2023. The effect of LIBOR's discontinuation or 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 or replacement may affect the value, liquidity, or return on certain Fund investments 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.

------

The U.S. Federal Reserve, along with a steering committee comprised of large U.S. financial institutions known as the Alternative Reference Rates Committee, intends to replace U.S. dollar LIBOR with the Secured Overnight Financing Rate ("SOFR"), a new index calculated by short-term repurchase agreements, backed by Treasury securities. On March 15, 2022, the Adjustable Interest Rate (LIBOR) Act was signed into law. This law provides a statutory fallback mechanism to replace LIBOR with a benchmark rate that is selected by the U.S. Federal Reserve Board and based on SOFR for certain contracts that reference LIBOR without adequate fallback provisions. Bank working groups and regulators in other countries have suggested other alternatives for their markets.

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 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.

**Foreign Currency**

Certain of a fund's investments will be denominated in foreign currencies or traded in securities markets in which settlements are made in foreign currencies. Any income on such investments is generally paid to a fund in foreign currencies. In addition, funds may engage in foreign currency transactions for both hedging and investment purposes, as well as to increase exposure to a foreign currency or to shift exposure to foreign currency fluctuations from one country to another.

The value of foreign currencies relative to the U.S. dollar varies continually, causing changes in the dollar value of a fund's portfolio investments (even if the local market price of the investments is unchanged) and changes in the dollar value of a fund's income available for distribution to its shareholders. The effect of changes in the dollar value of a foreign currency on the dollar value of a fund's assets and on the net investment income available for distribution may be favorable or unfavorable. Transactions in non-U.S. currencies are also subject to many of the risks of investing in foreign (non-U.S.) securities; for example, changes in foreign economies and political climates are more likely to affect a fund that has foreign currency exposure than a fund that invests exclusively in U.S. companies and currency. There also may be less government supervision of foreign markets, resulting in non-uniform accounting practices and less publicly available information. Transactions in foreign currencies, foreign currency denominated debt, and certain foreign currency options, futures contracts, and forward contracts (and similar instruments) may give rise to ordinary income or loss to the extent such income or loss results from fluctuations in the value of the foreign currency concerned.

A fund may incur costs in connection with conversions between various currencies. In addition, a fund may be required to liquidate portfolio assets, or may incur increased currency conversion costs, to compensate for a decline in the dollar value of a foreign currency occurring between the time when a fund declares and pays a dividend, or between the time when a fund accrues and pays an operating expense in U.S. dollars. To protect against a change in the foreign currency exchange rate between the date on which a fund contracts to purchase or sell a security and the settlement date for the purchase or sale, to gain exposure to one or more foreign currencies, or to "lock in" the equivalent of a dividend or interest payment in another currency, a fund might purchase or sell a foreign currency on a spot (i.e., cash) basis at the prevailing spot rate.

Currency hedging involves some of the same general risks and considerations as other transactions with similar instruments (i.e., derivative instruments) and hedging. Currency transactions are also subject to additional risks. Because currency control is of great importance to the issuing governments and influences economic planning and policy, purchases and sales of currency and related instruments can be adversely affected by government exchange controls, limitations or restrictions on repatriation of currency, and manipulations or exchange restrictions imposed by governments. These forms of governmental actions can result in losses to a fund if it is unable to deliver or receive currency or monies in settlement of obligations. They could also cause hedges the fund has entered into to be rendered useless, resulting in full currency exposure as well as incurring transaction costs. Settlement of a currency forward contract for the purchase of most currencies must occur at a bank based in the issuing nation. The ability to establish and close out positions on trading options on currency futures contracts is subject to the maintenance of a liquid market that may not always be available.

**Foreign Securities**

The Funds consider a security to be tied economically to countries outside the U.S. (a "foreign security") if the issuer of the security has its principal place of business or principal office outside the U.S., has its principal securities trading market outside the U.S., or derives a majority of its revenue from outside the U.S.

There may be less publicly available information about foreign companies than U.S. companies, and information about foreign securities in which the Funds invest may be less reliable or complete. Foreign companies, including those listed on U.S. securities exchanges, may not be subject to the same uniform accounting, auditing, and financial reporting practices as are required of U.S. companies with respect to such matters as insider trading rules, tender offer regulation, accounting

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standards or auditor oversight, stockholder proxy requirements, and the requirements mandating timely and accurate disclosure of information. For example, the Chinese government has taken positions that prevent the Public Company Accounting Oversight Board from inspecting the audit work and practices of accounting firms in mainland China and Hong Kong for compliance with U.S. law and professional standards. In addition, securities of many foreign companies are less liquid and more volatile than securities of comparable U.S. companies. Commissions on foreign securities exchanges may be generally higher than those on U.S. exchanges.

Foreign markets also have different clearance and settlement procedures than those in U.S. markets. In certain markets, there have been times when settlements have been unable to keep pace with the volume of securities transactions, making it difficult to conduct these transactions. Delays in settlement could result in temporary periods when a portion of fund assets is not invested and earning no return. If a fund is unable to make intended security purchases due to settlement problems, the fund may miss attractive investment opportunities. In addition, a fund may incur a loss as a result of a decline in the value of its portfolio if it is unable to sell a security.

With respect to certain foreign countries, there is the possibility of nationalization, expropriation, or confiscatory taxation, political or social instability, or diplomatic developments that could affect a fund's investments in those countries. In addition, a fund may also suffer losses due to differing accounting practices and treatments. Investments in foreign securities are subject to laws of the foreign country that may limit the amount and types of foreign investments. Changes of governments or of economic or monetary policies, in the U.S. or abroad, changes in dealings between nations, currency convertibility, or exchange rates could result in investment losses for a fund.

Foreign securities are often traded with less frequency and volume and, therefore, may have greater price volatility than is the case with many U.S. securities. Brokerage commissions, custodial services, and other costs relating to investment in foreign countries are generally more expensive than in the U.S. Though the fund intends to acquire the securities of foreign issuers where there are public trading markets, economic or political turmoil in a country in which a fund has a significant portion of its assets or deterioration of the relationship between the U.S. and a foreign country may reduce the liquidity of a fund's portfolio. The fund may have difficulty meeting a large number of redemption requests. Furthermore, there may be difficulties in obtaining or enforcing judgments against foreign issuers.

A fund may invest in a foreign company by purchasing depositary receipts. Depositary receipts are certificates of ownership of shares in a foreign-based issuer held by a bank or other financial institution. They are alternatives to purchasing the underlying security but are subject to the foreign securities risks to which they relate.

A fund may file claims to recover foreign withholding taxes on dividend and interest income (if any) received from issuers in certain countries and capital gains on the disposition of stocks or securities where such withholding tax reclaim is possible. Whether or when a fund will receive a withholding tax refund is within the control of the tax authorities in such countries. Where a fund expects to recover withholding taxes, the net asset value of a fund generally includes accruals for such tax refunds. If the likelihood of recovery materially decreases, accruals in the fund's net asset value for such refunds may be written down partially or in full, which will adversely affect the fund's net asset value. Shareholders in the fund at the time an accrual is written down will bear the impact of the resulting reduction in net asset value regardless of whether they were shareholders during the accrual period. Conversely, if a fund receives a tax refund that has not been previously accrued, shareholders in the fund at the time of the successful recovery will benefit from the resulting increase in the fund's net asset value. Shareholders who sold their shares prior to such time will not benefit from such increase in the fund's net asset value.

If a fund's portfolio invests significantly in a certain geographic region, any negative development affecting that region will have a greater impact on the fund than a fund that is not as heavily invested in that region. For example, with respect to funds that invest significantly in China or the EU:

<sup>•</sup>

Investing in China involves certain heightened risks and considerations, including, among others: frequent trading suspensions and government interventions (including by nationalizing assets); currency exchange rate fluctuations or blockages; limits on using brokers and on foreign ownership; different financial reporting standards, as described above; higher dependence on exports and international trade; political and social instability; infectious disease outbreaks; regional and global conflicts; increased trade tariffs, embargoes, and other trade limitations; custody and other risks associated with programs used to access Chinese securities; and uncertainties in tax rules that could result in unexpected tax liabilities for the Fund. Significant portions of the Chinese securities markets may become rapidly illiquid, as Chinese issuers have the ability to suspend the trading of their equity securities. Moreover, actions by the U.S. government, such as delisting of certain Chinese companies from U.S. securities exchanges or otherwise restricting their operations in the U.S., may negatively impact the value of such securities held by the funds.

<sup>•</sup>

Funds that invest in the United Kingdom (the "UK") face risks related to the UK's departure from the European Union (the "EU"), commonly known as "Brexit." Brexit has resulted in significant uncertainties and instability in the financial

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markets, and considerable uncertainty remains related to the potential consequences associated with the exit, how new trade agreements will be conducted, and whether the UK's exit will increase the likelihood of other countries also departing the EU. Brexit may have significant political and financial consequences in the UK, as well as in European markets and the broader global economy, which may result in increased volatility and illiquidity, and potentially lower economic growth in markets in the UK, Europe, and globally.

**Fund of Funds**

The performance and risks of a fund of funds directly correspond to the performance and risks of the underlying funds in which the fund invests.

As of October 31, 2022, the Principal LifeTime Funds, Principal LifeTime Hybrid Funds, and SAM Portfolios assets were allocated among the underlying funds as identified in the tables below.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Underlying Fund** | **Principal**<br> **LifeTime**<br> **Strategic**<br> **Income Fund**<br>| **Principal**<br> **LifeTime**<br> **2010 Fund**<br>| **Principal**<br> **LifeTime**<br> **2015 Fund**<br>| **Principal**<br> **LifeTime**<br> **2020 Fund**<br>| **Principal**<br> **LifeTime**<br> **2025 Fund**<br>| **Principal**<br> **LifeTime**<br> **2030 Fund**<br>| **Principal**<br> **LifeTime**<br> **2035 Fund**<br>|
| Blue Chip Fund | 3.5% | 3.5% | 3.8% | 4.6% | 5.4% | 6.4% | 7.5% |
| Core Fixed Income Fund | 36.0 | 36.3 | 34.3 | 32.6 | 30.7 | 34.7 | 25.1 |
| Diversified International Fund | 4.0 | 4.0 | 4.3 | 5.3 | 6.6 | 7.8 | 9.3 |
| Diversified Real Asset Fund | 2.6 | 2.4 | 2.5 | 2.4 | 2.7 |  |  |
| Equity Income Fund | 3.6 | 3.6 | 3.9 | 4.7 | 5.6 | 6.6 | 7.7 |
| High Income Fund | 6.9 | 6.9 | 6.6 | 5.9 | 5.2 | 4.9 | 4.2 |
| Inflation Protection Fund | 7.2 | 7.2 | 6.9 | 6.2 | 5.3 |  |  |
| International Small Company Fund | 0.8 | 0.7 | 0.8 | 1.0 | 1.2 | 1.4 | 1.7 |
| LargeCap Growth Fund I | 3.5 | 3.5 | 3.8 | 4.6 | 5.4 | 6.4 | 7.4 |
| LargeCap S&P 500 Index Fund | 3.6 | 3.6 | 3.9 | 4.7 | 5.5 | 6.5 | 7.6 |
| LargeCap Value Fund III | 3.6 | 3.6 | 4.0 | 4.8 | 5.6 | 6.6 | 7.7 |
| MidCap Fund | 0.6 | 0.6 | 0.6 | 0.8 | 0.9 | 1.0 | 1.5 |
| MidCap Growth Fund III | 1.6 | 1.6 | 1.7 | 2.1 | 2.5 | 3.0 | 3.2 |
| MidCap Value Fund I | 2.3 | 2.3 | 2.5 | 3.0 | 3.5 | 4.1 | 4.9 |
| Origin Emerging Markets Fund | 1.0 | 0.9 | 1.1 | 1.3 | 1.5 | 1.8 | 2.1 |
| Overseas Fund | 1.9 | 1.9 | 2.2 | 2.6 | 3.2 | 3.8 | 4.5 |
| Real Estate Securities Fund |  |  |  |  |  | 2.4 | 2.5 |
| Short-Term Income Fund | 15.9 | 16.0 | 15.6 | 11.6 | 7.0 |  |  |
| SmallCap Growth Fund I | 0.7 | 0.7 | 0.7 | 0.9 | 1.1 | 1.3 | 1.5 |
| SmallCap Value Fund II | 0.7 | 0.7 | 0.8 | 0.9 | 1.1 | 1.3 | 1.6 |
| Total | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Underlying Fund** | **Principal**<br> **LifeTime**<br> **2040 Fund**<br>| **Principal**<br> **LifeTime**<br> **2045 Fund**<br>| **Principal**<br> **LifeTime**<br> **2050 Fund**<br>| **Principal**<br> **LifeTime**<br> **2055 Fund**<br>| **Principal**<br> **LifeTime**<br> **2060 Fund**<br>| **Principal**<br> **LifeTime**<br> **2065 Fund**<br>|
| Blue Chip Fund | 8.7% | 9.5% | 10.1% | 10.1% | 10.1% | 10.1% |
| Core Fixed Income Fund | 14.9 | 7.7 | 3.3 | 3.3 | 3.3 | 3.3 |
| Diversified International Fund | 10.9 | 12.2 | 12.8 | 12.8 | 13.0 | 12.9 |
| Equity Income Fund | 8.9 | 9.8 | 10.4 | 10.4 | 10.4 | 10.4 |
| High Income Fund | 3.1 | 2.0 | 1.1 | 1.1 | 1.1 | 1.1 |
| International Small Company Fund | 2.0 | 2.2 | 2.3 | 2.3 | 2.3 | 2.3 |
| LargeCap Growth Fund I | 8.6 | 9.5 | 10.1 | 10.1 | 10.1 | 10.1 |
| LargeCap S&P 500 Index Fund | 8.9 | 9.8 | 10.4 | 10.4 | 10.3 | 10.3 |
| LargeCap Value Fund III | 9.0 | 9.9 | 10.5 | 10.5 | 10.5 | 10.5 |
| MidCap Fund | 1.7 | 1.9 | 2.1 | 2.1 | 2.0 | 2.0 |
| MidCap Growth Fund III | 3.7 | 4.1 | 4.3 | 4.3 | 4.3 | 4.3 |
| MidCap Value Fund I | 5.7 | 6.3 | 6.7 | 6.7 | 6.7 | 6.7 |
| Origin Emerging Markets Fund | 2.6 | 2.8 | 3.0 | 3.0 | 3.0 | 3.0 |
| Overseas Fund | 5.3 | 5.8 | 6.2 | 6.2 | 6.2 | 6.2 |
| Real Estate Securities Fund | 2.5 | 2.5 | 2.5 | 2.5 | 2.5 | 2.5 |
| SmallCap Growth Fund I | 1.7 | 2.0 | 2.1 | 2.1 | 2.1 | 2.1 |
| SmallCap Value Fund II | 1.8 | 2.0 | 2.1 | 2.1 | 2.1 | 2.2 |
| Total | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Underlying Fund** | **Principal**<br> **LifeTime Hybrid**<br> **Income Fund**<br>| **Principal**<br> **LifeTime Hybrid**<br> **2015 Fund**<br>| **Principal**<br> **LifeTime Hybrid**<br> **2020 Fund**<br>| **Principal**<br> **LifeTime Hybrid**<br> **2025 Fund**<br>| **Principal**<br> **LifeTime Hybrid**<br> **2030 Fund**<br>| **Principal**<br> **LifeTime Hybrid**<br> **2035 Fund**<br>|
| Bond Market Index Fund | 35.7% | 34.1% | 32.5% | 30.6% | 34.2% | 24.9% |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Underlying Fund** | **Principal**<br> **LifeTime Hybrid**<br> **Income Fund**<br>| **Principal**<br> **LifeTime Hybrid**<br> **2015 Fund**<br>| **Principal**<br> **LifeTime Hybrid**<br> **2020 Fund**<br>| **Principal**<br> **LifeTime Hybrid**<br> **2025 Fund**<br>| **Principal**<br> **LifeTime Hybrid**<br> **2030 Fund**<br>| **Principal**<br> **LifeTime Hybrid**<br> **2035 Fund**<br>|
| Diversified International Fund | 6.3 | 7.1 | 8.4 | 10.4 | 12.2 | 14.7 |
| Diversified Real Asset Fund | 2.6 | 2.5 | 2.5 | 2.6 |  |  |
| High Income Fund | 6.9 | 6.6 | 5.9 | 5.2 | 4.8 | 4.1 |
| Inflation Protection Fund | 7.1 | 6.7 | 6.1 | 5.2 |  |  |
| International Small Company Fund | 0.7 | 0.8 | 1.0 | 1.2 | 1.4 | 1.7 |
| LargeCap S&P 500 Index Fund | 17.7 | 19.1 | 23.3 | 27.4 | 32.5 | 37.8 |
| MidCap S&P 400 Index Fund | 4.6 | 5.0 | 6.0 | 7.0 | 8.4 | 9.8 |
| Origin Emerging Markets Fund | 0.7 | 0.8 | 0.8 | 1.0 | 1.3 | 1.4 |
| Real Estate Securities Fund |  |  |  |  | 2.4 | 2.4 |
| Short-Term Income Fund | 16.2 | 15.7 | 11.6 | 7.1 |  |  |
| SmallCap S&P 600 Index Fund | 1.5 | 1.6 | 1.9 | 2.3 | 2.8 | 3.2 |
| Total | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Underlying Fund** | **Principal**<br> **LifeTime Hybrid**<br> **2040 Fund**<br>| **Principal**<br> **LifeTime Hybrid**<br> **2045 Fund**<br>| **Principal**<br> **LifeTime Hybrid**<br> **2050 Fund**<br>| **Principal**<br> **LifeTime Hybrid**<br> **2055 Fund**<br>| **Principal**<br> **LifeTime Hybrid**<br> **2060 Fund**<br>| **Principal**<br> **LifeTime Hybrid**<br> **2065 Fund**<br>|
| Bond Market Index Fund | 14.8% | 7.6% | 3.3% | 3.3% | 3.3% | 3.3% |
| Diversified International Fund | 17.1 | 18.7 | 20.0 | 20.1 | 20.3 | 20.0 |
| High Income Fund | 3.0 | 2.0 | 1.1 | 1.1 | 1.1 | 1.1 |
| International Small Company Fund | 2.0 | 2.2 | 2.3 | 2.3 | 2.4 | 2.3 |
| LargeCap S&P 500 Index Fund | 44.0 | 48.5 | 51.2 | 51.1 | 50.6 | 51.2 |
| MidCap S&P 400 Index Fund | 11.3 | 12.6 | 13.2 | 13.2 | 13.2 | 13.2 |
| Origin Emerging Markets Fund | 1.7 | 1.9 | 2.0 | 2.0 | 2.1 | 2.0 |
| Real Estate Securities Fund | 2.4 | 2.4 | 2.4 | 2.4 | 2.4 | 2.4 |
| SmallCap S&P 600 Index Fund | 3.7 | 4.1 | 4.5 | 4.5 | 4.6 | 4.5 |
| Total | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Underlying Fund** | **SAM Balanced**<br> **Portfolio**<br>| **SAM Conservative**<br> **Balanced Portfolio**<br>| **SAM Conservative**<br> **Growth Portfolio**<br>| **SAM Flexible**<br> **Income Portfolio**<br>| **SAM Strategic**<br> **Growth Portfolio**<br>|
| Blue Chip Fund | 11.7% | 8.3% | 15.4% | 3.9% | 17.1% |
| Bond Market Index Fund | 8.7 | 14.8 | 3.6 | 20.6 | 2.9 |
| Core Fixed Income Fund | 10.9 | 19.4 | 4.9 | 26.3 |  |
| Diversified International Fund | 4.7 | 2.9 | 6.7 | 2.1 | 7.2 |
| Diversified Real Asset Fund | 4.5 | 2.8 | 4.8 |  | 2.7 |
| Equity Income Fund | 10.4 | 9.2 | 13.9 | 6.6 | 15.6 |
| Finisterre Emerging Markets Total Return Bond <br> Fund<br>| 1.3 | 2.3 | 0.8 | 1.9 |  |
| Global Real Estate Securities Fund | 0.4 | 0.6 | 0.4 | 0.6 |  |
| Government & High Quality Bond Fund | 2.6 | 4.9 | 1.0 | 6.5 |  |
| Government Money Market Fund | 1.0 | 0.9 | 0.9 | 0.9 | 0.7 |
| High Yield Fund | 2.7 | 3.0 | 1.1 | 1.4 |  |
| Inflation Protection Fund | 2.1 | 3.4 | 0.7 | 5.0 |  |
| International Small Company Fund | 1.0 | 0.6 | 1.4 |  | 2.4 |
| LargeCap Growth Fund I | 1.7 |  | 2.6 |  | 3.2 |
| LargeCap Value Fund III | 3.1 |  | 4.3 |  | 5.3 |
| MidCap Fund | 4.5 | 2.8 | 6.3 |  | 7.0 |
| Origin Emerging Markets Fund | 3.4 | 2.1 | 4.6 | 0.7 | 6.1 |
| Overseas Fund | 1.6 | 0.7 | 1.8 |  | 4.0 |
| Principal Active High Yield ETF |  |  |  | 2.1 |  |
| Principal Capital Appreciation Fund | 8.2 | 5.6 | 11.3 | 3.8 | 13.6 |
| Principal U.S. Mega-Cap ETF | 6.1 | 3.7 | 8.3 | 2.6 | 9.4 |
| Principal U.S. Small-Cap Multi-Factor ETF | 1.3 | 0.9 | 2.1 |  | 2.8 |
| Short-Term Income Fund | 3.2 | 4.8 | 1.1 | 6.2 |  |
| Small-MidCap Dividend Income Fund |  |  |  | 1.3 |  |
| Spectrum Preferred and Capital Securities <br> Income Fund<br>| 4.9 | 6.3 | 2.0 | 7.5 |  |
| Total | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |

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A fund of funds indirectly bears its pro-rata share of the expenses of the underlying funds in which it invests, as well as directly incurring expenses. Therefore, investment in a fund of funds is more costly than investing directly in shares of the underlying funds. Generally, if an underlying fund offers multiple classes of shares for investment by funds of funds, the Funds will purchase shares of the class with the lowest expense ratio (expressed as a percent of average net assets on an annualized basis) at the time of purchase.

If you are considering investing in a Principal LifeTime Fund or Principal LifeTime Hybrid Fund, you should take into account your estimated retirement date and risk tolerance. In general, each Principal LifeTime Fund or Principal LifeTime Hybrid Fund is managed with the assumption that the investor will invest in a Principal LifeTime Fund or Principal LifeTime Hybrid Fund whose stated date is closest to the date the shareholder retires. Choosing a fund targeting an earlier date represents a more conservative choice; choosing a fund with a later date represents a more aggressive choice. It is important to note that the retirement year of the fund you select should not necessarily represent the specific year you intend to start drawing retirement assets. It should be a guide only. Generally, the potential for higher returns over time is accompanied by the higher risk of a decline in the value of your principal. Investors should realize that the Principal LifeTime Funds or Principal LifeTime Hybrid Funds are not a complete solution to their retirement needs. Investors must weigh many factors when considering when to retire, what their retirement needs will be, and what sources of income they may have.

There are five Strategic Asset Management ("SAM") Portfolios: Flexible Income, Conservative Balanced, Balanced, Conservative Growth, and Strategic Growth. The SAM Portfolios offer long-term investors different asset allocation strategies having different levels of potential investment risk and reward. The SAM Portfolios share the same risks but often with different levels of exposure. In general, relative to the other Portfolios:

<sup>•</sup>

the Balanced Portfolio should offer investors the potential for a medium level of income and a medium level of capital growth, while exposing them to a medium level of principal risk,

<sup>•</sup>

the Conservative Balanced Portfolio should offer investors the potential for a medium-to-high level of income and a medium-to-low level of capital growth, while exposing them to a medium-to-low level of principal risk,

<sup>•</sup>

the Conservative Growth Portfolio should offer investors the potential for a low-to-medium level of income and a medium-to-high level of capital growth, while exposing them to a medium-to-high level of principal risk,

<sup>•</sup>

the Flexible Income Portfolio should offer investors the potential for a high level of income and a low level of capital growth, while exposing them to a low level of principal risk, and

<sup>•</sup>

the Strategic Growth Portfolio should offer investors the potential for a high level of capital growth, and a corresponding level of principal risk.

Funds of funds can be subject to payment-in-kind liquidity risk: if an underlying fund pays a redemption request by the fund wholly or partly by a distribution-in-kind of portfolio securities rather than in cash, the fund may hold such portfolio securities until those managing the investments of the fund determine that it is appropriate to dispose of them.

Management of funds of funds entails potential conflicts of interest: a fund of fund may invest in affiliated underlying funds, and those who manage the fund's investments and their affiliates may earn different fees from different underlying funds and may have an incentive to allocate more fund of fund assets to underlying funds from which they receive higher fees.

**Geographic Concentration (Municipal Obligations)**

Greater risks may arise from the geographic concentration (a particular state, such as California, Illinois, or New York, or a particular country or region) of investments, as well as the current and past financial condition of municipal issuers in the case of a municipal fund. In addition to factors affecting the state or regional economy, certain constitutional amendments, legislative measures, executive orders, administrative regulations, court decisions, and voter initiatives could result in adverse consequences affecting municipal obligations. See the SAI for a more detailed description of these risks.

**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 securities 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.

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**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.

No turnover rate can be calculated for the Government Money Market or Money Market Funds because of the short maturities of the securities in which they invest.

**High Yield Securities**

Below investment grade securities are fixed-income securities that are rated at the time of purchase Ba1 or lower by Moody's Investors Service, Inc. ("Moody's") and BB+ or lower by S&P Global Ratings ("S&P Global") (if the security has been rated by only one of those agencies, that rating will determine if the security is below investment grade; if the security has not been rated by either of those agencies, those managing investments of a Fund will determine whether the security is of a quality comparable to those rated below investment grade).

Below investment grade securities are sometimes referred to as high yield or "junk bonds" and are considered speculative, particularly with respect to the issuer's continuing ability to meet principal and interest payments. Such securities could be in default at time of purchase. Each fund of funds may invest in underlying funds that may invest in such securities.

Investing in high yield securities involves special risks in addition to those associated with investing in investment grade securities:

<sup>•</sup>

High yield securities may be less liquid than investment grade securities.

<sup>•</sup>

The secondary market on which high yield securities are traded may be less liquid, which may reduce the price of the security and adversely affect, and cause large fluctuations in, the daily price of the Fund's shares.

<sup>•</sup>

Analysis of the creditworthiness of issuers of high yield securities is more complex. To the extent a Fund invests in high yield securities, its ability to meet its objective may be more dependent on such credit analyses.

<sup>•</sup>

High yield securities may be more susceptible to real or perceived adverse economic and competitive industry conditions. Although high yield securities prices tend to be less sensitive to interest rate changes than those of investment grade securities, they tend to be more sensitive to adverse economic downturns or individual corporate developments. Adverse publicity and investor perceptions, whether or not based on fundamental analysis, may decrease the value and liquidity of high yield securities, especially in a thinly traded market.

<sup>•</sup>

If the issuer of high yield securities defaults, a Fund may incur additional expenses to seek recovery.

<sup>•</sup>

If an issuer of high yield securities undergoes a corporate restructuring, such high yield securities may become exchanged for or converted into reorganized equity of the underlying issuer. Moreover, to the extent that a bond indenture or loan agreement does not contain sufficiently protective covenants or otherwise permits the issuer to take certain actions to the Fund's detriment (such as distributing cash to equity holders, incurring additional indebtedness, and disposing of assets), the underlying value of the high yield security may decline.

The use of credit ratings for evaluating high yield securities also involves certain risks. For example, credit ratings reflect the safety of principal and interest payments, not the market value risk of high yield securities. Also, credit rating agencies may fail to change credit ratings in a timely manner to reflect subsequent events. If a credit rating agency changes the rating of a portfolio security held by a Fund, the Fund may retain the security.

**Industrial Revenue Bond**

The Fund will be sensitive to, and its performance will depend to a greater extent on, the overall condition and performance of industrial revenue bonds. These revenue bonds are issued by or on behalf of public authorities to obtain funds to finance various public and/or privately operated facilities, including those for business and manufacturing, housing, sports, pollution control, airport, mass transit, port, and parking facilities. These bonds are normally secured only by the revenues from the project and not by state or local government tax payments. Consequently, the credit quality of these bonds is dependent upon the ability of the user of the facilities financed by the bonds and any guarantor to meet its financial obligations. Payment

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of interest on and repayment of principal on such bonds are the responsibility of the user and/or any guarantor. These bonds are subject to a wide variety of risks, many of which relate to the nature of the specific project. Generally, the value and credit quality of these bonds are sensitive to the risks related to an economic slowdown.

**Industry Concentration**

A fund that concentrates its investments (invests more than 25% of its net assets) in a particular industry (or group of industries) is more exposed to the overall condition of the particular industry than a fund that invests in a wider variety of industries. A particular industry could be affected by economic, business, supply-and-demand, political, or regulatory factors. Companies within the same industry could react similarly to such factors. As a result, a fund's concentration in a particular industry would increase the possibility that the fund's performance will be affected by such factors.

**Inverse Floating Rate Investments**

**Investment Company Securities**

Securities of other investment companies, including shares of closed-end investment companies, unit investment trusts, various 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 closed-end investment companies, 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. Others 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 net asset value.

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.

For the Government Money Market Fund, PGI currently waives the management fee in an amount equal to the expenses of the underlying funds' fees in which the Government Money Market Fund invests.

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.

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**Municipal Obligations and AMT-Subject Bonds**

Municipal obligations are subject to the risk that litigation, legislation, or other political events, local business or economic conditions, credit rating downgrades, or the bankruptcy of the issuer could have a significant effect on an issuer's ability to make payments of principal and/or interest or otherwise affect the value of such obligations. Certain municipalities may have difficulty meeting their obligations due to, among other reasons, changes in underlying demographics. Municipal obligations can be significantly affected by political changes as well as uncertainties in the municipal market related to government regulation, taxation, legislative changes, or the rights of municipal security holders. Because many municipal obligations are issued to finance similar projects, especially those relating to education, health care, transportation, utilities, and water and sewer, conditions in those sectors can affect the overall municipal market. Municipal obligations include general obligation bonds, which are backed by the "full faith and credit" of the issuer, which has the power to tax residents to pay bondholders. Timely payments depend on the issuer's credit quality, ability to raise tax revenues, and ability to maintain an adequate tax base. General obligation bonds generally are not backed by revenues from a specific project or source. Municipal obligations also include revenue bonds, which are generally backed by revenue from a specific project or tax. The issuer of a revenue bond makes interest and principal payments from revenues generated from a particular source or facility, such as a tax on particular property or revenues generated from a municipal water or sewer utility or an airport. Revenue bonds generally are not backed by the full faith and credit and general taxing power of the issuer. The market for municipal obligations/bonds may be less liquid than for taxable bonds. There may be less information available on the financial condition of issuers of municipal obligations than for public corporations. Municipal obligations may be susceptible to periods of economic stress, which could affect the market values and marketability of many or all municipal obligations of issuers in a state, U.S. territory, or possession.

AMT-subject bonds are municipal obligations issued to finance certain "private activities," such as bonds used to finance airports, housing projects, student loan programs, and water and sewer projects. Interest on AMT-subject bonds is an item of tax preference for purposes of the federal individual alternative minimum tax ("AMT"). See "Tax Considerations" for a discussion of the tax consequences of investing in the Fund.

Current federal income tax laws limit the types and volume of bonds qualifying for the federal income tax exemption of interest, which may affect the ability of the Fund to purchase sufficient amounts of tax-exempt bonds.

**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.

**Preferred Securities**

Preferred securities include preferred stock and various types of junior subordinated debt and trust preferred securities. Preferred securities may pay fixed-rate or adjustable-rate distributions and generally have a payment "preference" over common stock, but are junior to the issuer's senior debt in a liquidation of the issuer's assets. Preference would mean that a company must pay on its preferred securities before paying on its common stock, and that any claims of the preferred security holder would typically be 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. The market value of preferred securities is sensitive to changes in interest rates as they are typically fixed-income securities; the fixed-income payments are expected to be the primary source of long-term investment return. While some preferred securities are issued with a final maturity date, others are perpetual in nature. In certain instances, a final maturity date may be extended and/or the final payment of principal may be deferred at the issuer's option for a specified time without triggering an event of default for the issuer. In addition, an issuer of preferred securities may have the right to redeem the securities before their stated maturity date. For instance, for certain types of preferred securities, a redemption may be triggered by a change in federal income tax or securities laws. As with call provisions, a redemption by the issuer may reduce the return of the security held by the fund. Preferred securities may be subject to provisions that allow an issuer, under certain circumstances to skip (indefinitely) or defer (possibly up to 10 years) distributions. If a fund owns a preferred security that is deferring its distribution, the fund may be required to report income for tax purposes while it is not receiving any income.

Preferred securities are typically issued by corporations, generally in the form of interest or dividend bearing instruments, or by an affiliated business trust of a corporation, generally in the form of beneficial interests in subordinated debentures or similarly structured securities. The preferred securities market is generally divided into the $25 par "retail" and the $1,000

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par "institutional" segments. The $25 par segment includes securities that are listed on the New York Stock Exchange ("NYSE") (exchange traded), which trade and are quoted with accrued dividend or interest income, and which are often callable at par value five years after their original issuance date. The institutional segment includes $1,000 par value securities that are not exchange-listed (over the counter), which trade and are quoted on a "clean" price, i.e., without accrued dividend or interest income, and which often have a minimum of 10 years of call protection from the date of their original issuance. Preferred securities can also be issued by real estate investment trusts and involve risks similar to those associated with investing in real estate investment trust companies.

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

REITs involve certain unique risks in addition to the risks associated with investing in the real estate industry in general (such as possible declines in the value of real estate, lack of availability of mortgage funds, or extended vacancies of property). REITs are characterized as: equity REITs, which primarily own property and generate revenue from rental income; mortgage REITs, which invest in real estate mortgages; and hybrid REITs, which combine the characteristics of both equity and mortgage REITs. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the quality of any credit extended. REITs are dependent upon management skills, are not diversified, and are subject to heavy cash flow dependency, risks of default by borrowers, and self-liquidation. A fund that invests in a REIT is subject to the REIT's expenses, including management fees, and will remain subject to the fund's advisory fees with respect to the assets so invested. REITs are also subject to the possibilities of failing to qualify for the special tax treatment accorded REITs under the Internal Revenue Code and failing to maintain their exemptions from registration under the 1940 Act.

Regular REIT dividends received by a Fund from a REIT will not qualify for the corporate dividends-received deduction and generally will not constitute qualified dividend income for U.S. income tax purposes. Any distribution of income attributable to regular REIT dividends from a Fund's investment in a REIT will not qualify for the deduction that would be available to a non-corporate shareholder were the shareholder to own such REIT directly.

Investment in REITs also involves risks similar to those associated with investing in small market capitalization companies. REITs may have limited financial resources, may trade less frequently and in a limited volume, and may be subject to more abrupt or erratic price movements than larger company securities.

**Real Estate Securities**

Investing in securities of companies in the real estate industry subjects a fund to the special risks associated with the real estate market and the real estate industry in general. Generally, companies in the real estate industry are considered to be those that have principal activity involving the development, ownership, construction, management, or sale of real estate; have significant real estate holdings, such as hospitality companies, healthcare facilities, supermarkets, mining, lumber, and/or paper companies; and/or provide products or services related to the real estate industry, such as financial institutions that make and/or service mortgage loans and manufacturers or distributors of building supplies. Securities of companies in the real estate industry are sensitive to factors such as loss to casualty or condemnation, changes in real estate values, property taxes, interest rates, cash flow of underlying real estate assets, occupancy rates, government regulations affecting zoning, land use and rents, and the management skill and creditworthiness of the issuer. Companies in the real estate industry may also be subject to liabilities under environmental and hazardous waste laws.

**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.

As an example, as of October 31, 2022, series of the Registrant, Principal Variable Contracts, Funds, Inc. ("PVC"), and Principal Exchange-Traded Funds owned the following percentages, in the aggregate, of the outstanding shares of the underlying funds listed below. 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.

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| | |
|:---|:---|
| **Fund** | **Total Percentage**<br> **of Outstanding**<br> **Shares Owned**<br>|
| Core Fixed Income Fund | 69.56% |
| Diversified International Fund | 75.34% |
| Equity Income Fund | 32.09% |
| Finisterre Emerging Markets Total Return Bond Fund | 45.58% |
| Global Real Estate Securities Fund | 2.70% |
| Government & High Quality Bond Fund | 48.13% |
| Government Money Market Fund | 99.58% |
| High Income Fund | 31.19% |
| High Yield Fund | 11.60% |
| Inflation Protection Fund | 43.38% |
| LargeCap Growth Fund I | 18.31% |
| LargeCap S&P 500 Index Fund | 48.45% |
| LargeCap Value Fund III | 73.19% |
| MidCap Fund | 4.36% |
| MidCap Growth Fund III | 57.85% |
| MidCap S&P 400 Index Fund | 45.82% |
| MidCap Value Fund I | 27.95% |
| Overseas Fund | 68.13% |
| Principal Capital Appreciation Fund | 37.66% |
| Real Estate Securities Fund | 7.62% |
| Short-Term Income Fund | 36.63% |
| SmallCap Growth Fund I | 13.60% |
| SmallCap S&P 600 Index Fund | 32.45% |
| SmallCap Value Fund II | 28.98% |

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**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 the 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, including incurring costs and delays. Repurchase agreements may involve more risk than investments in U.S. government securities. To minimize such risks, the fund enters into repurchase agreements only with parties those managing the investments of the fund 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 Fund pays to the seller of the securities.

**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.

<sup>•</sup>

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

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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).

<sup>•</sup>

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.

<sup>•</sup>

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.

**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.

**Volatility Mitigation**

Volatility mitigation strategies may increase fund transaction costs, which could increase losses or reduce gains. These strategies may not protect the fund from market declines and may reduce the fund's participation in market gains.

**PORTFOLIO HOLDINGS INFORMATION**

A description of the Registrant's 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 Registrant, PGI provides investment advisory services and certain corporate administrative services for the Funds.

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| | |
|:---|:---|
| **Advisor:** | &nbsp;&nbsp; **Principal Global Investors, LLC** (doing business as Principal Asset Management), 711 High Street, Des <br> Moines, IA 50392, is part of a diversified global asset management organization that utilizes specialized <br> investment teams and affiliates to provide institutional investors and individuals with diverse investment <br> capabilities, including fixed income, equities, real estate, currency, asset allocation, and stable value. In <br> addition to its asset management offices in the U.S., PGI has asset management offices of affiliate advisors <br> located in Europe, Asia, Latin America, and Australia. PGI has been a registered investment advisor since <br> 1998.<br>|
| **Funds:** | &nbsp;&nbsp; In fulfilling its investment advisory responsibilities, PGI provides day-to-day discretionary investment services <br> (directly making decisions to purchase or sell securities) for all or a portion of the following Funds:<br>|
|  | •California Municipal |
|  | •Core Fixed Income |
|  | •Core Plus Bond |
|  | &nbsp;&nbsp; •Diversified Income (emerging market debt, with services provided by Principal Finisterre, an investment <br> team within PGI; and one or more strategies that seek to track the performance of an index related to a <br> particular sector or asset class)<br>|
|  | •Diversified International |
|  | •Equity Income (services provided by Principal Edge, an investment team within PGI) |
|  | &nbsp;&nbsp; •Finisterre Emerging Markets Total Return Bond (services provided by Principal Finisterre, an investment <br> team within PGI)<br>|
|  | •Global Emerging Markets |
|  | •Government & High Quality Bond |
|  | •Government Money Market |
|  | •High Income (services provided by Principal<sup>®</sup> Asset Allocation) |
|  | •High Yield |
|  | •LargeCap Growth I (services provided by Principal<sup>®</sup> Asset Allocation) |
|  | •LargeCap S&P 500 Index |
|  | •LargeCap Value III (services provided by Principal<sup>®</sup> Asset Allocation) |
|  | •MidCap (services provided by Principal Aligned, an investment team within PGI) |
|  | •MidCap Growth (services provided by Principal Dynamic Growth, an investment team within PGI) |
|  | •MidCap Growth III (services provided by Principal<sup>®</sup> Asset Allocation) |
|  | •MidCap S&P 400 Index |
|  | •MidCap Value I (services provided by Principal<sup>®</sup> Asset Allocation) |
|  | •Money Market |
|  | •Overseas (services provided by Principal<sup>®</sup> Asset Allocation) |
|  | •Principal Capital Appreciation (services provided by Principal Edge, an investment team within PGI) |
|  | •Principal LifeTime Funds (services provided by Principal<sup>®</sup> Asset Allocation) |
|  | •Principal LifeTime Hybrid Funds (services provided by Principal<sup>®</sup> Asset Allocation) |
|  | •SAM (Strategic Asset Management) Portfolios (services provided by Principal<sup>®</sup> Asset Allocation) |
|  | •Short-Term Income |
|  | •SmallCap |
|  | •SmallCap Growth I (services provided by Principal<sup>®</sup> Asset Allocation) |
|  | •SmallCap S&P 600 Index |
|  | •SmallCap Value II (services provided by Principal<sup>®</sup> Asset Allocation) |
|  | •Tax-Exempt Bond |

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Several of the Funds have multiple sub-advisors. A team within Principal<sup>®</sup> Asset Allocation, an investment team within PGI and whose members are identified in each Fund Summary and listed below, determines the portion of those Funds' assets that PGI and each sub-advisor will manage and may reallocate Fund assets among PGI and the sub-advisors from time-to-time. This team agrees on allocation decisions and shares authority and responsibility for day-to-day portfolio management, with no limitation on the authority of one portfolio manager in relation to another.

The decision to reallocate Fund assets between PGI acting in a discretionary advisory capacity and the sub-advisors may be based on a variety of factors, including, but not limited to: the investment capacity of PGI and each sub-advisor, portfolio diversification, volume of net cash flows, fund liquidity, investment performance, investment strategies, changes in PGI or each sub-advisor's firm or investment professionals, or changes in the number of sub-advisors. Ordinarily, reallocations of Fund assets among sub-advisors occur as a sub-advisor liquidates assets in the normal course of portfolio management or with net new cash flows; however, at times, existing Fund assets may be reallocated among PGI and/or the sub-advisors.

The Fund Summaries identified the portfolio managers and the Funds they manage. Additional information about the portfolio managers follows. With respect to the biographies of PGI portfolio managers, references to Principal<sup>®</sup> encompass various entities and groups within the Principal organization, such as its majority- and wholly-owned subsidiaries, as well as investment teams within PGI.

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 portfolio. However, for the MidCap Fund, Mr. Nolin has ultimate decision making authority. Mr. Rozycki may make investment decisions in Mr. Nolin's absence.

**William C. Armstrong** has been with Principal<sup>®</sup> since 1992. He earned a bachelor's degree from Kearney State College and an M.B.A. from the University of Iowa. Mr. Armstrong has earned the right to use the Chartered Financial Analyst designation.

**Paul H. Blankenhagen** has been with Principal<sup>®</sup> since 1992. He earned a bachelor's degree in Finance from Iowa State University and a master's degree from Drake University. Mr. Blankenhagen has earned the right to use the Chartered Financial Analyst designation.

**Damien Buchet** has been with Principal<sup>®</sup> since 2015. He earned his degree from the EDHEC School of Business Administration. Mr. Buchet has earned the right to use the Chartered Financial Analyst designation.

**Jessica S. Bush** has been with Principal<sup>®</sup> since 2006. She earned a bachelor's degree in Business Administration from the University of Michigan. She has earned the right to use the Chartered Financial Analyst designation.

**Juliet Cohn** has been with Principal<sup>®</sup> since 2003. She earned a bachelor's degree in Mathematics from Trinity College, Cambridge, England.

**Daniel R. Coleman** has been with Principal<sup>®</sup> since 2001. He earned a bachelor's degree in Finance from the University of Washington and an M.B.A. from New York University.

**Christopher T. Corbett** has been with Principal<sup>®</sup> since 2006. He earned a B.B.A. in Accounting and an M.B.A. in Finance from the University of Notre Dame. Mr. Corbett has earned the right to use the Chartered Financial Analyst designation.

**Brody Dass** has been with Principal<sup>®</sup> since 2015. He earned a bachelor's degree from the University of Iowa. Mr. Dass has earned the right to use the Chartered Financial Analyst designation.

**Bryan C. Davis** has been with Principal<sup>®</sup> since 1993. He earned a bachelor's degree in Finance from the University of Iowa. Mr. Davis has earned the right to use the Chartered Financial Analyst designation.

**Mark P. Denkinger** has been with Principal<sup>®</sup> since 1990. He earned a bachelor's degree in Finance and an M.B.A. with a Finance emphasis from the University of Iowa. Mr. Denkinger has earned the right to use the Chartered Financial Analyst designation.

**James W. Fennessey** has been with Principal<sup>®</sup> since 2000. Mr. Fennessey earned a bachelor's degree in Business Administration, with an emphasis in Finance, and a minor in Economics from Truman State University. He has earned the right to use the Chartered Financial Analyst designation.

**John R. Friedl** has been with Principal<sup>®</sup> since 1998. He earned a bachelor's degree in Communications and History from the University of Washington and a master's degree in Finance from Seattle University. Mr. Friedl has earned the right to use the Chartered Financial Analyst designation.

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**Zach Gassmann** has been with Principal<sup>®</sup> since 2007. He received 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.

**Erika Isley** has been with Principal<sup>®</sup> since 2000. She earned a bachelor's degree in Business Management from Upper Iowa University and an M.B.A. from Drake University.

**Todd A. Jablonski** has been with Principal<sup>®</sup> since 2010. He earned a bachelor's degree in Economics from the University of Virginia and an M.B.A. with an emphasis in Quantitative Finance from New York University's Stern School of Business. Mr. Jablonski has earned the right to use the Chartered Financial Analyst designation.

**Theodore Jayne** has been with Principal<sup>®</sup> since 2015. He earned a bachelor's degree in Anthropology from Harvard University. Mr. Jayne has earned the right to use the Chartered Financial Analyst designation.

**Jeffrey Kilkenny** was with Principal<sup>®</sup> from 1999-2006 and rejoined Principal<sup>®</sup> in 2012. He earned a bachelor's degree in Finance from the University of Iowa. Mr. Kilkenny has earned the right to use the Chartered Financial Analyst designation.

**James Noble** has been with Principal<sup>®</sup> since 2010. He earned a bachelor's degree in Finance and an M.B.A. from Hofstra University. Mr. Noble has earned the right to use the Chartered Financial Analyst designation.

**K. William Nolin** has been with Principal<sup>®</sup> since 1993. He earned a bachelor's degree in Finance from the University of Iowa and an M.B.A. from the Yale School of Management. Mr. Nolin has earned the right to use the Chartered Financial Analyst designation.

**Phil Nordhus** has been with Principal<sup>®</sup> since 1990. He earned a bachelor's degree in Economics from Kansas State University and an M.B.A. from Drake University. Mr. Nordhus has earned the right to use the Chartered Financial Analyst designation.

**Brian W. Pattinson** has been with Principal<sup>®</sup> since 1994. He earned a bachelor's degree and an M.B.A. in Finance from the University of Iowa. Mr. Pattinson has earned the right to use the Chartered Financial Analyst designation.

**Scott J. Peterson** has been with Principal<sup>®</sup> since 2002. He earned a bachelor's degree in Mathematics from Brigham Young University and an M.B.A. from New York University's Stern School of Business. Mr. Peterson has earned the right to use the Chartered Financial Analyst designation.

**Sarah E. Radecki** has been with Principal<sup>®</sup> since 1999. She earned bachelor's degrees in Political Science and Economics from Saint Mary's College of California and a master's degree in Economics from the University of California at Santa Barbara. Ms. Radecki has earned the right to use the Chartered Financial Analyst designation.

**Josh Rank** has been with Principal<sup>®</sup> since 2013. He earned a bachelor's degree in Finance from Iowa State University. Mr. Rank has earned the right to use the Chartered Financial Analyst designation.

**Tracy Reeg** has been with Principal<sup>®</sup> since 1993. She earned a bachelor's degree in Finance from the University of Northern Iowa.

**Benjamin E. Rotenberg** has been with Principal<sup>®</sup> since 2014. He earned a bachelor's degree in International Relations and Russian from Pomona College. He has earned the right to use the Chartered Financial Analyst and the Chartered Alternative Investment Analyst designations.

**Tom Rozycki** has been with Principal<sup>®</sup> since 2001. He earned a bachelor's degree in Finance from Drake University. Mr. Rozycki has earned the right to use the Chartered Financial Analyst designation.

**Jeffrey A. Schwarte** has been with Principal<sup>®</sup> since 1993. He earned a bachelor's degree in Accounting from the University of Northern Iowa. Mr. Schwarte has earned the right to use the Chartered Financial Analyst designation.

**Marc R. Shapiro** has been with Principal<sup>®</sup> since 2004. He earned a bachelor's degree in Finance and Marketing from Emery University.

**Aaron J. Siebel** has been with Principal<sup>®</sup> since 2005. He earned a bachelor's degree in Finance from the University of Iowa. Mr. Siebel has earned the right to use the Chartered Financial Analyst designation.

**Darrin E. Smith** has been with Principal<sup>®</sup> since 2007. He earned a bachelor's degree in Economics from Iowa State University and an M.B.A. from Drake University. Mr. Smith has earned the right to use the Chartered Financial Analyst designation.

**Scott Smith** has been with Principal<sup>®</sup> since 1999. He earned a bachelor's degree in Finance from Iowa State University.

------

**Yesim Tokat-Acikel** has been with Principal<sup>®</sup> since 2023. Prior to that, Ms. Tokat-Acikel was a Managing Director, Head of Multi-Asset Research, Co-Head of ESG, and Portfolio Manager for PGIM Quantitative Solutions, a business of Prudential Financial, since 2010. She earned a bachelor's degree in Industrial Engineering from Bilkent University, a master's degree in Industrial Engineering from the University of Arizona, and a PhD in Financial Economics from the University of California, Santa Barbara.

**May Tong** has been with Principal<sup>®</sup> since 2021. Prior to that, Ms. Tong was a Senior Vice President, Portfolio Manager for Franklin Templeton Multi-Asset Solutions since 2018. Prior to that, Ms. Tong was a Portfolio Manager and Head of Portfolio Implementation and Management for Voya Investment Management's Multi-Asset Strategies and Solutions Team since 2011. She earned a bachelor's degree in Accounting and Finance from Boston College and an M.B.A. from Columbia University. She has earned the right to use the Chartered Financial Analyst designation.

**Nedret Vidinli** has been with Principal<sup>®</sup> since 2010. He earned a bachelor's degree in Business Administration at Drake University and an M.B.A. at Benedictine University. Mr. Vidinli has earned the right to use the Chartered Financial Analyst designation.

**Christopher Watson** has been with Principal<sup>®</sup> since 2011. He earned a B.A. Hons from McGill University, Montreal and an M.B.A. from IMD Lausanne. Mr. Watson has earned the right to use the Chartered Financial Analyst designation.

**James Welch** has been with Principal<sup>®</sup> since 2014. He earned a bachelor's degree in Economics from the Pennsylvania State University.

**Randy L. Welch** has been with Principal<sup>®</sup> since 1989. He earned a bachelor's degree in Business/Finance from Grand View College and an M.B.A. from Drake University. Mr. Welch is an affiliate member of the Chartered Financial Analysts (CFA) Institute.

**The Sub-Advisors**

PGI has signed contracts with various sub-advisors. Under the sub-advisory agreements, the sub-advisor agrees to assume the obligations of PGI to provide investment advisory services to the portion of the assets of a specific Fund allocated to it by PGI. For these services, PGI pays the sub-advisor a fee.

PGI or the sub-advisor provides the Board with a recommended investment program. The program must be consistent with the Fund's investment objective and policies. Within the scope of the approved investment program, the sub-advisor advises the Fund on its investment policy and determines which securities are bought or sold, and in what amounts.

The Fund Summaries identified the sub-advisors, portfolio managers, and the Funds they manage. Additional information follows.

---

| | |
|:---|:---|
| **Sub-Advisor:**  | &nbsp;&nbsp; **AllianceBernstein L.P. ("AllianceBernstein")**, 501 Commerce Street, Nashville, TN 37203, was <br> founded in 1971 as an independent investment advisor registered with the SEC.<br>|
| **Fund(s):** | a portion of SmallCap Growth I |
| **Sub-Advisor:**  | &nbsp;&nbsp; **Barrow, Hanley, Mewhinney & Strauss, LLC** (doing business as Barrow Hanley Global Investors) <br> **("Barrow Hanley")**, 2200 Ross Avenue, 31st Floor, Dallas, Texas 75201, is an investment advisory firm <br> that was founded in 1979.<br>|
| **Fund(s):** | a portion of LargeCap Value III and a portion of Overseas |
| **Sub-Advisor:** | &nbsp;&nbsp; **BlackRock Financial Management, Inc. ("BlackRock")**, 55 East 52nd Street, New York, New York <br> 10055, is a registered investment advisor organized in 1994. BlackRock and its affiliates manage <br> investment company and other portfolio assets.<br>|
|  | &nbsp;&nbsp; Sub-Sub-Advisor: **BlackRock International Limited ("BIL")**, Exchange Place One, 1 Semple Street, <br> Edinburgh EH3 8BL, Scotland, is a registered investment advisor that was founded in 1995.<br>|
| **Fund(s):** | Inflation Protection |
|  | &nbsp;&nbsp; BlackRock and BIL, with PGI's consent, have entered into a sub-sub-advisory agreement for the <br> Inflation Protection Fund. Under the agreement, BIL has agreed to carry out certain investment advisory <br> obligations of BlackRock to manage the Inflation Protection Fund's assets. BlackRock will allocate to <br> BIL a portion of the Inflation Protection Fund assets it manages.<br>|

---

**Chris Allen** has been with BIL since 2009. He earned an M.A. degree in Mathematics from Oxford University. Mr. Allen has earned the right to use the Chartered Financial Analyst designation.

------

**Akiva Dickstein** has been with BlackRock since 2009. He earned a B.A. degree in Economics from Yale University and an M.A. degree in Physics from Princeton University.

**David Rogal** has been with BlackRock since 2009. He earned a B.A. degree in Economics and Biology from Cornell University in 2006.

---

| | |
|:---|:---|
| **Sub-Advisor:** | &nbsp;&nbsp; **Brown Advisory, LLC ("Brown")**, 901 South Bond Street, Suite 400, Baltimore, Maryland 21231, is a <br> registered investment advisor that works with institutions, corporations, nonprofits, families, and <br> individuals.<br>|
| **Fund(s):** | a portion of LargeCap Growth I and a portion of SmallCap Growth I |
| **Sub-Advisor:** | &nbsp;&nbsp; **Causeway Capital Management LLC ("Causeway")**, 11111 Santa Monica Boulevard, 15th Floor, Los <br> Angeles, CA 90025, is a registered investment advisor founded in 2001.<br>|
| **Fund(s):** | a portion of Overseas |
| **Sub-Advisor:**  | &nbsp;&nbsp; **Eagle Asset Management, Inc.,** 880 Carillon Parkway, St. Petersburg, FL 33716, became an <br> investment advisor in 1984.<br>|
| **Fund(s):** | a portion of MidCap Growth III |
| **Sub-Advisor:**  | &nbsp;&nbsp; **Emerald Advisers, LLC ("Emerald")**, 3175 Oregon Pike, Leola, PA 17540, was founded in 1991 and <br> manages institutional separate account and mutual fund investment portfolios for corporations, public <br> and private pension funds, and for individual retail investors.<br>|
| **Fund(s):** | a portion of SmallCap Growth I |
| **Sub-Advisor:**  | &nbsp;&nbsp; **Hotchkis and Wiley Capital Management, LLC**, 601 S. Figueroa Street, 39th Floor, Los Angeles, CA <br> 90017, is an investment advisory firm founded in 1980 that manages value portfolios for institutional and <br> individual investors.<br>|
| **Fund(s):** | a portion of SmallCap Value II |
| **Sub-Advisor:** | &nbsp;&nbsp; **Insight North America LLC ("INA")**, 200 Park Avenue, New York, New York 10166, is part of the group <br> of affiliated companies providing investment advisory services under the brand "Insight Investment" or <br> "Insight". Investment advisory services in North America are provided through two different investment <br> advisors registered with the SEC using the brand Insight Investment: INA and Insight Investment <br> International Limited.<br>|
| **Fund(s):** | a portion of High Income |
| **Sub-Advisor:** | &nbsp;&nbsp; **Los Angeles Capital Management LLC ("Los Angeles Capital")**, 11150 Santa Monica Boulevard, <br> Suite 200, Los Angeles, CA 90025, founded in 2002, is a registered investment advisor offering <br> risk-controlled, active equity management services to a broad range of institutional investors.<br>|
| **Fund(s):** | a portion of MidCap Value I |
| **Sub-Advisor:** | &nbsp;&nbsp; **Nuveen Asset Management, LLC ("Nuveen Asset Management")**, 333 West Wacker Drive, Chicago, <br> IL 60606, is an investment advisor registered with the SEC providing investment management services <br> in a variety of investment strategies across multiple asset classes.<br>|
| **Fund(s):** | a portion of Diversified Income Fund (senior loan investment strategy) |
| **Sub-Advisor:** | &nbsp;&nbsp; **Origin Asset Management LLP** (doing business as Principal Origin) **("Origin")**, One Carey Lane, <br> London, EC2V 8AE, UK, manages global equity securities for institutional clients.<br>|
| **Fund(s):** | International I |

---

The portfolio managers operate as a team, sharing authority and responsibility for research and the day-to-day management of the portfolio with no limitation on the authority of one portfolio manager in relation to another.

**Chris Carter** has been with Origin since 2005. Mr. Carter is a graduate of Gonville & Caius College, University of Cambridge, with an M.A. Honours Degree in Economics and Philosophy.

**Tarlock Randhawa** has been with Origin since 2005. Mr. Randhawa is a graduate of Brunel University with a B.Sc. Joint Honours Degree in Mathematics & Management.

------

**Nerys Weir** was with Origin from 2008 to 2016 and rejoined Origin in 2019. Ms. Weir is a graduate of Leicester University with a B.A. Honours Degree in Ancient History and Archaeology.

---

| | |
|:---|:---|
| **Sub-Advisor:** | &nbsp;&nbsp; **PineBridge Investments LLC ("PineBridge")**, Park Avenue Tower, 65 East 55<sup>th</sup> Street, New York, NY <br> 10022, founded in 2010, is an investment advisor registered with the SEC that focuses on active, high <br> conviction investing. <br>|
| **Fund(s):** | a portion of Diversified Income (U.S. investment grade corporate bond sleeve)  |
| **Sub-Advisor:** | &nbsp;&nbsp; **Polen Capital Credit, LLC** (f/k/a DDJ Capital Management, LLC) **("Polen Credit")**, 1075 Main Street, <br> Suite 320, Waltham, MA 02451, is an SEC registered investment advisor. Polen Credit was formed in <br> 1996 and presently manages U.S. opportunistic high yield, upper tier U.S. high yield, bank loan, and total <br> return credit investment strategies, along with various customized fixed-income solutions, on behalf of <br> domestic and international investors.<br>|
| **Fund(s):** | a portion of Diversified Income (high yield strategy) and a portion of High Income |
| **Sub-Advisor:**  | &nbsp;&nbsp; **Post Advisory Group, LLC ("Post")**, 2049 Century Park East, Suite 3050, Los Angeles, CA 90067, <br> founded in 1992, is a global investment manager specializing in high yield securities with a <br> multi-strategy, value-oriented investment approach.<br>|
| **Fund(s):** | a portion of Diversified Income (high yield strategy) and a portion of High Income |
| **Sub-Advisor:** | &nbsp;&nbsp; **Principal Real Estate Investors, LLC** (doing business as Principal Real Estate) **("Principal - REI")**, <br> 711 High Street, Des Moines, IA 50392, was founded in 2000 and manages commercial real estate <br> across the spectrum of public and private equity and debt investments, primarily for institutional <br> investors.<br>|
| **Fund(s):** | &nbsp;&nbsp; Global Real Estate Securities, Real Estate Securities, and a portion of Diversified Income (CMBS <br> strategy)<br>|

---

The portfolio managers operate as a team, sharing authority and responsibility for research and the day-to-day management of the portfolio with no limitation on the authority of one portfolio manager in relation to another.

**Keith Bokota** has been with Principal - REI since 2007. He earned a bachelor's degree in Finance and International Business from Georgetown University. Mr. Bokota has earned the right to use the Chartered Financial Analyst designation.

**Simon Hedger** has been with Principal - REI since 2003. He earned an M.B.A. from the University of New England and is an associate member of both the Royal Institute of Chartered Surveyors and of the Australian Property Institute. He is a U.K. qualified chartered surveyor (ARICS).

**Anthony Kenkel** has been with Principal - REI since 2005. He earned a bachelor's degree in Finance from Drake University and an M.B.A. from the University of Chicago Graduate School of Business. Mr. Kenkel has earned the right to use the Chartered Financial Analyst and Financial Risk Manager designations.

**Kelly D. Rush** has been with Principal - REI since 2000 and the predecessor firms since 1987. He earned a B.A. in Finance and an M.B.A. in Business Administration from the University of Iowa. Mr. Rush has earned the right to use the Chartered Financial Analyst designation.

---

| | |
|:---|:---|
| **Sub-Advisor:**  | &nbsp;&nbsp; **Robert W. Baird & Co. Incorporated ("Baird")**, 777 East Wisconsin Avenue, Milwaukee, Wisconsin <br> 53202, was founded in 1919. Baird provides investment management services for individuals and <br> institutional clients including pension and profit sharing plans.<br>|
| **Fund(s):** | a portion of MidCap Growth III |
| **Sub-Advisor:** | &nbsp;&nbsp; **Spectrum Asset Management, Inc. ("Spectrum")**, 2 High Ridge Park, Stamford, CT 06905, founded <br> in 1987, manages portfolios of preferred securities for corporate, pension fund, insurance, and <br> endowment clients; open-end and closed-end mutual funds; and separately managed account <br> programs for high net worth individual investors, as well as provides volatility mitigation solutions for <br> some client portfolios.<br>|
| **Fund(s):** | a portion of Diversified Income (preferred securities strategy)  |

---

------

---

| | |
|:---|:---|
| **Sub-Advisor:**  | &nbsp;&nbsp; **T. Rowe Price Associates, Inc. ("T. Rowe Price")**, 100 East Pratt Street, Baltimore, MD 21202, has <br> over 75 years of investment management experience.<br>|
| **Fund(s):** | a portion of LargeCap Growth I |
| **Sub-Advisor:**  | &nbsp;&nbsp; **Vaughan Nelson Investment Management, L.P. ("Vaughan Nelson")**, 600 Travis Street, Suite 3800, <br> Houston, Texas 77002, was founded in 1970.<br>|
| **Fund(s):** | a portion of SmallCap Value II |
| **Sub-Advisor:**  | &nbsp;&nbsp; **Victory Capital Management Inc. ("Victory Capital")**, 15935 La Cantera Pkwy, San Antonio, TX <br> 78256, is an SEC-registered investment advisor that provides asset management services to individual <br> and institutional clients through multiple investment franchises.<br>|
| **Fund(s):** | a portion of MidCap Value I |
| **Sub-Advisor:**  | &nbsp;&nbsp; **Westwood Management Corp. ("Westwood")**, 200 Crescent Court, Suite 1200, Dallas, Texas 75201, <br> is a registered investment advisor that was founded in 1983.<br>|
| **Fund(s):** | a portion of LargeCap Value III |

---

The SAI provides additional information about each portfolio manager's compensation, other accounts managed by the portfolio manager, and the portfolio manager's ownership of securities in the Funds.

**Participating Affiliate Agreement**

In rendering investment advisory services to a Fund, the advisor and each sub-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. 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 Fund Complex 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**

Each Fund pays PGI a fee for its services, which includes the fee PGI pays to sub-advisors, as applicable.

The fee each Fund paid (as a percentage of the Fund's average daily net assets) for the fiscal year ended October 31, 2022 was:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Fund/Portfolio** | **Percentage of the Fund's**<br> **Average Daily** <br> **Net Assets**<br>|
| California Municipal  | 0.41% |
| Core Fixed Income  | 0.38% |
| Core Plus Bond  | 0.55% |
| Diversified Income  | 0.70% |
| Diversified International | 0.74% |
| Equity Income  | 0.50% |
| Finisterre Emerging Markets <br> Total Return Bond <br>| 0.75% |
| Global Emerging Markets | 1.05% |
| Global Real Estate Securities | 0.86% |
| Government & High Quality <br> Bond <br>| 0.48% |
| Government Money Market  | 0.15% |
| High Income | 0.61% |
| High Yield | 0.51% |
| Inflation Protection | 0.38% |
| International I | 0.72% |
| LargeCap Growth I | 0.60% |
| LargeCap S&P 500 Index  | 0.15% |

---

---

| | |
|:---|:---|
| **Fund/Portfolio** | **Percentage of the Fund's**<br> **Average Daily** <br> **Net Assets**<br>|
| LargeCap Value III | 0.75% |
| MidCap  | 0.58% |
| MidCap Growth  | 0.65% |
| MidCap Growth III | 0.86% |
| MidCap S&P 400 Index  | 0.15% |
| MidCap Value I | 0.64% |
| Money Market  | 0.40% |
| Overseas  | 0.94% |
| Principal Capital Appreciation  | 0.44% |
| Principal LifeTime Strategic <br> Income <br>| 0.00% |
| Principal LifeTime 2010  | 0.00% |
| Principal LifeTime 2015  | 0.00% |
| Principal LifeTime 2020  | 0.00% |
| Principal LifeTime 2025  | 0.00% |
| Principal LifeTime 2030  | 0.00% |
| Principal LifeTime 2035  | 0.00% |
| Principal LifeTime 2040  | 0.00% |

---

------

---

| | |
|:---|:---|
| **Fund/Portfolio** | **Percentage of the Fund's**<br> **Average Daily** <br> **Net Assets**<br>|
| Principal LifeTime 2045  | 0.00% |
| Principal LifeTime 2050  | 0.00% |
| Principal LifeTime 2055  | 0.00% |
| Principal LifeTime 2060  | 0.00% |
| Principal LifeTime 2065  | 0.00% |
| Principal LifeTime Hybrid Income  | 0.00% |
| Principal LifeTime Hybrid 2015  | 0.00% |
| Principal LifeTime Hybrid 2020  | 0.00% |
| Principal LifeTime Hybrid 2025  | 0.00% |
| Principal LifeTime Hybrid 2030  | 0.00% |
| Principal LifeTime Hybrid 2035  | 0.00% |
| Principal LifeTime Hybrid 2040  | 0.00% |
| Principal LifeTime Hybrid 2045  | 0.00% |
| Principal LifeTime Hybrid 2050  | 0.00% |
| Principal LifeTime Hybrid 2055  | 0.00% |

---

---

| | |
|:---|:---|
| **Fund/Portfolio** | **Percentage of the Fund's**<br> **Average Daily** <br> **Net Assets**<br>|
| Principal LifeTime Hybrid 2060  | 0.00% |
| Principal LifeTime Hybrid 2065  | 0.00% |
| Real Estate Securities  | 0.79% |
| SAM Balanced  | 0.27% |
| SAM Conservative Balanced  | 0.27% |
| SAM Conservative Growth  | 0.27% |
| SAM Flexible Income  | 0.27% |
| SAM Strategic Growth  | 0.27% |
| Short-Term Income  | 0.39% |
| SmallCap  | 0.73% |
| SmallCap Growth I | 0.85% |
| SmallCap S&P 600 Index  | 0.15% |
| SmallCap Value II | 0.93% |
| Tax-Exempt Bond  | 0.40% |

---

The management fee schedules for the Principal LifeTime 2070 and Principal LifeTime Hybrid 2070 Funds, which have not completed a full fiscal year, are as follows:

---

| | |
|:---|:---|
| **Fund** | **All Assets** |
| Principal LifeTime 2070 | 0.00% |
| Principal LifeTime Hybrid 2070 | 0.00% |

---

Availability of the discussions regarding the basis for the Board's approval of various management and sub-advisory agreements is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Annual Report to Shareholders**<br> **for the period ending October 31, 2022** | **Annual Report to Shareholders**<br> **for the period ending October 31, 2022** | **Semi-Annual Report to Shareholders**<br> **for the period ending April 30, 2023**<br>|
| **Fund/Portfolio** | **Management Agreement** | **Sub-Advisory Agreement** | **Management Agreement** |
| Principal LifeTime 2070 |  |  | X |
| Principal LifeTime Hybrid 2070 |  |  | X |
| All Other Funds/Portfolios | X | X |  |

---

**Voluntary Waivers**

Government Money Market and Money Market Funds

PGI has voluntarily agreed to limit the Fund's expenses to the extent necessary to maintain a 0% yield. The voluntary expense limit may be revised or terminated at any time without notice to the shareholders.

**Manager of Managers**

The Registrant operates as a Manager of Managers. Under an order received from the SEC (the "Order"), the Registrant 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:

<sup>•</sup>

hire one or more sub-advisors;

<sup>•</sup>

change sub-advisors; and

<sup>•</sup>

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, as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Funds/Portfolios** | &nbsp;&nbsp; **Unaffiliated**<br> **Sub-Advisors**<br>| &nbsp;&nbsp; **Wholly-Owned**<br> **Affiliated Sub-Advisors**<br>| &nbsp;&nbsp; **Majority-Owned**<br> **Affiliated Sub-Advisors**<br>| &nbsp;&nbsp; **Any Other Sub-Advisors**<br> **Regardless of**<br> **Degree of Affiliation**<br>|
| California Municipal and Tax-Exempt <br> Bond <br>| X |  |  |  |
| Principal LifeTime 2070 and Principal <br> LifeTime Hybrid 2070<br>| X | X | X | X |
| All Other Funds/Portfolios | X | X | X |  |

---

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.

**PRICING OF FUND SHARES**

Each Fund's shares are bought and sold at the current share price. The share price of each class of each Fund 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, 3:00 p.m. Central Time). 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) at the transaction processing center in Kansas City, Missouri. To process your transaction (purchase, redemption, or exchange) on the day it is received, it must be received (with complete information):

<sup>•</sup>

on a day that the NYSE is open and

<sup>•</sup>

before the close of trading on the NYSE (normally, 3:00 p.m. Central Time).

Orders received after the close of the NYSE or on days that the NYSE is not open will be processed on the next day that the NYSE is open for normal trading. The Funds will not treat an intraday unscheduled disruption in NYSE trading as a closure of the NYSE and will price shares as of 3:00 p.m. Central Time, if the particular disruption directly affects only the NYSE.

If we receive an application or purchase request for a new mutual fund account or subsequent purchase into an existing account that is accompanied by a check and the application or purchase request does not contain complete information, we may hold the application (and check) for up to two business days while we attempt to obtain the necessary information. If we receive the necessary information within two business days, we will process the order using the next share price calculated. If we do not receive the information within two business days, we will return the application and check to you.

For all Funds, except the Money Market Fund, the share price is calculated by:

<sup>•</sup>

taking the current market value of the total assets of the Fund,

<sup>•</sup>

subtracting liabilities of the Fund,

<sup>•</sup>

dividing the remainder proportionately into the classes of the Fund,

<sup>•</sup>

subtracting the liability of each class, and

<sup>•</sup>

dividing the remainder by the total number of shares outstanding for that class.

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.

The securities of the Government Money Market and Money Market Funds are valued at amortized cost. The calculation procedure is described in the SAI.

------

**Notes:**

<sup>•</sup>

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.

<sup>•</sup>

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. Securities traded outside of the Western Hemisphere are valued using a fair value policy adopted by the Fund. These fair valuation procedures are intended to discourage shareholders from investing in the Fund for the purpose of engaging in market timing or arbitrage transactions.

<sup>•</sup>

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 the Fund may change on days when shareholders are unable to purchase or redeem shares.

<sup>•</sup>

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 PGI expects the securities may be sold.

<sup>•</sup>

The securities of the Government Money Market and Money Market Funds are valued at amortized cost. The calculation procedure is described in the SAI.

**CONTACT PRINCIPAL FUNDS, INC.**

Contact information for Principal Funds, Inc. ("Principal Funds") is as follows:

---

| | |
|:---|:---|
| **Mailing Addresses:** |  |
| **Regular Mail** | **Overnight Mail** |
| Principal Funds<br> P.O. Box 219971<br> Kansas City, MO 64121-9971<br>| &nbsp;&nbsp; Principal Funds<br> 430 W. 7th Street, Ste. 219971<br> Kansas City, MO 64105-1407<br>|

---

You may speak with a Client Relations Specialist by calling 1-800-222-5852, between 7:00 a.m. and 7:00 p.m. Central Time on any day that the NYSE is open.

To obtain Automated Clearing House ("ACH") or wire instructions, please contact a Client Relations Specialist.

For additional information about Principal Funds, Inc., go to www.PrincipalAM.com.

**PURCHASE OF FUND SHARES**

Principal Funds, Inc. offers funds in multiple share classes: A, C, J, Institutional, R-1, R-3, R-4, R-5, R-6, and S. Funds available in multiple share classes have the same investments, but differing expenses. Institutional Class and Classes A, C, J, R-1, R-3, R-4, R-5, and R-6 shares are available in this Prospectus.

The Funds reserve the right to refuse or cancel any purchase orders, including those by exchange, for any reason. For example, the Funds do not intend to permit market timing because short-term or other excessive trading into and out of the Funds may harm performance by disrupting portfolio management strategies and by increasing expenses. Accordingly, the Funds may reject any purchase orders from market timers or investors that, in PGI's opinion, may be disruptive to the Funds. For these purposes, PGI may consider an investor's trading history in the Funds or other funds advised by PGI and accounts under common ownership or control.

PGI may recommend to the Board, and the Board may elect, to close certain Funds or share classes to new investors or to close certain Funds or share classes to new and existing investors.

The Registrant will not issue certificates for shares.

No salesperson, broker-dealer, or other person is authorized to give information or make representations about a 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 Registrant, a Fund, PGI, any sub-advisor, or Principal Funds Distributor, Inc.

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**Procedures for Opening an Account**

<u>Classes A and C Shares</u>

Shares of the Funds are generally purchased through Financial Professionals. Financial Professionals may establish shareholder accounts according to their procedures or they may establish shareholder accounts directly with the Funds by visiting our website to obtain the appropriate forms.

Your Financial Professional can help you buy shares of the Funds by mail, through bank wire, direct deposit, or Automatic Investment Plan ("AIP"). No wires are accepted on days when the NYSE is closed or when the Federal Reserve is closed (because the bank that would receive your wire is closed). An investment in a Fund may be held in various types of accounts, including individual, joint ownership, trust, and business accounts. The Funds also offer a range of custodial accounts for those who wish to invest for retirement and/or education expenses. Prospective shareholders should consult with their Financial Professional before making decisions about the account and type of investment that are appropriate for them.

<u>Class J Shares</u>

Class J shares are currently available through registered representatives of:

• Principal Securities, Inc. ("PSI") who are also employees of Principal Life distribution channels used to directly market certain products and services of subsidiaries of Principal Financial Group, Inc. as well as provide retirement plan services and education on topics such as investing and retirement. These PSI registered representatives are with Principal Connection (part of Principal Bank), and

• Selected broker-dealers that have entered into a selling agreement to offer Class J shares.

Class J shares are also available through an online IRA rollover tool on www.principal.com.

For more information about Class J shares of the Funds, please call Principal Connection at 1-800-247-8000.

<u>Institutional Class and Classes R-1, R-3, R-4, R-5, and R-6 Shares</u>

Shares of the Funds are generally purchased through Financial Professionals. There are no sales charges on Institutional Class and Classes R-1, R-3, R-4, R-5, and R-6 shares of the Funds.

Shareholder accounts in these share classes are generally maintained under an open account system. Under this system, an account is opened and maintained for each investor (generally within an omnibus account, plan level account, or institutional investor). Each investment is confirmed by sending the investor a statement of account showing the current purchase or sale and the total number of shares owned. The statement of account is treated by the Funds as evidence of ownership of Fund shares. Contact your Financial Professional for additional information on how to buy shares.

**Verification of Identity**

To help the government fight the funding of terrorism and money laundering activities, Federal law requires financial institutions to obtain, verify, and record information that identifies each person who opens an account. When you open an account, we (or your Financial Professional) may ask for your name, address, date of birth, and other information that will allow us (or your Financial Professional) to verify your identity. We (or your Financial Professional) may also ask to see your driver's license or other identifying documents.

If concerns arise with verification of your identity, no transactions, other than redemptions, will be permitted while we attempt to reconcile the concerns. If we are unable to verify your identity on a timely basis, we may close your account or take such other action as we deem appropriate.

The Funds will not establish accounts with foreign addresses. If an existing shareholder with a U.S. address moves to a foreign location and updates the address on the shareholder's account, we are unable to process any purchases or exchanges on that account. The Funds will not establish accounts that are for the benefit of a business/organization that is illegal under Federal and/or state law (such as a marijuana clinic) or a person who owns or receives income from such an entity or whose source of funds is illegal.

**Eligible Purchasers**

You must be an eligible purchaser for a particular share class to buy shares of a Fund available in that share class. At the sole discretion of the Distributor, the Fund may broaden or limit the designation of eligible purchasers, permit certain types of investors to open new accounts, impose further restrictions on purchases, or reject any purchase orders, all without prior notice. The Funds' shares may not be offered in every state. Please check with your Financial Professional or our home office for state availability.

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<u>Institutional Class and Classes R-1, R-3, R-4, R-5, and R-6 Shares</u>

Some eligible purchasers (as listed below) purchase shares through plans or other intermediaries; such plans or intermediaries may impose fees in addition to those charged by the Funds. The services or share classes available to you may vary depending upon how you wish to purchase shares of the Fund. Each investor's financial considerations are different. You should speak with your Financial Professional to help you decide which share class is best for you.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Eligible purchasers currently include, but are not limited to:** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| retirement and pension plans to which Principal Life Insurance Company ("Principal Life") provides <br> recordkeeping services<br>| X | X | X | X | X | X |
| separate accounts of Principal Life | X | X | X | X | X | X |
| Principal Life or any of its subsidiaries or affiliates | X | X | X | X | X | X |
| any fund distributed by PFD if the fund seeks to achieve its investment objective by investing primarily <br> in shares of mutual funds<br>| X | X | X | X | X | X |
| clients of Principal Global Investors, LLC | X | X | X | X | X | X |
| certain employer sponsored retirement plans with plan level omnibus accounts | X | X | X | X | X | X |
| certain pension plans and employee benefit plans | X | X | X | X | X | X |
| certain retirement account investment vehicles administered by foreign or domestic pension plans | X | X | X | X | X | X |
| an investor who buys shares through an omnibus account with certain intermediaries, such as a <br> broker-dealer, bank, or other financial institution, pursuant to a written agreement between the <br> intermediary and PFD or its affiliate<br>| X | X | X | X | X | X |
| certain retirement plan clients that have an organization, approved by Principal Life, for purposes of <br> providing plan recordkeeping services<br>| X | X | X | X | X | X |
| investors investing at least $1,000,000 per fund | X |  |  |  |  | X |
| sponsors, recordkeepers, or administrators of wrap account, mutual fund asset allocation, or fee-based <br> programs or participants in those programs<br>| X |  |  |  |  | X |
| certain institutional investors that provide recordkeeping for retirement plans or other employee benefit <br> plans<br>| X |  |  |  |  | X |
| institutional clients that Principal Life has approved for purposes of providing plan recordkeeping | X |  |  |  |  | X |
| institutional investors investing for their own account, including banks, trust companies, financial <br> intermediaries, corporations, endowments and foundations<br>| X |  |  |  |  | X |
| collective trust funds, fund of funds or other pooled investment vehicles, and entities acting for the <br> account of a public entity<br>| X |  |  |  |  | X |
| certain clients of a private banking division pursuant to a written agreement between the bank and PFD <br> or its affiliate<br>| X |  |  |  |  | X |
| the portfolio manager of any advisor to the fund | X |  |  |  |  |  |
| certain institutional investors with special arrangements (for example, insurance companies, employee <br> benefit plans, retirement plans, and Section 529 Plans, among others)<br>| X |  |  |  |  | X |
| retirement plans and IRAs investing through a retirement marketplace enabled by state legislation | X |  |  |  |  |  |

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<u>Class R-1 Shares</u>

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances. However, if a retirement plan currently offers Class R-1 shares, such plan will be allowed to continue to invest in this share class through Funds it currently offers in its plans or Funds it adds to its plans.

<u>Government Money Market Fund</u>

The Fund is not offered for sale, and will not be sold, in Nebraska, New Hampshire, Oklahoma, or Montana or to residents of Nebraska, New Hampshire, Oklahoma, or Montana.

<u>MidCap Fund</u>

For retail investors (i.e., non-employer sponsored retirement plan investors), effective as of the close of the NYSE on June 14, 2013, and for employer-sponsored retirement plan investors, effective as of the close of the NYSE on August 15, 2013, the MidCap Fund is no longer available for purchases from new investors except in limited circumstances, such as the following:

<sup>•</sup>

Shareholders, including those in omnibus accounts, who owned shares of the MidCap Fund as of June 14, 2013 (for retail investors, i.e., non-employer sponsored retirement plan investors) or August 15, 2013 (for employer-sponsored retirement plan investors), may continue to make purchases, exchanges, and dividend or capital gains reinvestment in existing accounts.

<sup>•</sup>

Registered Investment Advisor (RIA) and bank trust firms that have an investment allocation to the MidCap Strategy (i.e., investments in the same strategy used in collective investment trust, separately managed accounts, individually managed accounts, or insurance separate accounts) in a fee-based, wrap, or advisory account, may continue to add new clients, purchase shares, and exchange into the MidCap Fund. The MidCap Fund will not be available to new RIA and bank trust firms.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

<sup>•</sup>

Shareholders through accounts at private banks may continue to purchase shares and exchange into the MidCap Fund. Private banks that have an investment allocation to the MidCap Strategy may add new clients to the MidCap Fund. The MidCap Fund will not be available to private bank or private bank platforms not already investing in the MidCap Strategy.

<sup>•</sup>

Shareholders in broker/dealer wrap or fee-based programs that have an investment allocation to the MidCap Fund may continue to purchase shares and exchange into the MidCap Fund. Existing broker/dealer wrap or fee-based programs may add new participants.

<sup>•</sup>

Shareholders in certain types of retirement plans (including 401(k)s, SEPs, SIMPLEs, 403(b)s, etc.) may continue to purchase shares and exchange into the MidCap Fund. New participants in these plans may elect to purchase shares of the MidCap Fund.

<sup>•</sup>

Shareholders within brokerage accounts may continue to purchase shares of the MidCap Fund; however, new brokerage accounts will not be permitted to begin investing in the MidCap Fund after June 14, 2013.

<sup>•</sup>

529 plans that include the MidCap Fund within their investment options may continue to purchase shares and exchange into the MidCap Fund.

<sup>•</sup>

Investors who have a direct investment in the MidCap Strategy may, subject to the approval of the Distributor, purchase shares in the MidCap Fund.

<sup>•</sup>

Shareholders that invest through accounts with Principal Securities, Inc.

At the sole discretion of the Distributor, the MidCap Fund may permit certain types of investors to open new accounts, impose further restrictions on purchases, or reject any purchase orders, all without prior notice.

<u>Money Market Fund</u>

The Money Market Fund qualifies as a retail money market fund; therefore, it uses amortized cost to value its portfolio securities, transacts at a $1.00 share price, and maintains a $1.00 stable NAV.

Natural Persons. As a retail money market fund, the Money Market Fund has adopted policies and procedures reasonably designed to limit all beneficial owners of the Fund to natural persons (whether investing directly or through an intermediary). A natural person is an individual human being with sole or shared voting and/or investment power over the investment. New sales or exchanges into the Money Market Fund by investors who do not meet the definition of a natural person (whether investing directly or through an intermediary) will not be allowed. If a non-natural person invests (whether directly or through an intermediary) in the Money Market Fund, the Money Market Fund will involuntarily redeem those investors. The Money Market Fund will provide 60-days advance notice prior to involuntarily redeeming shares owned by investors who do not meet the definition of a natural person (whether investing directly or through an intermediary).

**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 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).

**Minimum Investments**

<u>Classes A, C, and J Shares</u>

Principal Funds has a minimum initial investment amount of $1,000 and a minimum subsequent investment amount of $100. Initial and subsequent investment minimums apply on a per-Fund basis for each Fund in which a shareholder invests.

Shareholders must meet the minimum initial investment amount of $1,000 unless an Automatic Investment Plan ("AIP") is established. With an AIP, the minimum initial investment is $100. Accounts or automatic payroll deduction plans established with an AIP that do not meet the minimum initial investment must maintain subsequent automatic investments that total at least $1,200 annually.

Minimum initial and subsequent investments may be waived on accounts set up for: certain employee benefit plans; retirement plans qualified under Internal Revenue Code Section 401(a); payroll deduction plans submitting contributions in an electronic format devised and/or approved by the Fund; and purchases through an omnibus account with a broker-dealer, investment advisor, or other financial institution.

<u>Institutional Class and Classes R-1, R-3, R-4, R-5, and R-6 Shares</u>

There are no minimum initial or subsequent investment requirements for an investor who otherwise qualifies as an eligible purchaser.

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**Payment**

<u>Classes A, C, and J Shares</u>

Payments are to be made via personal or financial institution check (for example, a bank or cashier's check), bank wire, direct deposit, or Automatic Investment Plan ("AIP"). No wires are accepted on days when the NYSE is closed or when the Federal Reserve is closed (because the bank that would receive your wire is closed). We consider your purchase of Fund shares by check to be your authorization to make an automated clearing house ("ACH") debit entry to your account. We reserve the right to refuse any payment that we feel presents a fraud or money laundering risk. Examples of the types of payments we will not accept are cash, starter checks, money orders, travelers' checks, credit card checks, and foreign checks.

The Funds may, in their discretion and under certain limited circumstances, accept securities as payment for Fund shares at the applicable net asset value ("'NAV"). For federal income tax purposes, a purchase of shares with securities will be treated as a sale or exchange of such securities on which the investor will generally realize a taxable gain or loss. Each Fund will value securities used to purchase its shares using the same method the Registrant uses to value its portfolio securities as described in this Prospectus.

You may reinvest your redemption proceeds, dividend payment, or capital gain distribution without an initial sales charge or contingent deferred sales charge, in the same share class of any other Fund of Principal Funds within 90 days of the date of the redemption. To purchase the shares without a sales charge (initial or contingent deferred) as described in this section, the shareholder must notify Principal Funds at the time of reinvestment that the shareholder is reinvesting proceeds within 90 days of the date of redemption. The original redemption will be considered a sale for federal (and state) income tax purposes even if the proceeds are reinvested within 90 days. If a loss is realized on the sale, the reinvestment may be subject to the "wash sale" rules resulting in the postponement of the recognition of the loss for tax purposes.

Your Financial Professional can help you make a direct deposit from your paycheck (if your employer approves) or from a government allotment. Direct deposit allows you to deposit automatically all or part of your paycheck (or government allotment) to your Principal Funds account(s). You can request a Direct Deposit Authorization Form to give to your employer or the governmental agency (either of which may charge a fee for this service). Shares will be purchased on the day the ACH notification is received by the transfer agent's bank. On days when the NYSE is closed, but the bank receiving the ACH notification is open, your purchase will be priced at the next calculated share price.

Your Financial Professional can help you establish an Automatic Investment Plan ("AIP"). You may make regular monthly investments with automatic deductions from your bank or other financial institution account. You select the day of the month the deduction is to be made (if none is selected, the investment will be made on the 15th of the month). If that date is a non-trading day, we will process the deduction on the next trading day. If the next trading day falls in the next month or year, we will process the deduction on the day before your selected day.

<u>Institutional Class and Classes R-1, R-3, R-4, R-5, and R-6 Shares</u>

Payments are generally to be made through your plan or intermediary. We reserve the right to refuse any payment that we feel presents a fraud or money laundering risk. Examples of the types of payments we will not accept are cash, starter checks, money orders, travelers' checks, credit card checks, and foreign checks.

For Institutional Class shareholders investing through a retirement marketplace enabled by state legislation, please contact Principal Funds by calling 1-800-222-5852, between 7:00 a.m. and 7:00 p.m. Central Time on any day that the NYSE is open.

**Automatic Conversion of Class C Shares**

Effective April 19, 2021, Class C shares held for eight years after purchase will automatically convert to Class A shares of the same Fund. The automatic conversion will generally occur on the 22nd day of each month or, if the 22nd day is not a business day, on the next business day (each, a "Conversion Date"). If the eighth anniversary of a purchase of Class C shares falls on a Conversion Date, a shareholder's Class C shares will be automatically converted on that date. If the eighth anniversary occurs between Conversion Dates, a shareholder's Class C shares will be automatically converted on the next Conversion Date after such anniversary. Automatic conversions will be on the basis of the NAV per share, without the imposition of any sales charge (including a CDSC), fee, or other charge. Automatic conversions of Class C shares will constitute tax-free exchanges for federal income tax purposes.

Class C shares of a Fund acquired through a reinvestment of dividends and distributions will convert to Class A shares of the Fund on the Conversion Date pro rata with the converting Class C shares of that Fund that were not acquired through reinvestment of dividends and distributions.

Class C shares held through a financial intermediary in certain omnibus accounts may be converted by the financial intermediary once it is determined that the Class C shares have been held for the required period. It is the financial intermediary's (and not the Fund's) responsibility to maintain appropriate supporting records and to ensure that the

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shareholder is credited with the proper holding period, and it is the responsibility of the shareholder or their financial intermediary to determine that the shareholder is eligible for the conversion. Additionally, some intermediaries may have adopted different policies and procedures related to the conversion of Class C shares, including shorter schedules for conversion. Please consult with your financial intermediary if you have any questions.

**Redemption of Fund Shares**

Under normal circumstances, you may redeem shares of any class of the Funds at any time. There is no fee for any redemption. The Board has determined that it is not necessary to impose a fee upon the redemption of Fund shares because the Fund has adopted transfer restrictions as described in EXCHANGE OF FUND SHARES.

The shares you redeem will have the NAV per share that is next computed after the Fund receives and accepts your redemption order in proper and complete form. The amount you receive will be reduced by any applicable CDSC except as noted below; see CHOOSING A SHARE CLASS AND THE COSTS OF INVESTING—One-Time Fee—Contingent Deferred Sales Charge ("CDSC")—CDSC Waiver. Your redemption proceeds will generally be sent on the next business day (a day when the NYSE is open for normal business) following the date on which your request is received and accepted in proper and complete form. Although you can redeem your shares at any time, if you purchased shares by check or ACH and subsequently request a redemption of those shares, your redemption proceeds will generally be delayed for seven calendar days after the purchase to allow a sufficient period of time to ensure your recent payment has been cleared by the relevant bank. To redeem shares purchased by check or ACH within the previous seven days, the Funds require redemption requests with respect to those shares to be submitted in writing or by telephone, unless you contact the Fund and make an alternate arrangement.

Under unusual circumstances, a Fund may suspend redemptions, or postpone payments for more than seven days, as permitted by federal securities law.

Under normal circumstances, the Funds expect to meet redemption requests through holdings of cash, the sale of investments held in cash equivalents, and/or by selling liquid index futures or other instruments used for cash management purposes. In situations in which such holdings are not sufficient to meet redemption requests, a Fund will typically borrow money through the Fund's interfund lending facility or through a bank line-of-credit. No Fund can borrow under the bank line-of-credit while also a lender under the interfund lending facility. Funds may also choose to sell portfolio assets for the purpose of meeting such requests. Each Fund further reserves the right to distribute "in kind" securities from the Fund's portfolio in lieu (in whole or in part) of cash under certain circumstances, including under stressed market conditions.

The agreement for the above-mentioned line of credit is with The Bank of New York Mellon.

**Classes A, C, and J Shares**

You will be charged a $10 wire fee if you have the sale proceeds wired to your bank. It may take additional business days for your financial institution to post this payment to your account at that financial institution. At your request, the check will be sent overnight (a $15 overnight fee will be deducted from your account unless other arrangements are made).

Distributions from IRA, SEP, SIMPLE, 403(b), and SAR-SEP accounts may be taken as:

<sup>•</sup>

lump sum of the entire interest in the account,

<sup>•</sup>

partial interest in the account, or

<sup>•</sup>

periodic payments of either a fixed amount or an amount based on certain life expectancy calculations.

Tax penalties may apply to distributions before the participant reaches age 59½.

Selling shares may create a gain or a loss for federal (and state) income tax purposes. You should maintain accurate records for use in preparing your income tax returns.

Generally, sales proceeds are:

<sup>•</sup>

payable to all owners on the account (as shown in the account registration) and

<sup>•</sup>

mailed to the address on the account (if not changed within the last 15 days) or sent by wire or ACH to previously authorized U.S. bank account (if not added or changed within the last 15 days).

For other payment arrangements, please call Principal Funds. You should also call Principal Funds for special instructions that may apply to sales from accounts:

<sup>•</sup>

when an owner has died;

<sup>•</sup>

for certain employee benefit plans; or

<sup>•</sup>

owned by corporations, partnerships, agents, or fiduciaries.

Except as described above, you may redeem shares of the Funds in any of the following ways:

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<u>By Mail</u>

To sell shares by mail, you must:

<sup>•</sup>

Send a letter or our distribution form, which is signed by an owner of the account,

<sup>•</sup>

Specify the account number, and

<sup>•</sup>

Specify the number of shares or the dollar amount to be sold.

If you send a letter rather than our distribution form, the letter must be in a form acceptable to the Fund.

<u>By Telephone or Website, in amounts of $100,000 or less</u>

To sell shares by telephone:

<sup>•</sup>

The request may be made by a shareholder or by the shareholder's Financial Professional.

<sup>•</sup>

The combined amount requested from all funds to which the redemption request relates is $100,000 or less.

<sup>•</sup>

The address on the account must not have been changed within the last 15 days and telephone privileges must apply to the account from which the shares are being sold.

<sup>•</sup>

Wire or ACH to a previously authorized U.S. bank account that must not have been added or changed within the last 15 days.

<sup>•</sup>

If our phone lines are busy or our website is unavailable, you may need to send in a written sell order.

Telephone and/or Website redemption privileges are NOT available for all account types.

**Class A shares of Money Market Fund: Sell shares by checkwriting**

<sup>•</sup>

Checkwriting must be elected on initial application or by written request to Principal Funds. Such election continues in effect until the Fund receives written notice revoking or changing the election.

<sup>•</sup>

The Fund can only sell shares after your check making the Fund investment has cleared your bank.

<sup>•</sup>

Checks must be written for at least $250. The Fund reserves the right to increase the minimum check amount.

<sup>•</sup>

The rules of the bank on which the checks are drawn concerning checking accounts apply.

<sup>•</sup>

If the account does not have sufficient funds to cover the check, it is marked "Insufficient Funds" and returned (the Fund may revoke checkwriting on accounts on which "Insufficient Funds" checks are drawn).

<sup>•</sup>

Accounts may not be closed by withdrawal check (accounts continue to earn dividends until checks clear and the exact value of the account is not known until the check is received by the bank).

<sup>•</sup>

Checkwriting is available only for non-qualified accounts.

<sup>•</sup>

Neither the Fund, the bank, nor PGI shall incur any liability for honoring the checks, selling shares to pay checks, or for returning checks unpaid.

<sup>•</sup>

Checkwriting may be converted to a point-of-purchase debit from your account. This only applies if such service is available at the business with which you are doing business.

**Institutional Class and Classes R-1, R-3, R-4, R-5, and R-6 Shares**

You may redeem shares of the Funds in any of the following ways:

<u>Through an Employer Sponsored Retirement Plan Administrator or Record-Keeper</u>

If you own Fund shares in an eligible retirement or employee benefit plan, you must sell your shares through the plan's administrator or record-keeper.

<u>Through your Financial Professional</u>

If your Fund shares are held for you in nominee form, you must sell those shares through your intermediary or dealer.

<u>By Mail</u>

To sell shares by mail, you must:

<sup>•</sup>

Send a letter or our distribution form, which is signed by an owner of the account,

<sup>•</sup>

Specify the account number, and

<sup>•</sup>

Specify the number of shares or the dollar amount to be sold.

If you send a letter rather than our distribution form, the letter must be in a form acceptable to the Fund.

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<u>By Telephone</u>

To sell shares by telephone:

<sup>•</sup>

Telephone privileges must apply to the account from which the shares are sold.

<sup>•</sup>

A shareholder or the shareholder's Financial Professional may request to sell shares by telephone.

<sup>•</sup>

A maximum amount (listed below) of redemption requests will be permitted per day per account, as the combined amount from all funds, provided the proceeds are to be sent to a previously authorized U.S. bank account that must not have been added or changed within the last 15 days:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

$10,000,000 for Institutional Class.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

$500,000 for Classes R-1, R-3, R-4, R-5, and R-6.

<sup>•</sup>

A maximum of $500,000 of redemption requests will be permitted per day, as the combined amount from all funds, provided the proceeds are to be sent by check through the mail to the address on the account and such address must not have changed within the last 15 days.

<sup>•</sup>

If our telephone lines are busy, you may need to send in a written sell order.

**Classes A, C, J, and Institutional Shares - Systematic Withdrawal Plans**

You may set up a systematic withdrawal plan on a monthly, quarterly, semiannual, or annual basis to sell enough shares to provide a fixed amount of money ($100 minimum amount; the required minimum is waived to the extent necessary to meet the required minimum distribution as defined by the Internal Revenue Code).

You can set up a systematic withdrawal plan by:

<sup>•</sup>

completing the applicable section of the application,

<sup>•</sup>

sending us your written instructions,

<sup>•</sup>

completing a Systematic Withdrawal Plan Request form, or

<sup>•</sup>

calling us if you have telephone privileges on the account (telephone privileges may not be available for all types of accounts).

Your systematic withdrawal plan continues until:

<sup>•</sup>

you instruct us to stop or

<sup>•</sup>

your Fund account balance is zero.

When you set up the withdrawal plan, you select which day you want the sale made (if none is selected, the sale will be made on the 15th of the month). If the selected date is not a trading day, the sale will take place on the preceding trading day (if that day falls in the month or year before your selected date, the transaction will take place on the next trading day after your selected date). If telephone privileges apply to the account, you may change the date or amount by telephoning us. Sales made under your systematic withdrawal plan will reduce and may eventually exhaust your account. The Fund from which the systematic withdrawal is made makes no recommendation as to either the number of shares or the fixed amount that you withdraw.

**Distributions in Kind**

Payment for shares of the Funds tendered for redemption is ordinarily made by check. However, the Funds may determine that it would be detrimental to the remaining shareholders of a Fund to make payment of a redemption order wholly or partly in cash. Under certain circumstances, therefore, each of the Funds may pay the redemption proceeds in whole or in part by a distribution of "in kind" of securities from the Fund's portfolio in lieu of cash. If a Fund pays the redemption proceeds in kind, the redeeming shareholder might incur brokerage or other costs in selling the securities for cash. In addition, the securities received will be subject to market risk until sold. Typically, such in kind redemptions would be distributed pro rata. Each Fund will value securities used to pay redemptions in kind using the same method the Registrant uses to value its portfolio securities as described in this Prospectus.

**Money Market Fund**

<u>Liquidity Fees on Redemptions and Redemption Gates.</u> As a retail money market fund, the Money Market Fund has adopted policies and procedures regarding the imposition of liquidity fees on redemptions and/or redemption gates in the event that its level of weekly liquid assets falls below a designated threshold, subject to the actions of the Money Market Fund's Board. The imposition of liquidity fees or redemption gates affects checkwriting and exchanges into the Money Market Fund.

<u>Imposition.</u> If at any time, the Money Market Fund has invested less than 30% of its total assets in weekly liquid assets, the Money Market Fund's Board, in its discretion, may impose liquidity fees of up to 2% of the value of the shares redeemed (discretionary liquidity fee) and/or suspend redemptions (redemption gate). The Board must determine that taking such action is in the best interests of the Money Market Fund. In addition, if at the end of a business day, the Money Market Fund has invested less than 10% of its total assets in weekly liquid assets, the Money Market Fund must impose a 1%

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liquidity fee on shareholder redemptions (default liquidity fee) unless the Money Market Fund's Board determines that not doing so or imposing a lower or higher (not to exceed 2%) fee level is in the best interests of the Money Market Fund. The discretionary liquidity fee, redemption gate, or default liquidity fee will be applied to all shares for which redemption requests are submitted.

<u>Duration.</u> *Discretionary Liquidity Fee.* A discretionary liquidity fee will commence when the Board determines to impose it (as early as the same day the Board makes the determination) and will remain in place until the Board determines that imposing the discretionary liquidity fee is no longer in the best interests of the Money Market Fund. However, if at the end of a business day, the Money Market Fund's level of weekly liquid assets equals or exceeds 30% of its total assets, the Money Market Fund must cease charging the discretionary liquidity fee, effective the beginning of the next business day.

*Redemption Gate.* A redemption gate will commence when the Board determines to impose it and will remain in place until the Board determines that imposing the redemption gate is no longer in the best interests of the Money Market Fund. However, the redemption gate must be lifted on the earlier of (1) the beginning of the next business day, following a business day that ended with the Money Market Fund's level of weekly liquid assets equaling or exceeding 30% of its total assets or (2) the beginning of the next business day, following 10 business days after instituting the redemption gate (the Money Market Fund cannot impose a redemption gate for more than 10 business days in any rolling 90 calendar day period).

*Default Liquidity Fee.* Assuming the default liquidity fee goes into effect, such fee will commence at the beginning of the business day following the business day in which the Money Market Fund's level of weekly liquid assets fell below 10% and will remain in place until the Board determines that imposing the default liquidity fee is no longer in the best interests of the Money Market Fund. However, if at the end of a business day, the Money Market Fund's level of weekly liquid assets equals or exceeds 30% of its total assets, the Money Market Fund must cease charging the default liquidity fee, effective the beginning of the next business day.

<u>Investor Communications.</u> The Money Market Fund will communicate the imposition or lifting of a liquidity fee and/or redemption gate in various ways, including:

<sup>•</sup>

filing a prospectus supplement,

<sup>•</sup>

filing Form N-CR, and/or

<sup>•</sup>

posting information on its website.

<u>Use of Fee Proceeds</u>

The liquidity fees imposed by the Money Market Fund will be used to offset the costs of liquidity incurred by the Fund for redeeming shareholders and to protect the Fund's NAV.

<u>Tax Consequences to the Money Market Fund and Investors of the Fund's Receipt of Liquidity Fees</u>

It is currently anticipated that shareholders of money market funds that impose a liquidity fee may generally treat the fee on the redemption as offsetting the shareholder's amount realized on the redemption (thereby decreasing the shareholder's gain, or increasing the shareholder's loss, on the redeemed amount). The fund anticipates using 100% of a liquidity fee to help repair a market-based net asset value per share that was below $1.00.

Liquidity fees are expected to be non-taxable to the Fund. A money market fund that uses amortized cost to maintain a stable share price of $1.00 may need to distribute to its remaining shareholders sufficient value to prevent the fund from breaking the buck on the upside (i.e., by rounding up to $1.01 in pricing its shares), if the imposition of liquidity fees causes the fund's market-based net asset value to reach $1.0050. To the extent that the fund has sufficient earnings and profits to support the distribution, the additional dividends would be taxable as ordinary income to shareholders and would be eligible for deduction by the funds. Any distribution in excess of the fund's earnings and profits is treated as a return of capital, which would reduce your cost basis in the fund shares.

<u>Liquidation.</u> If the Government Money Market Fund or Money Market Fund, at the end of a business day, has invested less than 10% of its total assets in weekly liquid assets or if the Government Money Market Fund's or Money Market Fund's price per share, rounded to the nearest one percent, has deviated from $1.00 or the Board determines that such deviation is likely to occur, the Board can irrevocably approve the liquidation of the Government Money Market Fund or Money Market Fund. The Money Market Fund does not have to impose liquidity fees or redemption gates prior to making the determination to liquidate.

------

**EXCHANGE OF FUND SHARES**

An exchange between Funds is a redemption of shares of one Fund and a concurrent purchase of shares in another Fund with the redemption proceeds. All exchanges completed on the same day are considered a single exchange for purposes of the exchange limitations described below. To prevent excessive exchanges, and under other circumstances where the Board or PGI believes it is in the best interests of the Fund, the Fund reserves the right to revise or terminate this exchange privilege, limit the amount or further limit the number of exchanges, reject any exchange, or close an account.

**Classes A, C, and J Shares**

Your shares in the Funds (except Money Market) may be exchanged without a sales charge or CDSC for the same class of any other Principal Funds. However, the original purchase date of the shares from which an exchange is made is used to determine if newly acquired shares are subject to a CDSC when they are sold. The Fund reserves the right to revise or terminate the exchange privilege at any time.

You may exchange shares by:

<sup>•</sup>

sending a written request to Principal Funds,

<sup>•</sup>

using our website, or

<sup>•</sup>

calling us, if you have telephone privileges on the account.

<u>Exchanges from Money Market Fund</u>

Class A shares of Money Market Fund may be exchanged into:

<sup>•</sup>

Class A shares of other Funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

If Money Market Fund shares were acquired by direct purchase, a sales charge will be imposed on the exchange into other Class A shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

If Money Market Fund shares were acquired by (1) exchange from other Funds, (2) conversion of Class B shares, or (3) reinvestment of dividends earned on Class A shares that were acquired through exchange, no sales charge will be imposed on the exchange into other Class A shares.

<sup>•</sup>

Class C shares of other Funds - subject to the applicable CDSC.

<u>Automatic Exchange Election</u>

This election authorizes an exchange from one Fund of Principal Funds to another Fund of Principal Funds on a monthly, quarterly, semi-annual, or annual basis. You can set up an automatic exchange by:

<sup>•</sup>

completing the Automatic Exchange Election section of the application,

<sup>•</sup>

calling us if telephone privileges apply to the account from which the exchange is to be made,

<sup>•</sup>

sending us your written instructions, or

<sup>•</sup>

completing an Automatic Exchange Election form.

Your automatic exchange continues until:

<sup>•</sup>

you instruct us to stop (by calling us if telephone privileges apply to the account or sending us your written instructions) or

<sup>•</sup>

your Fund account balance of the account from which shares are redeemed is zero.

You may specify the day of the exchange (if none is selected, the exchange will be made on the 15th of the month). If the selected day is not a trading day, the sale will take place on the preceding trading day (if that day falls in the month or year before your selected date, the transaction will take place on the next trading day after your selected date). If telephone privileges apply to the account, you may change the date or amount by telephoning us.

<u>General</u>

<sup>•</sup>

An exchange by any joint owner is binding on all joint owners.

<sup>•</sup>

If you do not have an existing account in the Fund to which the exchange is being made, a new account is established. The new account has the same owner(s), dividend and capital gain options, and dealer of record as the account from which the shares are being exchanged.

<sup>•</sup>

All exchanges are subject to the minimum investment and eligibility requirements of the Fund being acquired.

<sup>•</sup>

You may acquire shares of a Fund only if its shares are legally offered in your state of residence.

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When money is exchanged or transferred from one account registration or tax identification number to another, the account holder is relinquishing his or her rights to the money. Therefore, exchanges and transfers can only be accepted by telephone if the exchange (transfer) is between:

<sup>•</sup>

accounts with identical ownership,

<sup>•</sup>

an account with a single owner to one with joint ownership if the owner of the single owner account is also an owner of the account with joint ownership,

<sup>•</sup>

a single owner to a Uniform Transfers to Minors Act ("UTMA") account if the owner of the single owner account is also the custodian on the UTMA account, or

<sup>•</sup>

a single or jointly owned account to an IRA account to fund the yearly IRA contribution of the owner (or one of the owners in the case of a jointly owned account).

The exchange is treated as a sale of shares for federal (and state) income tax purposes and may result in a capital gain or loss.

Fund shares used to fund an employee benefit plan may be exchanged only for shares of other Funds available to the employee benefit plan. Such an exchange must be made by following the procedures provided in the employee benefit plan and the written service agreement.

**Institutional Class and Classes R-1, R-3, R-4, R-5, and R-6 Shares**

A shareholder, which may include a beneficial owner of shares held in nominee name or a participant in a participant-directed employee benefit plan, may exchange Fund shares under certain circumstances. In addition to any restrictions an intermediary (which may include, without limitation, an employee retirement plan or other employee benefit plan, plan administrator, plan record keeper, or managed account provider) imposes, Fund shares may be exchanged, without charge, for shares of the same share class of any other Fund of the Principal Funds, provided that:

<sup>•</sup>

the shareholder has not exchanged shares of the Fund within 30 days preceding the exchange, unless the shareholder is exchanging into the Money Market Fund,

<sup>•</sup>

the share class of such other Fund is available through the intermediary,

<sup>•</sup>

the share class of such other Fund is available in the shareholder's state of residence, and

<sup>•</sup>

with respect to shares purchased through an intermediary that is willing and able to impose the 30-day exchange or repurchase restriction described below, the shareholder has not exchanged shares of the Fund within 30 days preceding the exchange, unless the shareholder is exchanging into the Money Market Fund.

With respect to shares purchased through an intermediary that is willing and able to impose a 30-day exchange or repurchase restriction, an order to purchase shares of any Fund, except shares of the Money Market Fund, will be rejected if the shareholder redeemed shares from that Fund within the preceding 30-day period. The 30-day exchange or purchase restriction does not apply to exchanges or purchases made on a scheduled basis such as scheduled periodic portfolio rebalancing transactions or to transactions by managers of funds of funds in shares of the underlying Funds.

If Fund shares are purchased through an intermediary that is unable or unwilling to impose the 30-day exchange or repurchase restriction described above, Fund management may waive this restriction based on:

<sup>•</sup>

exchange and repurchase limitations that the intermediary is able to impose if, in management's judgment, such limitations are reasonably likely to prevent excessive trading in Fund shares; or

<sup>•</sup>

the implementation of other transaction monitoring management believes is reasonably likely to identify and prevent excessive trading in Fund shares.

The Funds' transfer agent employs transaction monitoring that management believes is reasonably likely to identify and prevent excessive trading in Fund shares. The 30-day exchange or repurchase restriction described above is not imposed with respect to shares held directly with the Funds' transfer agent. However, such shares may be purchased through an intermediary that imposes such an exchange or repurchase restriction.

Shares of the Government Money Market Fund are not available for exchanges.

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**DIVIDENDS AND DISTRIBUTIONS**

Dividends are based on estimates of income, expenses, and shareholder activity for the Fund. Actual income, expenses, and shareholder activity may differ from estimates; consequently, differences, if any, will be included in the calculation of subsequent dividends. Each Fund pays its net investment income to record date shareholders. The payment schedule is as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Fund** | **Daily** | **Monthly** | &nbsp;&nbsp; **Quarterly**<br> **(March, June,**<br> **September,**<br> **and December)**<br>| &nbsp;&nbsp; **Yearly**<br> **(in December)**<br>|
| California Municipal | X |  |  |  |
| Core Fixed Income | X |  |  |  |
| Core Plus Bond |  | X |  |  |
| Diversified Income |  | X |  |  |
| Diversified International |  |  |  | X |
| Equity Income |  |  | X |  |
| Finisterre Emerging Markets Total Return Bond  |  | X |  |  |
| Global Emerging Markets |  |  |  | X |
| Global Real Estate Securities |  |  |  | X |
| Government & High Quality Bond | X |  |  |  |
| Government Money Market | X |  |  |  |
| High Income |  | X |  |  |
| High Yield | X |  |  |  |
| Inflation Protection |  |  |  | X |
| International I |  |  |  | X |
| LargeCap Growth I |  |  |  | X |
| LargeCap S&P 500 Index |  |  |  | X |
| LargeCap Value III |  |  |  | X |
| MidCap |  |  |  | X |
| MidCap Growth |  |  |  | X |
| MidCap Growth III |  |  |  | X |
| MidCap S&P 400 Index |  |  |  | X |
| MidCap Value I |  |  |  | X |
| Money Market | X |  |  |  |
| Overseas |  |  |  | X |
| Principal Capital Appreciation |  |  |  | X |
| Principal LifeTime 2010, 2015, 2020, 2025, 2030, 2035,<br> 2040, 2045, 2050, 2055, 2060, 2065, 2070<br>|  |  |  | X |
| Principal LifeTime Hybrid 2015, 2020, 2025, 2030, 2035,<br> 2040, 2045, 2050, 2055, 2060, 2065, 2070<br>|  |  |  | X |
| Principal LifeTime Hybrid Income |  |  |  | X |
| Principal LifeTime Strategic Income |  |  |  | X |
| Real Estate Securities |  |  | X |  |
| SAM Balanced |  |  | X |  |
| SAM Conservative Balanced |  |  | X |  |
| SAM Conservative Growth |  |  |  | X |
| SAM Flexible Income |  | X |  |  |
| SAM Strategic Growth |  |  |  | X |
| Short-Term Income | X |  |  |  |
| SmallCap |  |  |  | X |
| SmallCap Growth I |  |  |  | X |
| SmallCap S&P 600 Index |  |  |  | X |
| SmallCap Value II |  |  |  | X |
| Tax-Exempt Bond | X |  |  |  |

---

For more details on the payment schedule, go to: www.principal.com/tax-center.

Daily dividend funds declare dividends of daily net investments income each day their shares are priced. Daily funds distribute their accumulated declared dividends monthly. You may ask to have your dividends paid to you in cash. If you do not request cash payment, your dividend will be applied to purchase additional shares of the Fund monthly.

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Net realized capital gains, if any, are distributed annually in December. Payments are made to shareholders of record on the business day before the payable date. Capital gains may be taxable at different rates, depending on the length of time that the Fund holds its assets.

The Government Money Market and Money Market Funds do not seek to realize any capital gains or losses. If capital gains or losses were to occur, they could result in an increase or decrease in dividends.

Dividend and capital gains distributions will be reinvested, without a sales charge, in shares of the Fund from which the distribution is paid; however, you may authorize (on your application or at a later time) the distribution to be:

<sup>•</sup>

invested in shares of another of the Principal Funds without a sales charge (distributions of a Fund may be directed only to one receiving Fund); or

<sup>•</sup>

paid in cash, if the amount is $10 or more.

Generally, for federal income tax purposes, Fund distributions are taxable as ordinary income, except that any distributions of long-term capital gains will be taxed as such, regardless of how long Fund shares have been held. Special tax rules apply to Fund distributions to Individual Retirement Accounts and other retirement plans. A tax advisor should be consulted to determine the suitability of the Fund as an investment by such a plan and the tax treatment of distributions by the Fund. A tax advisor can also provide information on the potential impact of possible foreign, state, and local taxes. A Fund's investments in foreign securities may be subject to foreign withholding taxes. In that case, the Fund's yield on those securities would be decreased.

To the extent that distributions the 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/tax-center. 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. The 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.

A Fund's payment of income dividends and capital gains has the effect of reducing the share price by the amount of the payment. Distributions from a Fund, whether received in cash or reinvested in additional shares, may be subject to federal (and state) income tax. For these reasons, buying shares of a Fund shortly before it makes a distribution may be disadvantageous to you.

**FREQUENT PURCHASES AND REDEMPTIONS**

The Funds are not designed for, and do not knowingly accommodate, frequent purchases and redemptions of Fund shares. If you intend to trade frequently and/or use market timing investment strategies, you should not purchase these Funds.

Frequent purchases and redemptions pose a risk to the Funds because they may:

<sup>•</sup>

Disrupt the management of the Funds by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

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; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

causing unplanned portfolio turnover;

<sup>•</sup>

Hurt the portfolio performance of the Funds; and

<sup>•</sup>

Increase expenses of the Funds due to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

increased broker-dealer commissions and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

increased recordkeeping and related costs.

Certain Funds may be at greater risk of harm due to frequent purchases and redemptions. For example, those Funds that invest in foreign securities may appeal to investors attempting to take advantage of time-zone arbitrage. The Funds have adopted procedures to "fair value" foreign securities owned by the Funds each day to discourage these market timing transactions in shares of the Funds.

The Board has also adopted policies and procedures with respect to frequent purchases and redemptions of shares of the Funds. The Funds monitor shareholder trading activity to identify and take action against abuses. When we do identify abusive trading, we will apply our policies and procedures in a fair and uniform manner. While our policies and procedures are designed to identify and protect against abusive trading practices, there can be no certainty that we will identify and prevent abusive trading in all instances. If we are not able to identify such excessive trading practices, the Funds and their

------

shareholders may be harmed. The harm of undetected excessive trading in shares of the underlying funds in which the funds of funds invest could flow through to the funds of funds as they would for any fund shareholder. If we, or a Fund, deem abusive trading practices to be occurring, we will take action that may include, but is not limited to:

<sup>•</sup>

Rejecting exchange instructions from the shareholder or other person authorized by the shareholder to direct exchanges;

<sup>•</sup>

Restricting submission of exchange requests by, for example, allowing exchange requests to be submitted by 1st class U.S. mail only and disallowing requests made by facsimile, overnight courier, telephone, or via the internet;

<sup>•</sup>

Limiting the number of exchanges during a year; and

<sup>•</sup>

Taking such other action as directed by the Fund.

We expect the Government Money Market Fund to be used by shareholders for short-term investing and by certain selected accounts utilizing the Fund as a sweep vehicle. Therefore, reasonably frequent purchases and redemptions of Fund shares by shareholders do not present risks for other shareholders of the Fund, and the policies and procedures adopted by the Board of the Fund as applicable to other Funds are generally not applicable with respect to frequent purchases and redemptions of Fund shares.

The Funds have reserved the right to accept or reject, without prior written notice, any exchange requests. In some instances, an exchange may be completed before a determination of abusive trading. In those instances, we will reverse the exchange and return the account holdings to the positions held before the exchange. We will give the shareholder written notice in this instance.

<u>Institutional Class and Classes R-1, R-3, R-4, R-5, and R-6 Shares</u>

In addition to taking any of the foregoing actions, if we, or a Fund, deem abusive trading practices to be occurring, we may require a holding period of a minimum of 30 days before permitting exchanges among the Funds where there is evidence of at least one round-trip exchange (exchange or redemption of shares that were purchased within 30 days of the exchange/redemption).

The Funds have adopted an exchange frequency restriction for these classes, described above in "Exchange of Fund Shares" to limit excessive trading in fund shares.

**TAX CONSIDERATIONS**

It is a policy of each Fund to make distributions of substantially all of its respective investment income and any net realized capital gains. Shareholders are responsible for federal income tax (and any other taxes, including state and local income taxes, if applicable) on dividends and capital gains distributions whether such dividends or distributions are paid in cash or are reinvested in additional shares. Special tax rules apply to distributions from IRAs and other retirement accounts. You should consult a tax advisor to determine the suitability of the Fund as an investment by such a plan and the tax treatment of Fund distributions.

Generally, dividends paid by the Funds from interest, dividends, or net short-term capital gains will be taxed as ordinary income. Distributions properly designated by the Fund as deriving from net gains on securities held for more than one year are taxable as such (generally at a 15% tax rate for individuals and taxable trusts, some individuals and taxable trusts will be subject to a 20% tax rate), regardless of how long you have held your shares. Distributions of investment income properly designated by the Fund as derived from "qualified dividend income" will be taxed at the rates applicable to long-term capital gains. Some high-income individuals and taxable trusts will be subject to a Medicare 3.8% tax on unearned net investment income.

A return of capital is a non-dividend distribution that is not paid out of the earnings and profits of the Fund. A return of capital distribution is generally not taxed until your investment in the Fund has been recovered. A return of capital reduces your cost basis in the Fund, which may increase your tax liability upon the sale of your Fund shares or upon subsequent distributions in respect of your investment in the Fund.

Because of tax law requirements, you must provide the Fund with an accurate and certified taxpayer identification number (for individuals, generally a Social Security number) to avoid "back-up" withholding, which is imposed at a rate of 24%. The 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 who has provided either an incorrect tax identification number or no number at all, who is subject to backup withholding by the Internal Revenue Service for failure to report the receipt of interest or dividend income properly, or 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."

A shareholder recognizes gain or loss on the sale or redemption of shares of the 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 incurs a sales charge in acquiring shares of the Fund, disposes of such shares less than 91 days after they are acquired, and subsequently acquires shares of the 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.

Any gain resulting from the redemption or exchange of your shares will generally also be subject to tax. For shares acquired after January 1, 2012, you will need to select a cost basis method to be used to calculate your reported gains and losses prior to or at the time of any redemption or exchange. If you do not select a method, the Funds' default method of average cost will be applied to the transactions. The cost basis method used on your account could significantly affect your taxes due and should be carefully considered. You should consult your tax advisor for more information on your own tax situation, including possible foreign, state, and local taxes.

Investments by a Fund in certain debt instruments or derivatives may cause the Fund to recognize taxable income in excess of the cash generated by such instruments. As a result, the Fund could be required at times to liquidate other investments to satisfy its distribution requirements under the Internal Revenue Code. The Fund's use of derivatives will also affect the amount, timing, and character of the Fund's distributions.

Under U.S. Treasury Regulations, non-corporate Fund shareholders meeting certain holding period requirements may be able to deduct up to 20% of qualified REIT dividends passed through and reported to them by the Fund. The 20% deduction applies to qualified REIT dividends distributed during 2018-2025 tax years.

Early in each calendar year, each Fund will notify you of the amount and tax status of distributions paid to you for the preceding year.

A dividend or distribution made shortly after the purchase of shares of a Fund by a shareholder, although in effect a return of capital to that shareholder, would be taxable to that shareholder as described above, subject to a holding period requirement for dividends designated as qualified dividend income.

The information contained in this Prospectus is not a complete description of the federal, state, local, or foreign tax consequences of investing in the Funds. You should consult your tax advisor before investing in the Funds.

**Funds Investing in Securities Generating Tax-Exempt Income**

Distributions designated as "exempt-interest dividends" by a Fund investing in securities generating tax-exempt income are generally not subject to federal income tax. However, if you receive Social Security or railroad retirement benefits, you should consult your tax advisor to determine what effect, if any, an investment in such Funds may have on the federal taxation of your benefits. Some Funds may invest in "AMT-subject bonds," which are municipal obligations issued to finance certain "private activities," such as bonds used to finance airports, housing projects, student loan programs, and water and sewer projects. Interest on AMT-subject bonds is an item of tax preference for purposes of the federal individual alternative minimum tax ("AMT"). A portion of such Funds' distributions may, therefore, be subject to federal income taxes or to the federal individual alternative minimum tax. Some Funds may invest a portion of their assets in securities that generate income that is not exempt from federal (or state and local) income tax. Income exempt from federal tax may be subject to state and local income tax. In addition, any capital gains distributed by such Funds will be taxable as described in this section. A portion of the dividends paid by such Funds may be exempt from California State personal income tax, but not from California State franchise tax or California State corporate income tax. Corporate taxpayers should consult their tax advisor concerning the California state tax treatment of investments in such Funds.

**Choosing a Share Class and the Costs of Investing**

Before you invest, you should understand the characteristics of each share class so you can be sure to choose the class that is right for you. Fund and share class selections must be made at the time of purchase.

------

Classes differ regarding the costs associated with buying, redeeming, and holding shares. Which class is best for you depends upon:

<sup>•</sup>

the dollar amount you are investing,

<sup>•</sup>

the amount of time you plan to hold the investment,

<sup>•</sup>

any plans to make additional investments in the Principal Funds, and

<sup>•</sup>

eligibility to purchase the class.

The following sections describe the fees and expenses you may pay if you invest in a Fund. You may pay both one-time fees and ongoing fees. Fees and expenses are important because they lower your earnings. Before investing, you should be sure you understand the nature of different costs. Your Financial Professional can help you with this process and can help you choose the share class and Fund or Funds that are appropriate for you based upon your investment objective, risk tolerance, and other factors. Financial Professionals may receive different compensation depending upon which class of shares you purchase.

**Fees and Expenses of the Funds**

<u>Classes A, C, and J Shares</u>

These share classes may include a front-end sales charge and/or contingent deferred sales charge. There is no sales charge on shares of the Funds purchased with reinvested dividends or other distributions. You may obtain more information about sales charge reductions and waivers from your Financial Professional.

In some cases, the initial sales charge or contingent deferred sales charge may be waived or reduced. Appendix B to this Prospectus, titled "Intermediary-Specific Sales Charge Waivers and Reductions," contains information about intermediary-specific sales charge waivers and reductions that will be available if you purchase Fund shares through those intermediaries. The Prospectus discusses the initial sales charge or contingent deferred sales charge waivers or reductions that will be available if you purchase Fund shares directly from the Fund or through another intermediary not listed on Appendix B.

In all instances, to receive a waiver or reduction in the initial sales charge or contingent deferred sales charge, you or your Financial Professional must let the Fund know at the time you purchase or redeem shares that you qualify for such a waiver or reduction. It may be necessary for you to provide information and records, such as account statements, to determine your eligibility. If you or your Financial Professional do not let the Fund know that you are eligible for a waiver or reduction, you may not receive a sales charge discount to which you are otherwise entitled.

<u>Class C Shares</u>

Class C shares may not be suitable for large investments. Due to the higher expenses associated with Class C shares, it may be more advantageous for investors currently purchasing, intending to purchase, or with existing assets in amounts that may qualify for a reduced sales charge on Class A shares, including through Rights of Accumulation and/or Statement of Intent, to purchase Class A shares. Class C shares have higher annual expenses than Class A shares because they are subject to higher distribution fees.

The Fund seeks to prevent investments in Class C shares by shareholders with at least $1 million of investments in Principal Funds eligible for inclusion pursuant to Rights of Accumulation. If you are making an initial purchase of Principal Funds of $1,000,000 or more and have selected Class C shares, the purchase will be of Class A shares of the Fund(s) you have selected. If you are making subsequent purchases into your existing Principal Funds Class C share accounts and the combined value of the subsequent investment and your existing Classes A, C, and J share accounts combined for Rights of Accumulation purposes exceeds $1,000,000, the subsequent investment will be applied to purchase Class A shares of the Fund(s) you have selected.

<u>Institutional Class and Classes R-1, R-3, R-4, R-5, and R-6 Shares</u>

Fund shares are sold without a front-end sales charge and do not have a contingent deferred sales charge. There is no sales charge on Fund shares purchased with reinvested dividends or other distributions.

However, if you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary. Shares of each Fund are usually available in other share classes that have different fees and expenses.

**One-Time Fee - Initial Sales Charge**

<u>Class A Shares</u>

The offering price for Class A shares is the NAV next calculated after receipt of an investor's order in proper form by the Fund or its servicing agent, plus any applicable initial sales charge as shown in the table below. The right-hand column in the table indicates what portion of the sales charge is paid to Financial Professionals and their brokerage firms ("dealers") for selling Class A shares.

------

**Note:**

Because of rounding in the calculation of the offering price, the actual maximum front-end sales charge paid by an investor may be higher or lower than the percentages noted.

For more information regarding compensation paid to dealers, see "Distribution Plans and Intermediary Compensation."

**Fund(s):**

**California Municipal, Tax-Exempt Bond** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Class A Sales Charge as % of:** | **Class A Sales Charge as % of:** | **Dealer Allowance**<br> **as % of Offering Price** |
| **Amount of Purchase** | **Offering Price** | **Amount Invested** | **Dealer Allowance**<br> **as % of Offering Price** |
| Less than $100,000 | 3.75% | 3.90% | 3.00% |
| $100,000 but less than $250,000 | 2.75% | 2.83% | 2.25% |
| $250,000 or more | 0.00% | 0.00% | 0.00%\* |

---

\*

The Distributor may pay authorized dealers commissions on purchases of Class A shares over $250,000 calculated as follows: 1.00% on purchases between $250,000 and $4,999,999, 0.75% on purchases between $5 million and $9,999,999, 0.50% on purchases between $10 million and 49,999,999, and 0.25% on purchases of $50 million or more. The commission rate is determined based on the cumulative investments over the life of the account combined with the investments in existing Classes A, C, and J shares.

**Fund(s):**

**Core Fixed Income, Government & High Quality Bond** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Class A Sales Charge as % of:** | **Class A Sales Charge as % of:** | **Dealer Allowance**<br> **as % of Offering Price** |
| **Amount of Purchase** | **Offering Price** | **Amount Invested** | **Dealer Allowance**<br> **as % of Offering Price** |
| Less than $100,000 | 2.25% | 2.30% | 2.00% |
| $100,000 but less than $250,000 | 1.75% | 1.78% | 1.50% |
| $250,000 but less than $500,000 | 1.25% | 1.27% | 1.00% |
| $500,000 or more | 0.00% | 0.00% | 0.00%\* |

---

\*

The Distributor may pay authorized dealers commissions on purchases of Class A shares over $500,000 calculated as follows: 1.00% on purchases between $500,000 and $4,999,999, 0.50% on purchases between $5 million and $49,999,999, and 0.25% on purchases of $50 million or more. The commission rate is determined based on the cumulative investments over the life of the account combined with the investments in existing Classes A, C, and J shares.

**Fund(s)/Portfolio(s):**

**Core Plus Bond, Diversified Income, High Yield, Principal LifeTime 2010, Principal LifeTime 2020, Principal LifeTime 2030, Principal LifeTime Strategic Income, SAM Flexible Income** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Class A Sales Charge as % of:** | **Class A Sales Charge as % of:** | **Dealer Allowance**<br> **of Offering Price** |
| **Amount of Purchase** | **Offering Price** | **Amount Invested** | **Dealer Allowance**<br> **of Offering Price** |
| Less than $100,000 | 3.75% | 3.90% | 3.00% |
| $100,000 but less than $250,000 | 2.75% | 2.83% | 2.25% |
| $250,000 but less than $500,000 | 1.50% | 1.52% | 1.00% |
| $500,000 or more | 0.00% | 0.00% | 0.00%\* |

---

\*

The Distributor may pay authorized dealers commissions on purchases of Class A shares over $500,000 calculated as follows: 1.00% on purchases between $500,000 and $4,999,999, 0.50% on purchases between $5 million and $49,999,999, and 0.25% on purchases of $50 million or more. The commission rate is determined based on the cumulative investments over the life of the account combined with the investments in existing Classes A, C, and J shares.

**Fund(s):**

**Short-Term Income** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Class A Sales Charge as % of:** | **Class A Sales Charge as % of:** | **Dealer Allowance**<br> **as % of Offering Price** |
| **Amount of Purchase** | **Offering Price** | **Amount Invested** | **Dealer Allowance**<br> **as % of Offering Price** |
| Less than $100,000 | 2.25% | 2.30% | 2.00% |
| $100,000 but less than $250,000 | 1.75% | 1.78% | 1.50% |
| $250,000 or more | 0.00% | 0.00% | 0.00%\* |

---

\*

The Distributor may pay authorized dealers commissions on purchases of Class A shares over $250,000 calculated as follows: 1.00% on purchases between $250,000 and $4,999,999, 0.50% on purchases between $5 million and 49,999,999, and 0.25% on purchases of $50 million or more. The commission rate is determined based on the cumulative investments over the life of the account combined with the investments in existing Classes A, C, and J shares.

------

**Fund(s):**

**LargeCap S&P 500 Index** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Class A Sales Charge as % of:** | **Class A Sales Charge as % of:** | **Dealer Allowance**<br> **as % of Offering Price** |
| **Amount of Purchase** | **Offering Price** | **Amount Invested** | **Dealer Allowance**<br> **as % of Offering Price** |
| Less than $50,000 | 1.50% | 1.52% | 1.25% |
| $50,000 but less than $100,000 | 1.25% | 1.27% | 1.00% |
| $100,000 but less than $250,000 | 1.00% | 1.01% | 0.75% |
| $250,000 but less than $500,000 | 0.75% | 0.76% | 0.50% |
| $500,000 but less than $1,000,000 | 0.50% | 0.50% | 0.25% |
| $1,000,000 or more | 0.00% | 0.00% | 0.25% |

---

**All other Funds/Portfolios (except Money Market Fund, for which there is no Class A sales charge)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Class A Sales Charge as % of:** | **Class A Sales Charge as % of:** | **Dealer Allowance**<br> **as % of Offering Price** |
| **Amount of Purchase** | **Offering Price** | **Amount Invested** | **Dealer Allowance**<br> **as % of Offering Price** |
| Less than $50,000 | 5.50% | 5.82% | 4.75% |
| $50,000 but less than $100,000 | 4.75% | 4.99% | 4.00% |
| $100,000 but less than $250,000 | 3.75% | 3.90% | 3.00% |
| $250,000 but less than $500,000 | 3.00% | 3.09% | 2.50% |
| $500,000 but less than $1,000,000 | 2.00% | 2.04% | 1.75% |
| $1,000,000 or more | 0.00% | 0.00% | 0.00%\* |

---

\*

The Distributor may pay authorized dealers commissions on purchases of Class A shares over $1 million calculated as follows: 1.00% on purchases between $1,000,000 and $4,999,999, 0.50% on purchases between $5 million and $49,999,999, and 0.25% on purchases of $50 million or more. The commission rate is determined based on the cumulative investments over the life of the account combined with the investments in existing Classes A, C, and J shares.

*<u>Initial Sales Charge Waiver or Reduction</u>*

Class A shares of the Funds may be purchased without a sales charge or at a reduced sales charge. The availability of certain sales charge waivers and reductions will depend on whether you purchase your shares directly from the Fund or through a financial intermediary. Intermediaries may have different policies and procedures regarding the availability of initial (front-end) sales charge waivers or reductions. **Such intermediary-specific sales charge variations are described in Appendix B to this prospectus, titled "Intermediary-Specific Sales Charge Waivers and Reductions." If you purchase Fund shares through an intermediary listed on Appendix B, you will be eligible to the receive only the intermediary's applicable waivers and reductions described on Appendix B. If you purchase Fund shares directly from the Fund or through an intermediary not listed on Appendix B, you will be eligible to receive only the following initial sales charge waivers and reductions.** In all instances, it is your responsibility to notify the Fund or your financial intermediary at the time of purchase of any relationship or other facts qualifying you for sales charge waivers or reductions.

*<u>Initial Sales Charge Waiver - For Purchases of Fund Shares From the Fund or Through Intermediaries Not Listed on Appendix B</u>*

<sup>•</sup>

No initial sales charge will apply to purchases of Fund shares if the purchase is of sufficient size as disclosed in the preceding "Class A Sales Charges" table.

<sup>•</sup>

You may reinvest the Funds' Class A share redemption proceeds without a sales charge within 90 days of the redemption, if you previously paid a sales charge. Shares invested directly within the Class A Money Market Fund are not eligible for this waiver; however, shares in the Money Market Fund that were obtained by exchange of another Fund that imposed an initial sales charge are eligible.

<sup>•</sup>

A Fund's Class A shares may be purchased without an initial sales charge by the following individuals, groups, and/or entities:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

any employee or registered representative (and their immediate family members and employees) of an authorized broker-dealer or company that makes available shares of a Fund;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

clients investing in Class A shares through a "wrap account" or investment product offered through broker-dealers, registered investment advisors, and other financial institutions under which clients may pay a fee to the broker-dealer, registered investment advisor, or financial institution;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

any investor who buys Class A shares through an omnibus account held by financial intermediaries, such as a bank, broker-dealer, or other financial institution, and that does not accept or charge the initial sales charge;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

financial intermediaries who offer shares to self-directed investment brokerage accounts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

retirement plans or benefit plans, or participants in such plans, where the plan's investments in the Fund are part of an omnibus account. For clarification, such plans do not include individual retirement arrangements under IRC Section 408, such as Simplified Employee Pensions (SEP), SIMPLE IRAs or other IRAs; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

shareholders who acquired Class A shares of Principal Capital Appreciation Fund through that fund's acquisition of Class J shares of the LargeCap Blend Fund II.

<sup>•</sup>

The following two bullet points are only applicable to intermediaries that are affiliated with Principal Financial Group, Inc. A Fund's Class A shares may be purchased without an initial sales charge by the following individuals, groups, and/or entities:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Premier Credit Union when the shares are owned directly with Principal Funds; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

non-ERISA clients of Principal Global Investors LLC.

*<u>Initial Sales Charge Reduction - For Purchases of Fund Shares From the Fund or Through Intermediaries Not Listed on Appendix B</u>*

(3) The maximum sales charge that applies to purchases of Class A shares by qualified plans administered by Expertplan, Inc. that were previously converted from B share plans is the sales charge that applies to purchases of at least $250,000 but less than $500,000 as described in the sales charge tables; the regular sales charge applies to purchases of $500,000 or more in such accounts and to all purchases of the Diversified Income Fund, LargeCap S&P 500 Index Fund, and Short-Term Income Fund shares.

(4) The maximum sales charge for all purchases made in an account that is included in a SIMPLE IRA, SEP, SAR-SEP, non-qualified deferred compensation, or payroll deduction plan established before March 1, 2002 with Principal Management Corporation as the Funds' transfer agent, is the sales charge that applies to purchases of at least $100,000 but less than $250,000 as described in the sales charge tables; the regular sales charge applies to purchases of $250,000 or more in such accounts and to all purchases of the Diversified Income Fund, LargeCap S&P 500 Index Fund, and Short-Term Income Fund shares. The reduced sales charge applies to purchases made by or on behalf of participants to such plans who became participants on or before July 28, 2007.

<u>Class C Shares</u>

Purchases of Class C shares are not subject to a front-end sales load. The offering price for Class C shares is the NAV next calculated after receipt of an investor's order in proper form by the Fund or its servicing agent, with no initial sales charge. The Distributor currently pays authorized dealers commissions of up to 1.00% of the amount invested in Class C shares.

------

<u>Institutional Class and Classes J, R-1, R-3, R-4, R-5, and R-6 Shares</u>

Purchases of these classes of shares are not subject to a front-end sales load. The offering price for such shares is the NAV next calculated after receipt of an investor's order in proper form by the Fund or its servicing agent, with no initial sales charge.

**One-Time Fee - Contingent Deferred Sales Charge ("CDSC")**

If you sell (redeem) shares and the CDSC is imposed, it will reduce the amount of sales proceeds.

The CDSC is based on the lesser of the market value at the time of redemption or the initial purchase price of the shares sold. The CDSC does not apply to shares purchased with reinvested dividends or other distributions. The CDSC is not charged on exchanges. However, the original purchase date of the shares from which an exchange is made determines if the newly acquired shares are subject to the CDSC when they are sold.

If you sell some but not all of the shares in your account, the shares not subject to a CDSC will be sold first. Other shares will be sold in the order purchased (first in, first out). The CDSC does not apply to shares redeemed according to a systematic withdrawal plan limited to no more than 1.00% per month (measured cumulatively for non-monthly plans) of the value of the Fund account at the time, and beginning on the date, the systematic withdrawal plan is established.

<u>Class A Shares</u>

Class A shares purchased in amounts that are of sufficient size to qualify for a 0.00% sales charge, as disclosed in the "Class A Sales Charges" table, are generally subject to a CDSC of 1.00% (0.25% for the LargeCap S&P 500 Index Fund) if the shares are redeemed during the first 18 months after purchase (12 months after purchase for the California Municipal, Short-Term Income, and Tax-Exempt Bond Funds), unless the dealer, at its discretion, has waived the commission. The Distributor may pay authorized dealers commissions up to 1.00% of the price of such purchases.

There is no CDSC on Class A shares of the Money Market Fund that are directly purchased by the shareholder. However, for Class A Money Market Fund shares that are obtained through an exchange of shares from another Fund, the CDSC originally applicable to the purchase of such Fund's shares will continue to apply.

The CDSC generally will not be imposed on redemptions of shares purchased through an omnibus account with certain financial intermediaries, such as a bank or other financial institution, where no sales charge payments were advanced for purchases made through these entities.

<u>Class C Shares</u>

Each initial and subsequent purchase of Class C shares is subject to a CDSC of 1.00% for a period of 12 months from the date of purchase. Shares will be redeemed first from shares purchased through reinvested dividends and capital gain distributions, which are not subject to the CDSC, and then in order of purchase. Within 90 days after the sale of Class C shares, you may reinvest any amount of the sale proceeds in Class C shares and those shares purchased will not be subject to the 12-month CDSC.

<u>Class J Shares</u>

If you sell your Class J shares within 18 months of purchase, a CDSC may be imposed on the shares sold. The CDSC, if any, is determined by multiplying by 1.00% the lesser of the market value at the time of redemption or the initial purchase price of the shares sold. Within 90 days after the sale of Class J shares, you may reinvest the amount of the sale proceeds into any Principal Funds Class J shares Fund; shares purchased by redemption proceeds are not subject to the eighteen-month CDSC.

<u>Institutional Class and Classes R-1, R-3, R-4, R-5, and R-6 Shares</u>

These share classes are not subject to a CDSC.

*<u>CDSC Waiver</u>*

The CDSC may be waived on Classes A, C, and J shares of the Funds; waivers vary depending on how shares are purchased. Certain waivers and reductions apply when shares are purchased directly from the Fund; others apply when shares are purchased through an intermediary. Intermediaries may have different policies and procedures regarding the availability of waivers or reductions of the CDSC. **Such intermediary-specific sales charge variations are described in Appendix B to this Prospectus, titled "Intermediary-Specific Sales Charge Waivers and Reductions." If you purchase Fund shares through an intermediary listed on Appendix B, you will be eligible to the receive only the intermediary's applicable waivers and reductions described on Appendix B. If you purchase Fund shares directly from the Fund or through an intermediary not listed on Appendix B, you will be eligible to receive only the following CDSC waivers and reductions.** In all instances, it is your responsibility to notify the Fund or your financial intermediary at the time of redemption of any facts qualifying you for sales charge waivers or reductions.

------

*<u>CDSC Waiver - For Purchases of Fund Shares From the Fund or Through Intermediaries Not Listed on Appendix B</u>*

For Classes A, C, and J shares, the CDSC is waived on shares:

<sup>•</sup>

redeemed within 90 days after an account is re-registered due to a shareholder's death;

<sup>•</sup>

redeemed to pay surrender fees;

<sup>•</sup>

redeemed to pay retirement plan fees;

<sup>•</sup>

redeemed involuntarily from accounts with small balances;

<sup>•</sup>

redeemed due to the shareholder's disability (as defined by the Internal Revenue Code) provided the shares were purchased before the disability;

<sup>•</sup>

redeemed from retirement plans to satisfy minimum distribution rules under the Internal Revenue Code;

<sup>•</sup>

redeemed from a retirement plan to assure the plan complies with the Internal Revenue Code;

<sup>•</sup>

redeemed from retirement plans qualified under Section 401(a) of the Internal Revenue Code due to the plan participant's death, disability, retirement, or separation from service after attaining age 55;

<sup>•</sup>

redeemed from retirement plans to satisfy excess contribution rules under the Internal Revenue Code; or

<sup>•</sup>

redeemed using a systematic withdrawal plan (up to 1% per month (measured cumulatively with respect to non-monthly plans) of the value of the fund account at the time, and beginning on the date, the systematic withdrawal plan begins). (The free withdrawal privilege not used in a calendar year is not added to the free withdrawal privileges for any following year.)

For Class J shares, the CDSC also is waived on shares:

<sup>•</sup>

redeemed that were purchased pursuant to the Small Amount Force Out program (SAFO); or

<sup>•</sup>

of the Money Market Fund redeemed within 30 days of the initial purchase if the redemption proceeds are transferred to another Principal IRA, defined as either a fixed or variable annuity issued by Principal Life Insurance Company to fund an IRA, a Principal Bank IRA product, or a WRAP account IRA sponsored by Principal Securities, Inc.

**Ongoing Fees**

The ongoing fees are the operating expenses of a Fund, which are described in the "Annual Fund Operating Expenses" table included in the Summary for each Fund. These expenses reduce the value of each share you own. Because they are ongoing, they increase the cost of investing in the Funds.

Each fund of funds, as a shareholder in the underlying funds, bears its pro rata share of the operating expenses incurred by each underlying fund. The investment return of each fund of funds is net of the underlying funds' operating expenses.

Each Fund pays ongoing fees to PGI and others who provide services to the Fund. These fees include:

<sup>•</sup>

Management Fee (all Classes) — Through the Management Agreement with the Registrant, PGI has agreed to provide investment advisory services and corporate administrative services to the Funds.

<sup>•</sup>

Distribution Fee (Classes A, C, J, R-1, R-3, and R-4) — Each Fund has adopted a distribution plan under Rule 12b-1 of the 1940 Act for the foregoing classes, with the exception of the Money Market Fund, Class A. Under the plan, these classes of each Fund pay a distribution fee based on the average daily NAV of the Fund. These fees pay distribution and other expenses for the sale of Fund shares and for services provided to shareholders. Because they are ongoing fees, over time, these fees may exceed other types of sales charges.

<sup>•</sup>

Other Expenses (all Classes) — A portion of expenses that are allocated to all classes of the Funds. Other expenses include interest expense, expenses related to fund investments, and index licensing fees. Additional examples of other expenses include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Transfer Agent Fee (all Classes) — Principal Shareholder Services, Inc. ("PSS") has entered into a Transfer Agency Agreement with the Registrant under which PSS provides transfer agent services to these classes. For Class J shares, these services are currently provided at a rate that includes a profit; for Classes A, C, and Institutional Class shares, these services are currently provided at cost. The Fund does not pay for these services for Classes R-1, R-3, R-4, R-5, and R-6 shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Certain Operating Expenses (Institutional Class and Classes A, C, J, and R-6) — Expenses of registering and qualifying shares for sale, the cost of producing and distributing reports and prospectuses to shareholders of these classes, the cost of shareholder meetings held solely for shareholders of these classes, and other operating expenses of the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Service Fee (Classes R-1, R-3, R-4, and R-5) — PGI has entered into a Service Agreement with the Registrant under which PGI is required to provide certain personal services to shareholders (plan sponsors) and beneficial owners (plan members), such as responding to plan sponsor and plan member inquiries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Administrative Services Fee (Classes R-1, R-3, R-4, and R-5) — PGI has entered into an Administrative Services Agreement with the Registrant under which PGI is required to provide shareholder and administrative services for retirement plans and other beneficial owners of Fund shares.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

<sup>•</sup>

Acquired Fund Fees and Expenses (all Classes) — Fees and expenses charged by other investment companies in which a Fund invests a portion of its assets.

**DISTRIBUTION PLANS AND INTERMEDIARY COMPENSATION**

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

Principal Funds Distributor, Inc. ("PFD" or the "Distributor") is the distributor for the shares of Principal Funds, Inc. PFD is an affiliate of Principal Life Insurance Company, a subsidiary of Principal Financial Group, Inc., and a member of Principal<sup>®</sup>.

The Funds have adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act (the "12b-1 Plan") for each of the Classes A, C, J, R-1, R-3, and R-4 shares of the Funds. Under the 12b-1 Plan, except as noted below, each Fund makes payments from its assets attributable to the particular share class to the Funds' Distributor for distribution-related expenses and for providing services to shareholders of that share class. Payments under the 12b-1 Plan are made by the Funds to the Distributor pursuant to the 12b-1 Plan regardless of the expenses incurred by the Distributor. When the Distributor receives Rule 12b-1 fees, it may pay some or all of them to financial intermediaries whose customers are shareholders of the Funds for sales support services and for providing services to shareholders of that share class. Financial intermediaries may include, among others, broker-dealers, registered investment advisors, banks, trust companies, pension plan consultants, retirement plan administrators, and insurance companies. These financial intermediaries include Principal Securities, Inc., a broker-dealer affiliated with PGI. 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.

The maximum annual Rule 12b-1 fee for distribution-related expenses and/or for providing services to shareholders under each 12b-1 Plan (as a percentage of average daily net assets) is:

---

| | |
|:---|:---|
| **Share Class** | &nbsp;&nbsp; **Maximum Annualized**<br> **Rule 12b-1 Fee**<br>|
| A<sup>(1)</sup> <br>| 0.25%<sup>(2)</sup> <br>|
| C | 1.00% |
| J | 0.15% |
| R-1 | 0.35% |
| R-3 | 0.25% |
| R-4 | 0.10% |

---

(1) Class A shares of the Money Market Fund are not subject to Rule 12b-1 fees.

(2) The maximum annualized Rule 12b-1 fee for Class A shares of the Government & High Quality Bond, LargeCap S&P 500 Index, and Short-Term Income Funds is 0.15%.

The Distributor generally uses Rule 12b-1 fees to finance any activity that is primarily intended to result in the sale of shares and for providing services to shareholders of the share class, and the activities vary depending on the share class. In addition to shareholder services, examples of such sales or distribution-related expenses include, but are not limited to:

<sup>•</sup>

Compensation to salespeople and selected dealers, including ongoing commission payments.

<sup>•</sup>

Printing of prospectuses and statements of additional information and reports for other-than-existing shareholders, and preparing and conducting sales seminars.

Examples of services to shareholders include furnishing information as to the status of shareholder accounts, responding to telephone and written inquiries of shareholders, and assisting shareholders with tax information.

Payments under the 12b-1 Plans will not automatically terminate for Funds that are closed to new investors or to additional purchases by existing shareholders. The Board will determine whether to terminate, modify, or leave unchanged the 12b-1 Plans when the Board directs the implementation of the closure of a Fund.

<u>Classes A and C Shares</u>

Generally, to receive 12b-1 fees from the Distributor, dealers or other intermediaries must be the dealer of record for shares with average daily net assets of at least $100,000. Generally, Class A shares must be held for three months before these fees are paid. In the case of Class C shares, generally these fees are not paid until such shares have been held for twelve months.

------

<u>Class J Shares</u>

Effective December 31, 2015, the Distributor has contractually agreed to limit the distribution fees attributable to Class J normally payable by the Money Market Fund. This waiver is in place through February 29, 2024 and will reduce the Money Market Fund's distribution fees by 0.15%. It is expected that the fee waiver will continue through the period disclosed; however, Principal Funds, Inc. and the Distributor, the parties to the agreement, may agree to terminate the fee waiver prior to the end of the period.

Effective January 1, 2021, the Distributor has voluntarily agreed to limit the distribution fees attributable to Class J, reducing the Funds' distribution fees for Class J shares by 0.020%.\* This voluntary waiver may be revised or terminated at any time without notice to shareholders.

\*

For the period from December 31, 2016 to December 31, 2020, the voluntary waiver was 0.030%.

**Commissions, Finder's Fees, and Ongoing Payments**

See "Choosing a Share Class and The Costs of Investing" for more details.

<u>Class A Shares</u>

All or a portion of the initial sales charge that you pay may be paid by the Distributor to intermediaries selling Class A shares. The Distributor may pay these intermediaries a commission of up to 1.00% on purchases of $1,000,000 or more (or $250,000 or $500,000 or more depending on the Fund purchased), which are not subject to initial sales charges.

<u>Classes A, J, R-1, R-3, and R-4 Shares</u>

Additionally, the Distributor generally makes ongoing 12b-1 fee payments to your intermediary at a rate that varies by class, as noted above under "Distribution and/or Service (12b-1) Fees."

<u>Class C Shares</u>

The Distributor will pay, at the time of your purchase, a commission to your intermediary equal to 1.00% of your investment. Additionally, the Distributor generally makes ongoing 12b-1 fee payments to your intermediary as noted above under "Distribution and/or Service (12b-1) Fees."

**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.

<u>Classes A, C, and J Shares</u>

In addition to payments pursuant to 12b-1 plans, sales charges, commissions, and finder's fees, including compensation for referrals, PGI or its affiliates enter into agreements with some intermediaries pursuant to which the intermediaries receive payments for providing services relating to Fund shares. Examples of such services are administrative, networking, recordkeeping, sub-transfer agency, and shareholder services. In some situations, the Fund will reimburse PGI or its affiliates for making such payments; in others, the Fund may make such additional payments directly to intermediaries.

PGI or its affiliates also pay, without reimbursement from the Fund, compensation from their own resources to certain intermediaries that support the distribution of shares of the Fund or provide services to Fund shareholders.

Such additional payments vary, but generally do not exceed: (a) 0.25% of the current year's sales of Fund shares by that intermediary and/or (b) 0.25% of average net asset value of Fund shares held by clients of such intermediary.

<u>Institutional Class and Classes R-1, R-3, R-4, R-5, and R-6 Shares</u>

In addition to payments pursuant to applicable 12b-1 plans, PGI or its affiliates enter into agreements with some intermediaries pursuant to which the intermediaries receive payments for providing services relating to Fund shares. Examples of such services are administrative, networking, recordkeeping, sub-transfer agency, and/or shareholder services. For Classes R-1, R-3, R-4, and R-5 shares, such compensation is generally paid out of the Service Fees and Administrative Services Fees that are disclosed in this Prospectus as Other Expenses. For Institutional Class shares, in some situations the Fund will reimburse PGI or its affiliates for making such payments; in others, the Fund may make such payments directly to the intermediaries.

PGI or its affiliates also pay, without reimbursement from the Fund, compensation from their own resources to certain intermediaries that support the distribution of shares of the Fund or provide services to Fund shareholders.

For Institutional Class shares, such payments vary, but generally do not exceed: (a) 0.10% of the current year's sales of Fund shares by that intermediary or (b) 0.10% of the average net asset value of Fund shares held by clients of such intermediary.

------

Principal Life Insurance Company is one such intermediary that provides services relating to Fund shares held in employee benefit plans, and it is typically paid all of the Service Fees and Administrative Services Fees pertaining to such plans, and it also is paid other compensation described in this section as payable to intermediaries.

The Distributor and its affiliates do not pay compensation to intermediaries (other than to affiliates of the Distributor) for distribution services or other services to Fund shareholders for Class R-6 shares. For more information, see the SAI.

<u>Institutional Class and Classes A, C, J, R-1, R-3, R-4, R-5, and R-6 Shares</u>

The intermediary may pay to its Financial Professionals some or all of the amounts the Distributor and its affiliates pay to the intermediary. The amounts paid to intermediaries vary by share class and by Fund.

In some cases, the Distributor and its affiliates will provide payments or reimbursements in connection with the costs of conferences, educational seminars, training, and marketing efforts related to the Funds. Such activities may be sponsored by intermediaries or the Distributor. The costs associated with such activities may include travel, lodging, entertainment, and meals. In some cases, the Distributor 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 the Fund over another investment, or to recommend one share class of the Fund over another share class. 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**

**Statements**

You will receive quarterly statements for the Funds you own, or if you purchase through a third-party intermediary, on a periodic basis established by such intermediary. Such statements provide the number and value of shares you own, transactions during the period, dividends declared or paid, and other information. The year-end statement includes information for all transactions that took place during the year. Please review your statement as soon as you receive it. Keep your statements, as you may need them for tax reporting purposes.

Generally, each time you buy, sell, or exchange shares in Principal Funds, you will receive a confirmation shortly thereafter. It summarizes all the key information - what you bought or sold, the amount of the transaction, and other important information.

Certain purchases and sales are only included on your quarterly statement. These include accounts:

<sup>•</sup>

when the only activity during the quarter are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

purchases of shares from reinvested dividends and/or capital gains,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

purchases under an Automatic Investment Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

sales under a Systematic Withdrawal Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

purchases or sales under an Automatic Exchange Election, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

conversion of Class C shares into Class A shares

<sup>•</sup>

used to fund certain individual retirement or individual pension plans, or

<sup>•</sup>

established under a payroll deduction plan.

If you need information about your account(s) at other times, you may call us or access your account on the internet.

**Orders Placed by Intermediaries**

Principal Funds may have an agreement with your intermediary, such as a broker-dealer, third party administrator, or trust company, that permits the intermediary to receive orders on behalf of the Fund until 3:00 p.m. Central Time. The agreement may include authorization for your intermediary to designate other intermediaries ("sub-designees") to receive orders on behalf of the Fund on the same terms that apply to the intermediary. In such cases, if your intermediary or a sub-designee receives your order in correct form by 3:00 p.m. Central Time, transmits it to the Fund, and pays for it in accordance with the agreement, the Fund will price the order at the next NAV per share it computes after your intermediary or sub-designee received your order.

The time at which the Fund prices orders and the time until which the Fund or your intermediary or sub-designee will accept orders may change in the case of an emergency or if the NYSE closes at a time other than 3:00 p.m. Central Time.

------

**Transactions through Financial Institutions/Professionals**

Financial institutions and dealers may charge their customers a processing or service fee in connection with the purchase or redemption of Fund shares. The amount and applicability of such a fee is determined and disclosed to its customers by each individual financial institution or dealer. Processing or service fees typically are fixed, nominal dollar amounts and are in addition to the sales and other charges described in this Prospectus and the SAI.

Your financial institution or dealer will provide you with specific information about any processing or service fees you will be charged.

**Telephone and Internet Instructions**

The Funds reserve the right to refuse telephone and/or internet instructions. You are liable for a loss resulting from a fraudulent telephone or internet instruction that we reasonably believe is genuine. We use reasonable procedures to assure instructions are genuine. If the procedures are not followed, we may be liable for loss due to unauthorized or fraudulent transactions. The procedures include: recording all telephone instructions, requiring the use of a password (Personal Identification Number) for internet instructions, requesting personal identification information, and sending written confirmation to the shareholder's address of record.

If you elect telephone privileges, instructions regarding your account(s) may be given to us via the telephone or internet. Your instructions:

<sup>•</sup>

may be given by calling us;

<sup>•</sup>

may be given via our website for certain transactions (for security purposes you need a username and password to use any of the internet services, including viewing your account information online. If you do not have a username or password, you may obtain one at our website); or

<sup>•</sup>

may be given to your Financial Professional (a person employed by or affiliated with broker/dealer firms) who will in turn contact us with your instructions.

Instructions received from one owner are binding on all owners. In the case of an account owned by a corporation or trust, instructions received from an authorized person are binding on the corporation/trust unless we have a written notification requiring that more than one authorized person execute written instructions.

**Signature Guarantees**

Certain transactions require that your signature be guaranteed. A signature guarantee may help protect your account against fraud. If required, the signature(s) must be guaranteed by a commercial bank, trust company, credit union, savings and loan, national securities exchange member, or brokerage firm that participates in a Medallion program recognized by the Securities Transfer Association. A signature guaranteed by a notary public or savings bank is not acceptable. We reserve the right to require a signature guarantee on any transaction.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Signature guarantees are required in any of the following circumstances:** | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| if you sell more than $100,000 (in the aggregate) from the Funds | X | X | X |  |  |  |  |  |  |
| if you sell more than $500,000 (in the aggregate) from the Funds |  |  |  | X | X | X | X | X | X |
| if you sell more than $10,000,000 if you have the proceeds sent electronically to a <br> previously authorized U.S. bank account<br>|  |  |  | X |  |  |  |  |  |
| if a sales proceeds check is payable to a party other than the account shareholder(s) |  |  |  | X | X | X | X | X | X |
| if a sales proceeds check is payable to a party other than the account shareholder(s) or <br> Principal Life, Principal Bank, a retirement plan trustee or custodian that has agreed in <br> writing to accept a transfer of assets from the Fund or Principal Securities, Inc. payable <br> through Pershing<br>| X | X | X |  |  |  |  |  |  |
| to change ownership of an account | X | X | X | X | X | X | X | X | X |
| to add telephone transaction services and/or wire or ACH redemption privileges to an <br> existing account if there is not a common owner between the bank account and mutual <br> fund account<br>| X | X | X | X | X | X | X | X | X |
| to change bank account information designated under an existing telephone withdrawal <br> plan if there is not a common owner between the bank account and mutual fund account<br>| X | X | X | X | X | X | X | X | X |
| to wire or ACH to a shareholder's U.S. bank account not previously authorized or when <br> the request does not include a voided check or deposit slip indicating a common owner <br> between the bank account and mutual fund account<br>| X | X | X | X | X | X | X | X | X |
| to exchange or transfer among accounts with different ownership | X | X | X | X | X | X | X | X | X |
| to have a sales proceeds check mailed to an address other than the address on the <br> account or to the address on the account if it has been changed within the preceding 15 <br> days<br>| X | X | X | X | X | X | X | X | X |

---

**Reservation of Rights**

Principal Funds reserves the right to amend or terminate the special plans described in this Prospectus. Shareholders will be notified of any such action to the extent required by law.

------

Such plans include, for example, automatic investment, systematic withdrawal, waiver of Fund minimums for certain accounts, and waiver or reduction of the sales charge or contingent deferred sales charge for certain purchasers.

**Classes A, C, and J Shares - Minimum Account Balance**

Each Fund has a minimum required account balance of $1,000. The Fund reserves the right to redeem all shares in your account if the value of your account falls below $1,000. The Fund will mail the redemption proceeds to you. An involuntary redemption of a small account will not be triggered by market conditions alone. The Fund will notify you before involuntarily redeeming your account. You will have 30 days to make an additional investment of an amount that brings your account up to the required minimum. Each Fund reserves the right to increase the required minimum.

**Householding**

To avoid sending duplicate copies of materials to households, mailings for accounts held by members of your household may be combined so that only one copy of each Prospectus and Annual and Semi-Annual Reports will be mailed. In addition, your account information may be included with other householded accounts on the same quarterly and annual statements. The consolidation of these mailings, called householding, benefits Principal Funds and its shareholders by reduced printing and mailing expenses. If you prefer to receive multiple copies of these materials, you may write or call Principal Funds. Householding will be stopped within 30 days after we receive your request.

**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.

**Financial Statements**

Shareholders will receive annual financial statements for the Funds, audited by the Funds' independent registered public accounting firm. Shareholders will also receive semi-annual financial statements that are unaudited.

------

**APPENDIX A—DESCRIPTION OF BOND RATINGS**

<u>Moody's Investors Service, Inc. Rating Definitions:</u>

Long-Term Obligation Ratings

Ratings assigned on Moody's global long-term obligation rating scales are forward-looking opinions of the relative credit risk of financial obligations issued by non-financial corporates, financial institutions, structured finance vehicles, project finance vehicles, and public sector entities. Long-term ratings are assigned to issuers or obligations with an original maturity of one year or more and reflect both on the likelihood of a default or impairment on contractual financial obligations and the expected financial loss suffered in the event of default or impairment.<sup>1</sup>

<sup>1</sup>

*For certain structured finance, preferred stock and hybrid securities in which payment default events are either not defined or do not match investor's expectations for timely payment, the ratings reflect the likelihood of impairment and the expected financial loss in the event of impairment.* 

---

| | |
|:---|:---|
| Aaa: | Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk. |
| Aa: | Obligations rated Aa are judged to be of high quality and are subject to very low credit risk. |
| A: | Obligations rated A are considered upper-medium grade and are subject to low credit risk. |
| Baa: | &nbsp;&nbsp; Obligations rated Baa are subject to moderate credit risk. They are considered medium-grade and as such may <br> possess certain speculative characteristics.<br>|
| Ba: | Obligations rated Ba are judged to be speculative and are subject to substantial credit risk. |
| B: | Obligations rated B are considered speculative and are subject to high credit risk. |
| Caa: | Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk. |
| Ca: | &nbsp;&nbsp; Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of <br> recovery of principal and interest.<br>|
| C: | &nbsp;&nbsp; Obligations rated C are the lowest rated class of bonds and are typically in default, with little prospect for <br> recovery of principal or interest.<br>|
| **NOTE:** | &nbsp;&nbsp; Moody's appends numerical modifiers, 1, 2, and 3 to each generic rating classification from Aa through Caa. <br> The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category, the modifier 2 <br> indicates a mid-range ranking, and the modifier 3 indicates a ranking in the lower end of that generic rating <br> category. Additionally, a "(hyb)" indicator is appended to all ratings of hybrid securities issued by banks, issuers, <br> financial companies, and securities firms.\*<br>|

---

\*

*By their terms, hybrid securities allow for the omission of scheduled dividends, interest, or principal payments, which can potentially result in impairment if such an omission occurs. Hybrid securities may also be subject to contractually allowable write-downs of principal that could result in impairment. Together the hybrid indicator, the long-term obligation rating assigned to a hybrid security is an expression of the relative credit risk associated with that security.*

SHORT-TERM NOTES: Short-term ratings are assigned to obligations with an original maturity of thirteen months or less and reflect both on the likelihood of a default or impairment on contractual financial obligations and the expected financial loss suffered in the event of default. Moody's employs the following three designations, all judged to be investment grade, to indicate the relative repayment ability of rated issuers:

Issuers rated Prime-1 (or related supporting institutions) have a superior ability to repay short-term debt obligations.

Issuers rated Prime-2 (or related supporting institutions) have a strong ability to repay short-term debt obligations.

Issuers rated Prime-3 (or related supporting institutions) have an acceptable ability to repay short-term obligations.

Issuers rated Not Prime do not fall within any of the Prime rating categories.

US MUNICIPAL SHORT-TERM DEBT: The Municipal Investment Grade (MIG) scale is used to rate US municipal bonds of up to five years maturity. MIG ratings are divided into three levels - MIG 1 through MIG 3 - while speculative grade short-term obligations are designated SG.

MIG 1 denotes superior credit quality, afforded excellent protection from highly reliable liquidity support, or demonstrated broad-based access to the market for refinancing.

MIG 2 denotes strong credit quality with ample margins of protection, although not as large as in the preceding group.

------

MIG 3 notes are of acceptable credit quality. Liquidity and cash-flow protection may be narrow and market access for refinancing is likely to be less well-established.

SG denotes speculative-grade credit quality and may lack sufficient margins of protection.

<u>Description of S&P Global Ratings' Credit Rating Definitions:</u>

S&P Global's credit rating, both long-term and short-term, is a forward-looking opinion of the creditworthiness of an obligor with respect to a specific obligation. This assessment takes into consideration the creditworthiness of guarantors, insurers, or other forms of credit enhancement on the obligation.

The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment as to market price or suitability for a particular investor.

The ratings are statements of opinion as of the date they are expressed furnished by the issuer or obtained by S&P Global Ratings from other sources S&P Global Ratings considers reliable. S&P Global Ratings does not perform an audit in connection with any rating and may, on occasion, rely on unaudited financial information. The ratings may be changed, suspended, or withdrawn as a result of changes in, or unavailability of, such information, or for other circumstances.

The ratings are based, in varying degrees, on the following considerations:

<sup>•</sup>

Likelihood of payment - capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation;

<sup>•</sup>

Nature of and provisions of the financial obligation;

<sup>•</sup>

Protection afforded by, and relative position of, the financial obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditor's rights.

LONG-TERM CREDIT RATINGS:

---

| | |
|:---|:---|
| AAA: | &nbsp;&nbsp; Obligations rated 'AAA' have the highest rating assigned by S&P Global Ratings. The obligor's capacity to <br> meet its financial commitment on the obligation is extremely strong.<br>|
| AA: | &nbsp;&nbsp; Obligations rated 'AA' differ from the highest-rated issues only in small degree. The obligor's capacity to <br> meet its financial commitment on the obligation is very strong.<br>|
| A:  | &nbsp;&nbsp; Obligations rated 'A' have a strong capacity to meet financial commitment on the obligation although they <br> are somewhat more susceptible to the adverse effects of changes in circumstances and economic <br> conditions than obligations in higher-rated categories.<br>|
| BBB: | &nbsp;&nbsp; Obligations rated 'BBB' exhibit adequate protection parameters; however, adverse economic conditions or <br> changing circumstances are more likely to lead to a weakened capacity to meet financial commitment on <br> the obligation.<br>|
| BB, B, CCC,<br> CC and C:<br>| &nbsp;&nbsp; Obligations rated 'BB', 'B', 'CCC', 'CC', and 'C' are regarded, on balance, as having significant speculative <br> characteristics. 'BB' indicates the lowest degree of speculation and 'C' the highest degree of speculation. <br> While such obligations will likely have some quality and protective characteristics, these may be <br> outweighed by large uncertainties or major risk exposures to adverse conditions. <br>|
| BB: | &nbsp;&nbsp; Obligations rated 'BB' are less vulnerable to nonpayment than other speculative issues. However it faces <br> major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which <br> could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.<br>|
| B: | &nbsp;&nbsp; Obligations rated 'B' are more vulnerable to nonpayment than 'BB' but the obligor currently has the <br> capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic <br> conditions will likely impair this capacity.<br>|
| CCC: | &nbsp;&nbsp; Obligations rated 'CCC' are currently vulnerable to nonpayment and is dependent upon favorable <br> business, financial, and economic conditions for the obligor to meet its financial commitment on the <br> obligation. If adverse business, financial, or economic conditions occur, the obligor is not likely to have the <br> capacity to meet its financial commitment on the obligation.<br>|
| CC: | &nbsp;&nbsp; Obligations rated 'CC' are currently highly vulnerable to nonpayment. The 'CC' rating is used when a <br> default has not yet occurred but S&P Global Ratings expects default to be a virtual certainty, regardless of <br> anticipated time to default.<br>|
| C:  | &nbsp;&nbsp; The rating 'C' is highly vulnerable to nonpayment, the obligation is expected to have lower relative seniority <br> or lower ultimate recovery compared to higher rated obligations. <br>|

---

------

---

| | |
|:---|:---|
| D:  | &nbsp;&nbsp; Obligations rated 'D' are in default, or in breach of an imputed promise. For non-hybrid capital instruments, <br> the 'D' rating category is used when payments on an obligation are not made on the date due, unless S&P <br> Global Ratings believes that such payments will be made within five business days in the absence of a <br> stated grace period or within the earlier of the stated grace period or 30 calendar days. The rating will also <br> be used upon filing for bankruptcy petition or the taking of similar action and where default is a virtual <br> certainty. If an obligation is subject to a distressed exchange offer the rating is lowered to 'D'.<br>|

---

Plus (+) or Minus (-): The ratings from 'AA' to 'CCC' may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.

NR: Indicates that no rating has been requested, that there is insufficient information on which to base a rating or that S&P Global Ratings does not rate a particular type of obligation as a matter of policy.

SHORT-TERM CREDIT RATINGS: Ratings are graded into four categories, ranging from 'A-1' for the highest quality obligations to 'D' for the lowest.

---

| | |
|:---|:---|
| A-1:  | &nbsp;&nbsp; This is the highest category. The obligor's capacity to meet its financial commitment on the obligation is strong. <br> Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's <br> capacity to meet its financial commitment on these obligations is extremely strong.<br>|
| A-2:  | &nbsp;&nbsp; Issues carrying this designation are somewhat more susceptible to the adverse effects of the changes in <br> circumstances and economic conditions than obligations in higher rating categories. However, the obligor's <br> capacity to meet its financial commitment on the obligation is satisfactory.<br>|
| A-3:  | &nbsp;&nbsp; Issues carrying this designation exhibit adequate capacity to meet their financial obligations. However, adverse <br> economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to <br> meet it financial commitment on the obligation.<br>|
| B:  | &nbsp;&nbsp; Issues rated 'B' are regarded as vulnerable and have significant speculative characteristics. The obligor has <br> capacity to meet financial commitments; however, it faces major ongoing uncertainties which could lead to <br> obligor's inadequate capacity to meet its financial obligations.<br>|
| C:  | &nbsp;&nbsp; This rating is assigned to short-term debt obligations that are currently vulnerable to nonpayment and is <br> dependent upon favorable business, financial, and economic conditions to meet its financial commitment on the <br> obligation.<br>|
| D:  | &nbsp;&nbsp; This rating indicates that the issue is either in default or in breach of an imputed promise. For non-hybrid capital <br> instruments, the 'D' rating category is used when payments on an obligation are not made on the date due, <br> unless S&P Global Ratings believes that such payments will be made within five business days in the absence <br> of a stated grace period or within the earlier of the stated grace period or 30 calendar days. The rating will also <br> be used upon filing for bankruptcy petition or the taking of similar action and where default is a virtual certainty. <br> If an obligation is subject to a distressed exchange offer the rating is lowered to 'D'.<br>|

---

MUNICIPAL SHORT-TERM NOTE RATINGS: S&P Global Ratings rates U.S. municipal notes with a maturity of less than three years as follows:

---

| | |
|:---|:---|
| SP-1:  | &nbsp;&nbsp; A strong capacity to pay principal and interest. Issues that possess a very strong capacity to pay debt service is <br> given a "+" designation.<br>|
| SP-2:  | &nbsp;&nbsp; A satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic <br> changes over the terms of the notes.<br>|
| SP-3:  | A speculative capacity to pay principal and interest. |

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**APPENDIX B—INTERMEDIARY-SPECIFIC SALES CHARGE WAIVERS AND REDUCTIONS**

Certain intermediaries have different policies and procedures regarding the availability of sales charge waivers and reductions, which are discussed below. In all instances, it is the purchaser's responsibility to notify the Fund or the purchaser's financial intermediary at the time of purchase of any relationship or other facts qualifying the purchaser for sales charge waivers or reductions. In order to receive a waiver or reduction offered by one intermediary or the Fund, the purchaser must purchase Fund shares from the Fund or intermediary offering the waiver or reduction. Please see the section of the prospectus entitled "CHOOSING A SHARE CLASS AND THE COSTS OF INVESTING" for more information on sales charges and waivers available for different classes.

Currently, the following intermediaries have implemented a schedule of sales charge waivers and reductions described below:

**<u>Ameriprise Financial</u>**

*<u>Class A Shares Front-End/Initial Sales Charge Waivers on Class A Shares Available at Ameriprise Financial</u>*

The following information applies to Class A purchases if you have an account with or otherwise purchase fund shares through Ameriprise Financial.

Shareholders purchasing Fund shares through an Ameriprise Financial brokerage account are eligible for the following front-end sales change waivers (also referred to as initial sales charge waivers), which may differ from those disclosed elsewhere in this Fund's prospectus or SAI:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs or SAR-SEPs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same Fund (but not any other fund within the same fund family).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares exchanged from Class C shares of the same fund in the month of or following the 7-year anniversary of the purchase date. To the extent that this prospectus elsewhere provides for a waiver with respect to exchanges of Class C shares or conversion of Class C shares following a shorter holding period, that waiver will apply.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Employees and registered representatives of Ameriprise Financial or its affiliates and their immediate family members.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased by or through qualified accounts (including IRAs, Coverdell Education Savings Accounts, 401(k)s, 403(b) TSCAs subject to ERISA and defined benefit plans) that are held by a covered family member, defined as an Ameriprise financial advisor and/or the advisor's spouse, advisor's lineal ascendant (mother, father, grandmother, grandfather, great grandmother, great grandfather), advisor's lineal descendant (son, step-son, daughter, step-daughter, grandson, granddaughter, great grandson, great granddaughter, including through adoption) or any spouse of a covered family member who is a lineal descendant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within 90 days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (i.e., Rights of Reinstatement).

**<u>Edward D. Jones & Co., L.P.</u>**

Effective on or after March 1, 2021, the following information supersedes prior information with respect to transactions and positions held in fund shares through an Edward Jones system. If you purchase fund shares on the Edward Jones commission and fee-based platforms, you are eligible only for the following sales charge discounts (also referred to as "breakpoints") and waivers, which can differ from discounts and waivers described elsewhere in the mutual fund prospectus or statement of additional information ("SAI") or through another broker-dealer. In all instances, it is your responsibility to inform Edward Jones at the time of purchase of any relationship, holdings of Principal Funds, Inc., or other facts qualifying the purchaser for discounts or waivers. Edward Jones can ask for documentation of such circumstance. You should contact Edward Jones if you have questions regarding your eligibility for these discounts and waivers.

*<u>Breakpoints at Edward Jones</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Breakpoint pricing, otherwise known as volume pricing, at dollar thresholds as described in the prospectus.

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*<u>Rights of Accumulation ("ROA") at Edward Jones</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

The applicable sales charge on a purchase of Class A shares is determined by taking into account all share classes (except certain money market funds and any assets held in group retirement plans) of Principal Funds, Inc. held by the shareholder or in an account grouped by Edward Jones with other accounts for the purpose of providing certain pricing considerations ("pricing groups"). If grouping assets as a shareholder, this includes all share classes held on the Edward Jones platform and/or held on another platform. The inclusion of eligible fund family assets in the ROA calculation is dependent on the shareholder notifying Edward Jones of such assets at the time of calculation. Money market funds are included only if such shares were sold with a sales charge at the time of purchase or acquired in exchange for shares purchased with a sales charge.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

The employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to establish or change ROA for the IRA accounts associated with the plan to a plan-level grouping as opposed to including all share classes at a shareholder or pricing group level.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

ROA is determined by calculating the higher of cost minus redemptions or market value (current shares x NAV).

*<u>Letter of Intent ("LOI") at Edward Jones</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Through an LOI, shareholders can receive the sales charge and breakpoint discounts for purchases shareholders intend to make over a 13-month period from the date Edward Jones receives the LOI. The LOI combines the current market value of any existing qualifying holdings and account types with the value that the shareholder intends to buy over a 13-month period to calculate the front-end sales charge and any breakpoint discounts. Each purchase the shareholder makes during that 13-month period will receive the sales charge and breakpoint discount that applies to the total amount. The inclusion of eligible fund family assets in the LOI calculation is dependent on the shareholder notifying Edward Jones of such assets at the time of calculation. Purchases made before the LOI is received by Edward Jones are not adjusted under the LOI and will not reduce the sales charge previously paid. Sales charges will be adjusted if the LOI is not met.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

If the employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to establish or change ROA for the IRA accounts associated with the plan to a plan-level grouping, LOIs will also be at the plan-level and may only be established by the employer.

*<u>Sales Charge Waivers at Edward Jones</u>*

Sales charges are waived for the following shareholders and in the following situations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Associates of Edward Jones and its affiliates and their family members who are in the same pricing group (as determined by Edward Jones under its policies and procedures) as the associate. This waiver will continue for the remainder of the associate's life if the associate retires from Edward Jones in good-standing and remains in good standing pursuant to Edward Jones' policies and procedures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased in an Edward Jones fee-based program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased through reinvestment of capital gains distributions and dividend reinvestment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased from the proceeds of redeemed shares of the same fund family so long as the following conditions are met: 1) the proceeds are from the sale of shares within 60 days of the purchase, and 2) the sale and purchase are made in the same share class and the same account or the purchase is made in an individual retirement account with proceeds from liquidations in a non-retirement account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares exchanged into Class A shares from another share class so long as the exchange is into the same fund and was initiated at the discretion of Edward Jones. Edward Jones is responsible for any remaining CDSC due to the fund company, if applicable. Any future purchases are subject to the applicable sales charge as disclosed in the prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Exchanges from Class C shares to Class A shares of the same fund, generally, in the 84th month following the anniversary of the purchase date or earlier at the discretion of Edward Jones.

*<u>Contingent Deferred Sales Charge ("CDSC") Waivers at Edward Jones</u>*

If the shareholder purchases shares that are subject to a CDSC and those shares are redeemed before the CDSC is expired, the shareholder is responsible to pay the CDSC, except in the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Death or disability of the shareholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Systematic withdrawals with up to 10% per year of the account value.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Return of excess contributions from an Individual Retirement Account (IRA).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after the year the shareholder reaches qualified age based on applicable IRA regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold to pay Edward Jones fees or costs in such cases where the transaction is initiated by Edward Jones.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares exchanged in an Edward Jones fee-based program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares acquired through NAV reinstatement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares redeemed at the discretion of Edward Jones for Minimum Balances, as described below.

*<u>Other Important Information Regarding Transactions Through Edward Jones</u>*

Minimum Purchase Amounts (Per Fund & Account)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Initial purchase minimum: $250

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Subsequent purchase minimum: none

Minimum Balances

Edward Jones has the right to redeem at its discretion fund holdings with a balance of $250 or less. The following are examples of accounts that are not included in this policy:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

A fee-based account held on an Edward Jones platform

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

A 529 account held on an Edward Jones platform

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

An account with an active systematic investment plan or LOI Exchanging Share Classes

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

At any time it deems necessary, Edward Jones has the authority to change a share class to Class A shares of the same fund at NAV.

**<u>Janney Montgomery Scott</u>**

Effective May 1, 2020, if you purchase fund shares through a Janney Montgomery Scott LLC ("Janney") brokerage account, you will be eligible for the following load waivers (front-end sales charge waivers and contingent deferred sales charge ("CDSC"), or back-end sales charge, waivers) and discounts, which may differ from those disclosed elsewhere in this fund's Prospectus or SAI.

*<u>Front-end Sales Charge\* Waivers on Class A Shares Available at Janney</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased by employees and registered representatives of Janney or its affiliates and their family members as designated by Janney.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within ninety (90) days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (i.e., right of reinstatement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares acquired through a right of reinstatement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Class C shares that are no longer subject to a contingent deferred sales charge and are converted to Class A shares of the same fund pursuant to Janney's policies and procedures.

*<u>CDSC Waivers on Class A and C Shares Available at Janney</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold upon the death or disability of the shareholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold as part of a systematic withdrawal plan as described in the fund's Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold in connection with a return of excess contributions from an IRA account.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after the year the shareholder reaches their qualified age based on applicable IRS regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold to pay Janney fees but only if the transaction is initiated by Janney.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares acquired through a right of reinstatement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares exchanged into the same share class of a different fund.

*<u>Front-end Sales Charge\* Discounts Available at Janney: Breakpoints, Rights of Accumulation, and/or Letters of Intent</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Breakpoints as described in the fund's Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Rights of accumulation ("ROA"), which entitle shareholders to breakpoint discounts, will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser's household at Janney. Eligible fund family assets not held at Janney may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Letters of intent ("LOI") which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Janney Montgomery Scott may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such assets.

\*Also referred to as an "initial sales charge."

**<u>Merrill Lynch</u>**

Shareholders purchasing Fund shares through a Merrill Lynch platform or account will be eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in this Fund's prospectus or SAI.

*<u>Front-end Sales Load Waivers on Class A Shares Available at Merrill Lynch</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Employer-sponsored retirement, deferred compensation and employee benefit plans (including health savings accounts) and trusts used to fund those plans, provided that the shares are not held in a commission-based brokerage account and shares are held for the benefit of the plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased by a 529 Plan (does not include 529 Plan units or 529-specific share classes or equivalents).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased through a Merrill Lynch affiliated investment advisory program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares exchanged due to the holdings moving from a Merrill Lynch affiliated investment advisory program to a Merrill Lynch brokerage (non-advisory) account pursuant to Merrill Lynch's policies relating to sales load discounts and waivers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased by third party investment advisors on behalf of their advisory clients through Merrill Lynch's platform.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares of funds purchased through the Merrill Edge Self-Directed platform.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares exchanged from Class C (i.e. level-load) shares of the same fund pursuant to Merrill Lynch's policies relating to sales load discounts and waivers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Employees and registered representatives of Merrill Lynch or its affiliates and their family members.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Directors or Trustees of the Fund, and employees of the Fund's investment adviser or any of its affiliates, as described in this prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Eligible shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within 90 days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (known as Rights of Reinstatement). Automated transactions (i.e. systematic purchases and withdrawals) and purchases made after shares are automatically sold to pay Merrill Lynch's account maintenance fees are not eligible for reinstatement.

*<u>CDSC Waivers on Class A, B and C Shares Available at Merrill Lynch</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Death or disability of the shareholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold as part of a systematic withdrawal plan as described in the Fund's prospectus.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Return of excess contributions from an IRA Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold as part of a required minimum distribution for IRA and retirement accounts pursuant to the Internal Revenue Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold to pay Merrill Lynch fees but only if the transaction is initiated by Merrill Lynch.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares acquired through a right of reinstatement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares held in retirement brokerage accounts, that are exchanged for a lower cost share class due to transfer to certain fee based accounts or platforms (applicable to A and C shares only).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares received through an exchange due to the holdings moving from a Merrill Lynch affiliated investment advisory program to a Merrill Lynch brokerage (non-advisory) account pursuant to Merrill Lynch's policies relating to sales load discounts and waivers.

*<u>Front-end load Discounts Available at Merrill Lynch: Breakpoints, Rights of Accumulation & Letters of Intent</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Breakpoints as described in this prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Rights of Accumulation (ROA) which entitle shareholders to breakpoint discounts as described in the Fund's prospectus will be automatically calculated based on the aggregated holding of fund family assets held by accounts (including 529 program holdings, where applicable) within the purchaser's household at Merrill Lynch. Eligible fund family assets not held at Merrill Lynch may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Letters of Intent (LOI) which allow for breakpoint discounts based on anticipated purchases within a fund family, through Merrill Lynch, over a 13-month period of time.

**<u>Morgan Stanley Wealth Management</u>**

*<u>Initial Sales Charge Waivers on Class A Shares Available at Morgan Stanley Wealth Management</u>*

Effective July 1, 2018, if you purchase Class A Fund shares through a Morgan Stanley Wealth Management transactional brokerage account you will be eligible only for the following initial sales charge waivers, which differ from those disclosed elsewhere in this prospectus or the SAI.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Morgan Stanley employee and employee-related accounts according to Morgan Stanley's account linking rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased through reinvestment of dividends and capital gains distributions when purchasing shares of the same fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased through a Morgan Stanley self-directed brokerage account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Class C (i.e., level-load) shares that are no longer subject to a contingent deferred sales charge and are converted to Class A shares of the same fund pursuant to Morgan Stanley Wealth Management's share class conversion program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased from the proceeds of redemptions within the same fund family, provided (i) the repurchase occurs within 90 days following the redemption, (ii) the redemption and purchase occur in the same account, and (iii) redeemed shares were subject to a front-end or deferred sales charge.

**<u>Oppenheimer & Co. Inc.</u>**

Effective June 12, 2020, shareholders purchasing Fund shares through an Oppenheimer & Co. Inc. ("OPCO") platform or account are eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in this Fund's prospectus or SAI.

*<u>Front-end Sales Load Waivers on Class A Shares Available at OPCO</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Employer-sponsored retirement, deferred compensation and employee benefit plans (including health savings accounts) and trusts used to fund those plans, provided that the shares are not held in a commission-based brokerage account and shares are held for the benefit of the plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased by or through a 529 Plan.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased through a OPCO affiliated investment advisory program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within 90 days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (known as Rights of Restatement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

A shareholder in the Fund's Class C shares will have their shares converted at net asset value to Class A shares (or the appropriate share class) of the Fund if the shares are no longer subject to a CDSC and the conversion is in line with the policies and procedures of OPCO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Employees and registered representatives of OPCO or its affiliates and their family members.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Directors or Trustees of the Fund, and employees of the Fund's investment adviser or any of its affiliates, as described in this prospectus.

*<u>CDSC Waivers on A, B and C Shares Available at OPCO</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Death or disability of the shareholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold as part of a systematic withdrawal plan as described in the Fund's prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Return of excess contributions from an IRA Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold as part of a required minimum distribution for IRA and retirement accounts due to the shareholder reaching the qualified age based on applicable IRS regulations as described in the prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold to pay OPCO fees but only if the transaction is initiated by OPCO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares acquired through a right of reinstatement.

*<u>Front-end Load Discounts Available at OPCO: Breakpoints, Rights of Accumulation & Letters of Intent</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Breakpoints as described in this prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Rights of Accumulation (ROA) which entitle shareholders to breakpoint discounts will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser's household at OPCO. Eligible fund family assets not held at OPCO may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets.

**<u>Raymond James</u>**

Effective March 1, 2019, shareholders purchasing fund shares through a Raymond James & Associates, Inc., Raymond James Financial Services, Inc. or each entity's affiliates ("Raymond James") platform or account, or through an introducing broker-dealer or independent registered investment adviser for which Raymond James provides trade execution, clearance, and/or custody services, will be eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in this fund's prospectus or SAI.

*<u>Front-end Sales Load Waivers on Class A Shares Available at Raymond James</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased in an investment advisory program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased within the same fund family through a systematic reinvestment of capital gains and dividend distributions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Employees and registered representatives of Raymond James or its affiliates and their family members as designated by Raymond James.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within 90 days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (known as Rights of Reinstatement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

A shareholder in the Fund's Class C shares will have their shares converted at net asset value to Class A shares (or the appropriate share class) of the Fund if the shares are no longer subject to a CDSC and the conversion is in line with the policies and procedures of Raymond James.

------

*<u>CDSC Waivers on Classes A and C Shares Available at Raymond James</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Death or disability of the shareholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold as part of a systematic withdrawal plan as described in the fund's prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Return of excess contributions from an IRA Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold as part of a required minimum distribution for IRA and retirement accounts due to the shareholder reaching their qualified age based on applicable IRS regulations as described in the fund's prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold to pay Raymond James fees but only if the transaction is initiated by Raymond James.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares acquired through a right of reinstatement.

*<u>Front-end Load Discounts Available at Raymond James: Breakpoints, Rights of Accumulation, and/or Letters of Intent</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Breakpoints as described in this prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Rights of accumulation which entitle shareholders to breakpoint discounts will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser's household at Raymond James. Eligible fund family assets not held at Raymond James may be included in the calculation of rights of accumulation only if the shareholder notifies his or her financial advisor about such assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Letters of intent which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Raymond James may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such assets.

**<u>Robert W. Baird & Co. Incorporated</u>**

Effective June 15, 2020, shareholders purchasing fund shares through a Robert W. Baird & Co. Incorporated ("Baird") platform or account will only be eligible for the following sales charge waivers (front-end sales charge waivers and CDSC waivers) and discounts, which may differ from those disclosed elsewhere in this prospectus or the SAI

*<u>Front-end Sales Charge Waivers on Investors A-shares Available at Baird</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing share of the same fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Share purchase by employees and registers representatives of Baird or its affiliate and their family members as designated by Baird.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares purchase from the proceeds of redemptions from another Principal Funds, Inc. Fund, provided (1) the repurchase occurs within 90 days following the redemption, (2) the redemption and purchase occur in the same accounts, and (3) redeemed shares were subject to a front-end or deferred sales charge (known as rights of reinstatement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

A shareholder in the Funds Investor C Shares will have their share converted at net asset value to Investor A shares of the fund if the shares are no longer subject to CDSC and the conversion is in line with the policies and procedures of Baird.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Employer-sponsored retirement plans or charitable accounts in a transactional brokerage account at Baird, including 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans. For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs or SAR-SEPs.

*<u>CDSC Waivers on Investor A and C shares Available at Baird</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold due to death or disability of the shareholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold as part of a systematic withdrawal plan as described in the Fund's Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares bought due to returns of excess contributions from an IRA Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold as part of a required minimum distribution for IRA and retirement accounts due to the shareholder reaching the qualified age based on applicable IRS regulations as described in the fund's prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares sold to pay Baird fees but only if the transaction is initiated by Baird.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Shares acquired through a right of reinstatement.

------

*<u>Front-end Sales Charge Discounts Available at Baird: Breakpoints and/or Rights of Accumulations</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Breakpoints as described in this prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Rights of accumulations which entitles shareholders to breakpoint discounts will be automatically calculated based on the aggregated holding of Principal Funds, Inc.'s assets held by accounts within the purchaser's household at Baird. Eligible Principal Funds, Inc.'s assets not held at Baird may be included in the rights of accumulations calculation only if the shareholder notifies his or her financial advisor about such assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Letters of Intent (LOI) allow for breakpoint discounts based on anticipated purchases of Principal Funds, Inc.'s funds through Baird, over a 13-month period of time.

**<u>Stifel, Nicolaus & Company, Incorporated</u>**

Effective July 1, 2020, shareholders purchasing Fund shares through a Stifel, Nicolaus & Company, Incorporated ("Stifel") platform or account or who own shares for which Stifel or an affiliate is the broker-dealer of record are eligible for the following additional sales charge waiver.

*<u>Front-end Sales Load Waivers on Class A Shares Available at Stifel</u>*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Class C shares that have been held for more than seven (7) years will be converted to Class A shares of the same Fund pursuant to Stifel's policies and procedures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

All other sales charge waivers and reductions described elsewhere in the Fund' Prospectus or SAI still apply.

**<u>US Bancorp Investments, Inc. ("USBI")</u>**

Effective February 2021, Shareholders who purchase fund shares through a USBI platform or account or who own shares for which USBI or an affiliate is the broker-dealer of record, where the shares are held in an omnibus account at the fund, and who are invested in Class C shares will have their shares converted at NAV to Class A shares (or the appropriate share class) of the fund if the shares are no longer subject to a CDSC and the conversion is in line with the policies and procedures of USBI.

(updated March 1, 2021)

------

**APPENDIX C — FINANCIAL HIGHLIGHTS**

The following financial highlights tables are intended to help you understand each Fund's financial performance for the periods shown. Certain information reflects returns for a single Fund share. The total returns in each table represent the rate that an investor would have earned or lost each period on an investment in the Fund (assuming reinvestment of all distributions). This information has been derived from the financial statements audited by Ernst & Young LLP, Independent Registered Public Accounting Firm, whose report, along with each Fund's financial statements, is included in Principal Funds, Inc. [<u>Annual Report to Shareholders</u>](https://www.sec.gov/Archives/edgar/data/898745/000089874522000215/primary-document.htm) for the fiscal year ended October 31, 2022, which is available upon request, and incorporated by reference into the SAI.

To request a free copy of the latest Annual or Semi-Annual report for the Funds, you may telephone 1-800-222-5852.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>| **Net Asset**<br> **Value, End**<br> **of Period**<br>|
| **CALIFORNIA MUNICIPAL FUND** | **CALIFORNIA MUNICIPAL FUND** | **CALIFORNIA MUNICIPAL FUND** | **CALIFORNIA MUNICIPAL FUND** | **CALIFORNIA MUNICIPAL FUND** | **CALIFORNIA MUNICIPAL FUND** | **CALIFORNIA MUNICIPAL FUND** | **CALIFORNIA MUNICIPAL FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $11.02 | $0.25 | $(1.75) | $(1.50) | $(0.25) | $(0.25) | $9.27 |
| 2021 | 10.85 | 0.24 | 0.17 | 0.41 | (0.24) | (0.24) | 11.02 |
| 2020 | 10.80 | 0.25 | 0.01 | 0.26 | (0.21) | (0.21) | 10.85 |
| 2019 | 10.10 | 0.32 | 0.67 | 0.99 | (0.29) | (0.29) | 10.80 |
| 2018 | 10.53 | 0.36 | (0.46) | (0.10) | (0.33) | (0.33) | 10.10 |
| **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** |
| 2022 | 11.05 | 0.16 | (1.76) | (1.60) | (0.16) | (0.16) | 9.29 |
| 2021 | 10.87 | 0.15 | 0.18 | 0.33 | (0.15) | (0.15) | 11.05 |
| 2020 | 10.82 | 0.16 | 0.01 | 0.17 | (0.12) | (0.12) | 10.87 |
| 2019 | 10.12 | 0.24 | 0.66 | 0.90 | (0.20) | (0.20) | 10.82 |
| 2018 | 10.55 | 0.27 | (0.46) | (0.19) | (0.24) | (0.24) | 10.12 |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 11.03 | 0.27 | (1.76) | (1.49) | (0.27) | (0.27) | 9.27 |
| 2021 | 10.86 | 0.26 | 0.18 | 0.44 | (0.27) | (0.27) | 11.03 |
| 2020 | 10.81 | 0.28 | 0.01 | 0.29 | (0.24) | (0.24) | 10.86 |
| 2019 | 10.10 | 0.35 | 0.68 | 1.03 | (0.32) | (0.32) | 10.81 |
| 2018 | 10.54 | 0.38 | (0.46) | (0.08) | (0.36) | (0.36) | 10.10 |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

<sup>(c)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(d)</sup>

Excludes interest expense and fees paid through inverse floater agreements. See "Operating Policies" in notes to financial statements.

<sup>(e)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| (13.86)%<sup>(b)(c)</sup> <br>| $328411 | 0.78%<br> 0.72%<sup>(d)</sup> <br>| 2.42% | 38.9% |
| 3.89<sup>(b)(c)</sup> <br>| 471777 | 0.79<br> 0.76<sup>(d)</sup> <br>| 2.11 | 13.2 |
| 2.44<sup>(c)</sup> <br>| 446357 | 0.79<br> 0.76<sup>(d)</sup> <br>| 2.29 | 40.1 |
| 9.94<sup>(c)</sup> <br>| 420656 | 0.81<br> 0.78<sup>(d)</sup> <br>| 3.08 | 42.3 |
| (1.00)<sup>(c)</sup> <br>| 283709 | 0.83<br> 0.77<sup>(d)</sup> <br>| 3.45 | 49.0 |
| (14.55)<sup>(c)</sup> <br>| 26031 | 1.60<br> 1.54<sup>(d)</sup> <br>| 1.59 | 38.9 |
| 3.05<sup>(c)</sup> <br>| 39213 | 1.59<br> 1.56<sup>(d)</sup> <br>| 1.31 | 13.2 |
| 1.61<sup>(c)</sup> <br>| 41166 | 1.60<br> 1.57<sup>(d)</sup> <br>| 1.49 | 40.1 |
| 9.01<sup>(c)</sup> <br>| 41462 | 1.65<br> 1.62<sup>(d)</sup> <br>| 2.26 | 42.3 |
| (1.82)<sup>(c)</sup> <br>| 33333 | 1.67<br> 1.61<sup>(d)</sup> <br>| 2.62 | 49.0 |
| (13.65) | 198684 | 0.53<sup>(e)</sup> <br>0.47<sup>(d)(e)</sup> <br>| 2.68 | 38.9 |
| 4.05 | 217309 | 0.54<sup>(e)</sup> <br>0.51<sup>(d)(e)</sup> <br>| 2.36 | 13.2 |
| 2.70 | 166577 | 0.54<sup>(e)</sup> <br>0.51<sup>(d)(e)</sup> <br>| 2.60 | 40.1 |
| 10.34 | 132152 | 0.54<sup>(e)</sup> <br>0.51<sup>(d)(e)</sup> <br>| 3.35 | 42.3 |
| (0.84) | 96073 | 0.57<sup>(e)</sup> <br>0.51<sup>(d)(e)</sup> <br>| 3.71 | 49.0 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>| **Net Asset**<br> **Value, End**<br> **of Period**<br>|
| **CORE FIXED INCOME FUND** | **CORE FIXED INCOME FUND** | **CORE FIXED INCOME FUND** | **CORE FIXED INCOME FUND** | **CORE FIXED INCOME FUND** | **CORE FIXED INCOME FUND** | **CORE FIXED INCOME FUND** | **CORE FIXED INCOME FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $9.95 | $0.16 | $(1.72) | $(1.56) | $(0.20) | $(0.20) | $8.19 |
| 2021 | 10.17 | 0.13 | (0.16) | (0.03) | (0.19) | (0.19) | 9.95 |
| 2020 | 9.78 | 0.18 | 0.43 | 0.61 | (0.22) | (0.22) | 10.17 |
| 2019 | 9.18 | 0.24 | 0.64 | 0.88 | (0.28) | (0.28) | 9.78 |
| 2018 | 9.56 | 0.28 | (0.37) | (0.09) | (0.29) | (0.29) | 9.18 |
| **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** |
| 2022 | 10.02 | 0.08 | (1.74) | (1.66) | (0.12) | (0.12) | 8.24 |
| 2021 | 10.24 | 0.05 | (0.16) | (0.11) | (0.11) | (0.11) | 10.02 |
| 2020 | 9.85 | 0.10 | 0.43 | 0.53 | (0.14) | (0.14) | 10.24 |
| 2019 | 9.23 | 0.16 | 0.66 | 0.82 | (0.20) | (0.20) | 9.85 |
| 2018 | 9.62 | 0.21 | (0.38) | (0.17) | (0.22) | (0.22) | 9.23 |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 9.98 | 0.17 | (1.72) | (1.55) | (0.22) | (0.22) | 8.21 |
| 2021 | 10.19 | 0.15 | (0.15) | – | (0.21) | (0.21) | 9.98 |
| 2020 | 9.81 | 0.19 | 0.43 | 0.62 | (0.24) | (0.24) | 10.19 |
| 2019 | 9.20 | 0.25 | 0.65 | 0.90 | (0.29) | (0.29) | 9.81 |
| 2018 | 9.59 | 0.30 | (0.39) | (0.09) | (0.30) | (0.30) | 9.20 |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 9.99 | 0.18 | (1.72) | (1.54) | (0.23) | (0.23) | 8.22 |
| 2021 | 10.20 | 0.16 | (0.15) | 0.01 | (0.22) | (0.22) | 9.99 |
| 2020 | 9.81 | 0.20 | 0.44 | 0.64 | (0.25) | (0.25) | 10.20 |
| 2019 | 9.20 | 0.27 | 0.65 | 0.92 | (0.31) | (0.31) | 9.81 |
| 2018 | 9.59 | 0.31 | (0.38) | (0.07) | (0.32) | (0.32) | 9.20 |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 9.99 | 0.11 | (1.72) | (1.61) | (0.16) | (0.16) | 8.22 |
| 2021 | 10.20 | 0.08 | (0.15) | (0.07) | (0.14) | (0.14) | 9.99 |
| 2020 | 9.82 | 0.13 | 0.42 | 0.55 | (0.17) | (0.17) | 10.20 |
| 2019 | 9.21 | 0.20 | 0.65 | 0.85 | (0.24) | (0.24) | 9.82 |
| 2018 | 9.59 | 0.24 | (0.37) | (0.13) | (0.25) | (0.25) | 9.21 |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

<sup>(c)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(d)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(e)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(f)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| (15.89)%<sup>(b)(c)</sup> <br>| $199804 | 0.76% | –% | 1.71% | 13.7% |
| (0.18)<sup>(b)(c)</sup> <br>| 293606 | 0.78 | – | 1.30 | 15.8 |
| 6.32<sup>(c)</sup> <br>| 337294 | 0.82 | – | 1.77 | 21.0 |
| 9.73<sup>(c)</sup> <br>| 261383 | 0.88 | – | 2.52 | 19.8 |
| (0.94)<sup>(c)</sup> <br>| 226417 | 0.88 | – | 3.01 | 9.2 |
| (16.63)<sup>(c)</sup> <br>| 18318 | 1.62 | – | 0.84 | 13.7 |
| (1.10)<sup>(c)</sup> <br>| 31255 | 1.61 | – | 0.48 | 15.8 |
| 5.42<sup>(c)</sup> <br>| 53725 | 1.63 | – | 0.97 | 21.0 |
| 8.99<sup>(c)</sup> <br>| 49336 | 1.71 | – | 1.71 | 19.8 |
| (1.82)<sup>(c)</sup> <br>| 52031 | 1.67 | – | 2.21 | 9.2 |
| (15.74)<sup>(c)</sup> <br>| 84794 | 0.62<sup>(d)</sup> <br>| 0.64<sup>(e)</sup> <br>| 1.85 | 13.7 |
| (0.05)<sup>(c)</sup> <br>| 114866 | 0.64<sup>(d)</sup> <br>| 0.66<sup>(e)</sup> <br>| 1.44 | 15.8 |
| 6.34<sup>(c)</sup> <br>| 132319 | 0.68<sup>(d)</sup> <br>| 0.71<sup>(e)</sup> <br>| 1.91 | 21.0 |
| 9.94<sup>(c)</sup> <br>| 97925 | 0.77<sup>(d)</sup> <br>| 0.80<sup>(e)</sup> <br>| 2.64 | 19.8 |
| (0.91)<sup>(c)</sup> <br>| 85102 | 0.74<sup>(d)</sup> <br>| 0.77<sup>(e)</sup> <br>| 3.15 | 9.2 |
| (15.60) | 636066 | 0.47<sup>(f)</sup> <br>| – | 2.00 | 13.7 |
| 0.06 | 770550 | 0.54<sup>(f)</sup> <br>| – | 1.55 | 15.8 |
| 6.56 | 674265 | 0.58<sup>(f)</sup> <br>| – | 2.02 | 21.0 |
| 10.14 | 519888 | 0.58<sup>(f)</sup> <br>| – | 2.82 | 19.8 |
| (0.75) | 413469 | 0.58<sup>(f)</sup> <br>| – | 3.30 | 9.2 |
| (16.27) | 7203 | 1.26 | – | 1.20 | 13.7 |
| (0.69) | 11332 | 1.29 | – | 0.79 | 15.8 |
| 5.65 | 12967 | 1.33 | – | 1.28 | 21.0 |
| 9.28 | 15209 | 1.36 | – | 2.07 | 19.8 |
| (1.41) | 16422 | 1.36 | – | 2.53 | 9.2 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>| **Net Asset**<br> **Value, End**<br> **of Period**<br>|
| **CORE FIXED INCOME FUND** | **CORE FIXED INCOME FUND** | **CORE FIXED INCOME FUND** | **CORE FIXED INCOME FUND** | **CORE FIXED INCOME FUND** | **CORE FIXED INCOME FUND** | **CORE FIXED INCOME FUND** | **CORE FIXED INCOME FUND** |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | $10.01 | $0.14 | $(1.72) | $(1.58) | $(0.19) | $(0.19) | $8.24 |
| 2021 | 10.22 | 0.11 | (0.15) | (0.04) | (0.17) | (0.17) | 10.01 |
| 2020 | 9.83 | 0.16 | 0.43 | 0.59 | (0.20) | (0.20) | 10.22 |
| 2019 | 9.22 | 0.23 | 0.64 | 0.87 | (0.26) | (0.26) | 9.83 |
| 2018 | 9.61 | 0.27 | (0.38) | (0.11) | (0.28) | (0.28) | 9.22 |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 10.00 | 0.16 | (1.73) | (1.57) | (0.20) | (0.20) | 8.23 |
| 2021 | 10.21 | 0.13 | (0.15) | (0.02) | (0.19) | (0.19) | 10.00 |
| 2020 | 9.83 | 0.18 | 0.42 | 0.60 | (0.22) | (0.22) | 10.21 |
| 2019 | 9.22 | 0.24 | 0.65 | 0.89 | (0.28) | (0.28) | 9.83 |
| 2018 | 9.60 | 0.28 | (0.37) | (0.09) | (0.29) | (0.29) | 9.22 |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 9.98 | 0.17 | (1.73) | (1.56) | (0.21) | (0.21) | 8.21 |
| 2021 | 10.19 | 0.14 | (0.15) | (0.01) | (0.20) | (0.20) | 9.98 |
| 2020 | 9.81 | 0.19 | 0.42 | 0.61 | (0.23) | (0.23) | 10.19 |
| 2019 | 9.20 | 0.25 | 0.65 | 0.90 | (0.29) | (0.29) | 9.81 |
| 2018 | 9.59 | 0.29 | (0.38) | (0.09) | (0.30) | (0.30) | 9.20 |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 9.98 | 0.19 | (1.72) | (1.53) | (0.24) | (0.24) | 8.21 |
| 2021 | 10.19 | 0.17 | (0.15) | 0.02 | (0.23) | (0.23) | 9.98 |
| 2020 | 9.80 | 0.21 | 0.44 | 0.65 | (0.26) | (0.26) | 10.19 |
| 2019 | 9.20 | 0.27 | 0.65 | 0.92 | (0.32) | (0.32) | 9.80 |
| 2018 | 9.58 | 0.32 | (0.37) | (0.05) | (0.33) | (0.33) | 9.20 |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| (15.97)% | $10025 | 0.95% | 1.52% | 13.7% |
| (0.38) | 12325 | 0.98 | 1.10 | 15.8 |
| 6.07 | 19911 | 1.02 | 1.59 | 21.0 |
| 9.61 | 24860 | 1.05 | 2.38 | 19.8 |
| (1.21) | 27890 | 1.05 | 2.83 | 9.2 |
| (15.83) | 10822 | 0.76 | 1.71 | 13.7 |
| (0.19) | 14605 | 0.79 | 1.29 | 15.8 |
| 6.17 | 13116 | 0.83 | 1.77 | 21.0 |
| 9.82 | 17519 | 0.86 | 2.57 | 19.8 |
| (0.92) | 19693 | 0.86 | 3.02 | 9.2 |
| (15.76) | 18198 | 0.64 | 1.81 | 13.7 |
| (0.07) | 32242 | 0.67 | 1.41 | 15.8 |
| 6.31 | 38478 | 0.71 | 1.89 | 21.0 |
| 9.97 | 35845 | 0.74 | 2.68 | 19.8 |
| (0.91) | 33909 | 0.74 | 3.11 | 9.2 |
| (15.54) | 8288998 | 0.38 | 2.10 | 13.7 |
| 0.18 | 9159603 | 0.41<sup>(b)</sup> <br>| 1.67 | 15.8 |
| 6.69 | 8278200 | 0.45<sup>(b)</sup> <br>| 2.15 | 21.0 |
| 10.14 | 5666716 | 0.48<sup>(b)</sup> <br>| 2.86 | 19.8 |
| (0.55) | 2034970 | 0.48<sup>(b)</sup> <br>| 3.40 | 9.2 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **CORE PLUS BOND FUND** | **CORE PLUS BOND FUND** | **CORE PLUS BOND FUND** | **CORE PLUS BOND FUND** | **CORE PLUS BOND FUND** | **CORE PLUS BOND FUND** | **CORE PLUS BOND FUND** | **CORE PLUS BOND FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $10.99 | $0.20 | $(2.05) | $(1.85) | $(0.17) | $(0.13) | $(0.30) |
| 2021 | 11.57 | 0.17 | (0.03) | 0.14 | (0.19) | (0.53) | (0.72) |
| 2020 | 11.13 | 0.24 | 0.54 | 0.78 | (0.34) | – | (0.34) |
| 2019 | 10.36 | 0.30 | 0.78 | 1.08 | (0.31) | – | (0.31) |
| 2018 | 10.98 | 0.30 | (0.60) | (0.30) | (0.32) | – | (0.32) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 11.08 | 0.20 | (2.07) | (1.87) | (0.17) | (0.13) | (0.30) |
| 2021 | 11.66 | 0.18 | (0.03) | 0.15 | (0.20) | (0.53) | (0.73) |
| 2020 | 11.21 | 0.25 | 0.54 | 0.79 | (0.34) | – | (0.34) |
| 2019 | 10.43 | 0.30 | 0.79 | 1.09 | (0.31) | – | (0.31) |
| 2018 | 11.06 | 0.31 | (0.61) | (0.30) | (0.33) | – | (0.33) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 10.98 | 0.23 | (2.04) | (1.81) | (0.20) | (0.13) | (0.33) |
| 2021 | 11.57 | 0.21 | (0.04) | 0.17 | (0.23) | (0.53) | (0.76) |
| 2020 | 11.13 | 0.28 | 0.53 | 0.81 | (0.37) | – | (0.37) |
| 2019 | 10.35 | 0.34 | 0.79 | 1.13 | (0.35) | – | (0.35) |
| 2018 | 10.98 | 0.34 | (0.60) | (0.26) | (0.37) | – | (0.37) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 10.98 | 0.15 | (2.05) | (1.90) | (0.12) | (0.13) | (0.25) |
| 2021 | 11.56 | 0.11 | (0.02) | 0.09 | (0.14) | (0.53) | (0.67) |
| 2020 | 11.13 | 0.19 | 0.52 | 0.71 | (0.28) | – | (0.28) |
| 2019 | 10.35 | 0.25 | 0.79 | 1.04 | (0.26) | – | (0.26) |
| 2018 | 10.98 | 0.25 | (0.60) | (0.35) | (0.28) | – | (0.28) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

<sup>(d)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

<sup>(e)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(f)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $8.84 | (17.03)%<sup>(b)</sup> <br>| $69698<br> 0.84%<sup>(c)</sup> <br>| –% | 2.04% | 160.7% |
| 10.99 | 1.24<sup>(b)</sup> <br>| 94268<br> 0.84<sup>(c)</sup> <br>| – | 1.54 | 181.5 |
| 11.57 | 6.98<sup>(b)(d)</sup> <br>| 100498<br> 0.88<sup>(c)</sup> <br>| – | 2.12 | 167.0 |
| 11.13 | 10.63<sup>(b)(d)</sup> <br>| 89060<br> 0.88<sup>(c)</sup> <br>| – | 2.75 | 138.6 |
| 10.36 | (2.74)<sup>(b)</sup> <br>| 78179<br> 0.88<sup>(c)</sup> <br>| – | 2.80 | 134.0 |
| 8.91 | (17.08)<sup>(b)</sup> <br>| 103790<br> 0.85<sup>(e)</sup> <br>| 0.93<sup>(f)</sup> <br>| 2.04 | 160.7 |
| 11.08 | 1.25<sup>(b)</sup> <br>| 142242<br> 0.82<sup>(e)</sup> <br>| 0.91<sup>(f)</sup> <br>| 1.56 | 181.5 |
| 11.66 | 7.07<sup>(b)(d)</sup> <br>| 155238<br> 0.83<sup>(e)</sup> <br>| 0.92<sup>(f)</sup> <br>| 2.17 | 167.0 |
| 11.21 | 10.66<sup>(b)(d)</sup> <br>| 137858<br> 0.88<sup>(e)</sup> <br>| 0.97<sup>(f)</sup> <br>| 2.76 | 138.6 |
| 10.43 | (2.76)<sup>(b)</sup> <br>| 131877<br> 0.82<sup>(e)</sup> <br>| 0.91<sup>(f)</sup> <br>| 2.86 | 134.0 |
| 8.84 | (16.89)<sup>(d)</sup> <br>| 350465<br> 0.56<sup>(c)</sup> <br>| – | 2.34 | 160.7 |
| 10.98 | 1.54<sup>(d)</sup> <br>| 398554<br> 0.56<sup>(c)</sup> <br>| – | 1.85 | 181.5 |
| 11.57 | 7.41 | 318810<br> 0.57<sup>(c)</sup> <br>| – | 2.44 | 167.0 |
| 11.13 | 11.10 | 1156182<br> 0.46<sup>(c)</sup> <br>| – | 3.18 | 138.6 |
| 10.35 | (2.42) | 2925885<br> 0.46<sup>(c)</sup> <br>| – | 3.22 | 134.0 |
| 8.83 | (17.50) | 3181<br> 1.38<sup>(c)</sup> <br>| – | 1.51 | 160.7 |
| 10.98 | 0.71 | 3719<br> 1.38<sup>(c)</sup> <br>| – | 1.03 | 181.5 |
| 11.56 | 6.45 | 4234<br> 1.38<sup>(c)</sup> <br>| – | 1.65 | 167.0 |
| 11.13 | 10.15 | 4758<br> 1.33<sup>(c)</sup> <br>| – | 2.30 | 138.6 |
| 10.35 | (3.27) | 4308<br> 1.33<sup>(c)</sup> <br>| – | 2.35 | 134.0 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **CORE PLUS BOND FUND** | **CORE PLUS BOND FUND** | **CORE PLUS BOND FUND** | **CORE PLUS BOND FUND** | **CORE PLUS BOND FUND** | **CORE PLUS BOND FUND** | **CORE PLUS BOND FUND** | **CORE PLUS BOND FUND** |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | $10.91 | $0.18 | $(2.04) | $(1.86) | $(0.15) | $(0.13) | $(0.28) |
| 2021 | 11.49 | 0.15 | (0.03) | 0.12 | (0.17) | (0.53) | (0.70) |
| 2020 | 11.06 | 0.22 | 0.52 | 0.74 | (0.31) | – | (0.31) |
| 2019 | 10.29 | 0.28 | 0.78 | 1.06 | (0.29) | – | (0.29) |
| 2018 | 10.91 | 0.28 | (0.59) | (0.31) | (0.31) | – | (0.31) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 11.16 | 0.20 | (2.08) | (1.88) | (0.17) | (0.13) | (0.30) |
| 2021 | 11.74 | 0.17 | (0.03) | 0.14 | (0.19) | (0.53) | (0.72) |
| 2020 | 11.29 | 0.25 | 0.53 | 0.78 | (0.33) | – | (0.33) |
| 2019 | 10.50 | 0.30 | 0.80 | 1.10 | (0.31) | – | (0.31) |
| 2018 | 11.13 | 0.31 | (0.61) | (0.30) | (0.33) | – | (0.33) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 10.92 | 0.21 | (2.04) | (1.83) | (0.18) | (0.13) | (0.31) |
| 2021 | 11.50 | 0.18 | (0.03) | 0.15 | (0.20) | (0.53) | (0.73) |
| 2020 | 11.07 | 0.25 | 0.53 | 0.78 | (0.35) | – | (0.35) |
| 2019 | 10.30 | 0.31 | 0.79 | 1.10 | (0.33) | – | (0.33) |
| 2018 | 10.93 | 0.32 | (0.61) | (0.29) | (0.34) | – | (0.34) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $8.77 | (17.25)% | $13893<br> 1.07%<sup>(b)</sup> <br>| 1.81% | 160.7% |
| 10.91 | 1.03 | 20465<br> 1.07<sup>(b)</sup> <br>| 1.33 | 181.5 |
| 11.49 | 6.83 | 20466<br> 1.07<sup>(b)</sup> <br>| 1.93 | 167.0 |
| 11.06 | 10.45 | 17923<br> 1.02<sup>(b)</sup> <br>| 2.61 | 138.6 |
| 10.29 | (2.89) | 16316<br> 1.02<sup>(b)</sup> <br>| 2.65 | 134.0 |
| 8.98 | (17.08) | 5015<br> 0.88<sup>(b)</sup> <br>| 2.00 | 160.7 |
| 11.16 | 1.19 | 6969<br> 0.88<sup>(b)</sup> <br>| 1.52 | 181.5 |
| 11.74 | 7.06 | 8449<br> 0.88<sup>(b)</sup> <br>| 2.16 | 167.0 |
| 11.29 | 10.63 | 11540<br> 0.83<sup>(b)</sup> <br>| 2.79 | 138.6 |
| 10.50 | (2.75) | 10643<br> 0.83<sup>(b)</sup> <br>| 2.84 | 134.0 |
| 8.78 | (16.98) | 38423<br> 0.76<sup>(b)</sup> <br>| 2.16 | 160.7 |
| 10.92 | 1.34 | 44691<br> 0.76<sup>(b)</sup> <br>| 1.64 | 181.5 |
| 11.50 | 7.15 | 49176<br> 0.76<sup>(b)</sup> <br>| 2.23 | 167.0 |
| 11.07 | 10.78 | 38543<br> 0.71<sup>(b)</sup> <br>| 2.93 | 138.6 |
| 10.30 | (2.68) | 43741<br> 0.71<sup>(b)</sup> <br>| 2.97 | 134.0 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Tax Return**<br> **of**<br> **Capital**<br> **Distribution**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **DIVERSIFIED INCOME FUND**<sup>(b)</sup>  | **DIVERSIFIED INCOME FUND**<sup>(b)</sup>  | **DIVERSIFIED INCOME FUND**<sup>(b)</sup>  | **DIVERSIFIED INCOME FUND**<sup>(b)</sup>  | **DIVERSIFIED INCOME FUND**<sup>(b)</sup>  | **DIVERSIFIED INCOME FUND**<sup>(b)</sup>  | **DIVERSIFIED INCOME FUND**<sup>(b)</sup>  | **DIVERSIFIED INCOME FUND**<sup>(b)</sup>  |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $13.87 | $0.55 | $(2.27) | $(1.72) | $(0.56) | $(0.01) | $(0.57) |
| 2021 | 12.57 | 0.56 | 1.32 | 1.88 | (0.58) | – | (0.58) |
| 2020 | 13.72 | 0.60 | (1.15) | (0.55) | (0.56) | (0.04) | (0.60) |
| 2019 | 13.20 | 0.69 | 0.48 | 1.17 | (0.65) | – | (0.65) |
| 2018 | 14.16 | 0.65 | (1.01) | (0.36) | (0.58) | (0.02) | (0.60) |
| **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** |
| 2022 | 13.78 | 0.45 | (2.25) | (1.80) | (0.47) | – | (0.47) |
| 2021 | 12.49 | 0.47 | 1.29 | 1.76 | (0.47) | – | (0.47) |
| 2020 | 13.63 | 0.50 | (1.14) | (0.64) | (0.47) | (0.03) | (0.50) |
| 2019 | 13.12 | 0.58 | 0.47 | 1.05 | (0.54) | – | (0.54) |
| 2018 | 14.07 | 0.54 | (1.00) | (0.46) | (0.48) | (0.01) | (0.49) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 13.79 | 0.59 | (2.24) | (1.65) | (0.61) | (0.01) | (0.62) |
| 2021 | 12.50 | 0.61 | 1.31 | 1.92 | (0.63) | – | (0.63) |
| 2020 | 13.66 | 0.64 | (1.16) | (0.52) | (0.60) | (0.04) | (0.64) |
| 2019 | 13.14 | 0.73 | 0.48 | 1.21 | (0.69) | – | (0.69) |
| 2018 | 14.10 | 0.69 | (1.01) | (0.32) | (0.64) | – | (0.64) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 13.78 | 0.58 | (2.23) | (1.65) | (0.61) | (0.01) | (0.62) |
| 2021 | 12.49 | 0.62 | 1.30 | 1.92 | (0.63) | – | (0.63) |
| 2020 | 13.64 | 0.64 | (1.15) | (0.51) | (0.60) | (0.04) | (0.64) |
| 2019 | 13.14 | 0.73 | 0.46 | 1.19 | (0.69) | – | (0.69) |
| 2018 | 14.09 | 0.71 | (1.01) | (0.30) | (0.65) | – | (0.65) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Effective March 1, 2022, Global Diversified Income Fund changed its name to Diversified Income Fund.

<sup>(c)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(d)</sup>

Reflects Manager's contractual expense limit.

<sup>(e)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

<sup>(f)</sup>

Excludes dividends and interest expense on short sales and short sale fees and reverse repurchase agreement expense. See "Operating Policies" in notes to financial statements.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Expenses to**<br> **Average Net Assets**<br> **(Excluding Dividends**<br> **and Interest Expense)**<br>| &nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $11.58 | (12.68)%<sup>(c)</sup> <br>| $1156493<br> 1.01%<sup>(d)</sup> <br>| N/A% | 4.31% | 72.1% |
| 13.87 | 15.13<sup>(c)</sup> <br>| 1475288<br> 1.02<sup>(d)</sup> <br>| N/A% | 4.10 | 93.6 |
| 12.57 | (4.01)<sup>(c)(e)</sup> <br>| 1246664<br> 1.01<sup>(d)</sup> <br>| N/A% | 4.69 | 79.7 |
| 13.72 | 9.17<sup>(c)(e)</sup> <br>| 1422501<br> 1.02<sup>(d)</sup> <br>| 1.02%<sup>(d)(f)</sup> <br>| 5.10 | 87.3 |
| 13.20 | (2.67)<sup>(c)</sup> <br>| 1474030<br> 1.07<sup>(d)</sup> <br>| 1.06<sup>(d)(f)</sup> <br>| 4.68 | 106.9 |
| 11.51 | (13.30)<sup>(c)</sup> <br>| 269493<br> 1.77<sup>(d)</sup> <br>| N/A | 3.50 | 72.1 |
| 13.78 | 14.24<sup>(c)</sup> <br>| 469597<br> 1.76<sup>(d)</sup> <br>| N/A | 3.48 | 93.6 |
| 12.49 | (4.71)<sup>(c)(e)</sup> <br>| 828186<br> 1.77<sup>(d)</sup> <br>| N/A | 3.94 | 79.7 |
| 13.63 | 8.30<sup>(c)(e)</sup> <br>| 1403821<br> 1.79<sup>(d)</sup> <br>| 1.79<sup>(d)(f)</sup> <br>| 4.36 | 87.3 |
| 13.12 | (3.34)<sup>(c)</sup> <br>| 1761951<br> 1.82<sup>(d)</sup> <br>| 1.81<sup>(d)(f)</sup> <br>| 3.93 | 106.9 |
| 11.52 | (12.31) | 1769364<br> 0.68<sup>(d)</sup> <br>| N/A | 4.63 | 72.1 |
| 13.79 | 15.52 | 2448424<br> 0.68<sup>(d)</sup> <br>| N/A | 4.48 | 93.6 |
| 12.50 | (3.71) | 2686381<br> 0.68<sup>(d)</sup> <br>| N/A | 5.03 | 79.7 |
| 13.66 | 9.49 | 4658602<br> 0.69<sup>(d)</sup> <br>| 0.69<sup>(d)(f)</sup> <br>| 5.43 | 87.3 |
| 13.14 | (2.36) | 4978450<br> 0.76<sup>(d)</sup> <br>| 0.75<sup>(d)(f)</sup> <br>| 5.00 | 106.9 |
| 11.51 | (12.31) | 43433<br> 0.67<sup>(d)</sup> <br>| N/A | 4.49 | 72.1 |
| 13.78 | 15.54 | 101194<br> 0.68<sup>(d)</sup> <br>| N/A | 4.54 | 93.6 |
| 12.49 | (3.70)<sup>(e)</sup> <br>| 133451<br> 0.67<sup>(d)</sup> <br>| N/A | 5.04 | 79.7 |
| 13.64 | 9.43<sup>(e)</sup> <br>| 250055<br> 0.67<sup>(d)</sup> <br>| 0.67<sup>(d)(f)</sup> <br>| 5.42 | 87.3 |
| 13.14 | (2.26) | 210815<br> 0.73<sup>(d)</sup> <br>| 0.72<sup>(d)(f)</sup> <br>| 5.11 | 106.9 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **DIVERSIFIED INTERNATIONAL FUND** | **DIVERSIFIED INTERNATIONAL FUND** | **DIVERSIFIED INTERNATIONAL FUND** | **DIVERSIFIED INTERNATIONAL FUND** | **DIVERSIFIED INTERNATIONAL FUND** | **DIVERSIFIED INTERNATIONAL FUND** | **DIVERSIFIED INTERNATIONAL FUND** | **DIVERSIFIED INTERNATIONAL FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $16.33 | $0.21 | $(3.85) | $(3.64) | $(0.50) | $(1.42) | $(1.92) |
| 2021 | 12.74 | 0.18 | 3.52 | 3.70 | (0.11) | – | (0.11) |
| 2020 | 12.52 | 0.11 | 0.34 | 0.45 | (0.23) | – | (0.23) |
| 2019 | 12.26 | 0.18 | 0.79 | 0.97 | (0.15) | (0.56) | (0.71) |
| 2018 | 13.96 | 0.20 | (1.71) | (1.51) | (0.19) | – | (0.19) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 16.13 | 0.22 | (3.79) | (3.57) | (0.52) | (1.42) | (1.94) |
| 2021 | 12.58 | 0.20 | 3.48 | 3.68 | (0.13) | – | (0.13) |
| 2020 | 12.37 | 0.12 | 0.34 | 0.46 | (0.25) | – | (0.25) |
| 2019 | 12.13 | 0.19 | 0.78 | 0.97 | (0.17) | (0.56) | (0.73) |
| 2018 | 13.82 | 0.21 | (1.69) | (1.48) | (0.21) | – | (0.21) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 16.25 | 0.25 | (3.82) | (3.57) | (0.55) | (1.42) | (1.97) |
| 2021 | 12.68 | 0.24 | 3.49 | 3.73 | (0.16) | – | (0.16) |
| 2020 | 12.47 | 0.15 | 0.34 | 0.49 | (0.28) | – | (0.28) |
| 2019 | 12.23 | 0.09 | 0.93 | 1.02 | (0.22) | (0.56) | (0.78) |
| 2018 | 13.93 | 0.26 | (1.71) | (1.45) | (0.25) | – | (0.25) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 16.25 | 0.15 | (3.83) | (3.68) | (0.43) | (1.42) | (1.85) |
| 2021 | 12.68 | 0.11 | 3.52 | 3.63 | (0.06) | – | (0.06) |
| 2020 | 12.46 | 0.06 | 0.33 | 0.39 | (0.17) | – | (0.17) |
| 2019 | 12.20 | 0.14 | 0.79 | 0.93 | (0.11) | (0.56) | (0.67) |
| 2018 | 13.89 | 0.14 | (1.70) | (1.56) | (0.13) | – | (0.13) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Includes 0.03% of expenses associated with the reclaim of foreign taxes paid. The expense is not subject to the Manager's contractual expense limit.

<sup>(d)</sup>

Reflects Manager's contractual expense limit.

<sup>(e)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(f)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(g)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $10.77 | (25.02)%<sup>(b)</sup> <br>| $193894 | 1.23%<sup>(c)</sup> <br>| –% | 1.65% | 57.0% |
| 16.33 | 29.16<sup>(b)</sup> <br>| 267701 | 1.18 | – | 1.16 | 48.7 |
| 12.74 | 3.59<sup>(b)</sup> <br>| 209868 | 1.20<sup>(d)</sup> <br>| – | 0.90 | 45.1 |
| 12.52 | 8.93<sup>(b)</sup> <br>| 217243 | 1.27<sup>(d)</sup> <br>| – | 1.52 | 51.0 |
| 12.26 | (10.99)<sup>(b)</sup> <br>| 217118 | 1.31 | – | 1.42 | 51.1 |
| 10.62 | (24.93)<sup>(b)</sup> <br>| 125792 | 1.12<sup>(c)(e)</sup> <br>| 1.14<sup>(f)</sup> <br>| 1.76 | 57.0 |
| 16.13 | 29.35<sup>(b)</sup> <br>| 178815 | 1.05<sup>(e)</sup> <br>| 1.08<sup>(f)</sup> <br>| 1.28 | 48.7 |
| 12.58 | 3.67<sup>(b)</sup> <br>| 143722 | 1.09<sup>(e)</sup> <br>| 1.15<sup>(f)</sup> <br>| 1.01 | 45.1 |
| 12.37 | 9.03<sup>(b)</sup> <br>| 153026 | 1.16<sup>(e)</sup> <br>| 1.27<sup>(f)</sup> <br>| 1.63 | 51.0 |
| 12.13 | (10.89)<sup>(b)</sup> <br>| 155540 | 1.17<sup>(e)</sup> <br>| 1.20<sup>(f)</sup> <br>| 1.56 | 51.1 |
| 10.71 | (24.77) | 402288 | 0.88<sup>(c)(d)</sup> <br>| – | 1.99 | 57.0 |
| 16.25 | 29.63<sup>(g)</sup> <br>| 557003 | 0.85<sup>(d)</sup> <br>| – | 1.50 | 48.7 |
| 12.68 | 3.86<sup>(g)</sup> <br>| 400116 | 0.85<sup>(d)</sup> <br>| – | 1.26 | 45.1 |
| 12.47 | 9.43 | 357306 | 0.79<sup>(d)</sup> <br>| – | 0.81 | 51.0 |
| 12.23 | (10.60) | 10407141 | 0.83<sup>(d)</sup> <br>| – | 1.91 | 51.1 |
| 10.72 | (25.32) | 2144 | 1.66<sup>(c)</sup> <br>| – | 1.19 | 57.0 |
| 16.25 | 28.65 | 3061 | 1.63 | – | 0.68 | 48.7 |
| 12.68 | 3.12 | 2905 | 1.61<sup>(d)</sup> <br>| – | 0.47 | 45.1 |
| 12.46 | 8.50 | 3655 | 1.63<sup>(d)</sup> <br>| – | 1.16 | 51.0 |
| 12.20 | (11.34) | 3998 | 1.71 | – | 0.99 | 51.1 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **DIVERSIFIED INTERNATIONAL FUND** | **DIVERSIFIED INTERNATIONAL FUND** | **DIVERSIFIED INTERNATIONAL FUND** | **DIVERSIFIED INTERNATIONAL FUND** | **DIVERSIFIED INTERNATIONAL FUND** | **DIVERSIFIED INTERNATIONAL FUND** | **DIVERSIFIED INTERNATIONAL FUND** | **DIVERSIFIED INTERNATIONAL FUND** |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | $16.28 | $0.19 | $(3.83) | $(3.64) | $(0.48) | $(1.42) | $(1.90) |
| 2021 | 12.70 | 0.17 | 3.51 | 3.68 | (0.10) | – | (0.10) |
| 2020 | 12.49 | 0.10 | 0.33 | 0.43 | (0.22) | – | (0.22) |
| 2019 | 12.21 | 0.18 | 0.79 | 0.97 | (0.13) | (0.56) | (0.69) |
| 2018 | 13.90 | 0.18 | (1.70) | (1.52) | (0.17) | – | (0.17) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 16.52 | 0.22 | (3.89) | (3.67) | (0.50) | (1.42) | (1.92) |
| 2021 | 12.88 | 0.18 | 3.57 | 3.75 | (0.11) | – | (0.11) |
| 2020 | 12.66 | 0.12 | 0.34 | 0.46 | (0.24) | – | (0.24) |
| 2019 | 12.38 | 0.19 | 0.81 | 1.00 | (0.16) | (0.56) | (0.72) |
| 2018 | 14.10 | 0.21 | (1.73) | (1.52) | (0.20) | – | (0.20) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 16.48 | 0.23 | (3.88) | (3.65) | (0.52) | (1.42) | (1.94) |
| 2021 | 12.85 | 0.21 | 3.56 | 3.77 | (0.14) | – | (0.14) |
| 2020 | 12.64 | 0.14 | 0.33 | 0.47 | (0.26) | – | (0.26) |
| 2019 | 12.37 | 0.21 | 0.80 | 1.01 | (0.18) | (0.56) | (0.74) |
| 2018 | 14.07 | 0.23 | (1.72) | (1.49) | (0.21) | – | (0.21) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 16.27 | 0.26 | (3.82) | (3.56) | (0.56) | (1.42) | (1.98) |
| 2021 | 12.69 | 0.23 | 3.52 | 3.75 | (0.17) | – | (0.17) |
| 2020 | 12.48 | 0.17 | 0.34 | 0.51 | (0.30) | – | (0.30) |
| 2019<sup>(d)</sup> <br>| 11.76 | 0.21 | 0.51 | 0.72 | – | – | – |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Includes 0.03% of expenses associated with the reclaim of foreign taxes paid. The expense is not subject to the Manager's contractual expense limit.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

<sup>(d)</sup>

Period from March 1, 2019, date operations commenced, through October 31, 2019.

<sup>(e)</sup>

Total return amounts have not been annualized.

<sup>(f)</sup>

Computed on an annualized basis.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $10.74 | (25.09)% | $9164 | 1.35%<sup>(b)</sup> <br>| 1.50% | 57.0% |
| 16.28 | 29.03 | 14118 | 1.32 | 1.06 | 48.7 |
| 12.70 | 3.38 | 10932 | 1.30<sup>(c)</sup> <br>| 0.78 | 45.1 |
| 12.49 | 8.88 | 12322 | 1.32<sup>(c)</sup> <br>| 1.48 | 51.0 |
| 12.21 | (11.07) | 15377 | 1.40 | 1.30 | 51.1 |
| 10.93 | (24.92) | 6467 | 1.16<sup>(b)</sup> <br>| 1.69 | 57.0 |
| 16.52 | 29.21 | 10683 | 1.13 | 1.15 | 48.7 |
| 12.88 | 3.65 | 10680 | 1.11<sup>(c)</sup> <br>| 0.98 | 45.1 |
| 12.66 | 9.09 | 17271 | 1.13<sup>(c)</sup> <br>| 1.54 | 51.0 |
| 12.38 | (10.94) | 27665 | 1.21 | 1.50 | 51.1 |
| 10.89 | (24.85) | 23589 | 1.04<sup>(b)</sup> <br>| 1.76 | 57.0 |
| 16.48 | 29.41 | 41789 | 1.01 | 1.35 | 48.7 |
| 12.85 | 3.72 | 32242 | 0.99<sup>(c)</sup> <br>| 1.11 | 45.1 |
| 12.64 | 9.21 | 41586 | 1.01<sup>(c)</sup> <br>| 1.78 | 51.0 |
| 12.37 | (10.74) | 47424 | 1.09 | 1.63 | 51.1 |
| 10.73 | (24.66) | 3254802 | 0.78<sup>(b)(c)</sup> <br>| 2.08 | 57.0 |
| 16.27 | 29.71 | 4491999 | 0.74<sup>(c)</sup> <br>| 1.51 | 48.7 |
| 12.69 | 4.03 | 10370769 | 0.73<sup>(c)</sup> <br>| 1.38 | 45.1 |
| 12.48 | 6.12<sup>(e)</sup> <br>| 11175055 | 0.73<sup>(c)(f)</sup> <br>| 2.68<sup>(f)</sup> <br>| 51.0 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **EQUITY INCOME FUND** | **EQUITY INCOME FUND** | **EQUITY INCOME FUND** | **EQUITY INCOME FUND** | **EQUITY INCOME FUND** | **EQUITY INCOME FUND** | **EQUITY INCOME FUND** | **EQUITY INCOME FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $41.63 | $0.56 | $(4.79) | $(4.23) | $(0.49) | $(1.61) | $(2.10) |
| 2021 | 30.66 | 0.51 | 10.94 | 11.45 | (0.48) | – | (0.48) |
| 2020 | 33.25 | 0.55 | (1.68) | (1.13) | (0.51) | (0.95) | (1.46) |
| 2019 | 30.97 | 0.56 | 3.75 | 4.31 | (0.60) | (1.43) | (2.03) |
| 2018 | 31.55 | 0.64 | 0.87 | 1.51 | (0.57) | (1.52) | (2.09) |
| **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** |
| 2022 | 40.42 | 0.26 | (4.63) | (4.37) | (0.21) | (1.61) | (1.82) |
| 2021 | 29.78 | 0.22 | 10.62 | 10.84 | (0.20) | – | (0.20) |
| 2020 | 32.33 | 0.31 | (1.62) | (1.31) | (0.29) | (0.95) | (1.24) |
| 2019 | 30.17 | 0.32 | 3.64 | 3.96 | (0.37) | (1.43) | (1.80) |
| 2018 | 30.78 | 0.40 | 0.85 | 1.25 | (0.34) | (1.52) | (1.86) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 41.68 | 0.60 | (4.80) | (4.20) | (0.53) | (1.61) | (2.14) |
| 2021 | 30.70 | 0.55 | 10.94 | 11.49 | (0.51) | – | (0.51) |
| 2020 | 33.29 | 0.57 | (1.69) | (1.12) | (0.52) | (0.95) | (1.47) |
| 2019 | 31.01 | 0.56 | 3.76 | 4.32 | (0.61) | (1.43) | (2.04) |
| 2018<sup>(f)</sup> <br>| 32.68 | 0.01 | (1.68) | (1.67) | – | – | – |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 41.69 | 0.69 | (4.79) | (4.10) | (0.62) | (1.61) | (2.23) |
| 2021 | 30.71 | 0.64 | 10.95 | 11.59 | (0.61) | – | (0.61) |
| 2020 | 33.31 | 0.66 | (1.68) | (1.02) | (0.63) | (0.95) | (1.58) |
| 2019 | 31.02 | 0.68 | 3.76 | 4.44 | (0.72) | (1.43) | (2.15) |
| 2018 | 31.59 | 0.76 | 0.87 | 1.63 | (0.68) | (1.52) | (2.20) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

<sup>(d)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(e)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(f)</sup>

Period from October 9, 2018, date operations commenced, through October 31, 2018.

<sup>(g)</sup>

Total return amounts have not been annualized.

<sup>(h)</sup>

Computed on an annualized basis.

<sup>(i)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $35.30 | (10.64)%<sup>(b)</sup> <br>| $1176246 | 0.86% | –% | 1.48% | 16.9% |
| 41.63 | 37.51<sup>(b)</sup> <br>| 1424668 | 0.86 | – | 1.33 | 22.0 |
| 30.66 | (3.49)<sup>(b)</sup> <br>| 1049990 | 0.88 | – | 1.79 | 16.9 |
| 33.25 | 15.12<sup>(b)</sup> <br>| 1200974 | 0.91 | – | 1.81 | 21.5 |
| 30.97 | 4.77<sup>(b)</sup> <br>| 1094052 | 0.89 | – | 2.02 | 13.2 |
| 34.23 | (11.33)<sup>(b)(c)</sup> <br>| 97145 | 1.62 | – | 0.72 | 16.9 |
| 40.42 | 36.49<sup>(b)(c)</sup> <br>| 125768 | 1.61 | – | 0.61 | 22.0 |
| 29.78 | (4.23)<sup>(b)</sup> <br>| 120112 | 1.63 | – | 1.05 | 16.9 |
| 32.33 | 14.26<sup>(b)</sup> <br>| 155071 | 1.65 | – | 1.08 | 21.5 |
| 30.17 | 4.03<sup>(b)</sup> <br>| 178958 | 1.62 | – | 1.30 | 13.2 |
| 35.34 | (10.55)<sup>(b)</sup> <br>| 76630 | 0.77<sup>(d)</sup> <br>| 0.79<sup>(e)</sup> <br>| 1.58 | 16.9 |
| 41.68 | 37.60<sup>(b)</sup> <br>| 86651 | 0.77<sup>(d)</sup> <br>| 0.79<sup>(e)</sup> <br>| 1.42 | 22.0 |
| 30.70 | (3.44)<sup>(b)</sup> <br>| 61063 | 0.82<sup>(d)</sup> <br>| 0.85<sup>(e)</sup> <br>| 1.84 | 16.9 |
| 33.29 | 15.16<sup>(b)</sup> <br>| 69728 | 0.90<sup>(d)</sup> <br>| 0.93<sup>(e)</sup> <br>| 1.81 | 21.5 |
| 31.01 | (5.11)<sup>(b)(g)</sup> <br>| 62247 | 0.82<sup>(d)(h)</sup> <br>| 1.33<sup>(e)(h)</sup> <br>| 0.63<sup>(h)</sup> <br>| 13.2 |
| 35.36 | (10.32)<sup>(c)</sup> <br>| 7731338 | 0.52<sup>(i)</sup> <br>| – | 1.82 | 16.9 |
| 41.69 | 37.97<sup>(c)</sup> <br>| 9001763 | 0.52<sup>(i)</sup> <br>| – | 1.68 | 22.0 |
| 30.71 | (3.14) | 6372962 | 0.52<sup>(i)</sup> <br>| – | 2.14 | 16.9 |
| 33.31 | 15.57 | 6190503 | 0.52<sup>(i)</sup> <br>| – | 2.19 | 21.5 |
| 31.02 | 5.17 | 5471644 | 0.52<sup>(i)</sup> <br>| – | 2.40 | 13.2 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **EQUITY INCOME FUND** | **EQUITY INCOME FUND** | **EQUITY INCOME FUND** | **EQUITY INCOME FUND** | **EQUITY INCOME FUND** | **EQUITY INCOME FUND** | **EQUITY INCOME FUND** | **EQUITY INCOME FUND** |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | $41.43 | $0.36 | $(4.76) | $(4.40) | $(0.28) | $(1.61) | $(1.89) |
| 2021 | 30.52 | 0.31 | 10.88 | 11.19 | (0.28) | – | (0.28) |
| 2020 | 33.10 | 0.39 | (1.66) | (1.27) | (0.36) | (0.95) | (1.31) |
| 2019 | 30.84 | 0.41 | 3.74 | 4.15 | (0.46) | (1.43) | (1.89) |
| 2018 | 31.42 | 0.50 | 0.84 | 1.34 | (0.40) | (1.52) | (1.92) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 41.49 | 0.48 | (4.77) | (4.29) | (0.41) | (1.61) | (2.02) |
| 2021 | 30.56 | 0.43 | 10.90 | 11.33 | (0.40) | – | (0.40) |
| 2020 | 33.14 | 0.49 | (1.67) | (1.18) | (0.45) | (0.95) | (1.40) |
| 2019 | 30.87 | 0.52 | 3.72 | 4.24 | (0.54) | (1.43) | (1.97) |
| 2018 | 31.45 | 0.58 | 0.86 | 1.44 | (0.50) | (1.52) | (2.02) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 41.58 | 0.55 | (4.78) | (4.23) | (0.48) | (1.61) | (2.09) |
| 2021 | 30.62 | 0.50 | 10.93 | 11.43 | (0.47) | – | (0.47) |
| 2020 | 33.21 | 0.54 | (1.67) | (1.13) | (0.51) | (0.95) | (1.46) |
| 2019 | 30.94 | 0.57 | 3.73 | 4.30 | (0.60) | (1.43) | (2.03) |
| 2018 | 31.51 | 0.65 | 0.86 | 1.51 | (0.56) | (1.52) | (2.08) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 41.64 | 0.60 | (4.79) | (4.19) | (0.53) | (1.61) | (2.14) |
| 2021 | 30.67 | 0.55 | 10.93 | 11.48 | (0.51) | – | (0.51) |
| 2020 | 33.26 | 0.58 | (1.67) | (1.09) | (0.55) | (0.95) | (1.50) |
| 2019 | 30.98 | 0.61 | 3.74 | 4.35 | (0.64) | (1.43) | (2.07) |
| 2018 | 31.55 | 0.69 | 0.86 | 1.55 | (0.60) | (1.52) | (2.12) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $35.14 | (11.09)% | $1942 | 1.39% | 0.96% | 16.9% |
| 41.43 | 36.76 | 2957 | 1.38 | 0.80 | 22.0 |
| 30.52 | (3.99) | 2424 | 1.39 | 1.27 | 16.9 |
| 33.10 | 14.59 | 2746 | 1.39 | 1.34 | 21.5 |
| 30.84 | 4.25 | 2909 | 1.39 | 1.58 | 13.2 |
| 35.18 | (10.81) | 30045 | 1.08 | 1.27 | 16.9 |
| 41.49 | 37.21 | 33754 | 1.07 | 1.12 | 22.0 |
| 30.56 | (3.68) | 24058 | 1.08 | 1.59 | 16.9 |
| 33.14 | 14.92 | 31298 | 1.08 | 1.68 | 21.5 |
| 30.87 | 4.56 | 40698 | 1.08 | 1.80 | 13.2 |
| 35.26 | (10.65) | 27590 | 0.89 | 1.45 | 16.9 |
| 41.58 | 37.48 | 32675 | 0.88 | 1.30 | 22.0 |
| 30.62 | (3.50) | 28701 | 0.89 | 1.76 | 16.9 |
| 33.21 | 15.11 | 36352 | 0.89 | 1.83 | 21.5 |
| 30.94 | 4.79 | 33554 | 0.89 | 2.04 | 13.2 |
| 35.31 | (10.54) | 147468 | 0.77 | 1.57 | 16.9 |
| 41.64 | 37.62 | 179232 | 0.76 | 1.43 | 22.0 |
| 30.67 | (3.37) | 129146 | 0.77 | 1.89 | 16.9 |
| 33.26 | 15.28 | 158549 | 0.77 | 1.95 | 21.5 |
| 30.98 | 4.91 | 116047 | 0.77 | 2.16 | 13.2 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Tax Return**<br> **of**<br> **Capital**<br> **Distribution**<br>|
| **FINISTERRE EMERGING MARKETS TOTAL RETURN BOND FUND** | **FINISTERRE EMERGING MARKETS TOTAL RETURN BOND FUND** | **FINISTERRE EMERGING MARKETS TOTAL RETURN BOND FUND** | **FINISTERRE EMERGING MARKETS TOTAL RETURN BOND FUND** | **FINISTERRE EMERGING MARKETS TOTAL RETURN BOND FUND** | **FINISTERRE EMERGING MARKETS TOTAL RETURN BOND FUND** | **FINISTERRE EMERGING MARKETS TOTAL RETURN BOND FUND** | **FINISTERRE EMERGING MARKETS TOTAL RETURN BOND FUND** |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | $10.28 | $0.49 | $(2.21) | $(1.72) | $(0.64) | $– | $– |
| 2021 | 10.24 | 0.39 | 0.07 | 0.46 | (0.29) | (0.09) | (0.04) |
| 2020 | 10.51 | 0.39 | (0.09) | 0.30 | (0.40) | (0.17) | – |
| 2019 | 9.81 | 0.43 | 0.76 | 1.19 | (0.49) | – | – |
| 2018 | 10.47 | 0.37 | (0.45) | (0.08) | (0.28) | (0.30) | – |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $(0.64) | $7.92 | (17.17)% | $378572<br> 0.84%<sup>(b)</sup> <br>| 5.24% | 117.4% |
| (0.42) | 10.28 | 4.47 | 770197<br> 0.85<sup>(b)</sup> <br>| 3.69 | 170.3 |
| (0.57) | 10.24 | 2.90 | 226511<br> 0.85<sup>(b)</sup> <br>| 3.78 | 285.3 |
| (0.49) | 10.51 | 12.52 | 241465<br> 0.87<sup>(b)</sup> <br>| 4.21 | 312.5 |
| (0.58) | 9.81 | (0.86) | 28216<br> 1.12<sup>(b)</sup> <br>| 3.62 | 399.2 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **GLOBAL EMERGING MARKETS FUND**<sup>(b)</sup>  | **GLOBAL EMERGING MARKETS FUND**<sup>(b)</sup>  | **GLOBAL EMERGING MARKETS FUND**<sup>(b)</sup>  | **GLOBAL EMERGING MARKETS FUND**<sup>(b)</sup>  | **GLOBAL EMERGING MARKETS FUND**<sup>(b)</sup>  | **GLOBAL EMERGING MARKETS FUND**<sup>(b)</sup>  | **GLOBAL EMERGING MARKETS FUND**<sup>(b)</sup>  | **GLOBAL EMERGING MARKETS FUND**<sup>(b)</sup>  |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $31.87 | $0.37 | $(10.12) | $(9.75) | $(0.31) | $(1.75) | $(2.06) |
| 2021 | 26.98 | 0.20 | 4.73 | 4.93 | (0.04) | – | (0.04) |
| 2020 | 25.02 | 0.13 | 2.55 | 2.68 | (0.44) | (0.28) | (0.72) |
| 2019 | 24.03 | 0.47 | 1.20 | 1.67 | (0.17) | (0.51) | (0.68) |
| 2018 | 29.17 | 0.23 | (5.10) | (4.87) | (0.27) | – | (0.27) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 30.64 | 0.38 | (9.67) | (9.29) | (0.37) | (1.75) | (2.12) |
| 2021 | 25.94 | 0.25 | 4.53 | 4.78 | (0.08) | – | (0.08) |
| 2020 | 24.09 | 0.17 | 2.45 | 2.62 | (0.49) | (0.28) | (0.77) |
| 2019 | 23.15 | 0.48 | 1.16 | 1.64 | (0.19) | (0.51) | (0.70) |
| 2018 | 28.11 | 0.25 | (4.92) | (4.67) | (0.29) | – | (0.29) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 31.58 | 0.47 | (10.01) | (9.54) | (0.43) | (1.75) | (2.18) |
| 2021 | 26.72 | 0.32 | 4.66 | 4.98 | (0.12) | – | (0.12) |
| 2020 | 24.78 | 0.22 | 2.54 | 2.76 | (0.54) | (0.28) | (0.82) |
| 2019 | 23.83 | 0.58 | 1.14 | 1.72 | (0.26) | (0.51) | (0.77) |
| 2018 | 28.92 | 0.33 | (5.07) | (4.74) | (0.35) | – | (0.35) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 31.32 | 0.24 | (9.93) | (9.69) | (0.18) | (1.75) | (1.93) |
| 2021 | 26.60 | 0.06 | 4.66 | 4.72 | – | – | – |
| 2020 | 24.66 | 0.02 | 2.50 | 2.52 | (0.30) | (0.28) | (0.58) |
| 2019 | 23.66 | 0.34 | 1.20 | 1.54 | (0.03) | (0.51) | (0.54) |
| 2018 | 28.74 | 0.09 | (5.03) | (4.94) | (0.14) | – | (0.14) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Effective January 3, 2022, International Emerging Markets Fund changed its name to Global Emerging Markets Fund.

<sup>(c)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(d)</sup>

Reflects Manager's contractual expense limit.

<sup>(e)</sup>

Includes 0.01% of expenses associated with the reclaim of foreign taxes paid. The expense is not subject to the Manager's contractual expense limit.

<sup>(f)</sup>

During the year ended October 31, 2020, the fund experienced a significant one time gain of approximately $0.11/share as a result of a settlement in a litigation proceeding. If such gain had not been recognized, the total return amounts expressed herein would have been lower.

<sup>(g)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(h)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(i)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $20.06 | (32.46)%<sup>(c)</sup> <br>| $60893 | 1.55%<sup>(d)</sup> <br>| –% | 1.44% | 34.7% |
| 31.87 | 18.27<sup>(c)</sup> <br>| 91585 | 1.56<sup>(d)(e)</sup> <br>| – | 0.63 | 43.9 |
| 26.98 | 10.84<sup>(c)(f)</sup> <br>| 76952 | 1.55<sup>(d)</sup> <br>| – | 0.55 | 53.9 |
| 25.02 | 7.22<sup>(c)</sup> <br>| 77559 | 1.57<sup>(d)</sup> <br>| – | 1.91 | 148.3 |
| 24.03 | (16.88)<sup>(c)</sup> <br>| 79698 | 1.62<sup>(d)(e)</sup> <br>| – | 0.81 | 118.1 |
| 19.23 | (32.31)<sup>(c)</sup> <br>| 61730 | 1.37<sup>(g)</sup> <br>| 1.52<sup>(h)</sup> <br>| 1.58 | 34.7 |
| 30.64 | 18.46<sup>(c)</sup> <br>| 99899 | 1.38<sup>(e)(g)</sup> <br>| 1.48<sup>(h)</sup> <br>| 0.80 | 43.9 |
| 25.94 | 11.01<sup>(c)(f)</sup> <br>| 89271 | 1.37<sup>(g)</sup> <br>| 1.62<sup>(h)</sup> <br>| 0.73 | 53.9 |
| 24.09 | 7.41<sup>(c)</sup> <br>| 88924 | 1.41<sup>(g)</sup> <br>| 1.78<sup>(h)</sup> <br>| 2.06 | 148.3 |
| 23.15 | (16.80)<sup>(c)</sup> <br>| 92909 | 1.53<sup>(e)(g)</sup> <br>| 1.63<sup>(h)</sup> <br>| 0.88 | 118.1 |
| 19.86 | (32.20) | 60449 | 1.20<sup>(d)</sup> <br>| – | 1.90 | 34.7 |
| 31.58 | 18.66 | 73485 | 1.21<sup>(d)(e)</sup> <br>| – | 0.98 | 43.9 |
| 26.72 | 11.21<sup>(f)(i)</sup> <br>| 62738 | 1.20<sup>(d)</sup> <br>| – | 0.90 | 53.9 |
| 24.78 | 7.60<sup>(i)</sup> <br>| 111045 | 1.22<sup>(d)</sup> <br>| – | 2.39 | 148.3 |
| 23.83 | (16.61) | 98961 | 1.31<sup>(d)(e)</sup> <br>| – | 1.14 | 118.1 |
| 19.70 | (32.73) | 1114 | 2.00 | – | 0.97 | 34.7 |
| 31.32 | 17.74 | 1702 | 1.99<sup>(e)</sup> <br>| – | 0.20 | 43.9 |
| 26.60 | 10.29<sup>(f)</sup> <br>| 1458 | 2.02<sup>(d)</sup> <br>| – | 0.06 | 53.9 |
| 24.66 | 6.72 | 1970 | 2.04<sup>(d)</sup> <br>| – | 1.41 | 148.3 |
| 23.66 | (17.29) | 2066 | 2.13<sup>(e)</sup> <br>| – | 0.30 | 118.1 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **GLOBAL EMERGING MARKETS FUND**<sup>(b)</sup>  | **GLOBAL EMERGING MARKETS FUND**<sup>(b)</sup>  | **GLOBAL EMERGING MARKETS FUND**<sup>(b)</sup>  | **GLOBAL EMERGING MARKETS FUND**<sup>(b)</sup>  | **GLOBAL EMERGING MARKETS FUND**<sup>(b)</sup>  | **GLOBAL EMERGING MARKETS FUND**<sup>(b)</sup>  | **GLOBAL EMERGING MARKETS FUND**<sup>(b)</sup>  | **GLOBAL EMERGING MARKETS FUND**<sup>(b)</sup>  |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | $31.46 | $0.31 | $(9.96) | $(9.65) | $(0.27) | $(1.75) | $(2.02) |
| 2021 | 26.64 | 0.17 | 4.65 | 4.82 | – | – | – |
| 2020 | 24.72 | 0.09 | 2.52 | 2.61 | (0.41) | (0.28) | (0.69) |
| 2019 | 23.70 | 0.41 | 1.20 | 1.61 | (0.08) | (0.51) | (0.59) |
| 2018 | 28.78 | 0.16 | (5.02) | (4.86) | (0.22) | – | (0.22) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 31.69 | 0.38 | (10.05) | (9.67) | (0.33) | (1.75) | (2.08) |
| 2021 | 26.82 | 0.22 | 4.69 | 4.91 | (0.04) | – | (0.04) |
| 2020 | 24.84 | 0.14 | 2.54 | 2.68 | (0.42) | (0.28) | (0.70) |
| 2019 | 23.83 | 0.42 | 1.24 | 1.66 | (0.14) | (0.51) | (0.65) |
| 2018 | 28.93 | 0.23 | (5.07) | (4.84) | (0.26) | – | (0.26) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 31.66 | 0.40 | (10.02) | (9.62) | (0.36) | (1.75) | (2.11) |
| 2021 | 26.79 | 0.26 | 4.69 | 4.95 | (0.08) | – | (0.08) |
| 2020 | 24.84 | 0.17 | 2.54 | 2.71 | (0.48) | (0.28) | (0.76) |
| 2019 | 23.87 | 0.47 | 1.21 | 1.68 | (0.20) | (0.51) | (0.71) |
| 2018 | 28.98 | 0.25 | (5.06) | (4.81) | (0.30) | – | (0.30) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 31.60 | 0.44 | (9.95) | (9.51) | (0.46) | (1.75) | (2.21) |
| 2021 | 26.74 | 0.36 | 4.65 | 5.01 | (0.15) | – | (0.15) |
| 2020 | 24.79 | 0.26 | 2.52 | 2.78 | (0.55) | (0.28) | (0.83) |
| 2019 | 23.84 | 0.15 | 1.58 | 1.73 | (0.27) | (0.51) | (0.78) |
| 2018 | 28.93 | 0.35 | (5.08) | (4.73) | (0.36) | – | (0.36) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Effective January 3, 2022, International Emerging Markets Fund changed its name to Global Emerging Markets Fund.

<sup>(c)</sup>

Includes 0.01% of expenses associated with the reclaim of foreign taxes paid. The expense is not subject to the Manager's contractual expense limit.

<sup>(d)</sup>

During the year ended October 31, 2020, the fund experienced a significant one time gain of approximately $0.11/share as a result of a settlement in a litigation proceeding. If such gain had not been recognized, the total return amounts expressed herein would have been lower.

<sup>(e)</sup>

Reflects Manager's contractual expense limit.

<sup>(f)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $19.79 | (32.54)% | $3733 | 1.69% | 1.23% | 34.7% |
| 31.46 | 18.09 | 6358 | 1.68<sup>(c)</sup> <br>| 0.53 | 43.9 |
| 26.64 | 10.67<sup>(d)</sup> <br>| 5693 | 1.71<sup>(e)</sup> <br>| 0.39 | 53.9 |
| 24.72 | 7.05 | 6052 | 1.73<sup>(e)</sup> <br>| 1.70 | 148.3 |
| 23.70 | (17.04) | 6718 | 1.82<sup>(c)</sup> <br>| 0.55 | 118.1 |
| 19.94 | (32.40) | 2335 | 1.50 | 1.51 | 34.7 |
| 31.69 | 18.32 | 3585 | 1.49<sup>(c)</sup> <br>| 0.69 | 43.9 |
| 26.82 | 10.85<sup>(d)(f)</sup> <br>| 3184 | 1.52<sup>(e)</sup> <br>| 0.56 | 53.9 |
| 24.84 | 7.28<sup>(f)</sup> <br>| 4440 | 1.54<sup>(e)</sup> <br>| 1.72 | 148.3 |
| 23.83 | (16.89) | 7036 | 1.63<sup>(c)</sup> <br>| 0.80 | 118.1 |
| 19.93 | (32.32) | 4563 | 1.38 | 1.60 | 34.7 |
| 31.66 | 18.48 | 8234 | 1.37<sup>(c)</sup> <br>| 0.79 | 43.9 |
| 26.79 | 10.98<sup>(d)(f)</sup> <br>| 8537 | 1.40<sup>(e)</sup> <br>| 0.68 | 53.9 |
| 24.84 | 7.40<sup>(f)</sup> <br>| 10943 | 1.42<sup>(e)</sup> <br>| 1.96 | 148.3 |
| 23.87 | (16.81) | 13593 | 1.51<sup>(c)</sup> <br>| 0.88 | 118.1 |
| 19.88 | (32.14)<sup>(f)</sup> <br>| 2165 | 1.09<sup>(e)</sup> <br>| 1.71 | 34.7 |
| 31.60 | 18.79<sup>(f)</sup> <br>| 4121 | 1.10<sup>(c)(e)</sup> <br>| 1.12 | 43.9 |
| 26.74 | 11.31<sup>(d)(f)</sup> <br>| 3086 | 1.09<sup>(e)</sup> <br>| 1.07 | 53.9 |
| 24.79 | 7.66<sup>(f)</sup> <br>| 7834 | 1.14<sup>(e)</sup> <br>| 0.63 | 148.3 |
| 23.84 | (16.58) | 437789 | 1.22<sup>(c)(e)</sup> <br>| 1.21 | 118.1 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **GLOBAL REAL ESTATE SECURITIES FUND** | **GLOBAL REAL ESTATE SECURITIES FUND** | **GLOBAL REAL ESTATE SECURITIES FUND** | **GLOBAL REAL ESTATE SECURITIES FUND** | **GLOBAL REAL ESTATE SECURITIES FUND** | **GLOBAL REAL ESTATE SECURITIES FUND** | **GLOBAL REAL ESTATE SECURITIES FUND** | **GLOBAL REAL ESTATE SECURITIES FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $10.83 | $0.14 | $(3.03) | $(2.89) | $(0.21) | $(0.04) | $(0.25) |
| 2021 | 7.98 | 0.12 | 2.80 | 2.92 | (0.07) | – | (0.07) |
| 2020 | 10.11 | 0.13 | (1.83) | (1.70) | (0.12) | (0.31) | (0.43) |
| 2019 | 8.62 | 0.12 | 1.79 | 1.91 | (0.36) | (0.06) | (0.42) |
| 2018 | 8.87 | 0.16 | – | 0.16 | (0.26) | (0.15) | (0.41) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 11.76 | 0.19 | (3.30) | (3.11) | (0.24) | (0.04) | (0.28) |
| 2021 | 8.64 | 0.16 | 3.04 | 3.20 | (0.08) | – | (0.08) |
| 2020 | 10.90 | 0.17 | (1.97) | (1.80) | (0.15) | (0.31) | (0.46) |
| 2019 | 9.25 | 0.17 | 1.93 | 2.10 | (0.39) | (0.06) | (0.45) |
| 2018 | 9.49 | 0.20 | – | 0.20 | (0.29) | (0.15) | (0.44) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 11.68 | 0.13 | (3.26) | (3.13) | (0.20) | (0.04) | (0.24) |
| 2021 | 8.61 | 0.12 | 3.02 | 3.14 | (0.07) | – | (0.07) |
| 2020 | 10.88 | 0.13 | (1.97) | (1.84) | (0.12) | (0.31) | (0.43) |
| 2019 | 9.24 | 0.12 | 1.92 | 2.04 | (0.34) | (0.06) | (0.40) |
| 2018 | 9.48 | 0.15 | 0.01 | 0.16 | (0.25) | (0.15) | (0.40) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 11.70 | 0.15 | (3.27) | (3.12) | (0.21) | (0.04) | (0.25) |
| 2021 | 8.61 | 0.13 | 3.03 | 3.16 | (0.07) | – | (0.07) |
| 2020 | 10.88 | 0.13 | (1.96) | (1.83) | (0.13) | (0.31) | (0.44) |
| 2019 | 9.24 | 0.14 | 1.92 | 2.06 | (0.36) | (0.06) | (0.42) |
| 2018 | 9.48 | 0.18 | – | 0.18 | (0.27) | (0.15) | (0.42) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 11.74 | 0.18 | (3.28) | (3.10) | (0.25) | (0.04) | (0.29) |
| 2021 | 8.64 | 0.14 | 3.03 | 3.17 | (0.07) | – | (0.07) |
| 2020 | 10.90 | 0.14 | (1.95) | (1.81) | (0.14) | (0.31) | (0.45) |
| 2019 | 9.26 | 0.14 | 1.94 | 2.08 | (0.38) | (0.06) | (0.44) |
| 2018 | 9.50 | 0.19 | – | 0.19 | (0.28) | (0.15) | (0.43) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 11.77 | 0.19 | (3.29) | (3.10) | (0.25) | (0.04) | (0.29) |
| 2021 | 8.64 | 0.17 | 3.04 | 3.21 | (0.08) | – | (0.08) |
| 2020 | 10.90 | 0.18 | (1.98) | (1.80) | (0.15) | (0.31) | (0.46) |
| 2019 | 9.25 | 0.17 | 1.94 | 2.11 | (0.40) | (0.06) | (0.46) |
| 2018 | 9.49 | 0.21 | – | 0.21 | (0.30) | (0.15) | (0.45) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $7.69 | (27.34)%<sup>(b)</sup> <br>| $82943 | 1.31% | 1.45% | 16.8% |
| 10.83 | 36.76<sup>(b)</sup> <br>| 112900 | 1.29 | 1.22 | 25.9 |
| 7.98 | (17.41)<sup>(b)</sup> <br>| 83680 | 1.33 | 1.48 | 41.7 |
| 10.11 | 22.96<sup>(b)</sup> <br>| 124180 | 1.35 | 1.28 | 42.4 |
| 8.62 | 1.75<sup>(b)</sup> <br>| 101404 | 1.31 | 1.81 | 24.3 |
| 8.37 | (27.10) | 1422719 | 0.94<sup>(c)</sup> <br>| 1.79 | 16.8 |
| 11.76 | 37.21 | 2394983 | 0.94<sup>(c)</sup> <br>| 1.53 | 25.9 |
| 8.64 | (17.09) | 1587908 | 0.94<sup>(c)</sup> <br>| 1.87 | 41.7 |
| 10.90 | 23.55 | 2203413 | 0.94<sup>(c)</sup> <br>| 1.73 | 42.4 |
| 9.25 | 2.10 | 2176030 | 0.94<sup>(c)</sup> <br>| 2.15 | 24.3 |
| 8.31 | (27.40) | 578 | 1.45 | 1.27 | 16.8 |
| 11.68 | 36.57 | 544 | 1.44 | 1.11 | 25.9 |
| 8.61 | (17.51) | 379 | 1.44 | 1.36 | 41.7 |
| 10.88 | 22.86 | 385 | 1.44 | 1.16 | 42.4 |
| 9.24 | 1.62 | 360 | 1.44 | 1.60 | 24.3 |
| 8.33 | (27.25) | 554 | 1.26 | 1.48 | 16.8 |
| 11.70 | 36.87 | 852 | 1.25 | 1.25 | 25.9 |
| 8.61 | (17.37) | 581 | 1.25 | 1.45 | 41.7 |
| 10.88 | 23.08 | 44 | 1.25 | 1.41 | 42.4 |
| 9.24 | 1.80 | 63 | 1.25 | 1.85 | 24.3 |
| 8.35 | (27.13) | 5935 | 1.14 | 1.79 | 16.8 |
| 11.74 | 36.91 | 353 | 1.13 | 1.27 | 25.9 |
| 8.64 | (17.22) | 199 | 1.13 | 1.57 | 41.7 |
| 10.90 | 23.24 | 161 | 1.13 | 1.36 | 42.4 |
| 9.26 | 1.92 | 12 | 1.13 | 1.98 | 24.3 |
| 8.38 | (27.02) | 707703 | 0.88<sup>(c)</sup> <br>| 1.84 | 16.8 |
| 11.77 | 37.35 | 1585562 | 0.87<sup>(c)</sup> <br>| 1.59 | 25.9 |
| 8.64 | (17.06) | 1039109 | 0.88<sup>(c)</sup> <br>| 1.92 | 41.7 |
| 10.90 | 23.63 | 1133581 | 0.87<sup>(c)</sup> <br>| 1.72 | 42.4 |
| 9.25 | 2.16 | 735742 | 0.88<sup>(c)</sup> <br>| 2.22 | 24.3 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>| **Net Asset**<br> **Value, End**<br> **of Period**<br>|
| **GOVERNMENT & HIGH QUALITY BOND FUND** | **GOVERNMENT & HIGH QUALITY BOND FUND** | **GOVERNMENT & HIGH QUALITY BOND FUND** | **GOVERNMENT & HIGH QUALITY BOND FUND** | **GOVERNMENT & HIGH QUALITY BOND FUND** | **GOVERNMENT & HIGH QUALITY BOND FUND** | **GOVERNMENT & HIGH QUALITY BOND FUND** | **GOVERNMENT & HIGH QUALITY BOND FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $10.32 | $0.09 | $(1.66) | $(1.57) | $(0.13) | $(0.13) | $8.62 |
| 2021 | 10.59 | 0.03 | (0.18) | (0.15) | (0.12) | (0.12) | 10.32 |
| 2020 | 10.52 | 0.15 | 0.14 | 0.29 | (0.22) | (0.22) | 10.59 |
| 2019 | 9.94 | 0.21 | 0.63 | 0.84 | (0.26) | (0.26) | 10.52 |
| 2018 | 10.42 | 0.21 | (0.42) | (0.21) | (0.27) | (0.27) | 9.94 |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 10.35 | 0.09 | (1.68) | (1.59) | (0.12) | (0.12) | 8.64 |
| 2021 | 10.62 | 0.03 | (0.19) | (0.16) | (0.11) | (0.11) | 10.35 |
| 2020 | 10.55 | 0.15 | 0.14 | 0.29 | (0.22) | (0.22) | 10.62 |
| 2019 | 9.97 | 0.20 | 0.63 | 0.83 | (0.25) | (0.25) | 10.55 |
| 2018 | 10.44 | 0.21 | (0.41) | (0.20) | (0.27) | (0.27) | 9.97 |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 10.34 | 0.11 | (1.67) | (1.56) | (0.15) | (0.15) | 8.63 |
| 2021 | 10.61 | 0.06 | (0.19) | (0.13) | (0.14) | (0.14) | 10.34 |
| 2020 | 10.54 | 0.18 | 0.14 | 0.32 | (0.25) | (0.25) | 10.61 |
| 2019 | 9.96 | 0.24 | 0.63 | 0.87 | (0.29) | (0.29) | 10.54 |
| 2018 | 10.43 | 0.24 | (0.41) | (0.17) | (0.30) | (0.30) | 9.96 |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 10.34 | 0.04 | (1.66) | (1.62) | (0.08) | (0.08) | 8.64 |
| 2021 | 10.62 | (0.02) | (0.20) | (0.22) | (0.06) | (0.06) | 10.34 |
| 2020 | 10.55 | 0.10 | 0.14 | 0.24 | (0.17) | (0.17) | 10.62 |
| 2019 | 9.96 | 0.16 | 0.64 | 0.80 | (0.21) | (0.21) | 10.55 |
| 2018 | 10.44 | 0.16 | (0.42) | (0.26) | (0.22) | (0.22) | 9.96 |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 10.34 | 0.07 | (1.66) | (1.59) | (0.11) | (0.11) | 8.64 |
| 2021 | 10.62 | 0.01 | (0.19) | (0.18) | (0.10) | (0.10) | 10.34 |
| 2020 | 10.55 | 0.14 | 0.13 | 0.27 | (0.20) | (0.20) | 10.62 |
| 2019 | 9.96 | 0.19 | 0.64 | 0.83 | (0.24) | (0.24) | 10.55 |
| 2018 | 10.44 | 0.19 | (0.42) | (0.23) | (0.25) | (0.25) | 9.96 |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 10.35 | 0.09 | (1.68) | (1.59) | (0.12) | (0.12) | 8.64 |
| 2021 | 10.62 | 0.03 | (0.18) | (0.15) | (0.12) | (0.12) | 10.35 |
| 2020 | 10.55 | 0.16 | 0.13 | 0.29 | (0.22) | (0.22) | 10.62 |
| 2019 | 9.97 | 0.21 | 0.63 | 0.84 | (0.26) | (0.26) | 10.55 |
| 2018 | 10.44 | 0.21 | (0.41) | (0.20) | (0.27) | (0.27) | 9.97 |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 10.35 | 0.10 | (1.67) | (1.57) | (0.14) | (0.14) | 8.64 |
| 2021 | 10.62 | 0.05 | (0.19) | (0.14) | (0.13) | (0.13) | 10.35 |
| 2020 | 10.55 | 0.17 | 0.14 | 0.31 | (0.24) | (0.24) | 10.62 |
| 2019 | 9.97 | 0.22 | 0.64 | 0.86 | (0.28) | (0.28) | 10.55 |
| 2018 | 10.45 | 0.22 | (0.42) | (0.20) | (0.28) | (0.28) | 9.97 |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(d)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(e)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| (15.37)%<sup>(b)</sup> <br>| $172969 | 0.78% | –% | 0.94% | 352.1% |
| (1.44)<sup>(b)</sup> <br>| 229225 | 0.77 | – | 0.32 | 343.7 |
| 2.82<sup>(b)</sup> <br>| 263721 | 0.80 | – | 1.44 | 84.3 |
| 8.53<sup>(b)</sup> <br>| 234134 | 0.83 | 0.87<sup>(c)</sup> <br>| 2.01 | 23.2 |
| (2.04)<sup>(b)</sup> <br>| 227870 | 0.81 | 0.91<sup>(c)</sup> <br>| 2.06 | 19.9 |
| (15.46)<sup>(b)</sup> <br>| 77181 | 0.82<sup>(d)</sup> <br>| 0.84<sup>(c)</sup> <br>| 0.90 | 352.1 |
| (1.47)<sup>(b)</sup> <br>| 99128 | 0.80<sup>(d)</sup> <br>| 0.83<sup>(c)</sup> <br>| 0.29 | 343.7 |
| 2.79<sup>(b)</sup> <br>| 117748 | 0.82<sup>(d)</sup> <br>| 0.85<sup>(c)</sup> <br>| 1.42 | 84.3 |
| 8.45<sup>(b)</sup> <br>| 108140 | 0.88<sup>(d)</sup> <br>| 0.91<sup>(c)</sup> <br>| 1.96 | 23.2 |
| (1.98)<sup>(b)</sup> <br>| 100537 | 0.85<sup>(d)</sup> <br>| 0.88<sup>(c)</sup> <br>| 2.03 | 19.9 |
| (15.22) | 500833 | 0.52<sup>(e)</sup> <br>| – | 1.18 | 352.1 |
| (1.19) | 770058 | 0.52<sup>(e)</sup> <br>| – | 0.58 | 343.7 |
| 3.09 | 1083668 | 0.53<sup>(e)</sup> <br>| – | 1.72 | 84.3 |
| 8.84 | 1236943 | 0.53<sup>(e)</sup> <br>| – | 2.31 | 23.2 |
| (1.67) | 1058699 | 0.53<sup>(e)</sup> <br>| – | 2.35 | 19.9 |
| (15.77) | 2393 | 1.29<sup>(e)</sup> <br>| – | 0.44 | 352.1 |
| (2.04) | 2797 | 1.29<sup>(e)</sup> <br>| – | (0.19) | 343.7 |
| 2.30 | 5048 | 1.29<sup>(e)</sup> <br>| – | 0.92 | 84.3 |
| 8.12 | 3324 | 1.29<sup>(e)</sup> <br>| – | 1.55 | 23.2 |
| (2.51) | 2412 | 1.29<sup>(e)</sup> <br>| – | 1.59 | 19.9 |
| (15.51) | 3656 | 0.98<sup>(e)</sup> <br>| – | 0.73 | 352.1 |
| (1.74) | 5493 | 0.98<sup>(e)</sup> <br>| – | 0.11 | 343.7 |
| 2.62 | 8704 | 0.98<sup>(e)</sup> <br>| – | 1.29 | 84.3 |
| 8.45 | 11288 | 0.98<sup>(e)</sup> <br>| – | 1.86 | 23.2 |
| (2.21) | 10622 | 0.98<sup>(e)</sup> <br>| – | 1.90 | 19.9 |
| (15.43) | 5283 | 0.79<sup>(e)</sup> <br>| – | 0.93 | 352.1 |
| (1.46) | 7522 | 0.79<sup>(e)</sup> <br>| – | 0.31 | 343.7 |
| 2.82 | 6419 | 0.79<sup>(e)</sup> <br>| – | 1.50 | 84.3 |
| 8.55 | 9826 | 0.79<sup>(e)</sup> <br>| – | 2.05 | 23.2 |
| (1.92) | 10117 | 0.79<sup>(e)</sup> <br>| – | 2.09 | 19.9 |
| (15.33) | 8761 | 0.67<sup>(e)</sup> <br>| – | 1.02 | 352.1 |
| (1.34) | 16336 | 0.67<sup>(e)</sup> <br>| – | 0.43 | 343.7 |
| 2.94 | 24044 | 0.67<sup>(e)</sup> <br>| – | 1.57 | 84.3 |
| 8.67 | 22401 | 0.67<sup>(e)</sup> <br>| – | 2.17 | 23.2 |
| (1.90) | 20523 | 0.67<sup>(e)</sup> <br>| – | 2.20 | 19.9 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>| **Net Asset**<br> **Value, End**<br> **of Period**<br>| **Total**<br> **Return**<br>|
| **GOVERNMENT MONEY MARKET FUND** | **GOVERNMENT MONEY MARKET FUND** | **GOVERNMENT MONEY MARKET FUND** | **GOVERNMENT MONEY MARKET FUND** | **GOVERNMENT MONEY MARKET FUND** | **GOVERNMENT MONEY MARKET FUND** | **GOVERNMENT MONEY MARKET FUND** | **GOVERNMENT MONEY MARKET FUND** |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | $1.00 | $0.01 | $0.01 | $(0.01) | $(0.01) | $1.00 | 0.81% |
| 2021 | 1.00 | – | – | – | – | 1.00 | 0.00 |
| 2020 | 1.00 | 0.01 | 0.01 | (0.01) | (0.01) | 1.00 | 0.60 |
| 2019 | 1.00 | 0.02 | 0.02 | (0.02) | (0.02) | 1.00 | 2.17 |
| 2018<sup>(e)</sup> <br>| 1.00 | 0.01 | 0.01 | (0.01) | (0.01) | 1.00 | 1.38<sup>(f)</sup> <br>|

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Reflects Manager's contractual and/or voluntary expense limit.

<sup>(c)</sup>

Excludes expense reimbursement from Manager.

<sup>(d)</sup>

Reflects Manager's contractual expense limit.

<sup>(e)</sup>

Period from December 20, 2017, date operations commenced, through October 31, 2018.

<sup>(f)</sup>

Total return amounts have not been annualized.

<sup>(g)</sup>

Computed on an annualized basis.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>|
| $2979627<br> 0.14%<sup>(b)</sup> <br>| 0.15%<sup>(c)</sup> <br>| 0.73% |
| 3657679<br> 0.04<sup>(b)</sup> <br>| 0.16<sup>(c)</sup> <br>| 0.00 |
| 3077863<br> 0.12<sup>(b)</sup> <br>| 0.16<sup>(c)</sup> <br>| 0.60 |
| 3972463<br> 0.14<sup>(d)</sup> <br>| – | 2.13 |
| 3285396<br> 0.14<sup>(d)(g)</sup> <br>| – | 1.58<sup>(g)</sup> <br>|

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>| **Net Asset**<br> **Value, End**<br> **of Period**<br>|
| **HIGH INCOME FUND** | **HIGH INCOME FUND** | **HIGH INCOME FUND** | **HIGH INCOME FUND** | **HIGH INCOME FUND** | **HIGH INCOME FUND** | **HIGH INCOME FUND** | **HIGH INCOME FUND** |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | $9.36 | $0.45 | $(1.47) | $(1.02) | $(0.48) | $(0.48) | $7.86 |
| 2021 | 9.00 | 0.47 | 0.38 | 0.85 | (0.49) | (0.49) | 9.36 |
| 2020 | 9.30 | 0.54 | (0.29) | 0.25 | (0.55) | (0.55) | 9.00 |
| 2019 | 9.45 | 0.60 | (0.13) | 0.47 | (0.62) | (0.62) | 9.30 |
| 2018 | 9.98 | 0.56 | (0.53) | 0.03 | (0.56) | (0.56) | 9.45 |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| (10.90)%<sup>(b)</sup> <br>| $3079579 | 0.60%<sup>(c)</sup> <br>| 5.27% | 48.1% |
| 9.45<sup>(b)</sup> <br>| 3720936 | 0.60<sup>(c)</sup> <br>| 4.99 | 62.8 |
| 2.85<sup>(b)</sup> <br>| 3020358 | 0.61<sup>(c)</sup> <br>| 6.04 | 73.8 |
| 5.22<sup>(b)</sup> <br>| 3112267 | 0.61<sup>(c)</sup> <br>| 6.42 | 56.5 |
| 0.35 | 3755184 | 0.65 | 5.81 | 42.5 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>| **Net Asset**<br> **Value, End**<br> **of Period**<br>|
| **HIGH YIELD FUND** | **HIGH YIELD FUND** | **HIGH YIELD FUND** | **HIGH YIELD FUND** | **HIGH YIELD FUND** | **HIGH YIELD FUND** | **HIGH YIELD FUND** | **HIGH YIELD FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $7.33 | $0.32 | $(1.02) | $(0.70) | $(0.34) | $(0.34) | $6.29 |
| 2021 | 7.01 | 0.32 | 0.35 | 0.67 | (0.35) | (0.35) | 7.33 |
| 2020 | 7.15 | 0.36 | (0.13) | 0.23 | (0.37) | (0.37) | 7.01 |
| 2019 | 7.11 | 0.38 | 0.06 | 0.44 | (0.40) | (0.40) | 7.15 |
| 2018 | 7.55 | 0.39 | (0.42) | (0.03) | (0.41) | (0.41) | 7.11 |
| **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** |
| 2022 | 7.43 | 0.27 | (1.03) | (0.76) | (0.29) | (0.29) | 6.38 |
| 2021 | 7.10 | 0.28 | 0.34 | 0.62 | (0.29) | (0.29) | 7.43 |
| 2020 | 7.23 | 0.32 | (0.13) | 0.19 | (0.32) | (0.32) | 7.10 |
| 2019 | 7.19 | 0.34 | 0.05 | 0.39 | (0.35) | (0.35) | 7.23 |
| 2018 | 7.63 | 0.34 | (0.43) | (0.09) | (0.35) | (0.35) | 7.19 |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 7.27 | 0.34 | (1.01) | (0.67) | (0.36) | (0.36) | 6.24 |
| 2021 | 6.96 | 0.34 | 0.34 | 0.68 | (0.37) | (0.37) | 7.27 |
| 2020 | 7.10 | 0.38 | (0.13) | 0.25 | (0.39) | (0.39) | 6.96 |
| 2019 | 7.06 | 0.40 | 0.06 | 0.46 | (0.42) | (0.42) | 7.10 |
| 2018 | 7.50 | 0.41 | (0.42) | (0.01) | (0.43) | (0.43) | 7.06 |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 7.27 | 0.35 | (1.01) | (0.66) | (0.37) | (0.37) | 6.24 |
| 2021 | 6.96 | 0.35 | 0.34 | 0.69 | (0.38) | (0.38) | 7.27 |
| 2020 | 7.10 | 0.38 | (0.12) | 0.26 | (0.40) | (0.40) | 6.96 |
| 2019 | 7.06 | 0.41 | 0.06 | 0.47 | (0.43) | (0.43) | 7.10 |
| 2018 | 7.50 | 0.42 | (0.42) | – | (0.44) | (0.44) | 7.06 |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

<sup>(d)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| (9.71)%<sup>(b)</sup> <br>| $426999 | 0.91% | 4.74% | 33.1% |
| 9.64<sup>(b)</sup> <br>| 539969 | 0.91 | 4.44 | 63.0 |
| 3.39<sup>(b)</sup> <br>| 513993 | 0.91 | 5.22 | 77.7 |
| 6.36<sup>(b)</sup> <br>| 615367 | 0.94 | 5.40 | 49.8 |
| (0.45)<sup>(b)</sup> <br>| 609934 | 0.92 | 5.35 | 42.0 |
| (10.42)<sup>(b)</sup> <br>| 39928 | 1.69 | 3.94 | 33.1 |
| 8.87<sup>(b)</sup> <br>| 62973 | 1.64 | 3.74 | 63.0 |
| 2.74<sup>(b)</sup> <br>| 118320 | 1.65 | 4.51 | 77.7 |
| 5.52<sup>(b)</sup> <br>| 170730 | 1.67 | 4.72 | 49.8 |
| (1.16)<sup>(b)</sup> <br>| 259729 | 1.63 | 4.64 | 42.0 |
| (9.50)<sup>(c)</sup> <br>| 1140046 | 0.61<sup>(d)</sup> <br>| 5.04 | 33.1 |
| 10.05<sup>(c)</sup> <br>| 1535963 | 0.61<sup>(d)</sup> <br>| 4.73 | 63.0 |
| 3.73 | 1379657 | 0.61<sup>(d)</sup> <br>| 5.51 | 77.7 |
| 6.76 | 1496764 | 0.61<sup>(d)</sup> <br>| 5.75 | 49.8 |
| (0.15) | 1686309 | 0.61<sup>(d)</sup> <br>| 5.67 | 42.0 |
| (9.42)<sup>(c)</sup> <br>| 557144 | 0.52 | 5.12 | 33.1 |
| 10.15<sup>(c)</sup> <br>| 757781 | 0.52<sup>(d)</sup> <br>| 4.84 | 63.0 |
| 3.82 | 971122 | 0.52<sup>(d)</sup> <br>| 5.57 | 77.7 |
| 6.86 | 688121 | 0.52<sup>(d)</sup> <br>| 5.81 | 49.8 |
| (0.06) | 447288 | 0.52<sup>(d)</sup> <br>| 5.76 | 42.0 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **INFLATION PROTECTION FUND** | **INFLATION PROTECTION FUND** | **INFLATION PROTECTION FUND** | **INFLATION PROTECTION FUND** | **INFLATION PROTECTION FUND** | **INFLATION PROTECTION FUND** | **INFLATION PROTECTION FUND** | **INFLATION PROTECTION FUND** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $9.31 | $0.53 | $(1.56) | $(1.03) | $(0.36) | $(0.29) | $(0.65) |
| 2021 | 8.83 | 0.28 | 0.24 | 0.52 | (0.04) | – | (0.04) |
| 2020 | 8.22 | 0.05 | 0.62 | 0.67 | (0.06) | – | (0.06) |
| 2019 | 7.96 | 0.08 | 0.49 | 0.57 | (0.31) | – | (0.31) |
| 2018 | 8.28 | 0.15 | (0.31) | (0.16) | (0.16) | – | (0.16) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 9.83 | 0.56 | (1.62) | (1.06) | (0.39) | (0.29) | (0.68) |
| 2021 | 9.29 | 0.29 | 0.30 | 0.59 | (0.05) | – | (0.05) |
| 2020 | 8.63 | 0.10 | 0.66 | 0.76 | (0.10) | – | (0.10) |
| 2019 | 8.33 | 0.15 | 0.51 | 0.66 | (0.36) | – | (0.36) |
| 2018 | 8.61 | 0.21 | (0.32) | (0.11) | (0.17) | – | (0.17) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 9.10 | 0.49 | (1.55) | (1.06) | (0.31) | (0.29) | (0.60) |
| 2021 | 8.65 | 0.21 | 0.26 | 0.47 | (0.02) | – | (0.02) |
| 2020 | 8.06 | 0.02 | 0.62 | 0.64 | (0.05) | – | (0.05) |
| 2019 | 7.81 | 0.08 | 0.47 | 0.55 | (0.30) | – | (0.30) |
| 2018 | 8.14 | 0.14 | (0.32) | (0.18) | (0.15) | – | (0.15) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 9.34 | 0.50 | (1.55) | (1.05) | (0.33) | (0.29) | (0.62) |
| 2021 | 8.86 | 0.25 | 0.26 | 0.51 | (0.03) | – | (0.03) |
| 2020 | 8.25 | 0.05 | 0.62 | 0.67 | (0.06) | – | (0.06) |
| 2019 | 7.98 | 0.10 | 0.49 | 0.59 | (0.32) | – | (0.32) |
| 2018 | 8.29 | 0.16 | (0.31) | (0.15) | (0.16) | – | (0.16) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 9.50 | 0.53 | (1.59) | (1.06) | (0.37) | (0.29) | (0.66) |
| 2021 | 8.99 | 0.20 | 0.35 | 0.55 | (0.04) | – | (0.04) |
| 2020 | 8.37 | 0.06 | 0.63 | 0.69 | (0.07) | – | (0.07) |
| 2019 | 8.09 | 0.12 | 0.49 | 0.61 | (0.33) | – | (0.33) |
| 2018 | 8.39 | 0.17 | (0.30) | (0.13) | (0.17) | – | (0.17) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 9.62 | 0.54 | (1.60) | (1.06) | (0.37) | (0.29) | (0.66) |
| 2021 | 9.10 | 0.29 | 0.27 | 0.56 | (0.04) | – | (0.04) |
| 2020 | 8.46 | 0.07 | 0.65 | 0.72 | (0.08) | – | (0.08) |
| 2019 | 8.18 | 0.12 | 0.50 | 0.62 | (0.34) | – | (0.34) |
| 2018 | 8.47 | 0.19 | (0.31) | (0.12) | (0.17) | – | (0.17) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $7.63 | (11.90)%<sup>(b)</sup> <br>| $18034 | 0.73%<sup>(c)</sup> <br>| 0.75%<sup>(d)</sup> <br>| 6.29% | 108.3% |
| 9.31 | 5.85<sup>(b)</sup> <br>| 16550 | 0.85<sup>(c)</sup> <br>| 0.87<sup>(d)</sup> <br>| 3.04 | 67.7 |
| 8.83 | 8.15<sup>(b)</sup> <br>| 9826 | 1.03<sup>(c)</sup> <br>| 1.06<sup>(d)</sup> <br>| 0.55 | 80.9 |
| 8.22 | 7.37<sup>(b)</sup> <br>| 6177 | 1.18<sup>(c)</sup> <br>| 1.27<sup>(d)</sup> <br>| 1.00 | 68.4 |
| 7.96 | (2.02)<sup>(b)</sup> <br>| 6213 | 1.07<sup>(c)</sup> <br>| 1.10<sup>(d)</sup> <br>| 1.85 | 84.0 |
| 8.09 | (11.61) | 1616313 | 0.39 | – | 6.34 | 108.3 |
| 9.83 | 6.33 | 1471415 | 0.39 | – | 3.03 | 67.7 |
| 9.29 | 8.83 | 1745470 | 0.39 | – | 1.11 | 80.9 |
| 8.63 | 8.15 | 1720548 | 0.39 | – | 1.82 | 68.4 |
| 8.33 | (1.27) | 1542325 | 0.39 | – | 2.51 | 84.0 |
| 7.44 | (12.36)<sup>(e)</sup> <br>| 663 | 1.27 | – | 5.92 | 108.3 |
| 9.10 | 5.37<sup>(e)</sup> <br>| 1258 | 1.27 | – | 2.33 | 67.7 |
| 8.65 | 7.93 | 1427 | 1.26 | – | 0.22 | 80.9 |
| 8.06 | 7.29 | 1009 | 1.27 | – | 0.96 | 68.4 |
| 7.81 | (2.22) | 988 | 1.27 | – | 1.69 | 84.0 |
| 7.67 | (12.09) | 6749 | 0.96 | – | 5.90 | 108.3 |
| 9.34 | 5.80 | 7120 | 0.96 | – | 2.76 | 67.7 |
| 8.86 | 8.17 | 8491 | 0.95 | – | 0.58 | 80.9 |
| 8.25 | 7.64 | 6836 | 0.96 | – | 1.22 | 68.4 |
| 7.98 | (1.85) | 6781 | 0.96 | – | 1.97 | 84.0 |
| 7.78 | (11.95) | 4051 | 0.77 | – | 6.17 | 108.3 |
| 9.50 | 6.09 | 5912 | 0.77 | – | 2.17 | 67.7 |
| 8.99 | 8.32 | 1780 | 0.76 | – | 0.70 | 80.9 |
| 8.37 | 7.82 | 1327 | 0.77 | – | 1.49 | 68.4 |
| 8.09 | (1.65) | 1588 | 0.77 | – | 2.00 | 84.0 |
| 7.90 | (11.83) | 4251 | 0.65 | – | 6.26 | 108.3 |
| 9.62 | 6.16 | 4114 | 0.65 | – | 3.06 | 67.7 |
| 9.10 | 8.56 | 4592 | 0.64 | – | 0.82 | 80.9 |
| 8.46 | 7.82 | 2679 | 0.65 | – | 1.43 | 68.4 |
| 8.18 | (1.48) | 3427 | 0.65 | – | 2.24 | 84.0 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **INTERNATIONAL FUND I** | **INTERNATIONAL FUND I** | **INTERNATIONAL FUND I** | **INTERNATIONAL FUND I** | **INTERNATIONAL FUND I** | **INTERNATIONAL FUND I** | **INTERNATIONAL FUND I** | **INTERNATIONAL FUND I** |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | $18.41 | $0.41 | $(5.23) | $(4.82) | $(0.41) | $(1.94) | $(2.35) |
| 2021 | 15.19 | 0.44 | 3.88 | 4.32 | (0.21) | (0.89) | (1.10) |
| 2020 | 14.94 | 0.22 | 0.41 | 0.63 | (0.38) | – | (0.38) |
| 2019 | 14.17 | 0.33 | 1.42 | 1.75 | (0.32) | (0.66) | (0.98) |
| 2018 | 16.73 | 0.33 | (2.71) | (2.38) | (0.18) | – | (0.18) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 18.31 | 0.30 | (5.22) | (4.92) | (0.27) | (1.94) | (2.21) |
| 2021 | 15.11 | 0.29 | 3.89 | 4.18 | (0.09) | (0.89) | (0.98) |
| 2020 | 14.85 | 0.10 | 0.40 | 0.50 | (0.24) | – | (0.24) |
| 2019 | 14.06 | 0.22 | 1.42 | 1.64 | (0.19) | (0.66) | (0.85) |
| 2018 | 16.62 | 0.15 | (2.65) | (2.50) | (0.06) | – | (0.06) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 18.35 | 0.34 | (5.22) | (4.88) | (0.32) | (1.94) | (2.26) |
| 2021 | 15.15 | 0.38 | 3.85 | 4.23 | (0.14) | (0.89) | (1.03) |
| 2020 | 14.89 | 0.14 | 0.42 | 0.56 | (0.30) | – | (0.30) |
| 2019 | 14.11 | 0.24 | 1.44 | 1.68 | (0.24) | (0.66) | (0.90) |
| 2018 | 16.66 | 0.20 | (2.65) | (2.45) | (0.10) | – | (0.10) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 18.40 | 0.37 | (5.24) | (4.87) | (0.35) | (1.94) | (2.29) |
| 2021 | 15.17 | 0.38 | 3.90 | 4.28 | (0.16) | (0.89) | (1.05) |
| 2020 | 14.90 | 0.18 | 0.40 | 0.58 | (0.31) | – | (0.31) |
| 2019 | 14.14 | 0.30 | 1.41 | 1.71 | (0.29) | (0.66) | (0.95) |
| 2018 | 16.70 | 0.25 | (2.68) | (2.43) | (0.13) | – | (0.13) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 18.39 | 0.38 | (5.23) | (4.85) | (0.34) | (1.94) | (2.28) |
| 2021 | 15.17 | 0.40 | 3.90 | 4.30 | (0.19) | (0.89) | (1.08) |
| 2020 | 14.91 | 0.19 | 0.40 | 0.59 | (0.33) | – | (0.33) |
| 2019 | 14.12 | 0.31 | 1.42 | 1.73 | (0.28) | (0.66) | (0.94) |
| 2018 | 16.68 | 0.25 | (2.66) | (2.41) | (0.15) | – | (0.15) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 18.41 | 0.42 | (5.22) | (4.80) | (0.42) | (1.94) | (2.36) |
| 2021 | 15.19 | 0.45 | 3.89 | 4.34 | (0.23) | (0.89) | (1.12) |
| 2020 | 14.94 | 0.23 | 0.41 | 0.64 | (0.39) | – | (0.39) |
| 2019 | 14.17 | 0.36 | 1.40 | 1.76 | (0.33) | (0.66) | (0.99) |
| 2018 | 16.72 | 0.30 | (2.66) | (2.36) | (0.19) | – | (0.19) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Reflects Manager's contractual expense limit.

<sup>(c)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $11.24 | (29.86)% | $88476 | 0.87%<sup>(b)</sup> <br>| 2.93% | 60.5% |
| 18.41 | 29.33 | 133135 | 0.90<sup>(b)</sup> <br>| 2.43 | 55.0 |
| 15.19 | 4.14 | 100695 | 0.90<sup>(b)</sup> <br>| 1.48 | 68.4 |
| 14.94 | 14.09 | 114993 | 0.92<sup>(b)</sup> <br>| 2.38 | 71.0 |
| 14.17 | (14.42) | 141451 | 1.00<sup>(b)</sup> <br>| 1.96 | 70.2 |
| 11.18 | (30.39) | 944 | 1.65 | 2.14 | 60.5 |
| 18.31 | 28.31<sup>(c)</sup> <br>| 1369 | 1.67 | 1.61 | 55.0 |
| 15.11 | 3.41<sup>(c)</sup> <br>| 1168 | 1.67<sup>(b)</sup> <br>| 0.64 | 68.4 |
| 14.85 | 13.14 | 1701 | 1.72<sup>(b)</sup> <br>| 1.63 | 71.0 |
| 14.06 | (15.12) | 2020 | 1.82 | 0.92 | 70.2 |
| 11.21 | (30.14) | 1649 | 1.34 | 2.40 | 60.5 |
| 18.35 | 28.72 | 3029 | 1.36 | 2.11 | 55.0 |
| 15.15 | 3.71 | 2167 | 1.36<sup>(b)</sup> <br>| 0.94 | 68.4 |
| 14.89 | 13.44 | 2906 | 1.41<sup>(b)</sup> <br>| 1.77 | 71.0 |
| 14.11 | (14.80) | 4019 | 1.51 | 1.19 | 70.2 |
| 11.24 | (30.04) | 1867 | 1.15 | 2.65 | 60.5 |
| 18.40 | 29.05 | 2623 | 1.17 | 2.11 | 55.0 |
| 15.17 | 3.85 | 3110 | 1.17<sup>(b)</sup> <br>| 1.24 | 68.4 |
| 14.90 | 13.71 | 3285 | 1.22<sup>(b)</sup> <br>| 2.20 | 71.0 |
| 14.14 | (14.69) | 5013 | 1.32 | 1.48 | 70.2 |
| 11.26 | (29.95) | 487 | 1.03 | 2.73 | 60.5 |
| 18.39 | 29.12<sup>(c)</sup> <br>| 755 | 1.05 | 2.21 | 55.0 |
| 15.17 | 3.99<sup>(c)</sup> <br>| 1493 | 1.05<sup>(b)</sup> <br>| 1.32 | 68.4 |
| 14.91 | 13.90 | 1932 | 1.10<sup>(b)</sup> <br>| 2.27 | 71.0 |
| 14.12 | (14.61) | 3064 | 1.20 | 1.49 | 70.2 |
| 11.25 | (29.73) | 181468 | 0.76<sup>(b)</sup> <br>| 3.06 | 60.5 |
| 18.41 | 29.47 | 204338 | 0.79<sup>(b)</sup> <br>| 2.51 | 55.0 |
| 15.19 | 4.22 | 173218 | 0.79<sup>(b)</sup> <br>| 1.58 | 68.4 |
| 14.94 | 14.19 | 215444 | 0.82<sup>(b)</sup> <br>| 2.57 | 71.0 |
| 14.17 | (14.32) | 216786 | 0.92<sup>(b)</sup> <br>| 1.76 | 70.2 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **LARGECAP GROWTH FUND I** | **LARGECAP GROWTH FUND I** | **LARGECAP GROWTH FUND I** | **LARGECAP GROWTH FUND I** | **LARGECAP GROWTH FUND I** | **LARGECAP GROWTH FUND I** | **LARGECAP GROWTH FUND I** | **LARGECAP GROWTH FUND I** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $23.75 | $(0.08) | $(6.95) | $(7.03) | $– | $(2.52) | $(2.52) |
| 2021 | 18.39 | (0.11) | 6.91 | 6.80 | – | (1.44) | (1.44) |
| 2020 | 15.59 | (0.07) | 4.15 | 4.08 | – | (1.28) | (1.28) |
| 2019 | 15.08 | (0.05) | 2.26 | 2.21 | – | (1.70) | (1.70) |
| 2018 | 14.62 | (0.05) | 1.90 | 1.85 | – | (1.39) | (1.39) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 19.22 | (0.04) | (5.49) | (5.53) | – | (2.52) | (2.52) |
| 2021 | 15.10 | (0.06) | 5.62 | 5.56 | – | (1.44) | (1.44) |
| 2020 | 13.00 | (0.03) | 3.41 | 3.38 | – | (1.28) | (1.28) |
| 2019 | 12.86 | – | 1.85 | 1.85 | (0.01) | (1.70) | (1.71) |
| 2018 | 12.62 | (0.02) | 1.65 | 1.63 | – | (1.39) | (1.39) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 24.95 | (0.03) | (7.35) | (7.38) | – | (2.52) | (2.52) |
| 2021 | 19.20 | (0.05) | 7.24 | 7.19 | – | (1.44) | (1.44) |
| 2020 | 16.18 | (0.02) | 4.32 | 4.30 | – | (1.28) | (1.28) |
| 2019 | 15.55 | 0.02 | 2.33 | 2.35 | (0.02) | (1.70) | (1.72) |
| 2018 | 15.00 | – | 1.96 | 1.96 | (0.02) | (1.39) | (1.41) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 19.83 | (0.14) | (5.66) | (5.80) | – | (2.52) | (2.52) |
| 2021 | 15.64 | (0.18) | 5.81 | 5.63 | – | (1.44) | (1.44) |
| 2020 | 13.50 | (0.13) | 3.55 | 3.42 | – | (1.28) | (1.28) |
| 2019 | 13.35 | (0.08) | 1.93 | 1.85 | – | (1.70) | (1.70) |
| 2018 | 13.14 | (0.11) | 1.71 | 1.60 | – | (1.39) | (1.39) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

<sup>(d)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

<sup>(e)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(f)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $14.20 | (32.72)%<sup>(b)</sup> <br>| $389907<br> 0.96%<sup>(c)</sup> <br>| –% | (0.46)% | 28.4% |
| 23.75 | 38.72<sup>(b)</sup> <br>| 632010<br> 0.95<sup>(c)</sup> <br>| – | (0.51) | 23.1 |
| 18.39 | 27.86<sup>(b)</sup> <br>| 487128<br> 0.99<sup>(c)</sup> <br>| – | (0.43) | 33.6 |
| 15.59 | 17.51<sup>(b)(d)</sup> <br>| 414599<br> 1.00<sup>(c)</sup> <br>| – | (0.37) | 28.1 |
| 15.08 | 13.21<sup>(b)(d)</sup> <br>| 39217<br> 1.04<sup>(c)</sup> <br>| – | (0.36) | 34.8 |
| 11.17 | (32.65)<sup>(b)(d)</sup> <br>| 269806<br> 0.79<sup>(e)</sup> <br>| 0.83<sup>(f)</sup> <br>| (0.29) | 28.4 |
| 19.22 | 39.03<sup>(b)(d)</sup> <br>| 445587<br> 0.78<sup>(e)</sup> <br>| 0.82<sup>(f)</sup> <br>| (0.34) | 23.1 |
| 15.10 | 28.03<sup>(b)</sup> <br>| 331514<br> 0.80<sup>(e)</sup> <br>| 0.85<sup>(f)</sup> <br>| (0.23) | 33.6 |
| 13.00 | 17.85<sup>(b)</sup> <br>| 274328<br> 0.82<sup>(e)</sup> <br>| 0.87<sup>(f)</sup> <br>| (0.01) | 28.1 |
| 12.86 | 13.50<sup>(b)</sup> <br>| 180871<br> 0.81<sup>(e)</sup> <br>| 0.86<sup>(f)</sup> <br>| (0.12) | 34.8 |
| 15.05 | (32.53) | 2371763<br> 0.68<sup>(c)</sup> <br>| – | (0.18) | 28.4 |
| 24.95 | 39.14 | 3460761<br> 0.67<sup>(c)</sup> <br>| – | (0.23) | 23.1 |
| 19.20 | 28.23 | 2630670<br> 0.68<sup>(c)</sup> <br>| – | (0.11) | 33.6 |
| 16.18 | 18.02 | 2366040<br> 0.68<sup>(c)</sup> <br>| – | 0.15 | 28.1 |
| 15.55 | 13.60 | 2181951<br> 0.67<sup>(c)</sup> <br>| – | 0.03 | 34.8 |
| 11.51 | (33.05)<sup>(d)</sup> <br>| 8728<br> 1.47<sup>(c)</sup> <br>| – | (0.97) | 28.4 |
| 19.83 | 38.07<sup>(d)</sup> <br>| 14313<br> 1.46<sup>(c)</sup> <br>| – | (1.02) | 23.1 |
| 15.64 | 27.22 | 11345<br> 1.47<sup>(c)</sup> <br>| – | (0.90) | 33.6 |
| 13.50 | 17.12 | 10940<br> 1.47<sup>(c)</sup> <br>| – | (0.64) | 28.1 |
| 13.35 | 12.68 | 8097<br> 1.47<sup>(c)</sup> <br>| – | (0.78) | 34.8 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **LARGECAP GROWTH FUND I** | **LARGECAP GROWTH FUND I** | **LARGECAP GROWTH FUND I** | **LARGECAP GROWTH FUND I** | **LARGECAP GROWTH FUND I** | **LARGECAP GROWTH FUND I** | **LARGECAP GROWTH FUND I** | **LARGECAP GROWTH FUND I** |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | $21.70 | $(0.10) | $(6.28) | $(6.38) | $– | $(2.52) | $(2.52) |
| 2021 | 16.94 | (0.14) | 6.34 | 6.20 | – | (1.44) | (1.44) |
| 2020 | 14.48 | (0.09) | 3.83 | 3.74 | – | (1.28) | (1.28) |
| 2019 | 14.15 | (0.04) | 2.07 | 2.03 | – | (1.70) | (1.70) |
| 2018 | 13.81 | (0.07) | 1.80 | 1.73 | – | (1.39) | (1.39) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 22.41 | (0.08) | (6.51) | (6.59) | – | (2.52) | (2.52) |
| 2021 | 17.42 | (0.10) | 6.53 | 6.43 | – | (1.44) | (1.44) |
| 2020 | 14.83 | (0.06) | 3.93 | 3.87 | – | (1.28) | (1.28) |
| 2019 | 14.42 | (0.02) | 2.13 | 2.11 | – | (1.70) | (1.70) |
| 2018 | 14.02 | (0.04) | 1.83 | 1.79 | – | (1.39) | (1.39) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 23.65 | (0.06) | (6.92) | (6.98) | – | (2.52) | (2.52) |
| 2021 | 18.29 | (0.08) | 6.88 | 6.80 | – | (1.44) | (1.44) |
| 2020 | 15.50 | (0.04) | 4.11 | 4.07 | – | (1.28) | (1.28) |
| 2019 | 14.98 | – | 2.22 | 2.22 | – | (1.70) | (1.70) |
| 2018 | 14.49 | (0.02) | 1.90 | 1.88 | – | (1.39) | (1.39) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 24.96 | (0.02) | (7.35) | (7.37) | – | (2.52) | (2.52) |
| 2021 | 19.19 | (0.03) | 7.25 | 7.22 | – | (1.45) | (1.45) |
| 2020 | 16.17 | – | 4.32 | 4.32 | (0.03) | (1.27) | (1.30) |
| 2019 | 15.55 | 0.04 | 2.31 | 2.35 | (0.03) | (1.70) | (1.73) |
| 2018 | 14.99 | 0.02 | 1.96 | 1.98 | (0.03) | (1.39) | (1.42) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $12.80 | (32.85)%<sup>(b)</sup> <br>| $58977<br> 1.16%<sup>(c)</sup> <br>| (0.66)% | 28.4% |
| 21.70 | 38.54<sup>(b)</sup> <br>| 102793<br> 1.15<sup>(c)</sup> <br>| (0.71) | 23.1 |
| 16.94 | 27.61 | 89315<br> 1.16<sup>(c)</sup> <br>| (0.58) | 33.6 |
| 14.48 | 17.46 | 85393<br> 1.16<sup>(c)</sup> <br>| (0.31) | 28.1 |
| 14.15 | 13.03 | 98560<br> 1.16<sup>(c)</sup> <br>| (0.46) | 34.8 |
| 13.30 | (32.71) | 47601<br> 0.97<sup>(c)</sup> <br>| (0.47) | 28.4 |
| 22.41 | 38.75 | 84797<br> 0.96<sup>(c)</sup> <br>| (0.51) | 23.1 |
| 17.42 | 27.86 | 82907<br> 0.97<sup>(c)</sup> <br>| (0.39) | 33.6 |
| 14.83 | 17.71 | 80284<br> 0.97<sup>(c)</sup> <br>| (0.14) | 28.1 |
| 14.42 | 13.28 | 77509<br> 0.97<sup>(c)</sup> <br>| (0.27) | 34.8 |
| 14.15 | (32.64) | 158035<br> 0.85<sup>(c)</sup> <br>| (0.35) | 28.4 |
| 23.65 | 38.94 | 364553<br> 0.84<sup>(c)</sup> <br>| (0.40) | 23.1 |
| 18.29 | 28.04<sup>(b)</sup> <br>| 296527<br> 0.85<sup>(c)</sup> <br>| (0.27) | 33.6 |
| 15.50 | 17.72<sup>(b)</sup> <br>| 293297<br> 0.85<sup>(c)</sup> <br>| (0.01) | 28.1 |
| 14.98 | 13.48 | 282290<br> 0.85<sup>(c)</sup> <br>| (0.15) | 34.8 |
| 15.07 | (32.47) | 6257991<br> 0.59<sup>(c)</sup> <br>| (0.09) | 28.4 |
| 24.96 | 39.24<sup>(b)</sup> <br>| 9740176<br> 0.59<sup>(c)</sup> <br>| (0.15) | 23.1 |
| 19.19 | 28.42<sup>(b)</sup> <br>| 7254770<br> 0.59<sup>(c)</sup> <br>| (0.02) | 33.6 |
| 16.17 | 18.06 | 6356209<br> 0.59<sup>(c)</sup> <br>| 0.24 | 28.1 |
| 15.55 | 13.72 | 5378075<br> 0.59<sup>(c)</sup> <br>| 0.10 | 34.8 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **LARGECAP S&P 500 INDEX FUND** | **LARGECAP S&P 500 INDEX FUND** | **LARGECAP S&P 500 INDEX FUND** | **LARGECAP S&P 500 INDEX FUND** | **LARGECAP S&P 500 INDEX FUND** | **LARGECAP S&P 500 INDEX FUND** | **LARGECAP S&P 500 INDEX FUND** | **LARGECAP S&P 500 INDEX FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $26.67 | $0.24 | $(3.75) | $(3.51) | $(0.20) | $(3.05) | $(3.25) |
| 2021 | 20.14 | 0.24 | 7.88 | 8.12 | (0.33) | (1.26) | (1.59) |
| 2020 | 19.10 | 0.28 | 1.46 | 1.74 | (0.32) | (0.38) | (0.70) |
| 2019 | 17.99 | 0.31 | 1.92 | 2.23 | (0.28) | (0.84) | (1.12) |
| 2018 | 17.96 | 0.29 | 0.92 | 1.21 | (0.25) | (0.93) | (1.18) |
| **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** |
| 2022 | 25.81 | 0.04 | (3.63) | (3.59) | – | (3.05) | (3.05) |
| 2021 | 19.54 | 0.03 | 7.65 | 7.68 | (0.15) | (1.26) | (1.41) |
| 2020 | 18.57 | 0.11 | 1.41 | 1.52 | (0.17) | (0.38) | (0.55) |
| 2019 | 17.51 | 0.16 | 1.89 | 2.05 | (0.15) | (0.84) | (0.99) |
| 2018 | 17.54 | 0.13 | 0.90 | 1.03 | (0.13) | (0.93) | (1.06) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 26.36 | 0.25 | (3.70) | (3.45) | (0.21) | (3.05) | (3.26) |
| 2021 | 19.93 | 0.25 | 7.78 | 8.03 | (0.34) | (1.26) | (1.60) |
| 2020 | 18.91 | 0.29 | 1.44 | 1.73 | (0.33) | (0.38) | (0.71) |
| 2019 | 17.82 | 0.32 | 1.91 | 2.23 | (0.30) | (0.84) | (1.14) |
| 2018 | 17.80 | 0.30 | 0.92 | 1.22 | (0.27) | (0.93) | (1.20) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 26.70 | 0.29 | (3.75) | (3.46) | (0.25) | (3.05) | (3.30) |
| 2021 | 20.16 | 0.30 | 7.88 | 8.18 | (0.38) | (1.26) | (1.64) |
| 2020 | 19.12 | 0.33 | 1.46 | 1.79 | (0.37) | (0.38) | (0.75) |
| 2019 | 18.01 | 0.36 | 1.92 | 2.28 | (0.33) | (0.84) | (1.17) |
| 2018 | 17.98 | 0.34 | 0.92 | 1.26 | (0.30) | (0.93) | (1.23) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

<sup>(d)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(e)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $19.91 | (14.93)%<sup>(b)</sup> <br>| $544686 | 0.40% | –% | 1.10% | 3.7% |
| 26.67 | 42.29<sup>(b)</sup> <br>| 651354 | 0.40 | – | 1.00 | 3.8 |
| 20.14 | 9.23<sup>(b)</sup> <br>| 465384 | 0.42 | – | 1.45 | 6.0 |
| 19.10 | 13.84<sup>(b)</sup> <br>| 435070 | 0.46 | – | 1.73 | 3.2 |
| 17.99 | 6.89<sup>(b)</sup> <br>| 380299 | 0.44 | – | 1.60 | 5.8 |
| 19.17 | (15.68)<sup>(b)</sup> <br>| 45234 | 1.29<sup>(c)</sup> <br>| – | 0.20 | 3.7 |
| 25.81 | 41.04<sup>(b)</sup> <br>| 65380 | 1.29<sup>(c)</sup> <br>| – | 0.14 | 3.8 |
| 19.54 | 8.27<sup>(b)</sup> <br>| 61996 | 1.30<sup>(c)</sup> <br>| – | 0.59 | 6.0 |
| 18.57 | 12.91<sup>(b)</sup> <br>| 66411 | 1.30<sup>(c)</sup> <br>| – | 0.91 | 3.2 |
| 17.51 | 5.92<sup>(b)</sup> <br>| 65204 | 1.30<sup>(c)</sup> <br>| – | 0.75 | 5.8 |
| 19.65 | (14.87)<sup>(b)</sup> <br>| 810657 | 0.34<sup>(d)</sup> <br>| 0.36<sup>(e)</sup> <br>| 1.15 | 3.7 |
| 26.36 | 42.31<sup>(b)</sup> <br>| 970126 | 0.35<sup>(d)</sup> <br>| 0.37<sup>(e)</sup> <br>| 1.06 | 3.8 |
| 19.93 | 9.29<sup>(b)</sup> <br>| 691249 | 0.36<sup>(d)</sup> <br>| 0.39<sup>(e)</sup> <br>| 1.52 | 6.0 |
| 18.91 | 13.95<sup>(b)</sup> <br>| 691045 | 0.38<sup>(d)</sup> <br>| 0.41<sup>(e)</sup> <br>| 1.82 | 3.2 |
| 17.82 | 6.98<sup>(b)</sup> <br>| 653442 | 0.37<sup>(d)</sup> <br>| 0.40<sup>(e)</sup> <br>| 1.68 | 5.8 |
| 19.94 | (14.73) | 3639186 | 0.16 | – | 1.34 | 3.7 |
| 26.70 | 42.61 | 4069356 | 0.17 | – | 1.27 | 3.8 |
| 20.16 | 9.51 | 3986295 | 0.17 | – | 1.71 | 6.0 |
| 19.12 | 14.18 | 4175228 | 0.17 | – | 2.02 | 3.2 |
| 18.01 | 7.17 | 3693260 | 0.16 | – | 1.88 | 5.8 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **LARGECAP S&P 500 INDEX FUND** | **LARGECAP S&P 500 INDEX FUND** | **LARGECAP S&P 500 INDEX FUND** | **LARGECAP S&P 500 INDEX FUND** | **LARGECAP S&P 500 INDEX FUND** | **LARGECAP S&P 500 INDEX FUND** | **LARGECAP S&P 500 INDEX FUND** | **LARGECAP S&P 500 INDEX FUND** |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | $26.53 | $0.10 | $(3.75) | $(3.65) | $(0.05) | $(3.05) | $(3.10) |
| 2021 | 20.05 | 0.09 | 7.85 | 7.94 | (0.20) | (1.26) | (1.46) |
| 2020 | 19.00 | 0.16 | 1.45 | 1.61 | (0.18) | (0.38) | (0.56) |
| 2019 | 17.87 | 0.21 | 1.93 | 2.14 | (0.17) | (0.84) | (1.01) |
| 2018 | 17.85 | 0.18 | 0.91 | 1.09 | (0.14) | (0.93) | (1.07) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 26.67 | 0.17 | (3.76) | (3.59) | (0.12) | (3.05) | (3.17) |
| 2021 | 20.15 | 0.17 | 7.87 | 8.04 | (0.26) | (1.26) | (1.52) |
| 2020 | 19.11 | 0.22 | 1.46 | 1.68 | (0.26) | (0.38) | (0.64) |
| 2019 | 17.98 | 0.26 | 1.93 | 2.19 | (0.22) | (0.84) | (1.06) |
| 2018 | 17.95 | 0.24 | 0.93 | 1.17 | (0.21) | (0.93) | (1.14) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 26.78 | 0.21 | (3.77) | (3.56) | (0.15) | (3.05) | (3.20) |
| 2021 | 20.23 | 0.21 | 7.91 | 8.12 | (0.31) | (1.26) | (1.57) |
| 2020 | 19.19 | 0.26 | 1.46 | 1.72 | (0.30) | (0.38) | (0.68) |
| 2019 | 18.05 | 0.30 | 1.94 | 2.24 | (0.26) | (0.84) | (1.10) |
| 2018 | 18.02 | 0.28 | 0.92 | 1.20 | (0.24) | (0.93) | (1.17) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 27.09 | 0.24 | (3.82) | (3.58) | (0.19) | (3.05) | (3.24) |
| 2021 | 20.44 | 0.24 | 7.99 | 8.23 | (0.32) | (1.26) | (1.58) |
| 2020 | 19.38 | 0.29 | 1.47 | 1.76 | (0.32) | (0.38) | (0.70) |
| 2019 | 18.22 | 0.32 | 1.96 | 2.28 | (0.28) | (0.84) | (1.12) |
| 2018 | 18.18 | 0.30 | 0.93 | 1.23 | (0.26) | (0.93) | (1.19) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $19.78 | (15.49)% | $11720 | 1.03% | 0.45% | 3.7% |
| 26.53 | 41.38 | 17742 | 1.03 | 0.36 | 3.8 |
| 20.05 | 8.58 | 11726 | 1.03 | 0.85 | 6.0 |
| 19.00 | 13.21 | 14258 | 1.03 | 1.17 | 3.2 |
| 17.87 | 6.20 | 15612 | 1.03 | 1.01 | 5.8 |
| 19.91 | (15.21) | 133978 | 0.72 | 0.77 | 3.7 |
| 26.67 | 41.78 | 192913 | 0.72 | 0.70 | 3.8 |
| 20.15 | 8.92 | 167324 | 0.72 | 1.16 | 6.0 |
| 19.11 | 13.54 | 181254 | 0.72 | 1.48 | 3.2 |
| 17.98 | 6.60 | 192273 | 0.72 | 1.32 | 5.8 |
| 20.02 | (15.06)<sup>(b)</sup> <br>| 105613 | 0.53 | 0.96 | 3.7 |
| 26.78 | 42.09<sup>(b)</sup> <br>| 135073 | 0.53 | 0.90 | 3.8 |
| 20.23 | 9.09 | 132402 | 0.53 | 1.35 | 6.0 |
| 19.19 | 13.80 | 142497 | 0.53 | 1.67 | 3.2 |
| 18.05 | 6.76 | 152704 | 0.53 | 1.51 | 5.8 |
| 20.27 | (14.94) | 256634 | 0.41 | 1.08 | 3.7 |
| 27.09 | 42.22 | 327673 | 0.41 | 0.99 | 3.8 |
| 20.44 | 9.21 | 244545 | 0.41 | 1.48 | 6.0 |
| 19.38 | 13.95 | 297495 | 0.41 | 1.80 | 3.2 |
| 18.22 | 6.87 | 352267 | 0.41 | 1.63 | 5.8 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **LARGECAP VALUE FUND III** | **LARGECAP VALUE FUND III** | **LARGECAP VALUE FUND III** | **LARGECAP VALUE FUND III** | **LARGECAP VALUE FUND III** | **LARGECAP VALUE FUND III** | **LARGECAP VALUE FUND III** | **LARGECAP VALUE FUND III** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $20.70 | $0.21 | $(1.16) | $(0.95) | $(0.14) | $(1.60) | $(1.74) |
| 2021 | 14.67 | 0.15 | 6.10 | 6.25 | (0.22) | – | (0.22) |
| 2020 | 16.98 | 0.21 | (1.47) | (1.26) | (0.31) | (0.74) | (1.05) |
| 2019 | 16.79 | 0.31 | 1.42 | 1.73 | (0.23) | (1.31) | (1.54) |
| 2018 | 16.93 | 0.23 | 0.74 | 0.97 | (0.16) | (0.95) | (1.11) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 21.07 | 0.26 | (1.18) | (0.92) | (0.19) | (1.60) | (1.79) |
| 2021 | 14.94 | 0.21 | 6.19 | 6.40 | (0.27) | – | (0.27) |
| 2020 | 17.27 | 0.26 | (1.48) | (1.22) | (0.37) | (0.74) | (1.11) |
| 2019 | 17.05 | 0.37 | 1.44 | 1.81 | (0.28) | (1.31) | (1.59) |
| 2018 | 17.17 | 0.29 | 0.75 | 1.04 | (0.21) | (0.95) | (1.16) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 20.93 | 0.10 | (1.18) | (1.08) | (0.04) | (1.60) | (1.64) |
| 2021 | 14.83 | 0.04 | 6.17 | 6.21 | (0.11) | – | (0.11) |
| 2020 | 17.13 | 0.13 | (1.48) | (1.35) | (0.21) | (0.74) | (0.95) |
| 2019 | 16.91 | 0.23 | 1.44 | 1.67 | (0.14) | (1.31) | (1.45) |
| 2018 | 17.05 | 0.13 | 0.75 | 0.88 | (0.07) | (0.95) | (1.02) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 22.13 | 0.16 | (1.24) | (1.08) | (0.09) | (1.60) | (1.69) |
| 2021 | 15.67 | 0.10 | 6.53 | 6.63 | (0.17) | – | (0.17) |
| 2020 | 18.07 | 0.19 | (1.58) | (1.39) | (0.27) | (0.74) | (1.01) |
| 2019 | 17.72 | 0.30 | 1.52 | 1.82 | (0.16) | (1.31) | (1.47) |
| 2018 | 17.80 | 0.20 | 0.77 | 0.97 | (0.10) | (0.95) | (1.05) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 21.04 | 0.19 | (1.19) | (1.00) | (0.12) | (1.60) | (1.72) |
| 2021 | 14.90 | 0.14 | 6.20 | 6.34 | (0.20) | – | (0.20) |
| 2020 | 17.23 | 0.21 | (1.50) | (1.29) | (0.30) | (0.74) | (1.04) |
| 2019 | 17.01 | 0.32 | 1.43 | 1.75 | (0.22) | (1.31) | (1.53) |
| 2018 | 17.13 | 0.22 | 0.76 | 0.98 | (0.15) | (0.95) | (1.10) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 21.22 | 0.22 | (1.20) | (0.98) | (0.12) | (1.60) | (1.72) |
| 2021 | 15.04 | 0.16 | 6.25 | 6.41 | (0.23) | – | (0.23) |
| 2020 | 17.38 | 0.23 | (1.50) | (1.27) | (0.33) | (0.74) | (1.07) |
| 2019 | 17.15 | 0.34 | 1.44 | 1.78 | (0.24) | (1.31) | (1.55) |
| 2018 | 17.26 | 0.25 | 0.76 | 1.01 | (0.17) | (0.95) | (1.12) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $18.01 | (4.80)%<sup>(b)</sup> <br>| $82605<br> 0.97%<sup>(c)</sup> <br>| 1.06%<sup>(d)</sup> <br>| 1.13% | 42.6% |
| 20.70 | 42.96<sup>(b)</sup> <br>| 84871<br> 0.98<sup>(c)</sup> <br>| 1.07<sup>(d)</sup> <br>| 0.82 | 46.3 |
| 14.67 | (8.14)<sup>(b)</sup> <br>| 62003<br> 1.04<sup>(c)</sup> <br>| 1.14<sup>(d)</sup> <br>| 1.39 | 54.6 |
| 16.98 | 12.14<sup>(b)</sup> <br>| 74483<br> 1.06<sup>(c)</sup> <br>| 1.15<sup>(d)</sup> <br>| 1.97 | 51.5 |
| 16.79 | 5.76<sup>(b)</sup> <br>| 72851<br> 1.03<sup>(c)</sup> <br>| 1.12<sup>(d)</sup> <br>| 1.35 | 44.4 |
| 18.36 | (4.56) | 2634970<br> 0.70<sup>(e)</sup> <br>| – | 1.39 | 42.6 |
| 21.07 | 43.27 | 3457999<br> 0.70<sup>(e)</sup> <br>| – | 1.07 | 46.3 |
| 14.94 | (7.82) | 1754898<br> 0.72<sup>(e)</sup> <br>| – | 1.72 | 54.6 |
| 17.27 | 12.53 | 2065317<br> 0.72<sup>(e)</sup> <br>| – | 2.30 | 51.5 |
| 17.05 | 6.11 | 1983831<br> 0.71<sup>(e)</sup> <br>| – | 1.66 | 44.4 |
| 18.21 | (5.41) | 4060<br> 1.57<sup>(e)</sup> <br>| – | 0.53 | 42.6 |
| 20.93 | 42.06 | 4000<br> 1.58<sup>(e)</sup> <br>| – | 0.22 | 46.3 |
| 14.83 | (8.58) | 2889<br> 1.59<sup>(e)</sup> <br>| – | 0.85 | 54.6 |
| 17.13 | 11.53 | 4436<br> 1.59<sup>(e)</sup> <br>| – | 1.44 | 51.5 |
| 16.91 | 5.15 | 4455<br> 1.59<sup>(e)</sup> <br>| – | 0.78 | 44.4 |
| 19.36 | (5.11) | 6078<br> 1.26<sup>(e)</sup> <br>| – | 0.83 | 42.6 |
| 22.13 | 42.56 | 7133<br> 1.27<sup>(e)</sup> <br>| – | 0.52 | 46.3 |
| 15.67 | (8.36) | 4056<br> 1.28<sup>(e)</sup> <br>| – | 1.16 | 54.6 |
| 18.07 | 11.90 | 5695<br> 1.28<sup>(e)</sup> <br>| – | 1.77 | 51.5 |
| 17.72 | 5.46 | 6196<br> 1.28<sup>(e)</sup> <br>| – | 1.09 | 44.4 |
| 18.32 | (4.97) | 1934<br> 1.07<sup>(e)</sup> <br>| – | 1.01 | 42.6 |
| 21.04 | 42.86 | 2599<br> 1.08<sup>(e)</sup> <br>| – | 0.72 | 46.3 |
| 14.90 | (8.19) | 1866<br> 1.09<sup>(e)</sup> <br>| – | 1.34 | 54.6 |
| 17.23 | 12.09 | 4028<br> 1.09<sup>(e)</sup> <br>| – | 1.98 | 51.5 |
| 17.01 | 5.71 | 4910<br> 1.09<sup>(e)</sup> <br>| – | 1.28 | 44.4 |
| 18.52 | (4.81) | 5432<br> 0.95<sup>(e)</sup> <br>| – | 1.15 | 42.6 |
| 21.22 | 42.94 | 8722<br> 0.96<sup>(e)</sup> <br>| – | 0.84 | 46.3 |
| 15.04 | (8.05) | 6935<br> 0.97<sup>(e)</sup> <br>| – | 1.47 | 54.6 |
| 17.38 | 12.22 | 10455<br> 0.97<sup>(e)</sup> <br>| – | 2.11 | 51.5 |
| 17.15 | 5.87 | 10726<br> 0.97<sup>(e)</sup> <br>| – | 1.41 | 44.4 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **MIDCAP FUND** | **MIDCAP FUND** | **MIDCAP FUND** | **MIDCAP FUND** | **MIDCAP FUND** | **MIDCAP FUND** | **MIDCAP FUND** | **MIDCAP FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $42.87 | $(0.09) | $(8.74) | $(8.83) | $– | $(3.33) | $(3.33) |
| 2021 | 30.19 | (0.19) | 13.26 | 13.07 | – | (0.39) | (0.39) |
| 2020 | 30.15 | (0.01) | 1.44 | 1.43 | (0.07) | (1.32) | (1.39) |
| 2019 | 26.24 | 0.01 | 6.64 | 6.65 | – | (2.74) | (2.74) |
| 2018 | 26.90 | (0.04) | 0.29 | 0.25 | – | (0.91) | (0.91) |
| **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** |
| 2022 | 37.32 | (0.31) | (7.49) | (7.80) | – | (3.33) | (3.33) |
| 2021 | 26.51 | (0.39) | 11.59 | 11.20 | – | (0.39) | (0.39) |
| 2020 | 26.77 | (0.19) | 1.25 | 1.06 | – | (1.32) | (1.32) |
| 2019 | 23.77 | (0.16) | 5.90 | 5.74 | – | (2.74) | (2.74) |
| 2018 | 24.63 | (0.22) | 0.27 | 0.05 | – | (0.91) | (0.91) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 41.18 | (0.04) | (8.37) | (8.41) | – | (3.33) | (3.33) |
| 2021 | 28.96 | (0.12) | 12.73 | 12.61 | – | (0.39) | (0.39) |
| 2020 | 28.99 | 0.03 | 1.38 | 1.41 | (0.12) | (1.32) | (1.44) |
| 2019 | 25.30 | 0.05 | 6.38 | 6.43 | – | (2.74) | (2.74) |
| 2018 | 25.94 | – | 0.27 | 0.27 | – | (0.91) | (0.91) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 44.26 | – | (9.05) | (9.05) | – | (3.33) | (3.33) |
| 2021 | 31.08 | (0.09) | 13.66 | 13.57 | – | (0.39) | (0.39) |
| 2020 | 31.00 | 0.06 | 1.49 | 1.55 | (0.15) | (1.32) | (1.47) |
| 2019 | 26.84 | 0.09 | 6.83 | 6.92 | (0.02) | (2.74) | (2.76) |
| 2018 | 27.44 | 0.04 | 0.28 | 0.32 | (0.01) | (0.91) | (0.92) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 38.77 | (0.24) | (7.83) | (8.07) | – | (3.33) | (3.33) |
| 2021 | 27.47 | (0.35) | 12.04 | 11.69 | – | (0.39) | (0.39) |
| 2020 | 27.63 | (0.14) | 1.30 | 1.16 | – | (1.32) | (1.32) |
| 2019 | 24.39 | (0.11) | 6.09 | 5.98 | – | (2.74) | (2.74) |
| 2018 | 25.20 | (0.16) | 0.26 | 0.10 | – | (0.91) | (0.91) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

<sup>(f)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $30.71 | (22.25)%<sup>(b)</sup> <br>| $1591916 | 0.94% | –% | (0.27)% | 14.1% |
| 42.87 | 43.63<sup>(b)</sup> <br>| 2198683 | 0.93 | – | (0.50) | 12.4 |
| 30.19 | 4.83<sup>(b)</sup> <br>| 1607917 | 0.95 | – | (0.04) | 13.9 |
| 30.15 | 29.21<sup>(b)</sup> <br>| 1645317 | 0.98 | – | 0.05 | 13.6 |
| 26.24 | 0.86<sup>(b)</sup> <br>| 1439026 | 0.96 | – | (0.14) | 25.8 |
| 26.19 | (22.84)<sup>(b)</sup> <br>| 40097 | 1.72 | – | (1.06) | 14.1 |
| 37.32 | 42.62<sup>(b)</sup> <br>| 72682 | 1.67 | – | (1.21) | 12.4 |
| 26.51 | 4.02<sup>(b)</sup> <br>| 158906 | 1.69 | – | (0.74) | 13.9 |
| 26.77 | 28.32<sup>(b)</sup> <br>| 228866 | 1.70 | – | (0.67) | 13.6 |
| 23.77 | 0.11<sup>(b)</sup> <br>| 248197 | 1.69 | – | (0.86) | 25.8 |
| 29.44 | (22.13)<sup>(b)</sup> <br>| 292151 | 0.79<sup>(c)</sup> <br>| 0.81<sup>(d)</sup> <br>| (0.12) | 14.1 |
| 41.18 | 43.85<sup>(b)(e)</sup> <br>| 407907 | 0.78<sup>(c)</sup> <br>| 0.80<sup>(d)</sup> <br>| (0.34) | 12.4 |
| 28.96 | 4.98<sup>(b)(e)</sup> <br>| 310404 | 0.79<sup>(c)</sup> <br>| 0.82<sup>(d)</sup> <br>| 0.12 | 13.9 |
| 28.99 | 29.45<sup>(b)</sup> <br>| 325426 | 0.83<sup>(c)</sup> <br>| 0.86<sup>(d)</sup> <br>| 0.21 | 13.6 |
| 25.30 | 0.98<sup>(b)</sup> <br>| 275443 | 0.82<sup>(c)</sup> <br>| 0.85<sup>(d)</sup> <br>| 0.00 | 25.8 |
| 31.88 | (22.05)<sup>(e)</sup> <br>| 10110818 | 0.67<sup>(f)</sup> <br>| – | 0.00 | 14.1 |
| 44.26 | 44.03<sup>(e)</sup> <br>| 15790247 | 0.67<sup>(f)</sup> <br>| – | (0.24) | 12.4 |
| 31.08 | 5.08 | 12106903 | 0.69<sup>(f)</sup> <br>| – | 0.21 | 13.9 |
| 31.00 | 29.61 | 12070133 | 0.70<sup>(f)</sup> <br>| – | 0.34 | 13.6 |
| 26.84 | 1.12 | 10720328 | 0.69<sup>(f)</sup> <br>| – | 0.13 | 25.8 |
| 27.37 | (22.67) | 83862 | 1.46 | – | (0.79) | 14.1 |
| 38.77 | 42.92 | 116642 | 1.46 | – | (1.02) | 12.4 |
| 27.47 | 4.27 | 89600 | 1.46 | – | (0.54) | 13.9 |
| 27.63 | 28.61 | 98489 | 1.47 | – | (0.43) | 13.6 |
| 24.39 | 0.31 | 81543 | 1.47 | – | (0.65) | 25.8 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **MIDCAP FUND** | **MIDCAP FUND** | **MIDCAP FUND** | **MIDCAP FUND** | **MIDCAP FUND** | **MIDCAP FUND** | **MIDCAP FUND** | **MIDCAP FUND** |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | $41.63 | $(0.16) | $(8.46) | $(8.62) | $– | $(3.33) | $(3.33) |
| 2021 | 29.38 | (0.26) | 12.90 | 12.64 | – | (0.39) | (0.39) |
| 2020 | 29.38 | (0.06) | 1.38 | 1.32 | – | (1.32) | (1.32) |
| 2019 | 25.68 | (0.04) | 6.48 | 6.44 | – | (2.74) | (2.74) |
| 2018 | 26.40 | (0.09) | 0.28 | 0.19 | – | (0.91) | (0.91) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 43.71 | (0.11) | (8.91) | (9.02) | – | (3.33) | (3.33) |
| 2021 | 30.78 | (0.20) | 13.52 | 13.32 | – | (0.39) | (0.39) |
| 2020 | 30.70 | (0.01) | 1.46 | 1.45 | (0.05) | (1.32) | (1.37) |
| 2019 | 26.66 | 0.01 | 6.77 | 6.78 | – | (2.74) | (2.74) |
| 2018 | 27.33 | (0.04) | 0.28 | 0.24 | – | (0.91) | (0.91) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 43.47 | (0.06) | (8.87) | (8.93) | – | (3.33) | (3.33) |
| 2021 | 30.57 | (0.15) | 13.44 | 13.29 | – | (0.39) | (0.39) |
| 2020 | 30.53 | 0.03 | 1.44 | 1.47 | (0.11) | (1.32) | (1.43) |
| 2019 | 26.50 | 0.05 | 6.72 | 6.77 | – | (2.74) | (2.74) |
| 2018 | 27.13 | (0.01) | 0.29 | 0.28 | – | (0.91) | (0.91) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 44.26 | 0.03 | (9.06) | (9.03) | – | (3.33) | (3.33) |
| 2021 | 31.05 | (0.06) | 13.66 | 13.60 | – | (0.39) | (0.39) |
| 2020 | 30.97 | 0.09 | 1.49 | 1.58 | (0.18) | (1.32) | (1.50) |
| 2019 | 26.83 | 0.13 | 6.80 | 6.93 | (0.05) | (2.74) | (2.79) |
| 2018 | 27.42 | 0.06 | 0.30 | 0.36 | (0.04) | (0.91) | (0.95) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $29.68 | (22.42)% | $44432 | 1.15% | (0.49)% | 14.1% |
| 41.63 | 43.32<sup>(b)</sup> <br>| 73376 | 1.15 | (0.71) | 12.4 |
| 29.38 | 4.61<sup>(b)</sup> <br>| 66616 | 1.15 | (0.22) | 13.9 |
| 29.38 | 29.01 | 83961 | 1.16 | (0.14) | 13.6 |
| 25.68 | 0.65 | 99735 | 1.16 | (0.33) | 25.8 |
| 31.36 | (22.25) | 48916 | 0.96 | (0.30) | 14.1 |
| 43.71 | 43.61 | 81569 | 0.96 | (0.52) | 12.4 |
| 30.78 | 4.82 | 71485 | 0.96 | (0.04) | 13.9 |
| 30.70 | 29.23 | 76985 | 0.97 | 0.02 | 13.6 |
| 26.66 | 0.81 | 87620 | 0.97 | (0.14) | 25.8 |
| 31.21 | (22.16) | 296351 | 0.84 | (0.17) | 14.1 |
| 43.47 | 43.76<sup>(b)</sup> <br>| 427065 | 0.84 | (0.40) | 12.4 |
| 30.57 | 4.93<sup>(b)</sup> <br>| 325105 | 0.84 | 0.09 | 13.9 |
| 30.53 | 29.39 | 387741 | 0.85 | 0.19 | 13.6 |
| 26.50 | 0.97 | 337245 | 0.85 | (0.02) | 25.8 |
| 31.90 | (21.98) | 5989509 | 0.59<sup>(c)</sup> <br>| 0.09 | 14.1 |
| 44.26 | 44.13 | 5220374 | 0.59<sup>(c)</sup> <br>| (0.15) | 12.4 |
| 31.05 | 5.20 | 4054486 | 0.60<sup>(c)</sup> <br>| 0.29 | 13.9 |
| 30.97 | 29.71 | 2431236 | 0.60<sup>(c)</sup> <br>| 0.45 | 13.6 |
| 26.83 | 1.24 | 1442924 | 0.59<sup>(c)</sup> <br>| 0.21 | 25.8 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>| **Net Asset**<br> **Value, End**<br> **of Period**<br>|
| **MIDCAP GROWTH FUND** | **MIDCAP GROWTH FUND** | **MIDCAP GROWTH FUND** | **MIDCAP GROWTH FUND** | **MIDCAP GROWTH FUND** | **MIDCAP GROWTH FUND** | **MIDCAP GROWTH FUND** | **MIDCAP GROWTH FUND** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $10.74 | $(0.03) | $(2.79) | $(2.82) | $(2.15) | $(2.15) | $5.77 |
| 2021 | 8.39 | (0.03) | 3.63 | 3.60 | (1.25) | (1.25) | 10.74 |
| 2020 | 6.40 | (0.04) | 2.39 | 2.35 | (0.36) | (0.36) | 8.39 |
| 2019 | 7.05 | (0.03) | 0.49 | 0.46 | (1.11) | (1.11) | 6.40 |
| 2018 | 7.13 | (0.03) | 0.26 | 0.23 | (0.31) | (0.31) | 7.05 |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 14.99 | (0.03) | (4.12) | (4.15) | (2.15) | (2.15) | 8.69 |
| 2021 | 11.30 | (0.03) | 4.97 | 4.94 | (1.25) | (1.25) | 14.99 |
| 2020 | 8.48 | (0.04) | 3.22 | 3.18 | (0.36) | (0.36) | 11.30 |
| 2019 | 8.92 | (0.02) | 0.69 | 0.67 | (1.11) | (1.11) | 8.48 |
| 2018 | 8.92 | (0.02) | 0.33 | 0.31 | (0.31) | (0.31) | 8.92 |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 11.05 | (0.08) | (2.88) | (2.96) | (2.15) | (2.15) | 5.94 |
| 2021 | 8.66 | (0.10) | 3.74 | 3.64 | (1.25) | (1.25) | 11.05 |
| 2020 | 6.63 | (0.09) | 2.48 | 2.39 | (0.36) | (0.36) | 8.66 |
| 2019 | 7.29 | (0.07) | 0.52 | 0.45 | (1.11) | (1.11) | 6.63 |
| 2018 | 7.41 | (0.08) | 0.27 | 0.19 | (0.31) | (0.31) | 7.29 |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 13.55 | (0.07) | (3.67) | (3.74) | (2.15) | (2.15) | 7.66 |
| 2021 | 10.35 | (0.09) | 4.54 | 4.45 | (1.25) | (1.25) | 13.55 |
| 2020 | 7.84 | (0.07) | 2.94 | 2.87 | (0.36) | (0.36) | 10.35 |
| 2019 | 8.37 | (0.06) | 0.64 | 0.58 | (1.11) | (1.11) | 7.84 |
| 2018 | 8.44 | (0.07) | 0.31 | 0.24 | (0.31) | (0.31) | 8.37 |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 14.68 | (0.06) | (4.02) | (4.08) | (2.15) | (2.15) | 8.45 |
| 2021 | 11.12 | (0.07) | 4.88 | 4.81 | (1.25) | (1.25) | 14.68 |
| 2020 | 8.38 | (0.06) | 3.16 | 3.10 | (0.36) | (0.36) | 11.12 |
| 2019 | 8.85 | (0.05) | 0.69 | 0.64 | (1.11) | (1.11) | 8.38 |
| 2018 | 8.88 | (0.05) | 0.33 | 0.28 | (0.31) | (0.31) | 8.85 |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 15.50 | (0.05) | (4.28) | (4.33) | (2.15) | (2.15) | 9.02 |
| 2021 | 11.67 | (0.05) | 5.13 | 5.08 | (1.25) | (1.25) | 15.50 |
| 2020 | 8.77 | (0.05) | 3.31 | 3.26 | (0.36) | (0.36) | 11.67 |
| 2019 | 9.19 | (0.04) | 0.73 | 0.69 | (1.11) | (1.11) | 8.77 |
| 2018 | 9.20 | (0.04) | 0.34 | 0.30 | (0.31) | (0.31) | 9.19 |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

<sup>(c)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(d)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(e)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(f)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| (31.59)%<sup>(b)(c)</sup> <br>| $81825 | 0.90%<sup>(d)</sup> <br>| 0.92%<sup>(e)</sup> <br>| (0.42)% | 165.5% |
| 45.43<sup>(b)(c)</sup> <br>| 131086 | 0.88<sup>(d)</sup> <br>| 0.90<sup>(e)</sup> <br>| (0.35) | 114.5 |
| 38.55<sup>(b)(c)</sup> <br>| 93209 | 0.93<sup>(d)</sup> <br>| 0.96<sup>(e)</sup> <br>| (0.56) | 120.6 |
| 10.27<sup>(c)</sup> <br>| 71129 | 0.97<sup>(d)</sup> <br>| 1.00<sup>(e)</sup> <br>| (0.46) | 104.6 |
| 3.26<sup>(c)</sup> <br>| 67918 | 0.93<sup>(d)</sup> <br>| 0.96<sup>(e)</sup> <br>| (0.44) | 114.2 |
| (31.50)<sup>(b)</sup> <br>| 125149 | 0.75<sup>(f)</sup> <br>| – | (0.26) | 165.5 |
| 45.74<sup>(b)</sup> <br>| 149191 | 0.75<sup>(f)</sup> <br>| – | (0.24) | 114.5 |
| 38.77 | 58852 | 0.75<sup>(f)</sup> <br>| – | (0.38) | 120.6 |
| 10.51 | 52324 | 0.75<sup>(f)</sup> <br>| – | (0.25) | 104.6 |
| 3.51 | 67785 | 0.75<sup>(f)</sup> <br>| – | (0.26) | 114.2 |
| (32.06)<sup>(b)</sup> <br>| 881 | 1.54 | – | (1.05) | 165.5 |
| 44.57<sup>(b)</sup> <br>| 1740 | 1.54 | – | (1.02) | 114.5 |
| 37.62 | 1789 | 1.55 | – | (1.19) | 120.6 |
| 9.71 | 1286 | 1.55 | – | (1.05) | 104.6 |
| 2.58 | 1391 | 1.55 | – | (1.05) | 114.2 |
| (31.86)<sup>(b)</sup> <br>| 17879 | 1.23 | – | (0.75) | 165.5 |
| 45.01<sup>(b)</sup> <br>| 22672 | 1.23 | – | (0.72) | 114.5 |
| 38.08<sup>(b)</sup> <br>| 13555 | 1.24 | – | (0.87) | 120.6 |
| 10.06 | 11187 | 1.24 | – | (0.74) | 104.6 |
| 2.86 | 12807 | 1.24 | – | (0.75) | 114.2 |
| (31.72)<sup>(b)</sup> <br>| 4709 | 1.04 | – | (0.56) | 165.5 |
| 45.27<sup>(b)</sup> <br>| 6759 | 1.04 | – | (0.52) | 114.5 |
| 38.26 | 4709 | 1.05 | – | (0.68) | 120.6 |
| 10.20 | 4103 | 1.05 | – | (0.55) | 104.6 |
| 3.18 | 4997 | 1.05 | – | (0.54) | 114.2 |
| (31.64)<sup>(b)</sup> <br>| 5778 | 0.92 | – | (0.43) | 165.5 |
| 45.47<sup>(b)</sup> <br>| 25223 | 0.92 | – | (0.39) | 114.5 |
| 38.38 | 23760 | 0.93 | – | (0.55) | 120.6 |
| 10.40 | 22099 | 0.93 | – | (0.43) | 104.6 |
| 3.29 | 22080 | 0.93 | – | (0.44) | 114.2 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>| **Net Asset**<br> **Value, End**<br> **of Period**<br>|
| **MIDCAP GROWTH FUND III** | **MIDCAP GROWTH FUND III** | **MIDCAP GROWTH FUND III** | **MIDCAP GROWTH FUND III** | **MIDCAP GROWTH FUND III** | **MIDCAP GROWTH FUND III** | **MIDCAP GROWTH FUND III** | **MIDCAP GROWTH FUND III** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $13.69 | $(0.05) | $(2.92) | $(2.97) | $(3.43) | $(3.43) | $7.29 |
| 2021 | 10.46 | (0.09) | 4.12 | 4.03 | (0.80) | (0.80) | 13.69 |
| 2020 | 9.53 | (0.06) | 1.98 | 1.92 | (0.99) | (0.99) | 10.46 |
| 2019 | 9.35 | (0.05) | 1.37 | 1.32 | (1.14) | (1.14) | 9.53 |
| 2018 | 10.21 | (0.06) | 0.69 | 0.63 | (1.49) | (1.49) | 9.35 |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 18.18 | (0.04) | (4.12) | (4.16) | (3.43) | (3.43) | 10.59 |
| 2021 | 13.63 | (0.08) | 5.43 | 5.35 | (0.80) | (0.80) | 18.18 |
| 2020 | 12.10 | (0.04) | 2.56 | 2.52 | (0.99) | (0.99) | 13.63 |
| 2019 | 11.50 | (0.02) | 1.76 | 1.74 | (1.14) | (1.14) | 12.10 |
| 2018 | 12.19 | (0.03) | 0.83 | 0.80 | (1.49) | (1.49) | 11.50 |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 13.51 | (0.10) | (2.86) | (2.96) | (3.43) | (3.43) | 7.12 |
| 2021 | 10.39 | (0.17) | 4.09 | 3.92 | (0.80) | (0.80) | 13.51 |
| 2020 | 9.52 | (0.11) | 1.97 | 1.86 | (0.99) | (0.99) | 10.39 |
| 2019 | 9.39 | (0.10) | 1.37 | 1.27 | (1.14) | (1.14) | 9.52 |
| 2018 | 10.30 | (0.11) | 0.69 | 0.58 | (1.49) | (1.49) | 9.39 |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 16.30 | (0.10) | (3.60) | (3.70) | (3.43) | (3.43) | 9.17 |
| 2021 | 12.36 | (0.16) | 4.90 | 4.74 | (0.80) | (0.80) | 16.30 |
| 2020 | 11.12 | (0.10) | 2.33 | 2.23 | (0.99) | (0.99) | 12.36 |
| 2019 | 10.72 | (0.08) | 1.62 | 1.54 | (1.14) | (1.14) | 11.12 |
| 2018 | 11.52 | (0.09) | 0.78 | 0.69 | (1.49) | (1.49) | 10.72 |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 17.08 | (0.09) | (3.81) | (3.90) | (3.43) | (3.43) | 9.75 |
| 2021 | 12.90 | (0.14) | 5.12 | 4.98 | (0.80) | (0.80) | 17.08 |
| 2020 | 11.53 | (0.08) | 2.44 | 2.36 | (0.99) | (0.99) | 12.90 |
| 2019 | 11.06 | (0.06) | 1.67 | 1.61 | (1.14) | (1.14) | 11.53 |
| 2018 | 11.82 | (0.07) | 0.80 | 0.73 | (1.49) | (1.49) | 11.06 |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 18.15 | (0.08) | (4.10) | (4.18) | (3.43) | (3.43) | 10.54 |
| 2021 | 13.65 | (0.12) | 5.42 | 5.30 | (0.80) | (0.80) | 18.15 |
| 2020 | 12.14 | (0.07) | 2.57 | 2.50 | (0.99) | (0.99) | 13.65 |
| 2019 | 11.56 | (0.05) | 1.77 | 1.72 | (1.14) | (1.14) | 12.14 |
| 2018 | 12.28 | (0.06) | 0.83 | 0.77 | (1.49) | (1.49) | 11.56 |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| (27.12)%<sup>(b)</sup> <br>| $38816<br> 1.14%<sup>(c)</sup> <br>| 1.18%<sup>(d)</sup> <br>| (0.65)% | 44.0% |
| 39.96<sup>(b)</sup> <br>| 59567<br> 1.12<sup>(c)</sup> <br>| 1.17<sup>(d)</sup> <br>| (0.77) | 34.3 |
| 21.76<sup>(b)</sup> <br>| 45753<br> 1.19<sup>(c)</sup> <br>| 1.25<sup>(d)</sup> <br>| (0.65) | 50.7 |
| 17.48<sup>(b)</sup> <br>| 41366<br> 1.27<sup>(c)</sup> <br>| 1.38<sup>(d)</sup> <br>| (0.55) | 43.2 |
| 6.61<sup>(b)</sup> <br>| 36912<br> 1.24<sup>(c)</sup> <br>| 1.35<sup>(d)</sup> <br>| (0.56) | 44.3 |
| (26.94) | 1120495<br> 0.85<sup>(e)</sup> <br>| – | (0.35) | 44.0 |
| 40.37 | 1165856<br> 0.86<sup>(e)</sup> <br>| – | (0.50) | 34.3 |
| 22.12 | 1127871<br> 0.87<sup>(e)</sup> <br>| – | (0.33) | 50.7 |
| 17.93 | 1032306<br> 0.91<sup>(e)</sup> <br>| – | (0.19) | 43.2 |
| 6.97 | 961018<br> 0.91<sup>(e)</sup> <br>| – | (0.22) | 44.3 |
| (27.51) | 1248<br> 1.73<sup>(e)</sup> <br>| – | (1.24) | 44.0 |
| 39.12 | 1781<br> 1.74<sup>(e)</sup> <br>| – | (1.38) | 34.3 |
| 21.09 | 1430<br> 1.75<sup>(e)</sup> <br>| – | (1.21) | 50.7 |
| 16.80 | 1438<br> 1.78<sup>(e)</sup> <br>| – | (1.06) | 43.2 |
| 6.00 | 1665<br> 1.78<sup>(e)</sup> <br>| – | (1.10) | 44.3 |
| (27.30) | 3568<br> 1.42<sup>(e)</sup> <br>| – | (0.93) | 44.0 |
| 39.54 | 5149<br> 1.43<sup>(e)</sup> <br>| – | (1.09) | 34.3 |
| 21.41 | 2643<br> 1.44<sup>(e)</sup> <br>| – | (0.89) | 50.7 |
| 17.28 | 2913<br> 1.47<sup>(e)</sup> <br>| – | (0.75) | 43.2 |
| 6.35 | 3424<br> 1.47<sup>(e)</sup> <br>| – | (0.78) | 44.3 |
| (27.21) | 1379<br> 1.23<sup>(e)</sup> <br>| – | (0.75) | 44.0 |
| 39.76 | 2640<br> 1.24<sup>(e)</sup> <br>| – | (0.89) | 34.3 |
| 21.80 | 2223<br> 1.25<sup>(e)</sup> <br>| – | (0.69) | 50.7 |
| 17.39 | 3004<br> 1.28<sup>(e)</sup> <br>| – | (0.57) | 43.2 |
| 6.55 | 3658<br> 1.28<sup>(e)</sup> <br>| – | (0.60) | 44.3 |
| (27.13) | 2520<br> 1.11<sup>(e)</sup> <br>| – | (0.61) | 44.0 |
| 39.92 | 5903<br> 1.12<sup>(e)</sup> <br>| – | (0.76) | 34.3 |
| 21.87 | 6505<br> 1.13<sup>(e)</sup> <br>| – | (0.59) | 50.7 |
| 17.62 | 5527<br> 1.16<sup>(e)</sup> <br>| – | (0.44) | 43.2 |
| 6.64 | 6408<br> 1.16<sup>(e)</sup> <br>| – | (0.49) | 44.3 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **MIDCAP S&P 400 INDEX FUND** | **MIDCAP S&P 400 INDEX FUND** | **MIDCAP S&P 400 INDEX FUND** | **MIDCAP S&P 400 INDEX FUND** | **MIDCAP S&P 400 INDEX FUND** | **MIDCAP S&P 400 INDEX FUND** | **MIDCAP S&P 400 INDEX FUND** | **MIDCAP S&P 400 INDEX FUND** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $25.15 | $0.24 | $(3.04) | $(2.80) | $(0.25) | $(1.79) | $(2.04) |
| 2021 | 18.23 | 0.26 | 8.18 | 8.44 | (0.21) | (1.31) | (1.52) |
| 2020 | 19.65 | 0.20 | (0.41) | (0.21) | (0.26) | (0.95) | (1.21) |
| 2019 | 20.17 | 0.23 | 1.15 | 1.38 | (0.22) | (1.68) | (1.90) |
| 2018 | 21.53 | 0.25 | (0.08) | 0.17 | (0.21) | (1.32) | (1.53) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 26.06 | 0.28 | (3.16) | (2.88) | (0.28) | (1.79) | (2.07) |
| 2021 | 18.84 | 0.31 | 8.46 | 8.77 | (0.24) | (1.31) | (1.55) |
| 2020 | 20.28 | 0.25 | (0.44) | (0.19) | (0.30) | (0.95) | (1.25) |
| 2019 | 20.76 | 0.28 | 1.18 | 1.46 | (0.26) | (1.68) | (1.94) |
| 2018 | 22.11 | 0.30 | (0.08) | 0.22 | (0.25) | (1.32) | (1.57) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 25.71 | 0.10 | (3.12) | (3.02) | (0.09) | (1.79) | (1.88) |
| 2021 | 18.62 | 0.11 | 8.37 | 8.48 | (0.08) | (1.31) | (1.39) |
| 2020 | 19.99 | 0.10 | (0.44) | (0.34) | (0.08) | (0.95) | (1.03) |
| 2019 | 20.45 | 0.12 | 1.18 | 1.30 | (0.08) | (1.68) | (1.76) |
| 2018 | 21.81 | 0.11 | (0.07) | 0.04 | (0.08) | (1.32) | (1.40) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 26.57 | 0.18 | (3.24) | (3.06) | (0.15) | (1.79) | (1.94) |
| 2021 | 19.19 | 0.19 | 8.64 | 8.83 | (0.14) | (1.31) | (1.45) |
| 2020 | 20.63 | 0.16 | (0.46) | (0.30) | (0.19) | (0.95) | (1.14) |
| 2019 | 21.05 | 0.19 | 1.21 | 1.40 | (0.14) | (1.68) | (1.82) |
| 2018 | 22.40 | 0.19 | (0.08) | 0.11 | (0.14) | (1.32) | (1.46) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 26.72 | 0.22 | (3.25) | (3.03) | (0.20) | (1.79) | (1.99) |
| 2021 | 19.29 | 0.23 | 8.68 | 8.91 | (0.17) | (1.31) | (1.48) |
| 2020 | 20.73 | 0.19 | (0.45) | (0.26) | (0.23) | (0.95) | (1.18) |
| 2019 | 21.14 | 0.23 | 1.22 | 1.45 | (0.18) | (1.68) | (1.86) |
| 2018 | 22.49 | 0.23 | (0.08) | 0.15 | (0.18) | (1.32) | (1.50) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 27.00 | 0.25 | (3.28) | (3.03) | (0.23) | (1.79) | (2.02) |
| 2021 | 19.48 | 0.27 | 8.76 | 9.03 | (0.20) | (1.31) | (1.51) |
| 2020 | 20.91 | 0.22 | (0.45) | (0.23) | (0.25) | (0.95) | (1.20) |
| 2019 | 21.32 | 0.25 | 1.23 | 1.48 | (0.21) | (1.68) | (1.89) |
| 2018 | 22.67 | 0.26 | (0.08) | 0.18 | (0.21) | (1.32) | (1.53) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 26.05 | 0.30 | (3.15) | (2.85) | (0.30) | (1.79) | (2.09) |
| 2021 | 18.83 | 0.32 | 8.46 | 8.78 | (0.25) | (1.31) | (1.56) |
| 2020 | 20.27 | 0.25 | (0.43) | (0.18) | (0.31) | (0.95) | (1.26) |
| 2019 | 20.74 | 0.29 | 1.19 | 1.48 | (0.27) | (1.68) | (1.95) |
| 2018 | 22.09 | 0.31 | (0.08) | 0.23 | (0.26) | (1.32) | (1.58) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Reflects Manager's contractual expense limit.

<sup>(f)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $20.31 | (11.85)%<sup>(b)</sup> <br>| $127212 | 0.39%<sup>(c)</sup> <br>| 0.41%<sup>(d)</sup> <br>| 1.12% | 20.9% |
| 25.15 | 48.22<sup>(b)</sup> <br>| 151143 | 0.39<sup>(c)</sup> <br>| 0.41<sup>(d)</sup> <br>| 1.11 | 19.2 |
| 18.23 | (1.47)<sup>(b)</sup> <br>| 104139 | 0.41<sup>(c)</sup> <br>| 0.44<sup>(d)</sup> <br>| 1.15 | 23.6 |
| 19.65 | 8.64<sup>(b)</sup> <br>| 121032 | 0.43<sup>(c)</sup> <br>| 0.46<sup>(d)</sup> <br>| 1.23 | 16.7 |
| 20.17 | 0.59<sup>(b)</sup> <br>| 120967 | 0.39<sup>(c)</sup> <br>| 0.42<sup>(d)</sup> <br>| 1.15 | 14.3 |
| 21.11 | (11.73) | 188790 | 0.23 | – | 1.27 | 20.9 |
| 26.06 | 48.45 | 251222 | 0.22 | – | 1.27 | 19.2 |
| 18.84 | (1.35) | 187318 | 0.23<sup>(e)</sup> <br>| – | 1.34 | 23.6 |
| 20.28 | 8.84 | 347631 | 0.23<sup>(e)</sup> <br>| – | 1.43 | 16.7 |
| 20.76 | 0.81 | 422159 | 0.20<sup>(e)</sup> <br>| – | 1.35 | 14.3 |
| 20.81 | (12.45)<sup>(f)</sup> <br>| 5539 | 1.04 | – | 0.47 | 20.9 |
| 25.71 | 47.28<sup>(f)</sup> <br>| 6584 | 1.04 | – | 0.45 | 19.2 |
| 18.62 | (2.07) | 5032 | 1.04 | – | 0.52 | 23.6 |
| 19.99 | 7.94 | 7771 | 1.04 | – | 0.62 | 16.7 |
| 20.45 | (0.03) | 10070 | 1.04 | – | 0.51 | 14.3 |
| 21.57 | (12.15) | 67797 | 0.73 | – | 0.77 | 20.9 |
| 26.57 | 47.71 | 88428 | 0.73 | – | 0.76 | 19.2 |
| 19.19 | (1.83) | 64732 | 0.73 | – | 0.83 | 23.6 |
| 20.63 | 8.31 | 84108 | 0.73 | – | 0.93 | 16.7 |
| 21.05 | 0.29 | 93374 | 0.73 | – | 0.83 | 14.3 |
| 21.70 | (12.00) | 42003 | 0.54 | – | 0.97 | 20.9 |
| 26.72 | 47.98 | 53233 | 0.54 | – | 0.95 | 19.2 |
| 19.29 | (1.62) | 43726 | 0.54 | – | 1.02 | 23.6 |
| 20.73 | 8.52 | 58888 | 0.54 | – | 1.12 | 16.7 |
| 21.14 | 0.47 | 66297 | 0.54 | – | 1.01 | 14.3 |
| 21.95 | (11.87) | 95818 | 0.42 | – | 1.08 | 20.9 |
| 27.00 | 48.14 | 122169 | 0.42 | – | 1.08 | 19.2 |
| 19.48 | (1.46) | 102868 | 0.42 | – | 1.14 | 23.6 |
| 20.91 | 8.63 | 137633 | 0.42 | – | 1.25 | 16.7 |
| 21.32 | 0.58 | 183944 | 0.42 | – | 1.13 | 14.3 |
| 21.11 | (11.64) | 712153 | 0.16<sup>(e)</sup> <br>| – | 1.36 | 20.9 |
| 26.05 | 48.58 | 740456 | 0.16<sup>(e)</sup> <br>| – | 1.34 | 19.2 |
| 18.83 | (1.28) | 479248 | 0.16<sup>(e)</sup> <br>| – | 1.38 | 23.6 |
| 20.27 | 8.94 | 531623 | 0.17<sup>(e)</sup> <br>| – | 1.48 | 16.7 |
| 20.74 | 0.85 | 405426 | 0.16<sup>(e)</sup> <br>| – | 1.38 | 14.3 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **MIDCAP VALUE FUND I** | **MIDCAP VALUE FUND I** | **MIDCAP VALUE FUND I** | **MIDCAP VALUE FUND I** | **MIDCAP VALUE FUND I** | **MIDCAP VALUE FUND I** | **MIDCAP VALUE FUND I** | **MIDCAP VALUE FUND I** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $18.93 | $0.18 | $(0.92) | $(0.74) | $(0.16) | $(1.80) | $(1.96) |
| 2021 | 12.76 | 0.16 | 6.14 | 6.30 | (0.13) | – | (0.13) |
| 2020 | 14.27 | 0.12 | (0.95) | (0.83) | (0.11) | (0.57) | (0.68) |
| 2019<sup>(d)</sup> <br>| 13.56 | 0.04 | 0.67 | 0.71 | – | – | – |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 18.74 | 0.21 | (0.90) | (0.69) | (0.19) | (1.80) | (1.99) |
| 2021 | 12.65 | 0.19 | 6.08 | 6.27 | (0.18) | – | (0.18) |
| 2020 | 14.13 | 0.16 | (0.94) | (0.78) | (0.13) | (0.57) | (0.70) |
| 2019 | 14.44 | 0.13 | 1.09 | 1.22 | (0.09) | (1.44) | (1.53) |
| 2018 | 15.31 | 0.10 | 0.03 | 0.13 | (0.07) | (0.93) | (1.00) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 18.98 | 0.25 | (0.93) | (0.68) | (0.21) | (1.80) | (2.01) |
| 2021 | 12.81 | 0.22 | 6.16 | 6.38 | (0.21) | – | (0.21) |
| 2020 | 14.30 | 0.19 | (0.95) | (0.76) | (0.16) | (0.57) | (0.73) |
| 2019 | 14.62 | 0.18 | 1.07 | 1.25 | (0.13) | (1.44) | (1.57) |
| 2018 | 15.48 | 0.15 | 0.03 | 0.18 | (0.11) | (0.93) | (1.04) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 18.04 | 0.10 | (0.87) | (0.77) | (0.08) | (1.80) | (1.88) |
| 2021 | 12.20 | 0.08 | 5.86 | 5.94 | (0.10) | – | (0.10) |
| 2020 | 13.63 | 0.09 | (0.92) | (0.83) | (0.03) | (0.57) | (0.60) |
| 2019 | 13.96 | 0.06 | 1.05 | 1.11 | – | (1.44) | (1.44) |
| 2018 | 14.84 | 0.01 | 0.04 | 0.05 | – | (0.93) | (0.93) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

<sup>(d)</sup>

Period from April 2, 2019, date operations commenced, through October 31, 2019.

<sup>(e)</sup>

Total return amounts have not been annualized.

<sup>(f)</sup>

Computed on an annualized basis.

<sup>(g)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(h)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(i)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $16.23 | (4.18)%<sup>(b)</sup> <br>| $46917<br> 1.09%<sup>(c)</sup> <br>| –% | 1.06% | 51.1% |
| 18.93 | 49.69<sup>(b)</sup> <br>| 42833<br> 1.10<sup>(c)</sup> <br>| – | 0.90 | 53.5 |
| 12.76 | (6.32)<sup>(b)</sup> <br>| 23187<br> 1.27<sup>(c)</sup> <br>| – | 0.94 | 65.9 |
| 14.27 | 5.24<sup>(b)(e)</sup> <br>| 26083<br> 1.38<sup>(c)(f)</sup> <br>| – | 0.51<sup>(f)</sup> <br>| 60.0 |
| 16.06 | (3.97)<sup>(b)</sup> <br>| 180636<br> 0.88<sup>(g)</sup> <br>| 0.92<sup>(h)</sup> <br>| 1.27 | 51.1 |
| 18.74 | 49.98<sup>(b)</sup> <br>| 190633<br> 0.89<sup>(g)</sup> <br>| 0.93<sup>(h)</sup> <br>| 1.11 | 53.5 |
| 12.65 | (6.00)<sup>(b)</sup> <br>| 129288<br> 0.94<sup>(g)</sup> <br>| 0.99<sup>(h)</sup> <br>| 1.28 | 65.9 |
| 14.13 | 10.55<sup>(b)</sup> <br>| 153602<br> 1.06<sup>(g)</sup> <br>| 1.13<sup>(h)</sup> <br>| 0.95 | 60.0 |
| 14.44 | 0.67<sup>(b)</sup> <br>| 65310<br> 1.20<sup>(g)</sup> <br>| 1.35<sup>(h)</sup> <br>| 0.65 | 61.1 |
| 16.29 | (3.82) | 1106800<br> 0.69<sup>(c)</sup> <br>| – | 1.49 | 51.1 |
| 18.98 | 50.23 | 349246<br> 0.72<sup>(c)</sup> <br>| – | 1.29 | 53.5 |
| 12.81 | (5.82) | 233785<br> 0.72<sup>(c)</sup> <br>| – | 1.49 | 65.9 |
| 14.30 | 10.73 | 279888<br> 0.85<sup>(c)</sup> <br>| – | 1.30 | 60.0 |
| 14.62 | 0.99 | 824306<br> 0.90<sup>(c)</sup> <br>| – | 0.95 | 61.1 |
| 15.39 | (4.62)<sup>(i)</sup> <br>| 2503<br> 1.50<sup>(c)</sup> <br>| – | 0.65 | 51.1 |
| 18.04 | 49.03<sup>(i)</sup> <br>| 2687<br> 1.51<sup>(c)</sup> <br>| – | 0.51 | 53.5 |
| 12.20 | (6.53) | 2079<br> 1.51<sup>(c)</sup> <br>| – | 0.70 | 65.9 |
| 13.63 | 9.97 | 2775<br> 1.61<sup>(c)</sup> <br>| – | 0.43 | 60.0 |
| 13.96 | 0.14 | 3190<br> 1.76<sup>(c)</sup> <br>| – | 0.08 | 61.1 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **MIDCAP VALUE FUND I** | **MIDCAP VALUE FUND I** | **MIDCAP VALUE FUND I** | **MIDCAP VALUE FUND I** | **MIDCAP VALUE FUND I** | **MIDCAP VALUE FUND I** | **MIDCAP VALUE FUND I** | **MIDCAP VALUE FUND I** |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | $18.65 | $0.16 | $(0.90) | $(0.74) | $(0.13) | $(1.80) | $(1.93) |
| 2021 | 12.60 | 0.14 | 6.05 | 6.19 | (0.14) | – | (0.14) |
| 2020 | 14.08 | 0.13 | (0.94) | (0.81) | (0.10) | (0.57) | (0.67) |
| 2019 | 14.37 | 0.10 | 1.09 | 1.19 | (0.04) | (1.44) | (1.48) |
| 2018 | 15.22 | 0.06 | 0.04 | 0.10 | (0.02) | (0.93) | (0.95) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 18.72 | 0.19 | (0.91) | (0.72) | (0.16) | (1.80) | (1.96) |
| 2021 | 12.64 | 0.17 | 6.08 | 6.25 | (0.17) | – | (0.17) |
| 2020 | 14.12 | 0.15 | (0.93) | (0.78) | (0.13) | (0.57) | (0.70) |
| 2019 | 14.42 | 0.13 | 1.08 | 1.21 | (0.07) | (1.44) | (1.51) |
| 2018 | 15.27 | 0.09 | 0.03 | 0.12 | (0.04) | (0.93) | (0.97) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 18.85 | 0.21 | (0.91) | (0.70) | (0.19) | (1.80) | (1.99) |
| 2021 | 12.72 | 0.19 | 6.12 | 6.31 | (0.18) | – | (0.18) |
| 2020 | 14.20 | 0.17 | (0.94) | (0.77) | (0.14) | (0.57) | (0.71) |
| 2019 | 14.50 | 0.14 | 1.09 | 1.23 | (0.09) | (1.44) | (1.53) |
| 2018 | 15.36 | 0.11 | 0.03 | 0.14 | (0.07) | (0.93) | (1.00) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 19.02 | 0.26 | (0.92) | (0.66) | (0.23) | (1.80) | (2.03) |
| 2021 | 12.84 | 0.24 | 6.16 | 6.40 | (0.22) | – | (0.22) |
| 2020 | 14.33 | 0.20 | (0.95) | (0.75) | (0.17) | (0.57) | (0.74) |
| 2019<sup>(d)</sup> <br>| 13.56 | 0.11 | 0.66 | 0.77 | – | – | – |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Reflects Manager's contractual expense limit.

<sup>(c)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

<sup>(d)</sup>

Period from April 2, 2019, date operations commenced, through October 31, 2019.

<sup>(e)</sup>

Total return amounts have not been annualized.

<sup>(f)</sup>

Computed on an annualized basis.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $15.98 | (4.26)% | $11582<br> 1.19%<sup>(b)</sup> <br>| 0.95% | 51.1% |
| 18.65 | 49.47 | 13975<br> 1.20<sup>(b)</sup> <br>| 0.81 | 53.5 |
| 12.60 | (6.24) | 10736<br> 1.20<sup>(b)</sup> <br>| 1.01 | 65.9 |
| 14.08 | 10.33 | 13305<br> 1.30<sup>(b)</sup> <br>| 0.74 | 60.0 |
| 14.37 | 0.45 | 9098<br> 1.45<sup>(b)</sup> <br>| 0.41 | 61.1 |
| 16.04 | (4.11) | 9611<br> 1.00<sup>(b)</sup> <br>| 1.15 | 51.1 |
| 18.72 | 49.77 | 12292<br> 1.01<sup>(b)</sup> <br>| 1.00 | 53.5 |
| 12.64 | (6.04) | 9285<br> 1.01<sup>(b)</sup> <br>| 1.21 | 65.9 |
| 14.12 | 10.49 | 13340<br> 1.11<sup>(b)</sup> <br>| 0.93 | 60.0 |
| 14.42 | 0.64 | 8590<br> 1.26<sup>(b)</sup> <br>| 0.60 | 61.1 |
| 16.16 | (4.00) | 28272<br> 0.88<sup>(b)</sup> <br>| 1.27 | 51.1 |
| 18.85 | 50.02 | 29746<br> 0.89<sup>(b)</sup> <br>| 1.12 | 53.5 |
| 12.72 | (5.96) | 21576<br> 0.89<sup>(b)</sup> <br>| 1.33 | 65.9 |
| 14.20 | 10.63 | 29270<br> 0.99<sup>(b)</sup> <br>| 1.06 | 60.0 |
| 14.50 | 0.73 | 27630<br> 1.14<sup>(b)</sup> <br>| 0.70 | 61.1 |
| 16.33 | (3.78)<sup>(c)</sup> <br>| 2249267<br> 0.62<sup>(b)</sup> <br>| 1.53 | 51.1 |
| 19.02 | 50.41<sup>(c)</sup> <br>| 2312305<br> 0.63<sup>(b)</sup> <br>| 1.38 | 53.5 |
| 12.84 | (5.73) | 1696270<br> 0.64<sup>(b)</sup> <br>| 1.58 | 65.9 |
| 14.33 | 5.68<sup>(e)</sup> <br>| 1980217<br> 0.64<sup>(b)(f)</sup> <br>| 1.33<sup>(f)</sup> <br>| 60.0 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>| **Net Asset**<br> **Value, End**<br> **of Period**<br>|
| **MONEY MARKET FUND** | **MONEY MARKET FUND** | **MONEY MARKET FUND** | **MONEY MARKET FUND** | **MONEY MARKET FUND** | **MONEY MARKET FUND** | **MONEY MARKET FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $1.00 | $0.01 | $0.01 | $(0.01) | $(0.01) | $1.00<br> 0.63%<sup>(b)</sup> <br>|
| 2021 | 1.00 | – | – | – | – | 1.00<br> 0.00<sup>(b)</sup> <br>|
| 2020 | 1.00 | 0.01 | 0.01 | (0.01) | (0.01) | 1.00<br> 0.61<sup>(b)</sup> <br>|
| 2019 | 1.00 | 0.02 | 0.02 | (0.02) | (0.02) | 1.00<br> 1.98<sup>(b)</sup> <br>|
| 2018 | 1.00 | 0.01 | 0.01 | (0.01) | (0.01) | 1.00<br> 1.36<sup>(b)</sup> <br>|
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 1.00 | 0.01 | 0.01 | (0.01) | (0.01) | 1.00<br> 0.64<sup>(b)</sup> <br>|
| 2021 | 1.00 | – | – | – | – | 1.00<br> 0.00<sup>(b)</sup> <br>|
| 2020 | 1.00 | 0.01 | 0.01 | (0.01) | (0.01) | 1.00<br> 0.58<sup>(b)</sup> <br>|
| 2019 | 1.00 | 0.02 | 0.02 | (0.02) | (0.02) | 1.00<br> 1.88<sup>(b)</sup> <br>|
| 2018 | 1.00 | 0.01 | 0.01 | (0.01) | (0.01) | 1.00<br> 1.29<sup>(b)</sup> <br>|

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual and/or voluntary expense limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager.

<sup>(e)</sup>

Reflects Manager's contractual and voluntary expense limit and/or Distributor's contractual distribution fee limit.

<sup>(f)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>|
| $352832<br> 0.50%<sup>(c)</sup> <br>0.54%<sup>(d)</sup> <br>| 0.67% |
| 293949<br> 0.12<sup>(c)</sup> <br>0.55<sup>(d)</sup> <br>| 0.00 |
| 342008<br> 0.39<sup>(c)</sup> <br>0.53<sup>(d)</sup> <br>| 0.54 |
| 242127<br> 0.50<sup>(c)</sup> <br>0.60<sup>(d)</sup> <br>| 1.94 |
| 231844<br> 0.52<sup>(c)</sup> <br>0.63<sup>(d)</sup> <br>| 1.34 |
| 625829<br> 0.49<sup>(e)</sup> <br>0.64<sup>(f)</sup> <br>| 0.76 |
| 411033<br> 0.12<sup>(e)</sup> <br>0.66<sup>(f)</sup> <br>| 0.00 |
| 455689<br> 0.41<sup>(e)</sup> <br>0.68<sup>(f)</sup> <br>| 0.49 |
| 278464<br> 0.60<sup>(e)</sup> <br>0.75<sup>(f)</sup> <br>| 1.84 |
| 257738<br> 0.59<sup>(e)</sup> <br>0.74<sup>(f)</sup> <br>| 1.28 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **OVERSEAS FUND** | **OVERSEAS FUND** | **OVERSEAS FUND** | **OVERSEAS FUND** | **OVERSEAS FUND** | **OVERSEAS FUND** | **OVERSEAS FUND** | **OVERSEAS FUND** |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | $11.44 | $0.26 | $(1.98) | $(1.72) | $(0.28) | $(0.54) | $(0.82) |
| 2021 | 8.12 | 0.20 | 3.31 | 3.51 | (0.19) | – | (0.19) |
| 2020 | 9.69 | 0.18 | (1.44) | (1.26) | (0.31) | – | (0.31) |
| 2019 | 10.12 | 0.28 | 0.14 | 0.42 | (0.24) | (0.61) | (0.85) |
| 2018 | 11.53 | 0.25 | (1.30) | (1.05) | (0.21) | (0.15) | (0.36) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 11.29 | 0.20 | (1.99) | (1.79) | (0.19) | (0.54) | (0.73) |
| 2021 | 8.02 | 0.10 | 3.28 | 3.38 | (0.11) | – | (0.11) |
| 2020 | 9.58 | 0.10 | (1.44) | (1.34) | (0.22) | – | (0.22) |
| 2019 | 10.01 | 0.20 | 0.14 | 0.34 | (0.16) | (0.61) | (0.77) |
| 2018 | 11.38 | 0.15 | (1.29) | (1.14) | (0.08) | (0.15) | (0.23) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 11.30 | 0.20 | (1.96) | (1.76) | (0.22) | (0.54) | (0.76) |
| 2021 | 8.02 | 0.14 | 3.27 | 3.41 | (0.13) | – | (0.13) |
| 2020 | 9.58 | 0.13 | (1.43) | (1.30) | (0.26) | – | (0.26) |
| 2019 | 10.00 | 0.23 | 0.14 | 0.37 | (0.18) | (0.61) | (0.79) |
| 2018 | 11.41 | 0.19 | (1.29) | (1.10) | (0.16) | (0.15) | (0.31) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 11.36 | 0.23 | (1.98) | (1.75) | (0.23) | (0.54) | (0.77) |
| 2021 | 8.07 | 0.16 | 3.29 | 3.45 | (0.16) | – | (0.16) |
| 2020 | 9.64 | 0.15 | (1.45) | (1.30) | (0.27) | – | (0.27) |
| 2019 | 10.06 | 0.24 | 0.16 | 0.40 | (0.21) | (0.61) | (0.82) |
| 2018 | 11.46 | 0.21 | (1.30) | (1.09) | (0.16) | (0.15) | (0.31) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $8.90 | (16.05)% | $1703672<br> 0.97%<sup>(b)</sup> <br>| 2.56% | 62.2% |
| 11.44 | 43.48 | 2927281<br> 0.94<sup>(b)</sup> <br>| 1.79 | 54.8 |
| 8.12 | (13.63) | 2314374<br> 0.96<sup>(b)</sup> <br>| 2.07 | 79.6 |
| 9.69 | 5.38 | 2580956<br> 1.04<sup>(b)</sup> <br>| 2.95 | 47.8 |
| 10.12 | (9.44) | 2919837<br> 1.02<sup>(b)</sup> <br>| 2.21 | 45.9 |
| 8.77 | (16.76) | 32<br> 1.83<sup>(b)</sup> <br>| 2.00 | 62.2 |
| 11.29 | 42.33 | 20<br> 1.80<sup>(b)</sup> <br>| 0.94 | 54.8 |
| 8.02 | (14.40) | 13<br> 1.82<sup>(b)</sup> <br>| 1.17 | 79.6 |
| 9.58 | 4.40 | 15<br> 1.91<sup>(b)</sup> <br>| 2.11 | 47.8 |
| 10.01 | (10.22) | 16<br> 1.89<sup>(b)</sup> <br>| 1.38 | 45.9 |
| 8.78 | (16.52) | 464<br> 1.52<sup>(b)</sup> <br>| 2.01 | 62.2 |
| 11.30 | 42.73 | 604<br> 1.49<sup>(b)</sup> <br>| 1.29 | 54.8 |
| 8.02 | (14.13) | 407<br> 1.51<sup>(b)</sup> <br>| 1.52 | 79.6 |
| 9.58 | 4.82 | 499<br> 1.60<sup>(b)</sup> <br>| 2.48 | 47.8 |
| 10.00 | (9.95) | 521<br> 1.58<sup>(b)</sup> <br>| 1.67 | 45.9 |
| 8.84 | (16.30) | 545<br> 1.33<sup>(b)</sup> <br>| 2.27 | 62.2 |
| 11.36 | 42.95 | 608<br> 1.30<sup>(b)</sup> <br>| 1.44 | 54.8 |
| 8.07 | (13.99) | 481<br> 1.32<sup>(b)</sup> <br>| 1.70 | 79.6 |
| 9.64 | 5.05 | 530<br> 1.41<sup>(b)</sup> <br>| 2.57 | 47.8 |
| 10.06 | (9.79) | 477<br> 1.39<sup>(b)</sup> <br>| 1.88 | 45.9 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL CAPITAL APPRECIATION FUND** | **PRINCIPAL CAPITAL APPRECIATION FUND** | **PRINCIPAL CAPITAL APPRECIATION FUND** | **PRINCIPAL CAPITAL APPRECIATION FUND** | **PRINCIPAL CAPITAL APPRECIATION FUND** | **PRINCIPAL CAPITAL APPRECIATION FUND** | **PRINCIPAL CAPITAL APPRECIATION FUND** | **PRINCIPAL CAPITAL APPRECIATION FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $68.28 | $0.38 | $(8.95) | $(8.57) | $(0.27) | $(5.85) | $(6.12) |
| 2021 | 51.30 | 0.36 | 19.57 | 19.93 | (0.43) | (2.52) | (2.95) |
| 2020 | 50.56 | 0.42 | 4.45 | 4.87 | (0.46) | (3.67) | (4.13) |
| 2019 | 63.24 | 0.53 | 5.65 | 6.18 | (0.66) | (18.20) | (18.86) |
| 2018 | 63.68 | 0.84 | 3.47 | 4.31 | (0.62) | (4.13) | (4.75) |
| **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** |
| 2022 | 42.16 | (0.07) | (5.23) | (5.30) | (0.01) | (5.85) | (5.86) |
| 2021 | 32.74 | (0.08) | 12.24 | 12.16 | (0.22) | (2.52) | (2.74) |
| 2020 | 33.73 | 0.01 | 2.90 | 2.91 | (0.23) | (3.67) | (3.90) |
| 2019 | 48.95 | 0.09 | 3.34 | 3.43 | (0.45) | (18.20) | (18.65) |
| 2018 | 50.38 | 0.24 | 2.75 | 2.99 | (0.29) | (4.13) | (4.42) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 70.67 | 0.57 | (9.26) | (8.69) | (0.46) | (5.85) | (6.31) |
| 2021 | 53.00 | 0.57 | 20.22 | 20.79 | (0.60) | (2.52) | (3.12) |
| 2020 | 52.09 | 0.61 | 4.60 | 5.21 | (0.63) | (3.67) | (4.30) |
| 2019 | 64.54 | 0.74 | 5.84 | 6.58 | (0.83) | (18.20) | (19.03) |
| 2018 | 64.86 | 1.00 | 3.63 | 4.63 | (0.82) | (4.13) | (4.95) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 68.09 | 0.06 | (8.95) | (8.89) | – | (5.85) | (5.85) |
| 2021 | 51.14 | 0.04 | 19.53 | 19.57 | (0.10) | (2.52) | (2.62) |
| 2020 | 50.41 | 0.16 | 4.43 | 4.59 | (0.19) | (3.67) | (3.86) |
| 2019 | 63.08 | 0.29 | 5.65 | 5.94 | (0.41) | (18.20) | (18.61) |
| 2018 | 63.50 | 0.49 | 3.49 | 3.98 | (0.27) | (4.13) | (4.40) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 68.37 | 0.24 | (8.98) | (8.74) | (0.17) | (5.85) | (6.02) |
| 2021 | 51.37 | 0.21 | 19.62 | 19.83 | (0.31) | (2.52) | (2.83) |
| 2020 | 50.62 | 0.31 | 4.45 | 4.76 | (0.34) | (3.67) | (4.01) |
| 2019 | 63.23 | 0.44 | 5.66 | 6.10 | (0.51) | (18.20) | (18.71) |
| 2018 | 63.61 | 0.67 | 3.51 | 4.18 | (0.43) | (4.13) | (4.56) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 69.31 | 0.36 | (9.11) | (8.75) | (0.22) | (5.85) | (6.07) |
| 2021 | 52.03 | 0.36 | 19.84 | 20.20 | (0.40) | (2.52) | (2.92) |
| 2020 | 51.23 | 0.41 | 4.51 | 4.92 | (0.45) | (3.67) | (4.12) |
| 2019 | 63.79 | 0.54 | 5.74 | 6.28 | (0.64) | (18.20) | (18.84) |
| 2018 | 64.18 | 0.83 | 3.51 | 4.34 | (0.60) | (4.13) | (4.73) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 69.77 | 0.43 | (9.17) | (8.74) | (0.30) | (5.85) | (6.15) |
| 2021 | 52.35 | 0.42 | 19.98 | 20.40 | (0.46) | (2.52) | (2.98) |
| 2020 | 51.51 | 0.47 | 4.54 | 5.01 | (0.50) | (3.67) | (4.17) |
| 2019 | 64.05 | 0.60 | 5.76 | 6.36 | (0.70) | (18.20) | (18.90) |
| 2018 | 64.40 | 0.90 | 3.53 | 4.43 | (0.65) | (4.13) | (4.78) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

<sup>(c)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(d)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $53.59 | (13.77)%<sup>(b)(c)</sup> <br>| $1037510 | 0.77% | 0.66% | 49.5% |
| 68.28 | 40.26<sup>(b)(c)</sup> <br>| 1288915 | 0.80 | 0.59 | 29.9 |
| 51.30 | 10.04<sup>(b)(c)</sup> <br>| 987963 | 0.83 | 0.86 | 35.4 |
| 50.56 | 17.38<sup>(c)</sup> <br>| 993244 | 0.86 | 1.10 | 35.4 |
| 63.24 | 6.95<sup>(c)</sup> <br>| 950601 | 0.83 | 1.30 | 36.3 |
| 31.00 | (14.52)<sup>(c)</sup> <br>| 22051 | 1.63 | (0.20) | 49.5 |
| 42.16 | 39.11<sup>(c)</sup> <br>| 33930 | 1.64 | (0.22) | 29.9 |
| 32.74 | 9.10<sup>(c)</sup> <br>| 35053 | 1.67 | 0.03 | 35.4 |
| 33.73 | 16.38<sup>(c)</sup> <br>| 39154 | 1.70 | 0.28 | 35.4 |
| 48.95 | 6.09<sup>(c)</sup> <br>| 51955 | 1.65 | 0.48 | 36.3 |
| 55.67 | (13.51)<sup>(b)</sup> <br>| 2022614 | 0.46 | 0.97 | 49.5 |
| 70.67 | 40.71<sup>(b)</sup> <br>| 961957 | 0.49<sup>(d)</sup> <br>| 0.90 | 29.9 |
| 53.00 | 10.42 | 717175 | 0.47<sup>(d)</sup> <br>| 1.21 | 35.4 |
| 52.09 | 17.85 | 683345 | 0.47<sup>(d)</sup> <br>| 1.49 | 35.4 |
| 64.54 | 7.35 | 683933 | 0.47<sup>(d)</sup> <br>| 1.53 | 36.3 |
| 53.35 | (14.25)<sup>(b)</sup> <br>| 1343 | 1.32 | 0.11 | 49.5 |
| 68.09 | 39.51<sup>(b)</sup> <br>| 1653 | 1.35 | 0.06 | 29.9 |
| 51.14 | 9.44 | 1653 | 1.37 | 0.33 | 35.4 |
| 50.41 | 16.78 | 1828 | 1.37 | 0.61 | 35.4 |
| 63.08 | 6.40 | 2381 | 1.35 | 0.76 | 36.3 |
| 53.61 | (13.98) | 19275 | 1.01 | 0.42 | 49.5 |
| 68.37 | 39.94 | 20459 | 1.04 | 0.35 | 29.9 |
| 51.37 | 9.76 | 14150 | 1.06 | 0.64 | 35.4 |
| 50.62 | 17.15 | 16017 | 1.06 | 0.91 | 35.4 |
| 63.23 | 6.74 | 17054 | 1.04 | 1.04 | 36.3 |
| 54.49 | (13.83)<sup>(b)</sup> <br>| 8365 | 0.82 | 0.61 | 49.5 |
| 69.31 | 40.22<sup>(b)</sup> <br>| 10333 | 0.85 | 0.59 | 29.9 |
| 52.03 | 9.98 | 13402 | 0.87 | 0.84 | 35.4 |
| 51.23 | 17.38 | 16878 | 0.87 | 1.10 | 35.4 |
| 63.79 | 6.94 | 17986 | 0.85 | 1.29 | 36.3 |
| 54.88 | (13.72) | 27542 | 0.70 | 0.73 | 49.5 |
| 69.77 | 40.37 | 33672 | 0.73 | 0.68 | 29.9 |
| 52.35 | 10.11 | 32567 | 0.75 | 0.95 | 35.4 |
| 51.51 | 17.51 | 34786 | 0.75 | 1.22 | 35.4 |
| 64.05 | 7.07 | 35915 | 0.73 | 1.39 | 36.3 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME STRATEGIC INCOME FUND** | **PRINCIPAL LIFETIME STRATEGIC INCOME FUND** | **PRINCIPAL LIFETIME STRATEGIC INCOME FUND** | **PRINCIPAL LIFETIME STRATEGIC INCOME FUND** | **PRINCIPAL LIFETIME STRATEGIC INCOME FUND** | **PRINCIPAL LIFETIME STRATEGIC INCOME FUND** | **PRINCIPAL LIFETIME STRATEGIC INCOME FUND** | **PRINCIPAL LIFETIME STRATEGIC INCOME FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $13.24 | $0.31 | $(2.18) | $(1.87) | $(0.31) | $(0.60) | $(0.91) |
| 2021 | 12.51 | 0.22 | 0.95 | 1.17 | (0.22) | (0.22) | (0.44) |
| 2020 | 12.43 | 0.25 | 0.43 | 0.68 | (0.27) | (0.33) | (0.60) |
| 2019 | 12.19 | 0.32 | 0.72 | 1.04 | (0.30) | (0.50) | (0.80) |
| 2018 | 12.87 | 0.30 | (0.45) | (0.15) | (0.30) | (0.23) | (0.53) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 13.04 | 0.32 | (2.15) | (1.83) | (0.32) | (0.60) | (0.92) |
| 2021 | 12.33 | 0.23 | 0.94 | 1.17 | (0.24) | (0.22) | (0.46) |
| 2020 | 12.26 | 0.26 | 0.43 | 0.69 | (0.29) | (0.33) | (0.62) |
| 2019 | 12.03 | 0.33 | 0.72 | 1.05 | (0.32) | (0.50) | (0.82) |
| 2018 | 12.73 | 0.32 | (0.46) | (0.14) | (0.33) | (0.23) | (0.56) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 13.13 | 0.36 | (2.17) | (1.81) | (0.35) | (0.60) | (0.95) |
| 2021 | 12.41 | 0.26 | 0.94 | 1.20 | (0.26) | (0.22) | (0.48) |
| 2020 | 12.34 | 0.28 | 0.44 | 0.72 | (0.32) | (0.33) | (0.65) |
| 2019 | 12.11 | 0.36 | 0.72 | 1.08 | (0.35) | (0.50) | (0.85) |
| 2018 | 12.80 | 0.35 | (0.46) | (0.11) | (0.35) | (0.23) | (0.58) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 13.11 | 0.25 | (2.17) | (1.92) | (0.22) | (0.60) | (0.82) |
| 2021 | 12.40 | 0.16 | 0.92 | 1.08 | (0.15) | (0.22) | (0.37) |
| 2020 | 12.32 | 0.19 | 0.43 | 0.62 | (0.21) | (0.33) | (0.54) |
| 2019 | 12.08 | 0.25 | 0.73 | 0.98 | (0.24) | (0.50) | (0.74) |
| 2018 | 12.77 | 0.23 | (0.45) | (0.22) | (0.24) | (0.23) | (0.47) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 12.99 | 0.29 | (2.16) | (1.87) | (0.27) | (0.60) | (0.87) |
| 2021 | 12.27 | 0.19 | 0.94 | 1.13 | (0.19) | (0.22) | (0.41) |
| 2020 | 12.20 | 0.22 | 0.42 | 0.64 | (0.24) | (0.33) | (0.57) |
| 2019 | 11.97 | 0.30 | 0.71 | 1.01 | (0.28) | (0.50) | (0.78) |
| 2018 | 12.66 | 0.28 | (0.46) | (0.18) | (0.28) | (0.23) | (0.51) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 13.03 | 0.32 | (2.16) | (1.84) | (0.30) | (0.60) | (0.90) |
| 2021 | 12.32 | 0.21 | 0.94 | 1.15 | (0.22) | (0.22) | (0.44) |
| 2020 | 12.24 | 0.24 | 0.43 | 0.67 | (0.26) | (0.33) | (0.59) |
| 2019 | 12.00 | 0.31 | 0.73 | 1.04 | (0.30) | (0.50) | (0.80) |
| 2018 | 12.69 | 0.31 | (0.47) | (0.16) | (0.30) | (0.23) | (0.53) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 13.12 | 0.33 | (2.18) | (1.85) | (0.31) | (0.60) | (0.91) |
| 2021 | 12.39 | 0.24 | 0.94 | 1.18 | (0.23) | (0.22) | (0.45) |
| 2020 | 12.32 | 0.26 | 0.43 | 0.69 | (0.29) | (0.33) | (0.62) |
| 2019 | 12.09 | 0.33 | 0.72 | 1.05 | (0.32) | (0.50) | (0.82) |
| 2018 | 12.77 | 0.32 | (0.45) | (0.13) | (0.32) | (0.23) | (0.55) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

<sup>(d)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(e)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $10.46 | (15.14)%<sup>(b)</sup> <br>| $16425 | 0.38%<sup>(c)</sup> <br>| –% | 2.72% | 33.6% |
| 13.24 | 9.45<sup>(b)</sup> <br>| 19902 | 0.38<sup>(c)</sup> <br>| – | 1.66 | 35.0 |
| 12.51 | 5.70<sup>(b)</sup> <br>| 16214 | 0.38<sup>(c)</sup> <br>| – | 2.01 | 31.0 |
| 12.43 | 9.31<sup>(b)</sup> <br>| 16283 | 0.38<sup>(c)</sup> <br>| – | 2.63 | 44.8 |
| 12.19 | (1.23)<sup>(b)</sup> <br>| 16585 | 0.38<sup>(c)</sup> <br>| – | 2.36 | 22.7 |
| 10.29 | (15.02)<sup>(b)</sup> <br>| 58048 | 0.23<sup>(d)</sup> <br>| 0.25<sup>(e)</sup> <br>| 2.87 | 33.6 |
| 13.04 | 9.61<sup>(b)</sup> <br>| 71811 | 0.22<sup>(d)</sup> <br>| 0.24<sup>(e)</sup> <br>| 1.84 | 35.0 |
| 12.33 | 5.87<sup>(b)</sup> <br>| 65404 | 0.22<sup>(d)</sup> <br>| 0.25<sup>(e)</sup> <br>| 2.18 | 31.0 |
| 12.26 | 9.52<sup>(b)</sup> <br>| 67084 | 0.24<sup>(d)</sup> <br>| 0.27<sup>(e)</sup> <br>| 2.75 | 44.8 |
| 12.03 | (1.17)<sup>(b)</sup> <br>| 67011 | 0.22<sup>(d)</sup> <br>| 0.25<sup>(e)</sup> <br>| 2.56 | 22.7 |
| 10.37 | (14.82) | 237065 | 0.02 | – | 3.12 | 33.6 |
| 13.13 | 9.83 | 337718 | 0.02 | – | 2.04 | 35.0 |
| 12.41 | 6.06 | 313363 | 0.02 | – | 2.35 | 31.0 |
| 12.34 | 9.71 | 288470 | 0.03 | – | 3.00 | 44.8 |
| 12.11 | (0.88) | 300145 | 0.02 | – | 2.85 | 22.7 |
| 10.37 | (15.58) | 1686 | 0.89 | – | 2.21 | 33.6 |
| 13.11 | 8.82 | 2173 | 0.89 | – | 1.22 | 35.0 |
| 12.40 | 5.22 | 2298 | 0.89 | – | 1.55 | 31.0 |
| 12.32 | 8.74 | 2935 | 0.89 | – | 2.12 | 44.8 |
| 12.08 | (1.77) | 3303 | 0.89 | – | 1.86 | 22.7 |
| 10.25 | (15.36) | 7731 | 0.58 | – | 2.56 | 33.6 |
| 12.99 | 9.31 | 10552 | 0.58 | – | 1.51 | 35.0 |
| 12.27 | 5.45 | 11439 | 0.58 | – | 1.86 | 31.0 |
| 12.20 | 9.13 | 13611 | 0.58 | – | 2.59 | 44.8 |
| 11.97 | (1.49) | 18843 | 0.58 | – | 2.24 | 22.7 |
| 10.29 | (15.12) | 3546 | 0.39 | – | 2.81 | 33.6 |
| 13.03 | 9.41 | 5143 | 0.39 | – | 1.67 | 35.0 |
| 12.32 | 5.69 | 5101 | 0.39 | – | 2.03 | 31.0 |
| 12.24 | 9.40 | 5513 | 0.39 | – | 2.60 | 44.8 |
| 12.00 | (1.31) | 7847 | 0.39 | – | 2.49 | 22.7 |
| 10.36 | (15.07) | 10147 | 0.27 | – | 2.90 | 33.6 |
| 13.12 | 9.64 | 13279 | 0.27 | – | 1.84 | 35.0 |
| 12.39 | 5.79 | 16430 | 0.27 | – | 2.14 | 31.0 |
| 12.32 | 9.42 | 19181 | 0.27 | – | 2.75 | 44.8 |
| 12.09 | (1.10) | 19665 | 0.27 | – | 2.57 | 22.7 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME 2010 FUND** | **PRINCIPAL LIFETIME 2010 FUND** | **PRINCIPAL LIFETIME 2010 FUND** | **PRINCIPAL LIFETIME 2010 FUND** | **PRINCIPAL LIFETIME 2010 FUND** | **PRINCIPAL LIFETIME 2010 FUND** | **PRINCIPAL LIFETIME 2010 FUND** | **PRINCIPAL LIFETIME 2010 FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $14.05 | $0.34 | $(2.33) | $(1.99) | $(0.30) | $(0.64) | $(0.94) |
| 2021 | 13.36 | 0.22 | 1.34 | 1.56 | (0.23) | (0.64) | (0.87) |
| 2020 | 13.48 | 0.26 | 0.48 | 0.74 | (0.29) | (0.57) | (0.86) |
| 2019 | 13.33 | 0.33 | 0.81 | 1.14 | (0.31) | (0.68) | (0.99) |
| 2018 | 14.07 | 0.33 | (0.45) | (0.12) | (0.32) | (0.30) | (0.62) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 13.88 | 0.36 | (2.29) | (1.93) | (0.33) | (0.64) | (0.97) |
| 2021 | 13.21 | 0.25 | 1.32 | 1.57 | (0.26) | (0.64) | (0.90) |
| 2020 | 13.34 | 0.28 | 0.47 | 0.75 | (0.31) | (0.57) | (0.88) |
| 2019 | 13.20 | 0.35 | 0.81 | 1.16 | (0.34) | (0.68) | (1.02) |
| 2018 | 13.95 | 0.36 | (0.45) | (0.09) | (0.36) | (0.30) | (0.66) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 13.95 | 0.38 | (2.30) | (1.92) | (0.35) | (0.64) | (0.99) |
| 2021 | 13.27 | 0.27 | 1.33 | 1.60 | (0.28) | (0.64) | (0.92) |
| 2020 | 13.40 | 0.30 | 0.47 | 0.77 | (0.33) | (0.57) | (0.90) |
| 2019 | 13.26 | 0.38 | 0.80 | 1.18 | (0.36) | (0.68) | (1.04) |
| 2018 | 14.01 | 0.40 | (0.47) | (0.07) | (0.38) | (0.30) | (0.68) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 13.88 | 0.27 | (2.30) | (2.03) | (0.23) | (0.64) | (0.87) |
| 2021 | 13.21 | 0.15 | 1.32 | 1.47 | (0.16) | (0.64) | (0.80) |
| 2020 | 13.34 | 0.19 | 0.47 | 0.66 | (0.22) | (0.57) | (0.79) |
| 2019 | 13.18 | 0.28 | 0.79 | 1.07 | (0.23) | (0.68) | (0.91) |
| 2018 | 13.92 | 0.26 | (0.45) | (0.19) | (0.25) | (0.30) | (0.55) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 13.81 | 0.31 | (2.29) | (1.98) | (0.26) | (0.64) | (0.90) |
| 2021 | 13.15 | 0.20 | 1.31 | 1.51 | (0.21) | (0.64) | (0.85) |
| 2020 | 13.28 | 0.23 | 0.46 | 0.69 | (0.25) | (0.57) | (0.82) |
| 2019 | 13.12 | 0.30 | 0.82 | 1.12 | (0.28) | (0.68) | (0.96) |
| 2018 | 13.87 | 0.32 | (0.47) | (0.15) | (0.30) | (0.30) | (0.60) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 13.86 | 0.35 | (2.31) | (1.96) | (0.29) | (0.64) | (0.93) |
| 2021 | 13.19 | 0.23 | 1.31 | 1.54 | (0.23) | (0.64) | (0.87) |
| 2020 | 13.32 | 0.26 | 0.46 | 0.72 | (0.28) | (0.57) | (0.85) |
| 2019 | 13.17 | 0.35 | 0.79 | 1.14 | (0.31) | (0.68) | (0.99) |
| 2018 | 13.91 | 0.34 | (0.46) | (0.12) | (0.32) | (0.30) | (0.62) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 13.89 | 0.36 | (2.31) | (1.95) | (0.31) | (0.64) | (0.95) |
| 2021 | 13.21 | 0.24 | 1.32 | 1.56 | (0.24) | (0.64) | (0.88) |
| 2020 | 13.33 | 0.27 | 0.47 | 0.74 | (0.29) | (0.57) | (0.86) |
| 2019 | 13.19 | 0.35 | 0.80 | 1.15 | (0.33) | (0.68) | (1.01) |
| 2018 | 13.94 | 0.35 | (0.46) | (0.11) | (0.34) | (0.30) | (0.64) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

<sup>(d)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(e)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $11.12 | (15.14)%<sup>(b)</sup> <br>| $22189 | 0.38%<sup>(c)</sup> <br>| –% | 2.75% | 26.7% |
| 14.05 | 12.06<sup>(b)</sup> <br>| 28819 | 0.38<sup>(c)</sup> <br>| – | 1.63 | 25.1 |
| 13.36 | 5.72<sup>(b)</sup> <br>| 27239 | 0.38<sup>(c)</sup> <br>| – | 1.98 | 31.1 |
| 13.48 | 9.43<sup>(b)</sup> <br>| 27312 | 0.38<sup>(c)</sup> <br>| – | 2.52 | 37.4 |
| 13.33 | (0.89)<sup>(b)</sup> <br>| 26867 | 0.38<sup>(c)</sup> <br>| – | 2.40 | 21.7 |
| 10.98 | (14.94)<sup>(b)</sup> <br>| 162058 | 0.19<sup>(d)</sup> <br>| 0.21<sup>(e)</sup> <br>| 2.95 | 26.7 |
| 13.88 | 12.25<sup>(b)</sup> <br>| 210497 | 0.19<sup>(d)</sup> <br>| 0.21<sup>(e)</sup> <br>| 1.82 | 25.1 |
| 13.21 | 5.91<sup>(b)</sup> <br>| 206711 | 0.18<sup>(d)</sup> <br>| 0.21<sup>(e)</sup> <br>| 2.18 | 31.1 |
| 13.34 | 9.71<sup>(b)</sup> <br>| 212675 | 0.19<sup>(d)</sup> <br>| 0.22<sup>(e)</sup> <br>| 2.72 | 37.4 |
| 13.20 | (0.72)<sup>(b)</sup> <br>| 215753 | 0.18<sup>(d)</sup> <br>| 0.21<sup>(e)</sup> <br>| 2.62 | 21.7 |
| 11.04 | (14.79) | 302641 | 0.01 | – | 3.14 | 26.7 |
| 13.95 | 12.44 | 426691 | 0.02 | – | 1.99 | 25.1 |
| 13.27 | 6.06 | 409464 | 0.02 | – | 2.33 | 31.1 |
| 13.40 | 9.86 | 414444 | 0.02 | – | 2.94 | 37.4 |
| 13.26 | (0.55) | 464671 | 0.01 | – | 2.91 | 21.7 |
| 10.98 | (15.58) | 2703 | 0.89 | – | 2.25 | 26.7 |
| 13.88 | 11.48 | 3858 | 0.89 | – | 1.12 | 25.1 |
| 13.21 | 5.14 | 4183 | 0.89 | – | 1.43 | 31.1 |
| 13.34 | 8.92 | 3967 | 0.89 | – | 2.18 | 37.4 |
| 13.18 | (1.41) | 4818 | 0.89 | – | 1.93 | 21.7 |
| 10.93 | (15.26) | 14052 | 0.58 | – | 2.57 | 26.7 |
| 13.81 | 11.81 | 20070 | 0.58 | – | 1.51 | 25.1 |
| 13.15 | 5.48 | 25428 | 0.58 | – | 1.79 | 31.1 |
| 13.28 | 9.35 | 26022 | 0.58 | – | 2.36 | 37.4 |
| 13.12 | (1.16) | 29905 | 0.58 | – | 2.34 | 21.7 |
| 10.97 | (15.12) | 4538 | 0.39 | – | 2.85 | 26.7 |
| 13.86 | 12.01 | 7270 | 0.39 | – | 1.69 | 25.1 |
| 13.19 | 5.65 | 9381 | 0.39 | – | 2.04 | 31.1 |
| 13.32 | 9.52 | 11749 | 0.39 | – | 2.71 | 37.4 |
| 13.17 | (0.90) | 16391 | 0.39 | – | 2.51 | 21.7 |
| 10.99 | (15.02) | 13563 | 0.27 | – | 2.94 | 26.7 |
| 13.89 | 12.21 | 20052 | 0.27 | – | 1.77 | 25.1 |
| 13.21 | 5.82 | 24198 | 0.27 | – | 2.12 | 31.1 |
| 13.33 | 9.59 | 27348 | 0.27 | – | 2.76 | 37.4 |
| 13.19 | (0.83) | 44323 | 0.27 | – | 2.58 | 21.7 |

---

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME 2015 FUND** | **PRINCIPAL LIFETIME 2015 FUND** | **PRINCIPAL LIFETIME 2015 FUND** | **PRINCIPAL LIFETIME 2015 FUND** | **PRINCIPAL LIFETIME 2015 FUND** | **PRINCIPAL LIFETIME 2015 FUND** | **PRINCIPAL LIFETIME 2015 FUND** | **PRINCIPAL LIFETIME 2015 FUND** |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | $10.57 | $0.29 | $(1.78) | $(1.49) | $(0.26) | $(0.54) | $(0.80) |
| 2021 | 9.66 | 0.20 | 1.26 | 1.46 | (0.20) | (0.35) | (0.55) |
| 2020 | 10.26 | 0.22 | 0.37 | 0.59 | (0.23) | (0.96) | (1.19) |
| 2019 | 10.18 | 0.29 | 0.66 | 0.95 | (0.28) | (0.59) | (0.87) |
| 2018 | 11.02 | 0.31 | (0.36) | (0.05) | (0.29) | (0.50) | (0.79) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 10.22 | 0.20 | (1.72) | (1.52) | (0.16) | (0.54) | (0.70) |
| 2021 | 9.35 | 0.10 | 1.23 | 1.33 | (0.11) | (0.35) | (0.46) |
| 2020 | 9.97 | 0.14 | 0.35 | 0.49 | (0.15) | (0.96) | (1.11) |
| 2019 | 9.90 | 0.19 | 0.65 | 0.84 | (0.18) | (0.59) | (0.77) |
| 2018 | 10.72 | 0.22 | (0.35) | (0.13) | (0.19) | (0.50) | (0.69) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 10.25 | 0.23 | (1.72) | (1.49) | (0.20) | (0.54) | (0.74) |
| 2021 | 9.38 | 0.14 | 1.22 | 1.36 | (0.14) | (0.35) | (0.49) |
| 2020 | 10.00 | 0.16 | 0.36 | 0.52 | (0.18) | (0.96) | (1.14) |
| 2019 | 9.93 | 0.22 | 0.66 | 0.88 | (0.22) | (0.59) | (0.81) |
| 2018 | 10.76 | 0.25 | (0.35) | (0.10) | (0.23) | (0.50) | (0.73) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 10.37 | 0.25 | (1.75) | (1.50) | (0.22) | (0.54) | (0.76) |
| 2021 | 9.48 | 0.16 | 1.24 | 1.40 | (0.16) | (0.35) | (0.51) |
| 2020 | 10.10 | 0.19 | 0.35 | 0.54 | (0.20) | (0.96) | (1.16) |
| 2019 | 10.02 | 0.25 | 0.66 | 0.91 | (0.24) | (0.59) | (0.83) |
| 2018 | 10.84 | 0.25 | (0.33) | (0.08) | (0.24) | (0.50) | (0.74) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 10.39 | 0.27 | (1.76) | (1.49) | (0.23) | (0.54) | (0.77) |
| 2021 | 9.50 | 0.17 | 1.24 | 1.41 | (0.17) | (0.35) | (0.52) |
| 2020 | 10.11 | 0.19 | 0.36 | 0.55 | (0.20) | (0.96) | (1.16) |
| 2019 | 10.04 | 0.26 | 0.66 | 0.92 | (0.26) | (0.59) | (0.85) |
| 2018 | 10.87 | 0.26 | (0.33) | (0.07) | (0.26) | (0.50) | (0.76) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

------

**Financial Highlights**

**Principal Funds, Inc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $8.28 | (15.15)% | $223930 | 0.02% | 3.16% | 29.2% |
| 10.57 | 15.48 | 304277 | 0.02 | 1.91 | 28.3 |
| 9.66 | 6.20 | 273028 | 0.02 | 2.30 | 31.2 |
| 10.26 | 10.48 | 291875 | 0.02 | 2.95 | 37.5 |
| 10.18 | (0.56) | 362525 | 0.02 | 2.94 | 23.6 |
| 8.00 | (15.90)<sup>(b)</sup> <br>| 2042 | 0.89 | 2.29 | 29.2 |
| 10.22 | 14.62<sup>(b)</sup> <br>| 2611 | 0.89 | 1.06 | 28.3 |
| 9.35 | 5.21 | 3288 | 0.89 | 1.49 | 31.2 |
| 9.97 | 9.44 | 3645 | 0.89 | 1.99 | 37.5 |
| 9.90 | (1.35) | 4325 | 0.89 | 2.17 | 23.6 |
| 8.02 | (15.57) | 19212 | 0.58 | 2.64 | 29.2 |
| 10.25 | 14.85 | 28808 | 0.58 | 1.38 | 28.3 |
| 9.38 | 5.52 | 31339 | 0.58 | 1.76 | 31.2 |
| 10.00 | 9.89 | 36399 | 0.58 | 2.31 | 37.5 |
| 9.93 | (1.06) | 48512 | 0.58 | 2.41 | 23.6 |
| 8.11 | (15.51) | 7376 | 0.39 | 2.82 | 29.2 |
| 10.37 | 15.11 | 12547 | 0.39 | 1.58 | 28.3 |
| 9.48 | 5.69 | 14286 | 0.39 | 2.03 | 31.2 |
| 10.10 | 10.11 | 18317 | 0.39 | 2.54 | 37.5 |
| 10.02 | (0.85) | 23837 | 0.39 | 2.43 | 23.6 |
| 8.13 | (15.35) | 18499 | 0.27 | 2.97 | 29.2 |
| 10.39 | 15.25 | 26565 | 0.27 | 1.67 | 28.3 |
| 9.50 | 5.86 | 28376 | 0.27 | 2.08 | 31.2 |
| 10.11 | 10.21 | 30810 | 0.27 | 2.72 | 37.5 |
| 10.04 | (0.76) | 48571 | 0.27 | 2.54 | 23.6 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME 2020 FUND** | **PRINCIPAL LIFETIME 2020 FUND** | **PRINCIPAL LIFETIME 2020 FUND** | **PRINCIPAL LIFETIME 2020 FUND** | **PRINCIPAL LIFETIME 2020 FUND** | **PRINCIPAL LIFETIME 2020 FUND** | **PRINCIPAL LIFETIME 2020 FUND** | **PRINCIPAL LIFETIME 2020 FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $15.80 | $0.38 | $(2.74) | $(2.36) | $(0.33) | $(0.97) | $(1.30) |
| 2021 | 14.07 | 0.23 | 2.30 | 2.53 | (0.23) | (0.57) | (0.80) |
| 2020 | 14.43 | 0.26 | 0.52 | 0.78 | (0.27) | (0.87) | (1.14) |
| 2019 | 13.92 | 0.31 | 1.07 | 1.38 | (0.30) | (0.57) | (0.87) |
| 2018 | 14.81 | 0.35 | (0.48) | (0.13) | (0.34) | (0.42) | (0.76) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 15.59 | 0.41 | (2.72) | (2.31) | (0.35) | (0.97) | (1.32) |
| 2021 | 13.89 | 0.25 | 2.28 | 2.53 | (0.26) | (0.57) | (0.83) |
| 2020 | 14.26 | 0.29 | 0.50 | 0.79 | (0.29) | (0.87) | (1.16) |
| 2019 | 13.78 | 0.34 | 1.04 | 1.38 | (0.33) | (0.57) | (0.90) |
| 2018 | 14.66 | 0.37 | (0.46) | (0.09) | (0.37) | (0.42) | (0.79) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 15.70 | 0.44 | (2.73) | (2.29) | (0.38) | (0.97) | (1.35) |
| 2021 | 13.99 | 0.28 | 2.28 | 2.56 | (0.28) | (0.57) | (0.85) |
| 2020 | 14.35 | 0.31 | 0.52 | 0.83 | (0.32) | (0.87) | (1.19) |
| 2019 | 13.86 | 0.37 | 1.04 | 1.41 | (0.35) | (0.57) | (0.92) |
| 2018 | 14.74 | 0.42 | (0.49) | (0.07) | (0.39) | (0.42) | (0.81) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 15.56 | 0.31 | (2.71) | (2.40) | (0.24) | (0.97) | (1.21) |
| 2021 | 13.86 | 0.15 | 2.27 | 2.42 | (0.15) | (0.57) | (0.72) |
| 2020 | 14.22 | 0.19 | 0.50 | 0.69 | (0.18) | (0.87) | (1.05) |
| 2019 | 13.71 | 0.27 | 1.02 | 1.29 | (0.21) | (0.57) | (0.78) |
| 2018 | 14.59 | 0.28 | (0.48) | (0.20) | (0.26) | (0.42) | (0.68) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 15.49 | 0.36 | (2.70) | (2.34) | (0.29) | (0.97) | (1.26) |
| 2021 | 13.82 | 0.19 | 2.25 | 2.44 | (0.20) | (0.57) | (0.77) |
| 2020 | 14.18 | 0.23 | 0.51 | 0.74 | (0.23) | (0.87) | (1.10) |
| 2019 | 13.69 | 0.29 | 1.03 | 1.32 | (0.26) | (0.57) | (0.83) |
| 2018 | 14.57 | 0.34 | (0.49) | (0.15) | (0.31) | (0.42) | (0.73) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 15.55 | 0.39 | (2.71) | (2.32) | (0.32) | (0.97) | (1.29) |
| 2021 | 13.86 | 0.23 | 2.26 | 2.49 | (0.23) | (0.57) | (0.80) |
| 2020 | 14.22 | 0.28 | 0.49 | 0.77 | (0.26) | (0.87) | (1.13) |
| 2019 | 13.73 | 0.35 | 1.00 | 1.35 | (0.29) | (0.57) | (0.86) |
| 2018 | 14.60 | 0.34 | (0.46) | (0.12) | (0.33) | (0.42) | (0.75) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 15.60 | 0.40 | (2.72) | (2.32) | (0.34) | (0.97) | (1.31) |
| 2021 | 13.90 | 0.24 | 2.28 | 2.52 | (0.25) | (0.57) | (0.82) |
| 2020 | 14.26 | 0.28 | 0.51 | 0.79 | (0.28) | (0.87) | (1.15) |
| 2019 | 13.77 | 0.33 | 1.04 | 1.37 | (0.31) | (0.57) | (0.88) |
| 2018 | 14.66 | 0.37 | (0.49) | (0.12) | (0.35) | (0.42) | (0.77) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

<sup>(d)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(e)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(f)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $12.14 | (16.17)%<sup>(b)</sup> <br>| $88607 | 0.36%<sup>(c)</sup> <br>| –% | 2.84% | 25.2% |
| 15.80 | 18.52<sup>(b)</sup> <br>| 112642 | 0.35<sup>(c)</sup> <br>| – | 1.50 | 19.6 |
| 14.07 | 5.58<sup>(b)</sup> <br>| 100919 | 0.36<sup>(c)</sup> <br>| – | 1.89 | 21.7 |
| 14.43 | 10.78<sup>(b)</sup> <br>| 102763 | 0.38<sup>(c)</sup> <br>| – | 2.27 | 34.2 |
| 13.92 | (1.00)<sup>(b)</sup> <br>| 100709 | 0.38<sup>(c)</sup> <br>| – | 2.42 | 20.4 |
| 11.96 | (16.05)<sup>(b)</sup> <br>| 679727 | 0.17<sup>(d)</sup> <br>| 0.19<sup>(e)</sup> <br>| 3.06 | 25.2 |
| 15.59 | 18.69<sup>(b)(f)</sup> <br>| 910454 | 0.18<sup>(d)</sup> <br>| 0.20<sup>(e)</sup> <br>| 1.68 | 19.6 |
| 13.89 | 5.86<sup>(b)(f)</sup> <br>| 832258 | 0.16<sup>(d)</sup> <br>| 0.19<sup>(e)</sup> <br>| 2.12 | 21.7 |
| 14.26 | 10.94<sup>(b)</sup> <br>| 880475 | 0.17<sup>(d)</sup> <br>| 0.20<sup>(e)</sup> <br>| 2.47 | 34.2 |
| 13.78 | (0.72)<sup>(b)</sup> <br>| 878626 | 0.17<sup>(d)</sup> <br>| 0.20<sup>(e)</sup> <br>| 2.59 | 20.4 |
| 12.06 | (15.85) | 1640911 | 0.01 | – | 3.25 | 25.2 |
| 15.70 | 18.87 | 2424308 | 0.01 | – | 1.86 | 19.6 |
| 13.99 | 5.99 | 2298787 | 0.01 | – | 2.28 | 21.7 |
| 14.35 | 11.15 | 2553165 | 0.01 | – | 2.74 | 34.2 |
| 13.86 | (0.56) | 2869014 | 0.01 | – | 2.91 | 20.4 |
| 11.95 | (16.60) | 11554 | 0.88 | – | 2.32 | 25.2 |
| 15.56 | 17.81<sup>(f)</sup> <br>| 15645 | 0.88 | – | 0.98 | 19.6 |
| 13.86 | 5.09<sup>(f)</sup> <br>| 17992 | 0.88 | – | 1.42 | 21.7 |
| 14.22 | 10.22 | 20527 | 0.88 | – | 1.97 | 34.2 |
| 13.71 | (1.50) | 26253 | 0.88 | – | 1.96 | 20.4 |
| 11.89 | (16.37)<sup>(f)</sup> <br>| 77582 | 0.57 | – | 2.69 | 25.2 |
| 15.49 | 18.24<sup>(f)</sup> <br>| 112088 | 0.57 | – | 1.30 | 19.6 |
| 13.82 | 5.42 | 110479 | 0.57 | – | 1.74 | 21.7 |
| 14.18 | 10.51 | 127255 | 0.57 | – | 2.16 | 34.2 |
| 13.69 | (1.16) | 151279 | 0.57 | – | 2.38 | 20.4 |
| 11.94 | (16.17) | 31027 | 0.38 | – | 2.90 | 25.2 |
| 15.55 | 18.44 | 48132 | 0.38 | – | 1.50 | 19.6 |
| 13.86 | 5.57 | 47227 | 0.38 | – | 2.09 | 21.7 |
| 14.22 | 10.74 | 73232 | 0.38 | – | 2.57 | 34.2 |
| 13.73 | (0.93) | 113348 | 0.38 | – | 2.41 | 20.4 |
| 11.97 | (16.13) | 103555 | 0.26 | – | 3.02 | 25.2 |
| 15.60 | 18.62 | 154635 | 0.26 | – | 1.63 | 19.6 |
| 13.90 | 5.73 | 158936 | 0.26 | – | 2.05 | 21.7 |
| 14.26 | 10.90 | 194723 | 0.26 | – | 2.44 | 34.2 |
| 13.77 | (0.91) | 237085 | 0.26 | – | 2.61 | 20.4 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME 2025 FUND** | **PRINCIPAL LIFETIME 2025 FUND** | **PRINCIPAL LIFETIME 2025 FUND** | **PRINCIPAL LIFETIME 2025 FUND** | **PRINCIPAL LIFETIME 2025 FUND** | **PRINCIPAL LIFETIME 2025 FUND** | **PRINCIPAL LIFETIME 2025 FUND** | **PRINCIPAL LIFETIME 2025 FUND** |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | $13.55 | $0.37 | $(2.48) | $(2.11) | $(0.33) | $(0.64) | $(0.97) |
| 2021 | 11.64 | 0.23 | 2.33 | 2.56 | (0.23) | (0.42) | (0.65) |
| 2020 | 11.75 | 0.24 | 0.43 | 0.67 | (0.25) | (0.53) | (0.78) |
| 2019 | 11.18 | 0.29 | 0.92 | 1.21 | (0.27) | (0.37) | (0.64) |
| 2018 | 11.77 | 0.32 | (0.36) | (0.04) | (0.31) | (0.24) | (0.55) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 13.16 | 0.27 | (2.43) | (2.16) | (0.22) | (0.64) | (0.86) |
| 2021 | 11.31 | 0.11 | 2.27 | 2.38 | (0.11) | (0.42) | (0.53) |
| 2020 | 11.44 | 0.16 | 0.39 | 0.55 | (0.15) | (0.53) | (0.68) |
| 2019 | 10.89 | 0.19 | 0.90 | 1.09 | (0.17) | (0.37) | (0.54) |
| 2018 | 11.47 | 0.24 | (0.37) | (0.13) | (0.21) | (0.24) | (0.45) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 13.20 | 0.31 | (2.43) | (2.12) | (0.26) | (0.64) | (0.90) |
| 2021 | 11.35 | 0.16 | 2.27 | 2.43 | (0.16) | (0.42) | (0.58) |
| 2020 | 11.48 | 0.19 | 0.40 | 0.59 | (0.19) | (0.53) | (0.72) |
| 2019 | 10.94 | 0.22 | 0.90 | 1.12 | (0.21) | (0.37) | (0.58) |
| 2018 | 11.52 | 0.26 | (0.36) | (0.10) | (0.24) | (0.24) | (0.48) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 13.37 | 0.33 | (2.46) | (2.13) | (0.28) | (0.64) | (0.92) |
| 2021 | 11.49 | 0.18 | 2.30 | 2.48 | (0.18) | (0.42) | (0.60) |
| 2020 | 11.61 | 0.22 | 0.40 | 0.62 | (0.21) | (0.53) | (0.74) |
| 2019 | 11.05 | 0.25 | 0.91 | 1.16 | (0.23) | (0.37) | (0.60) |
| 2018 | 11.63 | 0.27 | (0.35) | (0.08) | (0.26) | (0.24) | (0.50) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 13.42 | 0.36 | (2.48) | (2.12) | (0.30) | (0.64) | (0.94) |
| 2021 | 11.54 | 0.20 | 2.30 | 2.50 | (0.20) | (0.42) | (0.62) |
| 2020 | 11.66 | 0.22 | 0.41 | 0.63 | (0.22) | (0.53) | (0.75) |
| 2019 | 11.10 | 0.26 | 0.91 | 1.17 | (0.24) | (0.37) | (0.61) |
| 2018 | 11.68 | 0.29 | (0.35) | (0.06) | (0.28) | (0.24) | (0.52) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $10.47 | (16.71)% | $1283002 | 0.01% | 3.21% | 22.6% |
| 13.55 | 22.55 | 1534067 | 0.01 | 1.76 | 24.0 |
| 11.64 | 5.93 | 1225564 | 0.01 | 2.16 | 33.4 |
| 11.75 | 11.81 | 1155367 | 0.01 | 2.60 | 34.9 |
| 11.18 | (0.49) | 1203265 | 0.01 | 2.75 | 26.0 |
| 10.14 | (17.49) | 6575 | 0.88 | 2.41 | 22.6 |
| 13.16 | 21.53 | 8802 | 0.88 | 0.90 | 24.0 |
| 11.31 | 4.94 | 8795 | 0.88 | 1.48 | 33.4 |
| 11.44 | 10.78 | 11116 | 0.88 | 1.73 | 34.9 |
| 10.89 | (1.24) | 11721 | 0.88 | 2.08 | 26.0 |
| 10.18 | (17.18) | 98077 | 0.57 | 2.73 | 22.6 |
| 13.20 | 21.95 | 132449 | 0.57 | 1.23 | 24.0 |
| 11.35 | 5.29 | 123574 | 0.57 | 1.69 | 33.4 |
| 11.48 | 11.07 | 134168 | 0.57 | 2.04 | 34.9 |
| 10.94 | (0.96) | 142783 | 0.57 | 2.29 | 26.0 |
| 10.32 | (17.07) | 38530 | 0.38 | 2.84 | 22.6 |
| 13.37 | 22.14 | 51340 | 0.38 | 1.45 | 24.0 |
| 11.49 | 5.49 | 51235 | 0.38 | 1.95 | 33.4 |
| 11.61 | 11.37 | 63748 | 0.38 | 2.30 | 34.9 |
| 11.05 | (0.83) | 77410 | 0.38 | 2.31 | 26.0 |
| 10.36 | (16.95) | 89987 | 0.26 | 3.09 | 22.6 |
| 13.42 | 22.20 | 123237 | 0.26 | 1.54 | 24.0 |
| 11.54 | 5.59 | 109815 | 0.26 | 1.97 | 33.4 |
| 11.66 | 11.49 | 118440 | 0.26 | 2.31 | 34.9 |
| 11.10 | (0.66) | 135376 | 0.26 | 2.50 | 26.0 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME 2030 FUND** | **PRINCIPAL LIFETIME 2030 FUND** | **PRINCIPAL LIFETIME 2030 FUND** | **PRINCIPAL LIFETIME 2030 FUND** | **PRINCIPAL LIFETIME 2030 FUND** | **PRINCIPAL LIFETIME 2030 FUND** | **PRINCIPAL LIFETIME 2030 FUND** | **PRINCIPAL LIFETIME 2030 FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $17.49 | $0.42 | $(3.42) | $(3.00) | $(0.35) | $(1.02) | $(1.37) |
| 2021 | 14.76 | 0.22 | 3.45 | 3.67 | (0.22) | (0.72) | (0.94) |
| 2020 | 14.85 | 0.26 | 0.54 | 0.80 | (0.26) | (0.63) | (0.89) |
| 2019 | 14.31 | 0.29 | 1.23 | 1.52 | (0.27) | (0.71) | (0.98) |
| 2018 | 15.24 | 0.35 | (0.47) | (0.12) | (0.34) | (0.47) | (0.81) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 17.39 | 0.44 | (3.39) | (2.95) | (0.38) | (1.02) | (1.40) |
| 2021 | 14.67 | 0.26 | 3.43 | 3.69 | (0.25) | (0.72) | (0.97) |
| 2020 | 14.77 | 0.29 | 0.53 | 0.82 | (0.29) | (0.63) | (0.92) |
| 2019 | 14.24 | 0.31 | 1.23 | 1.54 | (0.30) | (0.71) | (1.01) |
| 2018 | 15.18 | 0.37 | (0.47) | (0.10) | (0.37) | (0.47) | (0.84) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 17.47 | 0.46 | (3.40) | (2.94) | (0.41) | (1.02) | (1.43) |
| 2021 | 14.73 | 0.28 | 3.45 | 3.73 | (0.27) | (0.72) | (0.99) |
| 2020 | 14.83 | 0.31 | 0.53 | 0.84 | (0.31) | (0.63) | (0.94) |
| 2019 | 14.29 | 0.35 | 1.22 | 1.57 | (0.32) | (0.71) | (1.03) |
| 2018 | 15.23 | 0.43 | (0.50) | (0.07) | (0.40) | (0.47) | (0.87) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 17.25 | 0.34 | (3.37) | (3.03) | (0.26) | (1.02) | (1.28) |
| 2021 | 14.58 | 0.14 | 3.40 | 3.54 | (0.15) | (0.72) | (0.87) |
| 2020 | 14.68 | 0.18 | 0.53 | 0.71 | (0.18) | (0.63) | (0.81) |
| 2019 | 14.12 | 0.23 | 1.22 | 1.45 | (0.18) | (0.71) | (0.89) |
| 2018 | 15.05 | 0.28 | (0.48) | (0.20) | (0.26) | (0.47) | (0.73) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 17.33 | 0.39 | (3.39) | (3.00) | (0.32) | (1.02) | (1.34) |
| 2021 | 14.63 | 0.19 | 3.42 | 3.61 | (0.19) | (0.72) | (0.91) |
| 2020 | 14.73 | 0.23 | 0.52 | 0.75 | (0.22) | (0.63) | (0.85) |
| 2019 | 14.19 | 0.27 | 1.21 | 1.48 | (0.23) | (0.71) | (0.94) |
| 2018 | 15.12 | 0.34 | (0.49) | (0.15) | (0.31) | (0.47) | (0.78) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 18.09 | 0.43 | (3.55) | (3.12) | (0.34) | (1.02) | (1.36) |
| 2021 | 15.23 | 0.24 | 3.55 | 3.79 | (0.21) | (0.72) | (0.93) |
| 2020 | 15.28 | 0.30 | 0.53 | 0.83 | (0.25) | (0.63) | (0.88) |
| 2019 | 14.69 | 0.34 | 1.22 | 1.56 | (0.26) | (0.71) | (0.97) |
| 2018 | 15.62 | 0.36 | (0.49) | (0.13) | (0.33) | (0.47) | (0.80) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 17.43 | 0.43 | (3.40) | (2.97) | (0.37) | (1.02) | (1.39) |
| 2021 | 14.70 | 0.25 | 3.44 | 3.69 | (0.24) | (0.72) | (0.96) |
| 2020 | 14.79 | 0.28 | 0.53 | 0.81 | (0.27) | (0.63) | (0.90) |
| 2019 | 14.26 | 0.31 | 1.22 | 1.53 | (0.29) | (0.71) | (1.00) |
| 2018 | 15.19 | 0.37 | (0.47) | (0.10) | (0.36) | (0.47) | (0.83) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

<sup>(d)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(e)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(f)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $13.12 | (18.48)%<sup>(b)</sup> <br>| $129354 | 0.37%<sup>(c)</sup> <br>| –% | 2.83% | 31.1% |
| 17.49 | 25.68<sup>(b)</sup> <br>| 168435 | 0.36<sup>(c)</sup> <br>| – | 1.34 | 24.0 |
| 14.76 | 5.48<sup>(b)</sup> <br>| 128178 | 0.38<sup>(c)</sup> <br>| – | 1.78 | 33.4 |
| 14.85 | 11.81<sup>(b)</sup> <br>| 125814 | 0.38<sup>(c)</sup> <br>| – | 2.04 | 23.0 |
| 14.31 | (0.94)<sup>(b)</sup> <br>| 115998 | 0.38<sup>(c)</sup> <br>| – | 2.35 | 23.8 |
| 13.04 | (18.33)<sup>(b)</sup> <br>| 1041206 | 0.18<sup>(d)</sup> <br>| 0.20<sup>(e)</sup> <br>| 3.02 | 31.1 |
| 17.39 | 26.00<sup>(b)</sup> <br>| 1388404 | 0.18<sup>(d)</sup> <br>| 0.20<sup>(e)</sup> <br>| 1.56 | 24.0 |
| 14.67 | 5.64<sup>(b)</sup> <br>| 1169328 | 0.17<sup>(d)</sup> <br>| 0.20<sup>(e)</sup> <br>| 2.02 | 33.4 |
| 14.77 | 12.06<sup>(b)</sup> <br>| 1197486 | 0.18<sup>(d)</sup> <br>| 0.21<sup>(e)</sup> <br>| 2.24 | 23.0 |
| 14.24 | (0.80)<sup>(b)</sup> <br>| 1146825 | 0.17<sup>(d)</sup> <br>| 0.20<sup>(e)</sup> <br>| 2.48 | 23.8 |
| 13.10 | (18.22) | 3437305 | 0.01 | – | 3.15 | 31.1 |
| 17.47 | 26.21 | 4530236 | 0.01 | – | 1.71 | 24.0 |
| 14.73 | 5.79 | 3592487 | 0.01 | – | 2.16 | 33.4 |
| 14.83 | 12.31 | 3620578 | 0.01 | – | 2.47 | 23.0 |
| 14.29 | (0.65) | 3625771 | 0.01 | – | 2.86 | 23.8 |
| 12.94 | (18.91)<sup>(f)</sup> <br>| 16009 | 0.88 | – | 2.32 | 31.1 |
| 17.25 | 25.06<sup>(f)</sup> <br>| 21472 | 0.88 | – | 0.88 | 24.0 |
| 14.58 | 4.92 | 21726 | 0.88 | – | 1.27 | 33.4 |
| 14.68 | 11.34 | 22286 | 0.88 | – | 1.65 | 23.0 |
| 14.12 | (1.49) | 24982 | 0.88 | – | 1.90 | 23.8 |
| 12.99 | (18.66) | 125371 | 0.57 | – | 2.65 | 31.1 |
| 17.33 | 25.46 | 176532 | 0.57 | – | 1.14 | 24.0 |
| 14.63 | 5.22 | 141979 | 0.57 | – | 1.60 | 33.4 |
| 14.73 | 11.62 | 153293 | 0.57 | – | 1.92 | 23.0 |
| 14.19 | (1.17) | 163571 | 0.57 | – | 2.27 | 23.8 |
| 13.61 | (18.53) | 52612 | 0.38 | – | 2.82 | 31.1 |
| 18.09 | 25.68 | 73168 | 0.38 | – | 1.38 | 24.0 |
| 15.23 | 5.50 | 65940 | 0.38 | – | 2.01 | 33.4 |
| 15.28 | 11.78 | 89004 | 0.38 | – | 2.37 | 23.0 |
| 14.69 | (0.97) | 129933 | 0.38 | – | 2.34 | 23.8 |
| 13.07 | (18.42) | 184436 | 0.26 | – | 2.94 | 31.1 |
| 17.43 | 25.88 | 242659 | 0.26 | – | 1.49 | 24.0 |
| 14.70 | 5.60 | 212626 | 0.26 | – | 1.96 | 33.4 |
| 14.79 | 11.94 | 245044 | 0.26 | – | 2.21 | 23.0 |
| 14.26 | (0.85) | 268734 | 0.26 | – | 2.49 | 23.8 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME 2035 FUND** | **PRINCIPAL LIFETIME 2035 FUND** | **PRINCIPAL LIFETIME 2035 FUND** | **PRINCIPAL LIFETIME 2035 FUND** | **PRINCIPAL LIFETIME 2035 FUND** | **PRINCIPAL LIFETIME 2035 FUND** | **PRINCIPAL LIFETIME 2035 FUND** | **PRINCIPAL LIFETIME 2035 FUND** |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | $15.10 | $0.41 | $(3.07) | $(2.66) | $(0.40) | $(0.61) | $(1.01) |
| 2021 | 12.34 | 0.24 | 3.24 | 3.48 | (0.23) | (0.49) | (0.72) |
| 2020 | 12.49 | 0.24 | 0.50 | 0.74 | (0.26) | (0.63) | (0.89) |
| 2019 | 11.97 | 0.28 | 1.06 | 1.34 | (0.27) | (0.55) | (0.82) |
| 2018 | 12.62 | 0.31 | (0.29) | 0.02 | (0.28) | (0.39) | (0.67) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 14.71 | 0.30 | (3.02) | (2.72) | (0.27) | (0.61) | (0.88) |
| 2021 | 12.04 | 0.12 | 3.16 | 3.28 | (0.12) | (0.49) | (0.61) |
| 2020 | 12.20 | 0.16 | 0.46 | 0.62 | (0.15) | (0.63) | (0.78) |
| 2019 | 11.70 | 0.18 | 1.03 | 1.21 | (0.16) | (0.55) | (0.71) |
| 2018 | 12.35 | 0.20 | (0.28) | (0.08) | (0.18) | (0.39) | (0.57) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 14.78 | 0.34 | (3.02) | (2.68) | (0.32) | (0.61) | (0.93) |
| 2021 | 12.09 | 0.15 | 3.19 | 3.34 | (0.16) | (0.49) | (0.65) |
| 2020 | 12.26 | 0.18 | 0.47 | 0.65 | (0.19) | (0.63) | (0.82) |
| 2019 | 11.76 | 0.21 | 1.04 | 1.25 | (0.20) | (0.55) | (0.75) |
| 2018 | 12.40 | 0.24 | (0.27) | (0.03) | (0.22) | (0.39) | (0.61) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 14.93 | 0.37 | (3.05) | (2.68) | (0.34) | (0.61) | (0.95) |
| 2021 | 12.21 | 0.19 | 3.20 | 3.39 | (0.18) | (0.49) | (0.67) |
| 2020 | 12.37 | 0.22 | 0.46 | 0.68 | (0.21) | (0.63) | (0.84) |
| 2019 | 11.85 | 0.25 | 1.04 | 1.29 | (0.22) | (0.55) | (0.77) |
| 2018 | 12.49 | 0.25 | (0.27) | (0.02) | (0.23) | (0.39) | (0.62) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 14.99 | 0.40 | (3.08) | (2.68) | (0.36) | (0.61) | (0.97) |
| 2021 | 12.26 | 0.21 | 3.21 | 3.42 | (0.20) | (0.49) | (0.69) |
| 2020 | 12.41 | 0.23 | 0.47 | 0.70 | (0.22) | (0.63) | (0.85) |
| 2019 | 11.90 | 0.25 | 1.05 | 1.30 | (0.24) | (0.55) | (0.79) |
| 2018 | 12.54 | 0.26 | (0.26) | – | (0.25) | (0.39) | (0.64) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $11.43 | (18.85)% | $1301768 | 0.01% | 3.19% | 19.6% |
| 15.10 | 28.95 | 1468727 | 0.01 | 1.66 | 19.5 |
| 12.34 | 6.02 | 1043617 | 0.01 | 2.04 | 37.1 |
| 12.49 | 12.43 | 955390 | 0.01 | 2.35 | 25.9 |
| 11.97 | 0.04 | 942246 | 0.01 | 2.44 | 20.2 |
| 11.11 | (19.58) | 6498 | 0.88 | 2.43 | 19.6 |
| 14.71 | 27.85 | 8129 | 0.88 | 0.84 | 19.5 |
| 12.04 | 5.11 | 7462 | 0.88 | 1.36 | 37.1 |
| 12.20 | 11.38 | 8566 | 0.89 | 1.59 | 25.9 |
| 11.70 | (0.80) | 10567 | 0.88 | 1.62 | 20.2 |
| 11.17 | (19.30) | 85620 | 0.57 | 2.75 | 19.6 |
| 14.78 | 28.31 | 110352 | 0.57 | 1.11 | 19.5 |
| 12.09 | 5.38 | 85507 | 0.57 | 1.56 | 37.1 |
| 12.26 | 11.74 | 87799 | 0.58 | 1.83 | 25.9 |
| 11.76 | (0.42) | 93396 | 0.57 | 1.98 | 20.2 |
| 11.30 | (19.11) | 34077 | 0.38 | 2.93 | 19.6 |
| 14.93 | 28.48 | 44010 | 0.38 | 1.37 | 19.5 |
| 12.21 | 5.58 | 38878 | 0.38 | 1.86 | 37.1 |
| 12.37 | 12.05 | 45491 | 0.39 | 2.10 | 25.9 |
| 11.85 | (0.30) | 57637 | 0.38 | 2.04 | 20.2 |
| 11.34 | (19.06) | 86155 | 0.26 | 3.14 | 19.6 |
| 14.99 | 28.61 | 113877 | 0.26 | 1.45 | 19.5 |
| 12.26 | 5.76 | 92452 | 0.26 | 1.92 | 37.1 |
| 12.41 | 12.11 | 99730 | 0.27 | 2.09 | 25.9 |
| 11.90 | (0.12) | 111791 | 0.26 | 2.12 | 20.2 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME 2040 FUND** | **PRINCIPAL LIFETIME 2040 FUND** | **PRINCIPAL LIFETIME 2040 FUND** | **PRINCIPAL LIFETIME 2040 FUND** | **PRINCIPAL LIFETIME 2040 FUND** | **PRINCIPAL LIFETIME 2040 FUND** | **PRINCIPAL LIFETIME 2040 FUND** | **PRINCIPAL LIFETIME 2040 FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $18.81 | $0.46 | $(3.88) | $(3.42) | $(0.46) | $(1.07) | $(1.53) |
| 2021 | 15.20 | 0.22 | 4.35 | 4.57 | (0.23) | (0.73) | (0.96) |
| 2020 | 15.43 | 0.24 | 0.60 | 0.84 | (0.26) | (0.81) | (1.07) |
| 2019 | 14.99 | 0.27 | 1.34 | 1.61 | (0.26) | (0.91) | (1.17) |
| 2018 | 15.89 | 0.31 | (0.32) | (0.01) | (0.30) | (0.59) | (0.89) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 19.07 | 0.50 | (3.94) | (3.44) | (0.49) | (1.07) | (1.56) |
| 2021 | 15.39 | 0.26 | 4.41 | 4.67 | (0.26) | (0.73) | (0.99) |
| 2020 | 15.61 | 0.28 | 0.59 | 0.87 | (0.28) | (0.81) | (1.09) |
| 2019 | 15.15 | 0.30 | 1.36 | 1.66 | (0.29) | (0.91) | (1.20) |
| 2018 | 16.06 | 0.34 | (0.33) | 0.01 | (0.33) | (0.59) | (0.92) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 19.29 | 0.53 | (3.99) | (3.46) | (0.52) | (1.07) | (1.59) |
| 2021 | 15.55 | 0.29 | 4.46 | 4.75 | (0.28) | (0.73) | (1.01) |
| 2020 | 15.77 | 0.30 | 0.60 | 0.90 | (0.31) | (0.81) | (1.12) |
| 2019 | 15.29 | 0.34 | 1.37 | 1.71 | (0.32) | (0.91) | (1.23) |
| 2018 | 16.20 | 0.41 | (0.37) | 0.04 | (0.36) | (0.59) | (0.95) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 18.99 | 0.38 | (3.94) | (3.56) | (0.34) | (1.07) | (1.41) |
| 2021 | 15.34 | 0.14 | 4.39 | 4.53 | (0.15) | (0.73) | (0.88) |
| 2020 | 15.55 | 0.17 | 0.59 | 0.76 | (0.16) | (0.81) | (0.97) |
| 2019 | 15.08 | 0.21 | 1.35 | 1.56 | (0.18) | (0.91) | (1.09) |
| 2018 | 15.98 | 0.24 | (0.33) | (0.09) | (0.22) | (0.59) | (0.81) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 18.93 | 0.44 | (3.93) | (3.49) | (0.42) | (1.07) | (1.49) |
| 2021 | 15.29 | 0.18 | 4.39 | 4.57 | (0.20) | (0.73) | (0.93) |
| 2020 | 15.52 | 0.22 | 0.58 | 0.80 | (0.22) | (0.81) | (1.03) |
| 2019 | 15.06 | 0.25 | 1.35 | 1.60 | (0.23) | (0.91) | (1.14) |
| 2018 | 15.96 | 0.31 | (0.35) | (0.04) | (0.27) | (0.59) | (0.86) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 19.00 | 0.47 | (3.93) | (3.46) | (0.45) | (1.07) | (1.52) |
| 2021 | 15.34 | 0.23 | 4.38 | 4.61 | (0.22) | (0.73) | (0.95) |
| 2020 | 15.56 | 0.29 | 0.55 | 0.84 | (0.25) | (0.81) | (1.06) |
| 2019 | 15.10 | 0.31 | 1.32 | 1.63 | (0.26) | (0.91) | (1.17) |
| 2018 | 15.99 | 0.32 | (0.33) | (0.01) | (0.29) | (0.59) | (0.88) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 19.15 | 0.49 | (3.97) | (3.48) | (0.47) | (1.07) | (1.54) |
| 2021 | 15.45 | 0.25 | 4.42 | 4.67 | (0.24) | (0.73) | (0.97) |
| 2020 | 15.67 | 0.27 | 0.59 | 0.86 | (0.27) | (0.81) | (1.08) |
| 2019 | 15.20 | 0.29 | 1.37 | 1.66 | (0.28) | (0.91) | (1.19) |
| 2018 | 16.10 | 0.34 | (0.33) | 0.01 | (0.32) | (0.59) | (0.91) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

<sup>(d)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(e)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $13.86 | (19.68)%<sup>(b)</sup> <br>| $101428 | 0.38%<sup>(c)</sup> <br>| –% | 2.94% | 23.8% |
| 18.81 | 31.00<sup>(b)</sup> <br>| 126454 | 0.38<sup>(c)</sup> <br>| – | 1.24 | 20.0 |
| 15.20 | 5.49<sup>(b)</sup> <br>| 97825 | 0.38<sup>(c)</sup> <br>| – | 1.65 | 32.8 |
| 15.43 | 12.24<sup>(b)</sup> <br>| 94659 | 0.38<sup>(c)</sup> <br>| – | 1.84 | 14.6 |
| 14.99 | (0.16)<sup>(b)</sup> <br>| 87497 | 0.38<sup>(c)</sup> <br>| – | 1.96 | 16.0 |
| 14.07 | (19.53)<sup>(b)</sup> <br>| 724982 | 0.18<sup>(d)</sup> <br>| 0.20<sup>(e)</sup> <br>| 3.17 | 23.8 |
| 19.07 | 31.30<sup>(b)</sup> <br>| 948713 | 0.18<sup>(d)</sup> <br>| 0.21<sup>(e)</sup> <br>| 1.44 | 20.0 |
| 15.39 | 5.67<sup>(b)</sup> <br>| 753868 | 0.18<sup>(d)</sup> <br>| 0.21<sup>(e)</sup> <br>| 1.86 | 32.8 |
| 15.61 | 12.47<sup>(b)</sup> <br>| 752041 | 0.20<sup>(d)</sup> <br>| 0.23<sup>(e)</sup> <br>| 2.01 | 14.6 |
| 15.15 | (0.03)<sup>(b)</sup> <br>| 700995 | 0.19<sup>(d)</sup> <br>| 0.22<sup>(e)</sup> <br>| 2.14 | 16.0 |
| 14.24 | (19.43) | 2684679 | 0.01 | – | 3.30 | 23.8 |
| 19.29 | 31.56 | 3429237 | 0.01 | – | 1.61 | 20.0 |
| 15.55 | 5.79 | 2615276 | 0.01 | – | 2.02 | 32.8 |
| 15.77 | 12.72 | 2569620 | 0.01 | – | 2.25 | 14.6 |
| 15.29 | 0.13 | 2529716 | 0.01 | – | 2.53 | 16.0 |
| 14.02 | (20.10) | 12069 | 0.88 | – | 2.41 | 23.8 |
| 18.99 | 30.38 | 16062 | 0.88 | – | 0.81 | 20.0 |
| 15.34 | 4.90 | 15714 | 0.88 | – | 1.11 | 32.8 |
| 15.55 | 11.68 | 17042 | 0.88 | – | 1.45 | 14.6 |
| 15.08 | (0.71) | 19314 | 0.88 | – | 1.50 | 16.0 |
| 13.95 | (19.88) | 96348 | 0.57 | – | 2.81 | 23.8 |
| 18.93 | 30.81 | 129032 | 0.57 | – | 1.02 | 20.0 |
| 15.29 | 5.22 | 97748 | 0.57 | – | 1.46 | 32.8 |
| 15.52 | 12.01 | 99952 | 0.57 | – | 1.72 | 14.6 |
| 15.06 | (0.37) | 106971 | 0.57 | – | 1.95 | 16.0 |
| 14.02 | (19.68) | 40589 | 0.38 | – | 2.96 | 23.8 |
| 19.00 | 31.00 | 53623 | 0.38 | – | 1.31 | 20.0 |
| 15.34 | 5.45 | 48722 | 0.38 | – | 1.94 | 32.8 |
| 15.56 | 12.24 | 68656 | 0.38 | – | 2.13 | 14.6 |
| 15.10 | (0.15) | 90529 | 0.38 | – | 2.01 | 16.0 |
| 14.13 | (19.62) | 147107 | 0.26 | – | 3.08 | 23.8 |
| 19.15 | 31.19 | 187926 | 0.26 | – | 1.39 | 20.0 |
| 15.45 | 5.56 | 159934 | 0.26 | – | 1.80 | 32.8 |
| 15.67 | 12.40 | 173689 | 0.26 | – | 1.98 | 14.6 |
| 15.20 | (0.07) | 183317 | 0.26 | – | 2.16 | 16.0 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME 2045 FUND** | **PRINCIPAL LIFETIME 2045 FUND** | **PRINCIPAL LIFETIME 2045 FUND** | **PRINCIPAL LIFETIME 2045 FUND** | **PRINCIPAL LIFETIME 2045 FUND** | **PRINCIPAL LIFETIME 2045 FUND** | **PRINCIPAL LIFETIME 2045 FUND** | **PRINCIPAL LIFETIME 2045 FUND** |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | $16.56 | $0.44 | $(3.51) | $(3.07) | $(0.47) | $(0.59) | $(1.06) |
| 2021 | 12.95 | 0.23 | 4.05 | 4.28 | (0.24) | (0.43) | (0.67) |
| 2020 | 13.12 | 0.24 | 0.48 | 0.72 | (0.25) | (0.64) | (0.89) |
| 2019 | 12.51 | 0.27 | 1.17 | 1.44 | (0.26) | (0.57) | (0.83) |
| 2018 | 13.06 | 0.30 | (0.27) | 0.03 | (0.28) | (0.30) | (0.58) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 15.93 | 0.34 | (3.41) | (3.07) | (0.34) | (0.59) | (0.93) |
| 2021 | 12.49 | 0.11 | 3.88 | 3.99 | (0.12) | (0.43) | (0.55) |
| 2020 | 12.67 | 0.15 | 0.44 | 0.59 | (0.13) | (0.64) | (0.77) |
| 2019 | 12.09 | 0.17 | 1.13 | 1.30 | (0.15) | (0.57) | (0.72) |
| 2018 | 12.65 | 0.18 | (0.26) | (0.08) | (0.18) | (0.30) | (0.48) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 16.03 | 0.38 | (3.43) | (3.05) | (0.38) | (0.59) | (0.97) |
| 2021 | 12.57 | 0.14 | 3.91 | 4.05 | (0.16) | (0.43) | (0.59) |
| 2020 | 12.76 | 0.18 | 0.45 | 0.63 | (0.18) | (0.64) | (0.82) |
| 2019 | 12.18 | 0.20 | 1.14 | 1.34 | (0.19) | (0.57) | (0.76) |
| 2018 | 12.73 | 0.24 | (0.27) | (0.03) | (0.22) | (0.30) | (0.52) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 16.23 | 0.40 | (3.47) | (3.07) | (0.40) | (0.59) | (0.99) |
| 2021 | 12.71 | 0.19 | 3.95 | 4.14 | (0.19) | (0.43) | (0.62) |
| 2020 | 12.89 | 0.21 | 0.45 | 0.66 | (0.20) | (0.64) | (0.84) |
| 2019 | 12.29 | 0.23 | 1.14 | 1.37 | (0.20) | (0.57) | (0.77) |
| 2018 | 12.84 | 0.25 | (0.27) | (0.02) | (0.23) | (0.30) | (0.53) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 16.26 | 0.43 | (3.47) | (3.04) | (0.43) | (0.59) | (1.02) |
| 2021 | 12.74 | 0.19 | 3.96 | 4.15 | (0.20) | (0.43) | (0.63) |
| 2020 | 12.92 | 0.22 | 0.46 | 0.68 | (0.22) | (0.64) | (0.86) |
| 2019 | 12.33 | 0.23 | 1.16 | 1.39 | (0.23) | (0.57) | (0.80) |
| 2018 | 12.88 | 0.25 | (0.25) | – | (0.25) | (0.30) | (0.55) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $12.43 | (19.76)% | $1010879 | 0.01% | 3.21% | 23.8% |
| 16.56 | 33.82 | 1139261 | 0.01 | 1.50 | 19.2 |
| 12.95 | 5.57 | 780234 | 0.01 | 1.90 | 32.5 |
| 13.12 | 12.75 | 705002 | 0.01 | 2.16 | 19.2 |
| 12.51 | 0.17 | 668913 | 0.01 | 2.30 | 20.9 |
| 11.93 | (20.41) | 3916 | 0.88 | 2.54 | 23.8 |
| 15.93 | 32.61 | 5074 | 0.88 | 0.76 | 19.2 |
| 12.49 | 4.68 | 4536 | 0.89 | 1.24 | 32.5 |
| 12.67 | 11.81 | 5738 | 0.89 | 1.41 | 19.2 |
| 12.09 | (0.74) | 6365 | 0.89 | 1.44 | 20.9 |
| 12.01 | (20.17) | 66131 | 0.57 | 2.85 | 23.8 |
| 16.03 | 32.97 | 88634 | 0.57 | 0.93 | 19.2 |
| 12.57 | 5.00 | 66042 | 0.58 | 1.45 | 32.5 |
| 12.76 | 12.13 | 67732 | 0.58 | 1.64 | 19.2 |
| 12.18 | (0.33) | 68394 | 0.58 | 1.87 | 20.9 |
| 12.17 | (20.06) | 22059 | 0.38 | 2.95 | 23.8 |
| 16.23 | 33.30 | 30290 | 0.38 | 1.23 | 19.2 |
| 12.71 | 5.19 | 27141 | 0.39 | 1.72 | 32.5 |
| 12.89 | 12.38 | 30975 | 0.39 | 1.91 | 19.2 |
| 12.29 | (0.22) | 35889 | 0.39 | 1.97 | 20.9 |
| 12.20 | (19.89) | 69495 | 0.26 | 3.17 | 23.8 |
| 16.26 | 33.37 | 91388 | 0.26 | 1.28 | 19.2 |
| 12.74 | 5.30 | 71201 | 0.27 | 1.80 | 32.5 |
| 12.92 | 12.46 | 74697 | 0.27 | 1.88 | 19.2 |
| 12.33 | (0.06) | 76402 | 0.27 | 1.96 | 20.9 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME 2050 FUND** | **PRINCIPAL LIFETIME 2050 FUND** | **PRINCIPAL LIFETIME 2050 FUND** | **PRINCIPAL LIFETIME 2050 FUND** | **PRINCIPAL LIFETIME 2050 FUND** | **PRINCIPAL LIFETIME 2050 FUND** | **PRINCIPAL LIFETIME 2050 FUND** | **PRINCIPAL LIFETIME 2050 FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $20.06 | $0.49 | $(4.30) | $(3.81) | $(0.49) | $(0.94) | $(1.43) |
| 2021 | 15.63 | 0.21 | 5.06 | 5.27 | (0.22) | (0.62) | (0.84) |
| 2020 | 15.89 | 0.24 | 0.56 | 0.80 | (0.24) | (0.82) | (1.06) |
| 2019 | 15.28 | 0.27 | 1.42 | 1.69 | (0.24) | (0.84) | (1.08) |
| 2018 | 16.03 | 0.31 | (0.31) | – | (0.29) | (0.46) | (0.75) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 19.30 | 0.51 | (4.13) | (3.62) | (0.52) | (0.94) | (1.46) |
| 2021 | 15.06 | 0.23 | 4.88 | 5.11 | (0.25) | (0.62) | (0.87) |
| 2020 | 15.35 | 0.25 | 0.54 | 0.79 | (0.26) | (0.82) | (1.08) |
| 2019 | 14.81 | 0.27 | 1.38 | 1.65 | (0.27) | (0.84) | (1.11) |
| 2018 | 15.56 | 0.31 | (0.28) | 0.03 | (0.32) | (0.46) | (0.78) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 19.99 | 0.55 | (4.26) | (3.71) | (0.56) | (0.94) | (1.50) |
| 2021 | 15.57 | 0.28 | 5.04 | 5.32 | (0.28) | (0.62) | (0.90) |
| 2020 | 15.84 | 0.29 | 0.55 | 0.84 | (0.29) | (0.82) | (1.11) |
| 2019 | 15.24 | 0.31 | 1.43 | 1.74 | (0.30) | (0.84) | (1.14) |
| 2018 | 15.99 | 0.39 | (0.33) | 0.06 | (0.35) | (0.46) | (0.81) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 19.67 | 0.39 | (4.20) | (3.81) | (0.39) | (0.94) | (1.33) |
| 2021 | 15.35 | 0.12 | 4.97 | 5.09 | (0.15) | (0.62) | (0.77) |
| 2020 | 15.61 | 0.15 | 0.54 | 0.69 | (0.13) | (0.82) | (0.95) |
| 2019 | 15.01 | 0.22 | 1.38 | 1.60 | (0.16) | (0.84) | (1.00) |
| 2018 | 15.75 | 0.22 | (0.30) | (0.08) | (0.20) | (0.46) | (0.66) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 19.64 | 0.46 | (4.20) | (3.74) | (0.46) | (0.94) | (1.40) |
| 2021 | 15.33 | 0.16 | 4.97 | 5.13 | (0.20) | (0.62) | (0.82) |
| 2020 | 15.60 | 0.20 | 0.56 | 0.76 | (0.21) | (0.82) | (1.03) |
| 2019 | 15.02 | 0.23 | 1.41 | 1.64 | (0.22) | (0.84) | (1.06) |
| 2018 | 15.77 | 0.29 | (0.32) | (0.03) | (0.26) | (0.46) | (0.72) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 19.81 | 0.50 | (4.26) | (3.76) | (0.48) | (0.94) | (1.42) |
| 2021 | 15.44 | 0.21 | 5.00 | 5.21 | (0.22) | (0.62) | (0.84) |
| 2020 | 15.71 | 0.27 | 0.52 | 0.79 | (0.24) | (0.82) | (1.06) |
| 2019 | 15.12 | 0.27 | 1.40 | 1.67 | (0.24) | (0.84) | (1.08) |
| 2018 | 15.86 | 0.30 | (0.30) | – | (0.28) | (0.46) | (0.74) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 19.88 | 0.51 | (4.25) | (3.74) | (0.51) | (0.94) | (1.45) |
| 2021 | 15.49 | 0.23 | 5.02 | 5.25 | (0.24) | (0.62) | (0.86) |
| 2020 | 15.76 | 0.25 | 0.55 | 0.80 | (0.25) | (0.82) | (1.07) |
| 2019 | 15.17 | 0.28 | 1.41 | 1.69 | (0.26) | (0.84) | (1.10) |
| 2018 | 15.92 | 0.31 | (0.29) | 0.02 | (0.31) | (0.46) | (0.77) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

<sup>(d)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(e)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(f)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $14.82 | (20.32)%<sup>(b)</sup> <br>| $87266 | 0.38%<sup>(c)</sup> <br>| –% | 2.93% | 26.9% |
| 20.06 | 34.64<sup>(b)</sup> <br>| 105294 | 0.38<sup>(c)</sup> <br>| – | 1.11 | 21.0 |
| 15.63 | 5.06<sup>(b)</sup> <br>| 77925 | 0.38<sup>(c)</sup> <br>| – | 1.56 | 26.9 |
| 15.89 | 12.47<sup>(b)</sup> <br>| 76784 | 0.38<sup>(c)</sup> <br>| – | 1.77 | 17.3 |
| 15.28 | (0.15)<sup>(b)</sup> <br>| 73509 | 0.38<sup>(c)</sup> <br>| – | 1.91 | 16.9 |
| 14.22 | (20.17)<sup>(b)</sup> <br>| 235469 | 0.22<sup>(d)</sup> <br>| 0.24<sup>(e)</sup> <br>| 3.17 | 26.9 |
| 19.30 | 34.90<sup>(b)</sup> <br>| 312540 | 0.21<sup>(d)</sup> <br>| 0.24<sup>(e)</sup> <br>| 1.29 | 21.0 |
| 15.06 | 5.18<sup>(b)</sup> <br>| 237515 | 0.22<sup>(d)</sup> <br>| 0.25<sup>(e)</sup> <br>| 1.74 | 26.9 |
| 15.35 | 12.60<sup>(b)</sup> <br>| 238083 | 0.24<sup>(d)</sup> <br>| 0.27<sup>(e)</sup> <br>| 1.84 | 17.3 |
| 14.81 | 0.01<sup>(b)</sup> <br>| 220530 | 0.23<sup>(d)</sup> <br>| 0.26<sup>(e)</sup> <br>| 2.00 | 16.9 |
| 14.78 | (19.96) | 1951777 | 0.01 | – | 3.29 | 26.9 |
| 19.99 | 35.15 | 2422742 | 0.01 | – | 1.49 | 21.0 |
| 15.57 | 5.37 | 1754692 | 0.01 | – | 1.91 | 26.9 |
| 15.84 | 12.92 | 1693422 | 0.01 | – | 2.10 | 17.3 |
| 15.24 | 0.20 | 1623713 | 0.01 | – | 2.42 | 16.9 |
| 14.53 | (20.65) | 10416 | 0.88 | – | 2.41 | 26.9 |
| 19.67 | 33.91<sup>(f)</sup> <br>| 13259 | 0.88 | – | 0.64 | 21.0 |
| 15.35 | 4.50<sup>(f)</sup> <br>| 10957 | 0.88 | – | 1.01 | 26.9 |
| 15.61 | 11.93 | 12804 | 0.88 | – | 1.52 | 17.3 |
| 15.01 | (0.65) | 13369 | 0.88 | – | 1.41 | 16.9 |
| 14.50 | (20.41) | 71732 | 0.57 | – | 2.80 | 26.9 |
| 19.64 | 34.33 | 94767 | 0.57 | – | 0.87 | 21.0 |
| 15.33 | 4.87 | 68182 | 0.57 | – | 1.35 | 26.9 |
| 15.60 | 12.24 | 67825 | 0.57 | – | 1.57 | 17.3 |
| 15.02 | (0.33) | 69167 | 0.57 | – | 1.83 | 16.9 |
| 14.63 | (20.32) | 33403 | 0.38 | – | 3.01 | 26.9 |
| 19.81 | 34.66 | 44900 | 0.38 | – | 1.15 | 21.0 |
| 15.44 | 5.03 | 36458 | 0.38 | – | 1.78 | 26.9 |
| 15.71 | 12.44 | 45136 | 0.38 | – | 1.84 | 17.3 |
| 15.12 | (0.12) | 48573 | 0.38 | – | 1.88 | 16.9 |
| 14.69 | (20.18) | 99622 | 0.26 | – | 3.12 | 26.9 |
| 19.88 | 34.84 | 128805 | 0.26 | – | 1.27 | 21.0 |
| 15.49 | 5.12 | 104577 | 0.26 | – | 1.66 | 26.9 |
| 15.76 | 12.60 | 103868 | 0.26 | – | 1.88 | 17.3 |
| 15.17 | (0.04) | 114158 | 0.26 | – | 1.91 | 16.9 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME 2055 FUND** | **PRINCIPAL LIFETIME 2055 FUND** | **PRINCIPAL LIFETIME 2055 FUND** | **PRINCIPAL LIFETIME 2055 FUND** | **PRINCIPAL LIFETIME 2055 FUND** | **PRINCIPAL LIFETIME 2055 FUND** | **PRINCIPAL LIFETIME 2055 FUND** | **PRINCIPAL LIFETIME 2055 FUND** |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | $18.20 | $0.48 | $(3.92) | $(3.44) | $(0.51) | $(0.50) | $(1.01) |
| 2021 | 13.87 | 0.23 | 4.71 | 4.94 | (0.25) | (0.36) | (0.61) |
| 2020 | 14.00 | 0.24 | 0.47 | 0.71 | (0.25) | (0.59) | (0.84) |
| 2019 | 13.22 | 0.26 | 1.29 | 1.55 | (0.26) | (0.51) | (0.77) |
| 2018 | 13.66 | 0.30 | (0.26) | 0.04 | (0.29) | (0.19) | (0.48) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 17.43 | 0.36 | (3.79) | (3.43) | (0.38) | (0.50) | (0.88) |
| 2021 | 13.32 | 0.11 | 4.49 | 4.60 | (0.13) | (0.36) | (0.49) |
| 2020 | 13.47 | 0.13 | 0.43 | 0.56 | (0.12) | (0.59) | (0.71) |
| 2019 | 12.73 | 0.16 | 1.24 | 1.40 | (0.15) | (0.51) | (0.66) |
| 2018 | 13.17 | 0.18 | (0.25) | (0.07) | (0.18) | (0.19) | (0.37) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 17.60 | 0.41 | (3.82) | (3.41) | (0.42) | (0.50) | (0.92) |
| 2021 | 13.45 | 0.13 | 4.56 | 4.69 | (0.18) | (0.36) | (0.54) |
| 2020 | 13.60 | 0.17 | 0.45 | 0.62 | (0.18) | (0.59) | (0.77) |
| 2019 | 12.86 | 0.19 | 1.25 | 1.44 | (0.19) | (0.51) | (0.70) |
| 2018 | 13.31 | 0.23 | (0.26) | (0.03) | (0.23) | (0.19) | (0.42) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 17.83 | 0.43 | (3.86) | (3.43) | (0.44) | (0.50) | (0.94) |
| 2021 | 13.61 | 0.19 | 4.59 | 4.78 | (0.20) | (0.36) | (0.56) |
| 2020 | 13.75 | 0.21 | 0.44 | 0.65 | (0.20) | (0.59) | (0.79) |
| 2019 | 12.98 | 0.22 | 1.27 | 1.49 | (0.21) | (0.51) | (0.72) |
| 2018 | 13.42 | 0.25 | (0.25) | – | (0.25) | (0.19) | (0.44) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 17.91 | 0.47 | (3.90) | (3.43) | (0.46) | (0.50) | (0.96) |
| 2021 | 13.66 | 0.20 | 4.63 | 4.83 | (0.22) | (0.36) | (0.58) |
| 2020 | 13.80 | 0.21 | 0.46 | 0.67 | (0.22) | (0.59) | (0.81) |
| 2019 | 13.05 | 0.23 | 1.26 | 1.49 | (0.23) | (0.51) | (0.74) |
| 2018 | 13.49 | 0.24 | (0.23) | 0.01 | (0.26) | (0.19) | (0.45) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $13.75 | (19.95)% | $613004 | 0.01% | 3.12% | 22.6% |
| 18.20 | 36.38 | 658064 | 0.01 | 1.37 | 18.9 |
| 13.87 | 5.07 | 421577 | 0.02 | 1.81 | 28.0 |
| 14.00 | 12.89 | 375813 | 0.02 | 1.97 | 15.5 |
| 13.22 | 0.18 | 314540 | 0.02 | 2.17 | 19.6 |
| 13.12 | (20.65) | 2912 | 0.89 | 2.47 | 22.6 |
| 17.43 | 35.19 | 3341 | 0.89 | 0.66 | 18.9 |
| 13.32 | 4.12 | 2642 | 0.89 | 1.04 | 28.0 |
| 13.47 | 11.96 | 3121 | 0.89 | 1.25 | 15.5 |
| 12.73 | (0.65) | 3289 | 0.89 | 1.32 | 19.6 |
| 13.27 | (20.37) | 38419 | 0.58 | 2.78 | 22.6 |
| 17.60 | 35.53 | 48174 | 0.58 | 0.81 | 18.9 |
| 13.45 | 4.53 | 32687 | 0.58 | 1.34 | 28.0 |
| 13.60 | 12.24 | 31793 | 0.58 | 1.50 | 15.5 |
| 12.86 | (0.36) | 29942 | 0.58 | 1.71 | 19.6 |
| 13.46 | (20.23) | 13440 | 0.39 | 2.83 | 22.6 |
| 17.83 | 35.84 | 16969 | 0.39 | 1.13 | 18.9 |
| 13.61 | 4.69 | 14221 | 0.39 | 1.63 | 28.0 |
| 13.75 | 12.53 | 14729 | 0.39 | 1.73 | 15.5 |
| 12.98 | (0.16) | 16262 | 0.39 | 1.86 | 19.6 |
| 13.52 | (20.14) | 40556 | 0.27 | 3.12 | 22.6 |
| 17.91 | 36.08 | 50443 | 0.27 | 1.19 | 18.9 |
| 13.66 | 4.81 | 38859 | 0.27 | 1.62 | 28.0 |
| 13.80 | 12.56 | 34838 | 0.27 | 1.76 | 15.5 |
| 13.05 | (0.02) | 33762 | 0.27 | 1.71 | 19.6 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME 2060 FUND** | **PRINCIPAL LIFETIME 2060 FUND** | **PRINCIPAL LIFETIME 2060 FUND** | **PRINCIPAL LIFETIME 2060 FUND** | **PRINCIPAL LIFETIME 2060 FUND** | **PRINCIPAL LIFETIME 2060 FUND** | **PRINCIPAL LIFETIME 2060 FUND** | **PRINCIPAL LIFETIME 2060 FUND** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $19.13 | $0.48 | $(4.18) | $(3.70) | $(0.47) | $(0.44) | $(0.91) |
| 2021 | 14.47 | 0.17 | 5.04 | 5.21 | (0.21) | (0.34) | (0.55) |
| 2020 | 14.61 | 0.21 | 0.47 | 0.68 | (0.22) | (0.60) | (0.82) |
| 2019 | 13.68 | 0.22 | 1.36 | 1.58 | (0.22) | (0.43) | (0.65) |
| 2018 | 14.05 | 0.25 | (0.27) | (0.02) | (0.26) | (0.09) | (0.35) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 19.32 | 0.51 | (4.17) | (3.66) | (0.54) | (0.44) | (0.98) |
| 2021 | 14.60 | 0.24 | 5.08 | 5.32 | (0.26) | (0.34) | (0.60) |
| 2020 | 14.72 | 0.25 | 0.49 | 0.74 | (0.26) | (0.60) | (0.86) |
| 2019 | 13.79 | 0.26 | 1.37 | 1.63 | (0.27) | (0.43) | (0.70) |
| 2018 | 14.14 | 0.31 | (0.27) | 0.04 | (0.30) | (0.09) | (0.39) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 18.72 | 0.35 | (4.05) | (3.70) | (0.38) | (0.44) | (0.82) |
| 2021 | 14.19 | 0.11 | 4.91 | 5.02 | (0.15) | (0.34) | (0.49) |
| 2020 | 14.32 | 0.14 | 0.45 | 0.59 | (0.12) | (0.60) | (0.72) |
| 2019 | 13.43 | 0.15 | 1.33 | 1.48 | (0.16) | (0.43) | (0.59) |
| 2018 | 13.79 | 0.18 | (0.26) | (0.08) | (0.19) | (0.09) | (0.28) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 19.00 | 0.43 | (4.14) | (3.71) | (0.44) | (0.44) | (0.88) |
| 2021 | 14.38 | 0.13 | 5.01 | 5.14 | (0.18) | (0.34) | (0.52) |
| 2020 | 14.52 | 0.17 | 0.48 | 0.65 | (0.19) | (0.60) | (0.79) |
| 2019 | 13.61 | 0.19 | 1.35 | 1.54 | (0.20) | (0.43) | (0.63) |
| 2018 | 13.98 | 0.24 | (0.28) | (0.04) | (0.24) | (0.09) | (0.33) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 19.08 | 0.48 | (4.16) | (3.68) | (0.46) | (0.44) | (0.90) |
| 2021 | 14.44 | 0.18 | 5.01 | 5.19 | (0.21) | (0.34) | (0.55) |
| 2020 | 14.57 | 0.24 | 0.44 | 0.68 | (0.21) | (0.60) | (0.81) |
| 2019 | 13.64 | 0.24 | 1.34 | 1.58 | (0.22) | (0.43) | (0.65) |
| 2018 | 14.01 | 0.25 | (0.27) | (0.02) | (0.26) | (0.09) | (0.35) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 19.14 | 0.48 | (4.15) | (3.67) | (0.49) | (0.44) | (0.93) |
| 2021 | 14.48 | 0.20 | 5.02 | 5.22 | (0.22) | (0.34) | (0.56) |
| 2020 | 14.61 | 0.20 | 0.50 | 0.70 | (0.23) | (0.60) | (0.83) |
| 2019 | 13.69 | 0.24 | 1.35 | 1.59 | (0.24) | (0.43) | (0.67) |
| 2018 | 14.05 | 0.24 | (0.24) | – | (0.27) | (0.09) | (0.36) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $14.52 | (20.23)%<sup>(b)</sup> <br>| $14614 | 0.38%<sup>(c)</sup> <br>| 0.43%<sup>(d)</sup> <br>| 2.94% | 21.7% |
| 19.13 | 36.62<sup>(b)</sup> <br>| 18803 | 0.38<sup>(c)</sup> <br>| 0.43<sup>(d)</sup> <br>| 0.94 | 18.3 |
| 14.47 | 4.61<sup>(b)</sup> <br>| 11740 | 0.38<sup>(c)</sup> <br>| 0.58<sup>(d)</sup> <br>| 1.49 | 22.9 |
| 14.61 | 12.54<sup>(b)</sup> <br>| 10924 | 0.38<sup>(c)</sup> <br>| 0.64<sup>(d)</sup> <br>| 1.58 | 12.6 |
| 13.68 | (0.24)<sup>(b)</sup> <br>| 8891 | 0.38<sup>(c)</sup> <br>| 0.57<sup>(d)</sup> <br>| 1.76 | 24.0 |
| 14.68 | (19.92) | 594766 | 0.01 | – | 3.13 | 21.7 |
| 19.32 | 37.12 | 629044 | 0.02 | – | 1.32 | 18.3 |
| 14.60 | 5.02 | 385276 | 0.02 | – | 1.75 | 22.9 |
| 14.72 | 12.88 | 319472 | 0.03<sup>(e)</sup> <br>| – | 1.87 | 12.6 |
| 13.79 | 0.19 | 244280 | 0.03<sup>(e)</sup> <br>| – | 2.16 | 24.0 |
| 14.20 | (20.60) | 2442 | 0.89 | – | 2.22 | 21.7 |
| 18.72 | 35.95 | 2430 | 0.89 | – | 0.65 | 18.3 |
| 14.19 | 4.08 | 1935 | 0.89 | – | 1.02 | 22.9 |
| 14.32 | 11.91 | 2165 | 0.89 | – | 1.13 | 12.6 |
| 13.43 | (0.67) | 1651 | 0.89<sup>(e)</sup> <br>| – | 1.27 | 24.0 |
| 14.41 | (20.41) | 19914 | 0.58 | – | 2.67 | 21.7 |
| 19.00 | 36.38 | 22111 | 0.58 | – | 0.75 | 18.3 |
| 14.38 | 4.45 | 14091 | 0.58 | – | 1.23 | 22.9 |
| 14.52 | 12.27 | 12016 | 0.58 | – | 1.40 | 12.6 |
| 13.61 | (0.38) | 10034 | 0.58<sup>(e)</sup> <br>| – | 1.65 | 24.0 |
| 14.50 | (20.21) | 5694 | 0.39 | – | 2.95 | 21.7 |
| 19.08 | 36.55 | 7736 | 0.39 | – | 1.05 | 18.3 |
| 14.44 | 4.67 | 5851 | 0.39 | – | 1.72 | 22.9 |
| 14.57 | 12.53 | 6603 | 0.39 | – | 1.72 | 12.6 |
| 13.64 | (0.25) | 6285 | 0.39<sup>(e)</sup> <br>| – | 1.77 | 24.0 |
| 14.54 | (20.10) | 28139 | 0.27 | – | 2.94 | 21.7 |
| 19.14 | 36.74 | 30796 | 0.27 | – | 1.13 | 18.3 |
| 14.48 | 4.76 | 20854 | 0.27 | – | 1.46 | 22.9 |
| 14.61 | 12.62 | 16867 | 0.27 | – | 1.73 | 12.6 |
| 13.69 | (0.07) | 14963 | 0.27<sup>(e)</sup> <br>| – | 1.66 | 24.0 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME 2065 FUND** | **PRINCIPAL LIFETIME 2065 FUND** | **PRINCIPAL LIFETIME 2065 FUND** | **PRINCIPAL LIFETIME 2065 FUND** | **PRINCIPAL LIFETIME 2065 FUND** | **PRINCIPAL LIFETIME 2065 FUND** | **PRINCIPAL LIFETIME 2065 FUND** | **PRINCIPAL LIFETIME 2065 FUND** |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | $15.19 | $0.38 | $(3.30) | $(2.92) | $(0.42) | $(0.14) | $(0.56) |
| 2021 | 11.33 | 0.15 | 4.03 | 4.18 | (0.19) | (0.13) | (0.32) |
| 2020 | 11.19 | 0.14 | 0.44 | 0.58 | (0.19) | (0.25) | (0.44) |
| 2019 | 10.25 | 0.17 | 1.08 | 1.25 | (0.19) | (0.12) | (0.31) |
| 2018 | 10.45 | 0.02 | (0.02) | – | (0.20) | – | (0.20) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 14.92 | 0.30 | (3.28) | (2.98) | (0.34) | (0.14) | (0.48) |
| 2021 | 11.17 | (0.01) | 4.01 | 4.00 | (0.12) | (0.13) | (0.25) |
| 2020 | 11.05 | 0.29 | 0.19 | 0.48 | (0.11) | (0.25) | (0.36) |
| 2019 | 10.16 | 0.10 | 1.06 | 1.16 | (0.15) | (0.12) | (0.27) |
| 2018 | 10.43 | (0.04) | (0.03) | (0.07) | (0.20) | – | (0.20) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 15.04 | 0.30 | (3.26) | (2.96) | (0.37) | (0.14) | (0.51) |
| 2021 | 11.21 | 0.07 | 4.00 | 4.07 | (0.11) | (0.13) | (0.24) |
| 2020 | 11.10 | 0.11 | 0.40 | 0.51 | (0.15) | (0.25) | (0.40) |
| 2019 | 10.20 | 0.13 | 1.05 | 1.18 | (0.16) | (0.12) | (0.28) |
| 2018 | 10.44 | (0.02) | (0.02) | (0.04) | (0.20) | – | (0.20) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 15.06 | 0.37 | (3.31) | (2.94) | (0.38) | (0.14) | (0.52) |
| 2021 | 11.25 | 0.13 | 3.97 | 4.10 | (0.16) | (0.13) | (0.29) |
| 2020 | 11.13 | 0.17 | 0.36 | 0.53 | (0.16) | (0.25) | (0.41) |
| 2019 | 10.22 | 0.15 | 1.06 | 1.21 | (0.18) | (0.12) | (0.30) |
| 2018 | 10.44 | 0.01 | (0.03) | (0.02) | (0.20) | – | (0.20) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 15.10 | 0.33 | (3.26) | (2.93) | (0.40) | (0.14) | (0.54) |
| 2021 | 11.27 | 0.14 | 3.99 | 4.13 | (0.17) | (0.13) | (0.30) |
| 2020 | 11.16 | 0.06 | 0.48 | 0.54 | (0.18) | (0.25) | (0.43) |
| 2019 | 10.24 | 0.14 | 1.09 | 1.23 | (0.19) | (0.12) | (0.31) |
| 2018 | 10.44 | 0.01 | (0.01) | – | (0.20) | – | (0.20) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $11.71 | (19.92)% | $83762<br> 0.05%<sup>(b)</sup> <br>| 2.96% | 28.4% |
| 15.19 | 37.37 | 73568<br> 0.08<sup>(b)</sup> <br>| 1.04 | 22.5 |
| 11.33 | 5.15 | 26561<br> 0.08<sup>(b)</sup> <br>| 1.28 | 55.1 |
| 11.19 | 12.82 | 11938<br> 0.10<sup>(b)</sup> <br>| 1.57 | 51.6 |
| 10.25 | (0.08) | 7146<br> 0.10<sup>(b)</sup> <br>| 0.23 | 195.7 |
| 11.46 | (20.61) | 268<br> 0.90<sup>(b)</sup> <br>| 2.40 | 28.4 |
| 14.92 | 36.21 | 176<br> 0.91<sup>(b)</sup> <br>| (0.10) | 22.5 |
| 11.17 | 4.34 | 58<br> 0.93<sup>(b)</sup> <br>| 2.64 | 55.1 |
| 11.05 | 11.93 | 136<br> 0.93<sup>(b)</sup> <br>| 0.93 | 51.6 |
| 10.16 | (0.76) | 109<br> 0.93<sup>(b)</sup> <br>| (0.36) | 195.7 |
| 11.57 | (20.37) | 4642<br> 0.59<sup>(b)</sup> <br>| 2.34 | 28.4 |
| 15.04 | 36.70 | 4115<br> 0.60<sup>(b)</sup> <br>| 0.49 | 22.5 |
| 11.21 | 4.55 | 1590<br> 0.62<sup>(b)</sup> <br>| 1.00 | 55.1 |
| 11.10 | 12.19 | 2256<br> 0.62<sup>(b)</sup> <br>| 1.29 | 51.6 |
| 10.20 | (0.46) | 1565<br> 0.62<sup>(b)</sup> <br>| (0.23) | 195.7 |
| 11.60 | (20.19) | 1102<br> 0.40<sup>(b)</sup> <br>| 2.86 | 28.4 |
| 15.06 | 36.90 | 1234<br> 0.41<sup>(b)</sup> <br>| 0.91 | 22.5 |
| 11.25 | 4.73 | 505<br> 0.43<sup>(b)</sup> <br>| 1.55 | 55.1 |
| 11.13 | 12.48 | 427<br> 0.43<sup>(b)</sup> <br>| 1.39 | 51.6 |
| 10.22 | (0.27) | 339<br> 0.43<sup>(b)</sup> <br>| 0.14 | 195.7 |
| 11.63 | (20.11) | 5055<br> 0.28<sup>(b)</sup> <br>| 2.57 | 28.4 |
| 15.10 | 37.09 | 3917<br> 0.29<sup>(b)</sup> <br>| 0.98 | 22.5 |
| 11.27 | 4.81 | 1898<br> 0.31<sup>(b)</sup> <br>| 0.52 | 55.1 |
| 11.16 | 12.60 | 711<br> 0.31<sup>(b)</sup> <br>| 1.37 | 51.6 |
| 10.24 | (0.08) | 469<br> 0.31<sup>(b)</sup> <br>| 0.07 | 195.7 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME HYBRID INCOME FUND** | **PRINCIPAL LIFETIME HYBRID INCOME FUND** | **PRINCIPAL LIFETIME HYBRID INCOME FUND** | **PRINCIPAL LIFETIME HYBRID INCOME FUND** | **PRINCIPAL LIFETIME HYBRID INCOME FUND** | **PRINCIPAL LIFETIME HYBRID INCOME FUND** | **PRINCIPAL LIFETIME HYBRID INCOME FUND** | **PRINCIPAL LIFETIME HYBRID INCOME FUND** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $11.69 | $0.23 | $(1.83) | $(1.60) | $(0.25) | $(0.35) | $(0.60) |
| 2021 | 11.18 | 0.39 | 0.66 | 1.05 | (0.50) | (0.04) | (0.54) |
| 2020 | 10.84 | 0.19 | 0.45 | 0.64 | (0.26) | (0.04) | (0.30) |
| 2019 | 10.16 | 0.22 | 0.66 | 0.88 | (0.16) | (0.04) | (0.20) |
| 2018<sup>(e)</sup> <br>| 10.26 | 0.05 | (0.15) | (0.10) | – | – | – |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 11.74 | 0.29 | (1.86) | (1.57) | (0.28) | (0.35) | (0.63) |
| 2021 | 11.23 | 0.43 | 0.63 | 1.06 | (0.51) | (0.04) | (0.55) |
| 2020 | 10.88 | 0.27 | 0.40 | 0.67 | (0.28) | (0.04) | (0.32) |
| 2019 | 10.17 | 0.28 | 0.64 | 0.92 | (0.17) | (0.04) | (0.21) |
| 2018 | 10.51 | 0.28 | (0.37) | (0.09) | (0.24) | (0.01) | (0.25) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 11.76 | 0.27 | (1.84) | (1.57) | (0.28) | (0.35) | (0.63) |
| 2021 | 11.24 | 0.52 | 0.56 | 1.08 | (0.52) | (0.04) | (0.56) |
| 2020 | 10.89 | 0.26 | 0.41 | 0.67 | (0.28) | (0.04) | (0.32) |
| 2019 | 10.18 | 0.17 | 0.75 | 0.92 | (0.17) | (0.04) | (0.21) |
| 2018 | 10.52 | 0.15 | (0.24) | (0.09) | (0.24) | (0.01) | (0.25) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Period from March 1, 2018, date operations commenced, through October 31, 2018.

<sup>(f)</sup>

Total return amounts have not been annualized.

<sup>(g)</sup>

Computed on an annualized basis.

<sup>(h)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $9.49 | (14.39)%<sup>(b)</sup> <br>| $42296<br> 0.26%<sup>(c)</sup> <br>| 0.28%<sup>(d)</sup> <br>| 2.23% | 31.5% |
| 11.69 | 9.56<sup>(b)</sup> <br>| 33456<br> 0.28<sup>(c)</sup> <br>| 0.30<sup>(d)</sup> <br>| 3.38 | 20.6 |
| 11.18 | 6.01<sup>(b)</sup> <br>| 18439<br> 0.30<sup>(c)</sup> <br>| 0.43<sup>(d)</sup> <br>| 1.72 | 34.6 |
| 10.84 | 8.82<sup>(b)</sup> <br>| 8310<br> 0.30<sup>(c)</sup> <br>| 0.72<sup>(d)</sup> <br>| 2.07 | 24.1 |
| 10.16 | (0.97)<sup>(b)(f)</sup> <br>| 3029<br> 0.30<sup>(c)(g)</sup> <br>| 2.97<sup>(d)(g)</sup> <br>| 0.72<sup>(g)</sup> <br>| 58.8 |
| 9.54 | (14.17) | 11474<br> 0.05<sup>(h)</sup> <br>| – | 2.76 | 31.5 |
| 11.74 | 9.69 | 17255<br> 0.05<sup>(h)</sup> <br>| – | 3.74 | 20.6 |
| 11.23 | 6.27 | 12454<br> 0.05<sup>(h)</sup> <br>| – | 2.45 | 34.6 |
| 10.88 | 9.20 | 13554<br> 0.05<sup>(h)</sup> <br>| – | 2.67 | 24.1 |
| 10.17 | (0.88) | 14431<br> 0.05<sup>(h)</sup> <br>| – | 2.73 | 58.8 |
| 9.56 | (14.13) | 33623<br> 0.02<sup>(h)</sup> <br>| – | 2.61 | 31.5 |
| 11.76 | 9.78 | 34760<br> 0.02<sup>(h)</sup> <br>| – | 4.48 | 20.6 |
| 11.24 | 6.27 | 33148<br> 0.02<sup>(h)</sup> <br>| – | 2.42 | 34.6 |
| 10.89 | 9.19 | 34983<br> 0.02<sup>(h)</sup> <br>| – | 1.62 | 24.1 |
| 10.18 | (0.88) | 8750<br> 0.02<sup>(h)</sup> <br>| – | 1.40 | 58.8 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME HYBRID 2015 FUND** | **PRINCIPAL LIFETIME HYBRID 2015 FUND** | **PRINCIPAL LIFETIME HYBRID 2015 FUND** | **PRINCIPAL LIFETIME HYBRID 2015 FUND** | **PRINCIPAL LIFETIME HYBRID 2015 FUND** | **PRINCIPAL LIFETIME HYBRID 2015 FUND** | **PRINCIPAL LIFETIME HYBRID 2015 FUND** | **PRINCIPAL LIFETIME HYBRID 2015 FUND** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $12.91 | $0.23 | $(2.00) | $(1.77) | $(0.28) | $(0.42) | $(0.70) |
| 2021 | 11.75 | 0.39 | 1.34 | 1.73 | (0.48) | (0.09) | (0.57) |
| 2020 | 11.39 | 0.21 | 0.48 | 0.69 | (0.26) | (0.07) | (0.33) |
| 2019 | 10.63 | 0.18 | 0.80 | 0.98 | (0.14) | (0.08) | (0.22) |
| 2018<sup>(e)</sup> <br>| 10.79 | 0.03 | (0.19) | (0.16) | – | – | – |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 12.96 | 0.31 | (2.07) | (1.76) | (0.29) | (0.42) | (0.71) |
| 2021 | 11.80 | 0.48 | 1.27 | 1.75 | (0.50) | (0.09) | (0.59) |
| 2020 | 11.42 | 0.28 | 0.45 | 0.73 | (0.28) | (0.07) | (0.35) |
| 2019 | 10.65 | 0.26 | 0.74 | 1.00 | (0.15) | (0.08) | (0.23) |
| 2018 | 10.96 | 0.26 | (0.31) | (0.05) | (0.22) | (0.04) | (0.26) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 12.98 | 0.32 | (2.07) | (1.75) | (0.30) | (0.42) | (0.72) |
| 2021 | 11.82 | 0.50 | 1.26 | 1.76 | (0.51) | (0.09) | (0.60) |
| 2020 | 11.44 | 0.27 | 0.46 | 0.73 | (0.28) | (0.07) | (0.35) |
| 2019 | 10.66 | 0.14 | 0.87 | 1.01 | (0.15) | (0.08) | (0.23) |
| 2018 | 10.98 | 0.11 | (0.17) | (0.06) | (0.22) | (0.04) | (0.26) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Period from March 1, 2018, date operations commenced, through October 31, 2018.

<sup>(f)</sup>

Total return amounts have not been annualized.

<sup>(g)</sup>

Computed on an annualized basis.

<sup>(h)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $10.44 | (14.50)%<sup>(b)</sup> <br>| $96345<br> 0.23%<sup>(c)</sup> <br>| 0.25%<sup>(d)</sup> <br>| 2.07% | 18.1% |
| 12.91 | 15.07<sup>(b)</sup> <br>| 55458<br> 0.23<sup>(c)</sup> <br>| 0.25<sup>(d)</sup> <br>| 3.10 | 20.6 |
| 11.75 | 6.21<sup>(b)</sup> <br>| 29710<br> 0.28<sup>(c)</sup> <br>| 0.31<sup>(d)</sup> <br>| 1.84 | 32.4 |
| 11.39 | 9.44<sup>(b)</sup> <br>| 19129<br> 0.30<sup>(c)</sup> <br>| 0.44<sup>(d)</sup> <br>| 1.67 | 31.5 |
| 10.63 | (1.48)<sup>(b)(f)</sup> <br>| 7117<br> 0.30<sup>(c)(g)</sup> <br>| 1.32<sup>(d)(g)</sup> <br>| 0.42<sup>(g)</sup> <br>| 40.9 |
| 10.49 | (14.35) | 18704<br> 0.05<sup>(h)</sup> <br>| – | 2.72 | 18.1 |
| 12.96 | 15.21 | 22888<br> 0.05<sup>(h)</sup> <br>| – | 3.85 | 20.6 |
| 11.80 | 6.54 | 19501<br> 0.05<sup>(h)</sup> <br>| – | 2.46 | 32.4 |
| 11.42 | 9.63 | 22269<br> 0.05<sup>(h)</sup> <br>| – | 2.41 | 31.5 |
| 10.65 | (0.56) | 29429<br> 0.05<sup>(h)</sup> <br>| – | 2.34 | 40.9 |
| 10.51 | (14.30) | 46216<br> 0.02<sup>(h)</sup> <br>| – | 2.78 | 18.1 |
| 12.98 | 15.21 | 58859<br> 0.02<sup>(h)</sup> <br>| – | 3.98 | 20.6 |
| 11.82 | 6.55 | 56576<br> 0.02<sup>(h)</sup> <br>| – | 2.34 | 32.4 |
| 11.44 | 9.73 | 61079<br> 0.02<sup>(h)</sup> <br>| – | 1.32 | 31.5 |
| 10.66 | (0.65) | 14245<br> 0.02<sup>(h)</sup> <br>| – | 1.04 | 40.9 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME HYBRID 2020 FUND** | **PRINCIPAL LIFETIME HYBRID 2020 FUND** | **PRINCIPAL LIFETIME HYBRID 2020 FUND** | **PRINCIPAL LIFETIME HYBRID 2020 FUND** | **PRINCIPAL LIFETIME HYBRID 2020 FUND** | **PRINCIPAL LIFETIME HYBRID 2020 FUND** | **PRINCIPAL LIFETIME HYBRID 2020 FUND** | **PRINCIPAL LIFETIME HYBRID 2020 FUND** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $13.47 | $0.28 | $(2.19) | $(1.91) | $(0.30) | $(0.46) | $(0.76) |
| 2021 | 11.92 | 0.37 | 1.76 | 2.13 | (0.47) | (0.11) | (0.58) |
| 2020 | 11.54 | 0.20 | 0.53 | 0.73 | (0.26) | (0.09) | (0.35) |
| 2019 | 10.85 | 0.16 | 0.87 | 1.03 | (0.18) | (0.16) | (0.34) |
| 2018<sup>(e)</sup> <br>| 11.04 | 0.02 | (0.21) | (0.19) | – | – | – |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 13.54 | 0.33 | (2.24) | (1.91) | (0.31) | (0.46) | (0.77) |
| 2021 | 11.97 | 0.45 | 1.71 | 2.16 | (0.48) | (0.11) | (0.59) |
| 2020 | 11.59 | 0.33 | 0.41 | 0.74 | (0.27) | (0.09) | (0.36) |
| 2019 | 10.88 | 0.26 | 0.79 | 1.05 | (0.18) | (0.16) | (0.34) |
| 2018 | 11.21 | 0.28 | (0.33) | (0.05) | (0.23) | (0.05) | (0.28) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 13.54 | 0.33 | (2.24) | (1.91) | (0.31) | (0.46) | (0.77) |
| 2021 | 11.97 | 0.49 | 1.68 | 2.17 | (0.49) | (0.11) | (0.60) |
| 2020 | 11.59 | 0.26 | 0.49 | 0.75 | (0.28) | (0.09) | (0.37) |
| 2019 | 10.88 | 0.12 | 0.94 | 1.06 | (0.19) | (0.16) | (0.35) |
| 2018 | 11.22 | 0.10 | (0.15) | (0.05) | (0.24) | (0.05) | (0.29) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Period from March 1, 2018, date operations commenced, through October 31, 2018.

<sup>(f)</sup>

Total return amounts have not been annualized.

<sup>(g)</sup>

Computed on an annualized basis.

<sup>(h)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $10.80 | (15.02)%<sup>(b)</sup> <br>| $205008<br> 0.18%<sup>(c)</sup> <br>| 0.20%<sup>(d)</sup> <br>| 2.38% | 20.4% |
| 13.47 | 18.31<sup>(b)</sup> <br>| 184994<br> 0.19<sup>(c)</sup> <br>| 0.21<sup>(d)</sup> <br>| 2.87 | 16.2 |
| 11.92 | 6.38<sup>(b)</sup> <br>| 87239<br> 0.20<sup>(c)</sup> <br>| 0.23<sup>(d)</sup> <br>| 1.71 | 26.7 |
| 11.54 | 9.89<sup>(b)</sup> <br>| 44553<br> 0.28<sup>(c)</sup> <br>| 0.31<sup>(d)</sup> <br>| 1.42 | 21.4 |
| 10.85 | (1.72)<sup>(b)(f)</sup> <br>| 12536<br> 0.30<sup>(c)(g)</sup> <br>| 1.07<sup>(d)(g)</sup> <br>| 0.27<sup>(g)</sup> <br>| 33.7 |
| 10.86 | (14.95) | 42581<br> 0.05<sup>(h)</sup> <br>| – | 2.78 | 20.4 |
| 13.54 | 18.50 | 58554<br> 0.05<sup>(h)</sup> <br>| – | 3.44 | 16.2 |
| 11.97 | 6.50 | 49188<br> 0.05<sup>(h)</sup> <br>| – | 2.83 | 26.7 |
| 11.59 | 10.11 | 81108<br> 0.05<sup>(h)</sup> <br>| – | 2.34 | 21.4 |
| 10.88 | (0.50) | 94427<br> 0.05<sup>(h)</sup> <br>| – | 2.45 | 33.7 |
| 10.86 | (14.91) | 187400<br> 0.02<sup>(h)</sup> <br>| – | 2.77 | 20.4 |
| 13.54 | 18.54 | 233947<br> 0.02<sup>(h)</sup> <br>| – | 3.78 | 16.2 |
| 11.97 | 6.53 | 212655<br> 0.02<sup>(h)</sup> <br>| – | 2.28 | 26.7 |
| 11.59 | 10.16 | 205364<br> 0.02<sup>(h)</sup> <br>| – | 1.04 | 21.4 |
| 10.88 | (0.57) | 35759<br> 0.02<sup>(h)</sup> <br>| – | 0.94 | 33.7 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME HYBRID 2025 FUND** | **PRINCIPAL LIFETIME HYBRID 2025 FUND** | **PRINCIPAL LIFETIME HYBRID 2025 FUND** | **PRINCIPAL LIFETIME HYBRID 2025 FUND** | **PRINCIPAL LIFETIME HYBRID 2025 FUND** | **PRINCIPAL LIFETIME HYBRID 2025 FUND** | **PRINCIPAL LIFETIME HYBRID 2025 FUND** | **PRINCIPAL LIFETIME HYBRID 2025 FUND** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $14.27 | $0.29 | $(2.42) | $(2.13) | $(0.32) | $(0.39) | $(0.71) |
| 2021 | 12.20 | 0.37 | 2.25 | 2.62 | (0.46) | (0.09) | (0.55) |
| 2020 | 11.84 | 0.20 | 0.55 | 0.75 | (0.26) | (0.13) | (0.39) |
| 2019 | 11.10 | 0.16 | 0.92 | 1.08 | (0.19) | (0.15) | (0.34) |
| 2018<sup>(e)</sup> <br>| 11.33 | 0.01 | (0.24) | (0.23) | – | – | – |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 14.33 | 0.34 | (2.47) | (2.13) | (0.33) | (0.39) | (0.72) |
| 2021 | 12.24 | 0.45 | 2.20 | 2.65 | (0.47) | (0.09) | (0.56) |
| 2020 | 11.88 | 0.28 | 0.48 | 0.76 | (0.27) | (0.13) | (0.40) |
| 2019 | 11.12 | 0.25 | 0.86 | 1.11 | (0.20) | (0.15) | (0.35) |
| 2018 | 11.44 | 0.26 | (0.31) | (0.05) | (0.24) | (0.03) | (0.27) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 14.34 | 0.35 | (2.48) | (2.13) | (0.33) | (0.39) | (0.72) |
| 2021 | 12.25 | 0.47 | 2.19 | 2.66 | (0.48) | (0.09) | (0.57) |
| 2020 | 11.89 | 0.25 | 0.51 | 0.76 | (0.27) | (0.13) | (0.40) |
| 2019 | 11.13 | 0.13 | 0.98 | 1.11 | (0.20) | (0.15) | (0.35) |
| 2018 | 11.45 | 0.13 | (0.18) | (0.05) | (0.24) | (0.03) | (0.27) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Period from March 1, 2018, date operations commenced, through October 31, 2018.

<sup>(f)</sup>

Total return amounts have not been annualized.

<sup>(g)</sup>

Computed on an annualized basis.

<sup>(h)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $11.43 | (15.71)%<sup>(b)</sup> <br>| $272529<br> 0.18%<sup>(c)</sup> <br>| 0.20%<sup>(d)</sup> <br>| 2.30% | 13.6% |
| 14.27 | 21.94<sup>(b)</sup> <br>| 207361<br> 0.19<sup>(c)</sup> <br>| 0.21<sup>(d)</sup> <br>| 2.69 | 14.2 |
| 12.20 | 6.36<sup>(b)</sup> <br>| 95483<br> 0.20<sup>(c)</sup> <br>| 0.23<sup>(d)</sup> <br>| 1.70 | 18.6 |
| 11.84 | 10.24<sup>(b)</sup> <br>| 48991<br> 0.28<sup>(c)</sup> <br>| 0.31<sup>(d)</sup> <br>| 1.42 | 22.5 |
| 11.10 | (2.03)<sup>(b)(f)</sup> <br>| 13840<br> 0.30<sup>(c)(g)</sup> <br>| 0.84<sup>(d)(g)</sup> <br>| 0.09<sup>(g)</sup> <br>| 23.3 |
| 11.48 | (15.63) | 64787<br> 0.05<sup>(h)</sup> <br>| – | 2.70 | 13.6 |
| 14.33 | 22.14 | 75042<br> 0.05<sup>(h)</sup> <br>| – | 3.27 | 14.2 |
| 12.24 | 6.46 | 58524<br> 0.05<sup>(h)</sup> <br>| – | 2.38 | 18.6 |
| 11.88 | 10.48 | 63839<br> 0.05<sup>(h)</sup> <br>| – | 2.17 | 22.5 |
| 11.12 | (0.53) | 75318<br> 0.05<sup>(h)</sup> <br>| – | 2.25 | 23.3 |
| 11.49 | (15.60) | 178008<br> 0.02<sup>(h)</sup> <br>| – | 2.73 | 13.6 |
| 14.34 | 22.16 | 206615<br> 0.02<sup>(h)</sup> <br>| – | 3.42 | 14.2 |
| 12.25 | 6.49 | 161907<br> 0.02<sup>(h)</sup> <br>| – | 2.11 | 18.6 |
| 11.89 | 10.52 | 129870<br> 0.02<sup>(h)</sup> <br>| – | 1.13 | 22.5 |
| 11.13 | (0.53) | 35044<br> 0.02<sup>(h)</sup> <br>| – | 1.13 | 23.3 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME HYBRID 2030 FUND** | **PRINCIPAL LIFETIME HYBRID 2030 FUND** | **PRINCIPAL LIFETIME HYBRID 2030 FUND** | **PRINCIPAL LIFETIME HYBRID 2030 FUND** | **PRINCIPAL LIFETIME HYBRID 2030 FUND** | **PRINCIPAL LIFETIME HYBRID 2030 FUND** | **PRINCIPAL LIFETIME HYBRID 2030 FUND** | **PRINCIPAL LIFETIME HYBRID 2030 FUND** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $14.78 | $0.28 | $(2.67) | $(2.39) | $(0.32) | $(0.44) | $(0.76) |
| 2021 | 12.32 | 0.37 | 2.67 | 3.04 | (0.45) | (0.13) | (0.58) |
| 2020 | 11.99 | 0.19 | 0.57 | 0.76 | (0.25) | (0.18) | (0.43) |
| 2019 | 11.25 | 0.14 | 0.99 | 1.13 | (0.21) | (0.18) | (0.39) |
| 2018<sup>(e)</sup> <br>| 11.53 | – | (0.28) | (0.28) | – | – | – |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 14.86 | 0.33 | (2.70) | (2.37) | (0.34) | (0.44) | (0.78) |
| 2021 | 12.38 | 0.41 | 2.66 | 3.07 | (0.46) | (0.13) | (0.59) |
| 2020 | 12.04 | 0.35 | 0.44 | 0.79 | (0.27) | (0.18) | (0.45) |
| 2019 | 11.27 | 0.24 | 0.92 | 1.16 | (0.21) | (0.18) | (0.39) |
| 2018 | 11.62 | 0.27 | (0.33) | (0.06) | (0.24) | (0.05) | (0.29) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 14.86 | 0.33 | (2.70) | (2.37) | (0.34) | (0.44) | (0.78) |
| 2021 | 12.37 | 0.45 | 2.63 | 3.08 | (0.46) | (0.13) | (0.59) |
| 2020 | 12.03 | 0.26 | 0.53 | 0.79 | (0.27) | (0.18) | (0.45) |
| 2019 | 11.27 | 0.13 | 1.03 | 1.16 | (0.22) | (0.18) | (0.40) |
| 2018 | 11.62 | 0.09 | (0.15) | (0.06) | (0.24) | (0.05) | (0.29) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Period from March 1, 2018, date operations commenced, through October 31, 2018.

<sup>(f)</sup>

Total return amounts have not been annualized.

<sup>(g)</sup>

Computed on an annualized basis.

<sup>(h)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $11.63 | (17.04)%<sup>(b)</sup> <br>| $203444<br> 0.19%<sup>(c)</sup> <br>| 0.21%<sup>(d)</sup> <br>| 2.17% | 16.7% |
| 14.78 | 25.23<sup>(b)</sup> <br>| 177896<br> 0.20<sup>(c)</sup> <br>| 0.22<sup>(d)</sup> <br>| 2.61 | 14.9 |
| 12.32 | 6.42<sup>(b)</sup> <br>| 78987<br> 0.22<sup>(c)</sup> <br>| 0.25<sup>(d)</sup> <br>| 1.60 | 26.7 |
| 11.99 | 10.56<sup>(b)</sup> <br>| 40498<br> 0.30<sup>(c)</sup> <br>| 0.37<sup>(d)</sup> <br>| 1.25 | 16.3 |
| 11.25 | (2.43)<sup>(b)(f)</sup> <br>| 11583<br> 0.30<sup>(c)(g)</sup> <br>| 1.09<sup>(d)(g)</sup> <br>| (0.04)<sup>(g)</sup> <br>| 25.9 |
| 11.71 | (16.87) | 77067<br> 0.05<sup>(h)</sup> <br>| – | 2.56 | 16.7 |
| 14.86 | 25.38 | 92984<br> 0.05<sup>(h)</sup> <br>| – | 2.93 | 14.9 |
| 12.38 | 6.64 | 60462<br> 0.05<sup>(h)</sup> <br>| – | 2.92 | 26.7 |
| 12.04 | 10.88 | 93111<br> 0.05<sup>(h)</sup> <br>| – | 2.14 | 16.3 |
| 11.27 | (0.56) | 93545<br> 0.05<sup>(h)</sup> <br>| – | 2.31 | 25.9 |
| 11.71 | (16.84) | 237340<br> 0.02<sup>(h)</sup> <br>| – | 2.54 | 16.7 |
| 14.86 | 25.52 | 261855<br> 0.02<sup>(h)</sup> <br>| – | 3.23 | 14.9 |
| 12.37 | 6.67 | 194059<br> 0.02<sup>(h)</sup> <br>| – | 2.15 | 26.7 |
| 12.03 | 10.83 | 161196<br> 0.02<sup>(h)</sup> <br>| – | 1.15 | 16.3 |
| 11.27 | (0.55) | 53746<br> 0.02<sup>(h)</sup> <br>| – | 0.79 | 25.9 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME HYBRID 2035 FUND** | **PRINCIPAL LIFETIME HYBRID 2035 FUND** | **PRINCIPAL LIFETIME HYBRID 2035 FUND** | **PRINCIPAL LIFETIME HYBRID 2035 FUND** | **PRINCIPAL LIFETIME HYBRID 2035 FUND** | **PRINCIPAL LIFETIME HYBRID 2035 FUND** | **PRINCIPAL LIFETIME HYBRID 2035 FUND** | **PRINCIPAL LIFETIME HYBRID 2035 FUND** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $15.50 | $0.31 | $(2.88) | $(2.57) | $(0.34) | $(0.39) | $(0.73) |
| 2021 | 12.56 | 0.33 | 3.14 | 3.47 | (0.42) | (0.11) | (0.53) |
| 2020 | 12.28 | 0.18 | 0.55 | 0.73 | (0.26) | (0.19) | (0.45) |
| 2019 | 11.49 | 0.14 | 1.07 | 1.21 | (0.21) | (0.21) | (0.42) |
| 2018<sup>(e)</sup> <br>| 11.78 | – | (0.29) | (0.29) | – | – | – |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 15.59 | 0.34 | (2.90) | (2.56) | (0.36) | (0.39) | (0.75) |
| 2021 | 12.62 | 0.40 | 3.12 | 3.52 | (0.44) | (0.11) | (0.55) |
| 2020 | 12.33 | 0.28 | 0.47 | 0.75 | (0.27) | (0.19) | (0.46) |
| 2019 | 11.51 | 0.22 | 1.02 | 1.24 | (0.21) | (0.21) | (0.42) |
| 2018 | 11.83 | 0.27 | (0.32) | (0.05) | (0.23) | (0.04) | (0.27) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 15.61 | 0.35 | (2.91) | (2.56) | (0.36) | (0.39) | (0.75) |
| 2021 | 12.64 | 0.42 | 3.10 | 3.52 | (0.44) | (0.11) | (0.55) |
| 2020 | 12.35 | 0.25 | 0.51 | 0.76 | (0.28) | (0.19) | (0.47) |
| 2019 | 11.53 | 0.14 | 1.10 | 1.24 | (0.21) | (0.21) | (0.42) |
| 2018 | 11.84 | 0.14 | (0.18) | (0.04) | (0.23) | (0.04) | (0.27) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Period from March 1, 2018, date operations commenced, through October 31, 2018.

<sup>(f)</sup>

Total return amounts have not been annualized.

<sup>(g)</sup>

Computed on an annualized basis.

<sup>(h)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $12.20 | (17.38)%<sup>(b)</sup> <br>| $158186<br> 0.20%<sup>(c)</sup> <br>| 0.22%<sup>(d)</sup> <br>| 2.27% | 12.6% |
| 15.50 | 28.22<sup>(b)</sup> <br>| 143236<br> 0.21<sup>(c)</sup> <br>| 0.24<sup>(d)</sup> <br>| 2.22 | 10.6 |
| 12.56 | 5.94<sup>(b)</sup> <br>| 60829<br> 0.24<sup>(c)</sup> <br>| 0.27<sup>(d)</sup> <br>| 1.51 | 14.3 |
| 12.28 | 11.12<sup>(b)</sup> <br>| 29770<br> 0.30<sup>(c)</sup> <br>| 0.40<sup>(d)</sup> <br>| 1.16 | 17.4 |
| 11.49 | (2.46)<sup>(b)(f)</sup> <br>| 8266<br> 0.30<sup>(c)(g)</sup> <br>| 1.65<sup>(d)(g)</sup> <br>| 0.00<sup>(g)</sup> <br>| 13.7 |
| 12.28 | (17.25) | 71210<br> 0.05<sup>(h)</sup> <br>| – | 2.50 | 12.6 |
| 15.59 | 28.46 | 79002<br> 0.05<sup>(h)</sup> <br>| – | 2.75 | 10.6 |
| 12.62 | 6.15 | 54018<br> 0.05<sup>(h)</sup> <br>| – | 2.31 | 14.3 |
| 12.33 | 11.42 | 54756<br> 0.05<sup>(h)</sup> <br>| – | 1.90 | 17.4 |
| 11.51 | (0.45) | 54606<br> 0.05<sup>(h)</sup> <br>| – | 2.22 | 13.7 |
| 12.30 | (17.21) | 167461<br> 0.02<sup>(h)</sup> <br>| – | 2.55 | 12.6 |
| 15.61 | 28.45 | 180539<br> 0.02<sup>(h)</sup> <br>| – | 2.84 | 10.6 |
| 12.64 | 6.17 | 124836<br> 0.02<sup>(h)</sup> <br>| – | 2.05 | 14.3 |
| 12.35 | 11.45 | 94420<br> 0.02<sup>(h)</sup> <br>| – | 1.17 | 17.4 |
| 11.53 | (0.36) | 33325<br> 0.02<sup>(h)</sup> <br>| – | 1.12 | 13.7 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME HYBRID 2040 FUND** | **PRINCIPAL LIFETIME HYBRID 2040 FUND** | **PRINCIPAL LIFETIME HYBRID 2040 FUND** | **PRINCIPAL LIFETIME HYBRID 2040 FUND** | **PRINCIPAL LIFETIME HYBRID 2040 FUND** | **PRINCIPAL LIFETIME HYBRID 2040 FUND** | **PRINCIPAL LIFETIME HYBRID 2040 FUND** | **PRINCIPAL LIFETIME HYBRID 2040 FUND** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $15.84 | $0.30 | $(2.98) | $(2.68) | $(0.35) | $(0.40) | $(0.75) |
| 2021 | 12.58 | 0.30 | 3.48 | 3.78 | (0.38) | (0.14) | (0.52) |
| 2020 | 12.34 | 0.19 | 0.51 | 0.70 | (0.25) | (0.21) | (0.46) |
| 2019 | 11.59 | 0.11 | 1.10 | 1.21 | (0.21) | (0.25) | (0.46) |
| 2018<sup>(e)</sup> <br>| 11.91 | – | (0.32) | (0.32) | – | – | – |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 15.93 | 0.36 | (3.02) | (2.66) | (0.37) | (0.40) | (0.77) |
| 2021 | 12.64 | 0.36 | 3.47 | 3.83 | (0.40) | (0.14) | (0.54) |
| 2020 | 12.40 | 0.34 | 0.38 | 0.72 | (0.27) | (0.21) | (0.48) |
| 2019 | 11.62 | 0.23 | 1.02 | 1.25 | (0.22) | (0.25) | (0.47) |
| 2018 | 11.94 | 0.27 | (0.31) | (0.04) | (0.23) | (0.05) | (0.28) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 15.96 | 0.35 | (3.02) | (2.67) | (0.37) | (0.40) | (0.77) |
| 2021 | 12.66 | 0.38 | 3.46 | 3.84 | (0.40) | (0.14) | (0.54) |
| 2020 | 12.41 | 0.25 | 0.48 | 0.73 | (0.27) | (0.21) | (0.48) |
| 2019 | 11.63 | 0.12 | 1.13 | 1.25 | (0.22) | (0.25) | (0.47) |
| 2018 | 11.96 | 0.15 | (0.20) | (0.05) | (0.23) | (0.05) | (0.28) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Period from March 1, 2018, date operations commenced, through October 31, 2018.

<sup>(f)</sup>

Total return amounts have not been annualized.

<sup>(g)</sup>

Computed on an annualized basis.

<sup>(h)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $12.41 | (17.72)%<sup>(b)</sup> <br>| $138511<br> 0.21%<sup>(c)</sup> <br>| 0.23%<sup>(d)</sup> <br>| 2.18% | 13.5% |
| 15.84 | 30.64<sup>(b)</sup> <br>| 115496<br> 0.22<sup>(c)</sup> <br>| 0.24<sup>(d)</sup> <br>| 1.98 | 12.9 |
| 12.58 | 5.74<sup>(b)</sup> <br>| 49746<br> 0.26<sup>(c)</sup> <br>| 0.29<sup>(d)</sup> <br>| 1.60 | 22.5 |
| 12.34 | 11.18<sup>(b)</sup> <br>| 26552<br> 0.30<sup>(c)</sup> <br>| 0.42<sup>(d)</sup> <br>| 0.94 | 14.9 |
| 11.59 | (2.69)<sup>(b)(f)</sup> <br>| 6882<br> 0.30<sup>(c)(g)</sup> <br>| 1.71<sup>(d)(g)</sup> <br>| (0.03)<sup>(g)</sup> <br>| 15.1 |
| 12.50 | (17.53) | 58528<br> 0.05<sup>(h)</sup> <br>| – | 2.58 | 13.5 |
| 15.93 | 30.90 | 68006<br> 0.05<sup>(h)</sup> <br>| – | 2.42 | 12.9 |
| 12.64 | 5.86 | 44657<br> 0.05<sup>(h)</sup> <br>| – | 2.75 | 22.5 |
| 12.40 | 11.49 | 65024<br> 0.05<sup>(h)</sup> <br>| – | 1.96 | 14.9 |
| 11.62 | (0.38) | 65042<br> 0.05<sup>(h)</sup> <br>| – | 2.18 | 15.1 |
| 12.52 | (17.54) | 187431<br> 0.02<sup>(h)</sup> <br>| – | 2.50 | 13.5 |
| 15.96 | 30.97 | 194948<br> 0.02<sup>(h)</sup> <br>| – | 2.56 | 12.9 |
| 12.66 | 5.97 | 137469<br> 0.02<sup>(h)</sup> <br>| – | 2.08 | 22.5 |
| 12.41 | 11.52 | 112973<br> 0.02<sup>(h)</sup> <br>| – | 1.04 | 14.9 |
| 11.63 | (0.46) | 36294<br> 0.02<sup>(h)</sup> <br>| – | 1.19 | 15.1 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME HYBRID 2045 FUND** | **PRINCIPAL LIFETIME HYBRID 2045 FUND** | **PRINCIPAL LIFETIME HYBRID 2045 FUND** | **PRINCIPAL LIFETIME HYBRID 2045 FUND** | **PRINCIPAL LIFETIME HYBRID 2045 FUND** | **PRINCIPAL LIFETIME HYBRID 2045 FUND** | **PRINCIPAL LIFETIME HYBRID 2045 FUND** | **PRINCIPAL LIFETIME HYBRID 2045 FUND** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $16.35 | $0.30 | $(3.09) | $(2.79) | $(0.37) | $(0.37) | $(0.74) |
| 2021 | 12.71 | 0.28 | 3.83 | 4.11 | (0.35) | (0.12) | (0.47) |
| 2020 | 12.46 | 0.18 | 0.52 | 0.70 | (0.25) | (0.20) | (0.45) |
| 2019 | 11.72 | 0.10 | 1.12 | 1.22 | (0.21) | (0.27) | (0.48) |
| 2018<sup>(e)</sup> <br>| 12.05 | (0.01) | (0.32) | (0.33) | – | – | – |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 16.44 | 0.36 | (3.14) | (2.78) | (0.39) | (0.37) | (0.76) |
| 2021 | 12.77 | 0.34 | 3.82 | 4.16 | (0.37) | (0.12) | (0.49) |
| 2020 | 12.51 | 0.28 | 0.45 | 0.73 | (0.27) | (0.20) | (0.47) |
| 2019 | 11.74 | 0.21 | 1.05 | 1.26 | (0.22) | (0.27) | (0.49) |
| 2018 | 12.05 | 0.25 | (0.29) | (0.04) | (0.23) | (0.04) | (0.27) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 16.46 | 0.36 | (3.14) | (2.78) | (0.39) | (0.37) | (0.76) |
| 2021 | 12.79 | 0.35 | 3.81 | 4.16 | (0.37) | (0.12) | (0.49) |
| 2020 | 12.53 | 0.24 | 0.49 | 0.73 | (0.27) | (0.20) | (0.47) |
| 2019 | 11.75 | 0.11 | 1.16 | 1.27 | (0.22) | (0.27) | (0.49) |
| 2018 | 12.06 | 0.12 | (0.16) | (0.04) | (0.23) | (0.04) | (0.27) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Period from March 1, 2018, date operations commenced, through October 31, 2018.

<sup>(f)</sup>

Total return amounts have not been annualized.

<sup>(g)</sup>

Computed on an annualized basis.

<sup>(h)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $12.82 | (17.90)%<sup>(b)</sup> <br>| $86099<br> 0.24%<sup>(c)</sup> <br>| 0.26%<sup>(d)</sup> <br>| 2.10% | 15.9% |
| 16.35 | 32.92<sup>(b)</sup> <br>| 70004<br> 0.26<sup>(c)</sup> <br>| 0.28<sup>(d)</sup> <br>| 1.81 | 13.5 |
| 12.71 | 5.58<sup>(b)</sup> <br>| 30151<br> 0.30<sup>(c)</sup> <br>| 0.35<sup>(d)</sup> <br>| 1.46 | 14.5 |
| 12.46 | 11.20<sup>(b)</sup> <br>| 14776<br> 0.30<sup>(c)</sup> <br>| 0.60<sup>(d)</sup> <br>| 0.84 | 17.7 |
| 11.72 | (2.74)<sup>(b)(f)</sup> <br>| 3288<br> 0.30<sup>(c)(g)</sup> <br>| 3.08<sup>(d)(g)</sup> <br>| (0.10)<sup>(g)</sup> <br>| 12.0 |
| 12.90 | (17.75) | 49445<br> 0.05<sup>(h)</sup> <br>| – | 2.52 | 15.9 |
| 16.44 | 33.20 | 55809<br> 0.05<sup>(h)</sup> <br>| – | 2.22 | 13.5 |
| 12.77 | 5.80 | 36546<br> 0.05<sup>(h)</sup> <br>| – | 2.30 | 14.5 |
| 12.51 | 11.53 | 38651<br> 0.05<sup>(h)</sup> <br>| – | 1.80 | 17.7 |
| 11.74 | (0.39) | 37700<br> 0.05<sup>(h)</sup> <br>| – | 2.07 | 12.0 |
| 12.92 | (17.71) | 119980<br> 0.02<sup>(h)</sup> <br>| – | 2.49 | 15.9 |
| 16.46 | 33.18 | 122476<br> 0.02<sup>(h)</sup> <br>| – | 2.30 | 13.5 |
| 12.79 | 5.81 | 82272<br> 0.02<sup>(h)</sup> <br>| – | 1.95 | 14.5 |
| 12.53 | 11.62 | 59532<br> 0.02<sup>(h)</sup> <br>| – | 0.94 | 17.7 |
| 11.75 | (0.39) | 17071<br> 0.02<sup>(h)</sup> <br>| – | 0.99 | 12.0 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME HYBRID 2050 FUND** | **PRINCIPAL LIFETIME HYBRID 2050 FUND** | **PRINCIPAL LIFETIME HYBRID 2050 FUND** | **PRINCIPAL LIFETIME HYBRID 2050 FUND** | **PRINCIPAL LIFETIME HYBRID 2050 FUND** | **PRINCIPAL LIFETIME HYBRID 2050 FUND** | **PRINCIPAL LIFETIME HYBRID 2050 FUND** | **PRINCIPAL LIFETIME HYBRID 2050 FUND** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $16.55 | $0.29 | $(3.14) | $(2.85) | $(0.36) | $(0.36) | $(0.72) |
| 2021 | 12.73 | 0.26 | 4.02 | 4.28 | (0.32) | (0.14) | (0.46) |
| 2020 | 12.56 | 0.17 | 0.51 | 0.68 | (0.25) | (0.26) | (0.51) |
| 2019 | 11.79 | 0.11 | 1.12 | 1.23 | (0.22) | (0.24) | (0.46) |
| 2018<sup>(e)</sup> <br>| 12.12 | (0.01) | (0.32) | (0.33) | – | – | – |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 16.63 | 0.36 | (3.19) | (2.83) | (0.39) | (0.36) | (0.75) |
| 2021 | 12.77 | 0.32 | 4.02 | 4.34 | (0.34) | (0.14) | (0.48) |
| 2020 | 12.59 | 0.36 | 0.34 | 0.70 | (0.26) | (0.26) | (0.52) |
| 2019 | 11.79 | 0.22 | 1.05 | 1.27 | (0.23) | (0.24) | (0.47) |
| 2018 | 12.12 | 0.24 | (0.28) | (0.04) | (0.23) | (0.06) | (0.29) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 16.63 | 0.35 | (3.17) | (2.82) | (0.40) | (0.36) | (0.76) |
| 2021 | 12.78 | 0.32 | 4.01 | 4.33 | (0.34) | (0.14) | (0.48) |
| 2020 | 12.59 | 0.23 | 0.49 | 0.72 | (0.27) | (0.26) | (0.53) |
| 2019 | 11.80 | 0.11 | 1.15 | 1.26 | (0.23) | (0.24) | (0.47) |
| 2018 | 12.12 | 0.10 | (0.13) | (0.03) | (0.23) | (0.06) | (0.29) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Period from March 1, 2018, date operations commenced, through October 31, 2018.

<sup>(f)</sup>

Total return amounts have not been annualized.

<sup>(g)</sup>

Computed on an annualized basis.

<sup>(h)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $12.98 | (18.01)%<sup>(b)</sup> <br>| $70033<br> 0.26%<sup>(c)</sup> <br>| 0.28%<sup>(d)</sup> <br>| 2.05% | 16.3% |
| 16.55 | 34.17<sup>(b)</sup> <br>| 57162<br> 0.28<sup>(c)</sup> <br>| 0.30<sup>(d)</sup> <br>| 1.65 | 12.1 |
| 12.73 | 5.36<sup>(b)</sup> <br>| 25905<br> 0.30<sup>(c)</sup> <br>| 0.40<sup>(d)</sup> <br>| 1.39 | 26.5 |
| 12.56 | 11.25<sup>(b)</sup> <br>| 12754<br> 0.30<sup>(c)</sup> <br>| 0.69<sup>(d)</sup> <br>| 0.95 | 12.6 |
| 11.79 | (2.72)<sup>(b)(f)</sup> <br>| 3239<br> 0.30<sup>(c)(g)</sup> <br>| 3.46<sup>(d)(g)</sup> <br>| (0.12)<sup>(g)</sup> <br>| 12.1 |
| 13.05 | (17.85) | 39987<br> 0.05<sup>(h)</sup> <br>| – | 2.47 | 16.3 |
| 16.63 | 34.60 | 43480<br> 0.05<sup>(h)</sup> <br>| – | 2.04 | 12.1 |
| 12.77 | 5.58 | 28345<br> 0.05<sup>(h)</sup> <br>| – | 2.87 | 26.5 |
| 12.59 | 11.60 | 44432<br> 0.05<sup>(h)</sup> <br>| – | 1.88 | 12.6 |
| 11.79 | (0.38) | 38809<br> 0.05<sup>(h)</sup> <br>| – | 1.95 | 12.1 |
| 13.05 | (17.83) | 108293<br> 0.02<sup>(h)</sup> <br>| – | 2.45 | 16.3 |
| 16.63 | 34.53 | 105040<br> 0.02<sup>(h)</sup> <br>| – | 2.08 | 12.1 |
| 12.78 | 5.68 | 64444<br> 0.02<sup>(h)</sup> <br>| – | 1.91 | 26.5 |
| 12.59 | 11.52 | 45364<br> 0.02<sup>(h)</sup> <br>| – | 0.95 | 12.6 |
| 11.80 | (0.30) | 13369<br> 0.02<sup>(h)</sup> <br>| – | 0.81 | 12.1 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME HYBRID 2055 FUND** | **PRINCIPAL LIFETIME HYBRID 2055 FUND** | **PRINCIPAL LIFETIME HYBRID 2055 FUND** | **PRINCIPAL LIFETIME HYBRID 2055 FUND** | **PRINCIPAL LIFETIME HYBRID 2055 FUND** | **PRINCIPAL LIFETIME HYBRID 2055 FUND** | **PRINCIPAL LIFETIME HYBRID 2055 FUND** | **PRINCIPAL LIFETIME HYBRID 2055 FUND** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $16.92 | $0.29 | $(3.22) | $(2.93) | $(0.37) | $(0.31) | $(0.68) |
| 2021 | 12.86 | 0.21 | 4.28 | 4.49 | (0.30) | (0.13) | (0.43) |
| 2020 | 12.67 | 0.17 | 0.45 | 0.62 | (0.25) | (0.18) | (0.43) |
| 2019 | 11.91 | 0.09 | 1.16 | 1.25 | (0.23) | (0.26) | (0.49) |
| 2018<sup>(e)</sup> <br>| 12.27 | (0.01) | (0.35) | (0.36) | – | – | – |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 17.01 | 0.36 | (3.26) | (2.90) | (0.40) | (0.31) | (0.71) |
| 2021 | 12.92 | 0.28 | 4.27 | 4.55 | (0.33) | (0.13) | (0.46) |
| 2020 | 12.71 | 0.29 | 0.37 | 0.66 | (0.27) | (0.18) | (0.45) |
| 2019 | 11.93 | 0.20 | 1.08 | 1.28 | (0.24) | (0.26) | (0.50) |
| 2018 | 12.23 | 0.24 | (0.27) | (0.03) | (0.23) | (0.04) | (0.27) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 17.04 | 0.35 | (3.25) | (2.90) | (0.40) | (0.31) | (0.71) |
| 2021 | 12.94 | 0.30 | 4.26 | 4.56 | (0.33) | (0.13) | (0.46) |
| 2020 | 12.72 | 0.22 | 0.45 | 0.67 | (0.27) | (0.18) | (0.45) |
| 2019 | 11.94 | 0.09 | 1.19 | 1.28 | (0.24) | (0.26) | (0.50) |
| 2018 | 12.24 | 0.09 | (0.12) | (0.03) | (0.23) | (0.04) | (0.27) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Period from March 1, 2018, date operations commenced, through October 31, 2018.

<sup>(f)</sup>

Total return amounts have not been annualized.

<sup>(g)</sup>

Computed on an annualized basis.

<sup>(h)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $13.31 | (18.06)%<sup>(b)</sup> <br>| $32146<br> 0.30%<sup>(c)</sup> <br>| 0.39%<sup>(d)</sup> <br>| 1.96% | 13.4% |
| 16.92 | 35.47<sup>(b)</sup> <br>| 24427<br> 0.30<sup>(c)</sup> <br>| 0.44<sup>(d)</sup> <br>| 1.30 | 9.1 |
| 12.86 | 4.91<sup>(b)</sup> <br>| 9235<br> 0.30<sup>(c)</sup> <br>| 0.73<sup>(d)</sup> <br>| 1.34 | 14.2 |
| 12.67 | 11.29<sup>(b)</sup> <br>| 4097<br> 0.30<sup>(c)</sup> <br>| 1.63<sup>(d)</sup> <br>| 0.74 | 22.3 |
| 11.91 | (2.93)<sup>(b)(f)</sup> <br>| 1178<br> 0.30<sup>(c)(g)</sup> <br>| 10.17<sup>(d)(g)</sup> <br>| (0.12)<sup>(g)</sup> <br>| 13.8 |
| 13.40 | (17.82) | 24173<br> 0.05<sup>(h)</sup> <br>| – | 2.45 | 13.4 |
| 17.01 | 35.76 | 25049<br> 0.05<sup>(h)</sup> <br>| – | 1.74 | 9.1 |
| 12.92 | 5.19 | 13916<br> 0.05<sup>(h)</sup> <br>| – | 2.30 | 14.2 |
| 12.71 | 11.53 | 14697<br> 0.05<sup>(h)</sup> <br>| – | 1.68 | 22.3 |
| 11.93 | (0.30) | 13086<br> 0.05<sup>(h)</sup> <br>| – | 1.89 | 13.8 |
| 13.43 | (17.77) | 55493<br> 0.02<sup>(h)</sup> <br>| – | 2.39 | 13.4 |
| 17.04 | 35.79 | 50453<br> 0.02<sup>(h)</sup> <br>| – | 1.92 | 9.1 |
| 12.94 | 5.26 | 28721<br> 0.02<sup>(h)</sup> <br>| – | 1.78 | 14.2 |
| 12.72 | 11.52 | 17525<br> 0.02<sup>(h)</sup> <br>| – | 0.77 | 22.3 |
| 11.94 | (0.30) | 3741<br> 0.02<sup>(h)</sup> <br>| – | 0.68 | 13.8 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **PRINCIPAL LIFETIME HYBRID 2060 FUND** | **PRINCIPAL LIFETIME HYBRID 2060 FUND** | **PRINCIPAL LIFETIME HYBRID 2060 FUND** | **PRINCIPAL LIFETIME HYBRID 2060 FUND** | **PRINCIPAL LIFETIME HYBRID 2060 FUND** | **PRINCIPAL LIFETIME HYBRID 2060 FUND** | **PRINCIPAL LIFETIME HYBRID 2060 FUND** | **PRINCIPAL LIFETIME HYBRID 2060 FUND** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $17.18 | $0.27 | $(3.26) | $(2.99) | $(0.38) | $(0.25) | $(0.63) |
| 2021 | 12.97 | 0.19 | 4.44 | 4.63 | (0.30) | (0.12) | (0.42) |
| 2020 | 12.81 | 0.14 | 0.49 | 0.63 | (0.26) | (0.21) | (0.47) |
| 2019 | 11.91 | 0.11 | 1.17 | 1.28 | (0.24) | (0.14) | (0.38) |
| 2018<sup>(e)</sup> <br>| 12.28 | (0.01) | (0.36) | (0.37) | – | – | – |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 17.33 | 0.35 | (3.31) | (2.96) | (0.41) | (0.25) | (0.66) |
| 2021 | 13.07 | 0.24 | 4.45 | 4.69 | (0.31) | (0.12) | (0.43) |
| 2020 | 12.87 | 0.30 | 0.38 | 0.68 | (0.27) | (0.21) | (0.48) |
| 2019 | 11.94 | 0.19 | 1.12 | 1.31 | (0.24) | (0.14) | (0.38) |
| 2018 | 12.26 | 0.21 | (0.24) | (0.03) | (0.23) | (0.06) | (0.29) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 17.37 | 0.35 | (3.32) | (2.97) | (0.41) | (0.25) | (0.66) |
| 2021 | 13.09 | 0.28 | 4.43 | 4.71 | (0.31) | (0.12) | (0.43) |
| 2020 | 12.89 | 0.22 | 0.46 | 0.68 | (0.27) | (0.21) | (0.48) |
| 2019 | 11.95 | 0.11 | 1.21 | 1.32 | (0.24) | (0.14) | (0.38) |
| 2018 | 12.28 | 0.04 | (0.08) | (0.04) | (0.23) | (0.06) | (0.29) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Period from March 1, 2018, date operations commenced, through October 31, 2018.

<sup>(f)</sup>

Total return amounts have not been annualized.

<sup>(g)</sup>

Computed on an annualized basis.

<sup>(h)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $13.56 | (18.08)%<sup>(b)</sup> <br>| $15523<br> 0.30%<sup>(c)</sup> <br>| 0.58%<sup>(d)</sup> <br>| 1.79% | 13.8% |
| 17.18 | 36.20<sup>(b)</sup> <br>| 9593<br> 0.30<sup>(c)</sup> <br>| 0.82<sup>(d)</sup> <br>| 1.16 | 12.9 |
| 12.97 | 4.97<sup>(b)</sup> <br>| 3203<br> 0.30<sup>(c)</sup> <br>| 1.72<sup>(d)</sup> <br>| 1.15 | 31.4 |
| 12.81 | 11.30<sup>(b)</sup> <br>| 1426<br> 0.30<sup>(c)</sup> <br>| 3.92<sup>(d)</sup> <br>| 0.92 | 15.9 |
| 11.91 | (3.01)<sup>(b)(f)</sup> <br>| 442<br> 0.30<sup>(c)(g)</sup> <br>| 19.65<sup>(d)(g)</sup> <br>| (0.13)<sup>(g)</sup> <br>| 22.7 |
| 13.71 | (17.80) | 10035<br> 0.05<sup>(h)</sup> <br>| – | 2.35 | 13.8 |
| 17.33 | 36.46 | 9423<br> 0.05<sup>(h)</sup> <br>| – | 1.48 | 12.9 |
| 13.07 | 5.30 | 4268<br> 0.05<sup>(h)</sup> <br>| – | 2.39 | 31.4 |
| 12.87 | 11.53 | 5085<br> 0.05<sup>(h)</sup> <br>| – | 1.53 | 15.9 |
| 11.94 | (0.31) | 3282<br> 0.05<sup>(h)</sup> <br>| – | 1.71 | 22.7 |
| 13.74 | (17.81) | 24880<br> 0.02<sup>(h)</sup> <br>| – | 2.30 | 13.8 |
| 17.37 | 36.56 | 19773<br> 0.02<sup>(h)</sup> <br>| – | 1.70 | 12.9 |
| 13.09 | 5.29 | 9905<br> 0.02<sup>(h)</sup> <br>| – | 1.71 | 31.4 |
| 12.89 | 11.61 | 5924<br> 0.02<sup>(h)</sup> <br>| – | 0.93 | 15.9 |
| 11.95 | (0.39) | 1680<br> 0.02<sup>(h)</sup> <br>| – | 0.30 | 22.7 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Tax Return**<br> **of**<br> **Capital**<br> **Distribution**<br>|
| **PRINCIPAL LIFETIME HYBRID 2065 FUND** | **PRINCIPAL LIFETIME HYBRID 2065 FUND** | **PRINCIPAL LIFETIME HYBRID 2065 FUND** | **PRINCIPAL LIFETIME HYBRID 2065 FUND** | **PRINCIPAL LIFETIME HYBRID 2065 FUND** | **PRINCIPAL LIFETIME HYBRID 2065 FUND** | **PRINCIPAL LIFETIME HYBRID 2065 FUND** | **PRINCIPAL LIFETIME HYBRID 2065 FUND** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $15.22 | $0.30 | $(2.98) | $(2.68) | $(0.34) | $– | $– |
| 2021 | 11.36 | 0.17 | 3.95 | 4.12 | (0.25) | – | (0.01) |
| 2020 | 10.98 | 0.15 | 0.42 | 0.57 | (0.19) | – | – |
| 2019 | 10.20 | 0.15 | 0.96 | 1.11 | (0.27) | (0.06) | – |
| 2018<sup>(e)</sup> <br>| 10.52 | (0.01) | (0.31) | (0.32) | – | – | – |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 15.38 | 0.29 | (2.96) | (2.67) | (0.35) | – | – |
| 2021 | 11.45 | 0.19 | 4.00 | 4.19 | (0.25) | – | (0.01) |
| 2020 | 11.03 | 0.18 | 0.43 | 0.61 | (0.19) | – | – |
| 2019 | 10.22 | 0.12 | 1.02 | 1.14 | (0.27) | (0.06) | – |
| 2018 | 10.44 | 0.06 | (0.08) | (0.02) | (0.20) | – | – |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 15.39 | 0.28 | (2.95) | (2.67) | (0.35) | – | – |
| 2021 | 11.45 | 0.27 | 3.93 | 4.20 | (0.25) | – | (0.01) |
| 2020 | 11.03 | 0.17 | 0.44 | 0.61 | (0.19) | – | – |
| 2019 | 10.22 | 0.01 | 1.13 | 1.14 | (0.27) | (0.06) | – |
| 2018 | 10.44 | 0.02 | (0.04) | (0.02) | (0.20) | – | – |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Period from March 1, 2018, date operations commenced, through October 31, 2018.

<sup>(f)</sup>

Total return amounts have not been annualized.

<sup>(g)</sup>

Computed on an annualized basis.

<sup>(h)</sup>

Reflects Manager's contractual expense limit.

<sup>(i)</sup>

During the fiscal year ending October 31, 2019, the Class experienced a one-time gain of net $0.02/share as a result of a loss related to a large redemption and a subsequent reimbursement by the Advisor. If such gain had not been recognized, the total return amounts expressed herein would have been lower.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>| &nbsp;&nbsp;&nbsp;&nbsp; **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $(0.34) | $12.20 | (18.04)%<sup>(b)</sup> <br>| $5632<br> 0.30%<sup>(c)</sup> <br>| 0.89%<sup>(d)</sup> <br>| 2.26% | 28.4% |
| (0.26) | 15.22 | 36.67<sup>(b)</sup> <br>| 5381<br> 0.30<sup>(c)</sup> <br>| 1.24<sup>(d)</sup> <br>| 1.19 | 31.3 |
| (0.19) | 11.36 | 5.18<sup>(b)</sup> <br>| 1550<br> 0.30<sup>(c)</sup> <br>| 3.26<sup>(d)</sup> <br>| 1.34 | 65.7 |
| (0.33) | 10.98 | 11.42<sup>(b)</sup> <br>| 625<br> 0.30<sup>(c)</sup> <br>| 7.73<sup>(d)</sup> <br>| 1.44 | 143.3 |
| – | 10.20 | (3.04)<sup>(b)(f)</sup> <br>| 397<br> 0.30<sup>(c)(g)</sup> <br>| 16.07<sup>(d)(g)</sup> <br>| (0.12)<sup>(g)</sup> <br>| 14.2 |
| (0.35) | 12.36 | (17.81) | 1463<br> 0.05<sup>(h)</sup> <br>| – | 2.12 | 28.4 |
| (0.26) | 15.38 | 37.00 | 1312<br> 0.05<sup>(h)</sup> <br>| – | 1.29 | 31.3 |
| (0.19) | 11.45 | 5.52 | 360<br> 0.05<sup>(h)</sup> <br>| – | 1.59 | 65.7 |
| (0.33) | 11.03 | 11.70 | 264<br> 0.05<sup>(h)</sup> <br>| – | 1.19 | 143.3 |
| (0.20) | 10.22 | (0.28) | 86<br> 0.05<sup>(h)</sup> <br>| – | 0.56 | 14.2 |
| (0.35) | 12.37 | (17.80) | 5956<br> 0.02<sup>(h)</sup> <br>| – | 2.07 | 28.4 |
| (0.26) | 15.39 | 37.09 | 3340<br> 0.02<sup>(h)</sup> <br>| – | 1.91 | 31.3 |
| (0.19) | 11.45 | 5.52 | 1013<br> 0.02<sup>(h)</sup> <br>| – | 1.56 | 65.7 |
| (0.33) | 11.03 | 11.83<sup>(i)</sup> <br>| 434<br> 0.02<sup>(h)</sup> <br>| – | 0.13 | 143.3 |
| (0.20) | 10.22 | (0.28) | 3948<br> 0.02<sup>(h)</sup> <br>| – | 0.17 | 14.2 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **REAL ESTATE SECURITIES FUND** | **REAL ESTATE SECURITIES FUND** | **REAL ESTATE SECURITIES FUND** | **REAL ESTATE SECURITIES FUND** | **REAL ESTATE SECURITIES FUND** | **REAL ESTATE SECURITIES FUND** | **REAL ESTATE SECURITIES FUND** | **REAL ESTATE SECURITIES FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $33.58 | $0.32 | $(6.82) | $(6.50) | $(0.35) | $(1.11) | $(1.46) |
| 2021 | 23.53 | 0.26 | 10.41 | 10.67 | (0.30) | (0.32) | (0.62) |
| 2020 | 28.63 | 0.33 | (4.75) | (4.42) | (0.52) | (0.16) | (0.68) |
| 2019 | 23.20 | 0.31 | 6.02 | 6.33 | (0.33) | (0.57) | (0.90) |
| 2018 | 23.65 | 0.35 | 0.11 | 0.46 | (0.45) | (0.46) | (0.91) |
| **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** |
| 2022 | 32.93 | 0.08 | (6.68) | (6.60) | (0.11) | (1.11) | (1.22) |
| 2021 | 23.08 | 0.05 | 10.20 | 10.25 | (0.08) | (0.32) | (0.40) |
| 2020 | 28.08 | 0.14 | (4.67) | (4.53) | (0.31) | (0.16) | (0.47) |
| 2019 | 22.77 | 0.11 | 5.91 | 6.02 | (0.14) | (0.57) | (0.71) |
| 2018 | 23.23 | 0.17 | 0.10 | 0.27 | (0.27) | (0.46) | (0.73) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 32.49 | 0.35 | (6.59) | (6.24) | (0.39) | (1.11) | (1.50) |
| 2021 | 22.79 | 0.28 | 10.08 | 10.36 | (0.34) | (0.32) | (0.66) |
| 2020 | 27.76 | 0.36 | (4.62) | (4.26) | (0.55) | (0.16) | (0.71) |
| 2019 | 22.52 | 0.33 | 5.84 | 6.17 | (0.36) | (0.57) | (0.93) |
| 2018 | 22.99 | 0.37 | 0.11 | 0.48 | (0.49) | (0.46) | (0.95) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 33.61 | 0.42 | (6.82) | (6.40) | (0.45) | (1.11) | (1.56) |
| 2021 | 23.55 | 0.32 | 10.46 | 10.78 | (0.40) | (0.32) | (0.72) |
| 2020 | 28.66 | 0.42 | (4.77) | (4.35) | (0.60) | (0.16) | (0.76) |
| 2019 | 23.22 | 0.39 | 6.04 | 6.43 | (0.42) | (0.57) | (0.99) |
| 2018 | 23.67 | 0.43 | 0.12 | 0.55 | (0.54) | (0.46) | (1.00) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 33.15 | 0.17 | (6.72) | (6.55) | (0.20) | (1.11) | (1.31) |
| 2021 | 23.24 | 0.11 | 10.29 | 10.40 | (0.17) | (0.32) | (0.49) |
| 2020 | 28.26 | 0.23 | (4.70) | (4.47) | (0.39) | (0.16) | (0.55) |
| 2019 | 22.91 | 0.20 | 5.95 | 6.15 | (0.23) | (0.57) | (0.80) |
| 2018 | 23.36 | 0.23 | 0.12 | 0.35 | (0.34) | (0.46) | (0.80) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

<sup>(d)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(e)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(f)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $25.62 | (20.14)%<sup>(b)</sup> <br>| $283213 | 1.20% | –% | 1.05% | 18.7% |
| 33.58 | 45.87<sup>(b)</sup> <br>| 348715 | 1.21 | – | 0.88 | 31.0 |
| 23.53 | (15.56)<sup>(b)</sup> <br>| 286896 | 1.24 | – | 1.33 | 35.1 |
| 28.63 | 28.09<sup>(b)</sup> <br>| 370891 | 1.26 | – | 1.20 | 20.1 |
| 23.20 | 1.99<sup>(b)</sup> <br>| 277447 | 1.25 | – | 1.51 | 22.7 |
| 25.11 | (20.76)<sup>(b)</sup> <br>| 27677 | 1.99 | – | 0.25 | 18.7 |
| 32.93 | 44.73<sup>(b)(c)</sup> <br>| 40295 | 1.99 | – | 0.16 | 31.0 |
| 23.08 | (16.21)<sup>(b)(c)</sup> <br>| 34198 | 2.02 | – | 0.55 | 35.1 |
| 28.08 | 27.10<sup>(b)</sup> <br>| 53250 | 2.05 | – | 0.44 | 20.1 |
| 22.77 | 1.19<sup>(b)</sup> <br>| 47303 | 2.03 | – | 0.73 | 22.7 |
| 24.75 | (20.04)<sup>(b)(c)</sup> <br>| 139555 | 1.07<sup>(d)</sup> <br>| 1.09<sup>(e)</sup> <br>| 1.18 | 18.7 |
| 32.49 | 46.09<sup>(b)(c)</sup> <br>| 185393 | 1.08<sup>(d)</sup> <br>| 1.10<sup>(e)</sup> <br>| 1.00 | 31.0 |
| 22.79 | (15.45)<sup>(b)</sup> <br>| 134897 | 1.10<sup>(d)</sup> <br>| 1.13<sup>(e)</sup> <br>| 1.46 | 35.1 |
| 27.76 | 28.24<sup>(b)</sup> <br>| 181025 | 1.14<sup>(d)</sup> <br>| 1.17<sup>(e)</sup> <br>| 1.33 | 20.1 |
| 22.52 | 2.12<sup>(b)</sup> <br>| 150427 | 1.12<sup>(d)</sup> <br>| 1.15<sup>(e)</sup> <br>| 1.63 | 22.7 |
| 25.65 | (19.85) | 3291840 | 0.86<sup>(f)</sup> <br>| – | 1.39 | 18.7 |
| 33.61 | 46.34 | 3930727 | 0.89<sup>(f)</sup> <br>| – | 1.06 | 31.0 |
| 23.55 | (15.27) | 2160526 | 0.91<sup>(f)</sup> <br>| – | 1.66 | 35.1 |
| 28.66 | 28.54 | 2411326 | 0.91<sup>(f)</sup> <br>| – | 1.53 | 20.1 |
| 23.22 | 2.35 | 1540537 | 0.91<sup>(f)</sup> <br>| – | 1.83 | 22.7 |
| 25.29 | (20.49) | 2230 | 1.68 | – | 0.57 | 18.7 |
| 33.15 | 45.20 | 2955 | 1.68 | – | 0.37 | 31.0 |
| 23.24 | (15.94) | 2141 | 1.68 | – | 0.90 | 35.1 |
| 28.26 | 27.54 | 4368 | 1.69 | – | 0.79 | 20.1 |
| 22.91 | 1.53 | 3823 | 1.69 | – | 1.01 | 22.7 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **REAL ESTATE SECURITIES FUND** | **REAL ESTATE SECURITIES FUND** | **REAL ESTATE SECURITIES FUND** | **REAL ESTATE SECURITIES FUND** | **REAL ESTATE SECURITIES FUND** | **REAL ESTATE SECURITIES FUND** | **REAL ESTATE SECURITIES FUND** | **REAL ESTATE SECURITIES FUND** |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | $32.66 | $0.26 | $(6.62) | $(6.36) | $(0.30) | $(1.11) | $(1.41) |
| 2021 | 22.91 | 0.17 | 10.17 | 10.34 | (0.27) | (0.32) | (0.59) |
| 2020 | 27.89 | 0.29 | (4.63) | (4.34) | (0.48) | (0.16) | (0.64) |
| 2019 | 22.62 | 0.28 | 5.87 | 6.15 | (0.31) | (0.57) | (0.88) |
| 2018 | 23.08 | 0.31 | 0.11 | 0.42 | (0.42) | (0.46) | (0.88) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 32.26 | 0.32 | (6.54) | (6.22) | (0.36) | (1.11) | (1.47) |
| 2021 | 22.63 | 0.27 | 10.00 | 10.27 | (0.32) | (0.32) | (0.64) |
| 2020 | 27.57 | 0.34 | (4.59) | (4.25) | (0.53) | (0.16) | (0.69) |
| 2019 | 22.37 | 0.32 | 5.80 | 6.12 | (0.35) | (0.57) | (0.92) |
| 2018 | 22.84 | 0.34 | 0.12 | 0.46 | (0.47) | (0.46) | (0.93) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 32.34 | 0.35 | (6.56) | (6.21) | (0.39) | (1.11) | (1.50) |
| 2021 | 22.68 | 0.29 | 10.04 | 10.33 | (0.35) | (0.32) | (0.67) |
| 2020 | 27.63 | 0.37 | (4.59) | (4.22) | (0.57) | (0.16) | (0.73) |
| 2019 | 22.42 | 0.36 | 5.80 | 6.16 | (0.38) | (0.57) | (0.95) |
| 2018 | 22.89 | 0.38 | 0.11 | 0.49 | (0.50) | (0.46) | (0.96) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 33.60 | 0.45 | (6.83) | (6.38) | (0.47) | (1.11) | (1.58) |
| 2021 | 23.55 | 0.40 | 10.39 | 10.79 | (0.42) | (0.32) | (0.74) |
| 2020 | 28.66 | 0.44 | (4.76) | (4.32) | (0.63) | (0.16) | (0.79) |
| 2019 | 23.22 | 0.42 | 6.04 | 6.46 | (0.45) | (0.57) | (1.02) |
| 2018 | 23.67 | 0.47 | 0.09 | 0.56 | (0.55) | (0.46) | (1.01) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $24.89 | (20.26)% | $33778 | 1.37% | 0.88% | 18.7% |
| 32.66 | 45.63 | 46314 | 1.37 | 0.59 | 31.0 |
| 22.91 | (15.66) | 28733 | 1.37 | 1.19 | 35.1 |
| 27.89 | 27.96 | 43588 | 1.38 | 1.11 | 20.1 |
| 22.62 | 1.86 | 36751 | 1.38 | 1.36 | 22.7 |
| 24.57 | (20.10) | 22634 | 1.18 | 1.08 | 18.7 |
| 32.26 | 45.92 | 31739 | 1.18 | 0.95 | 31.0 |
| 22.63 | (15.51) | 24909 | 1.18 | 1.39 | 35.1 |
| 27.57 | 28.20 | 37265 | 1.19 | 1.32 | 20.1 |
| 22.37 | 2.04 | 39574 | 1.19 | 1.53 | 22.7 |
| 24.63 | (20.01) | 87270 | 1.06 | 1.19 | 18.7 |
| 32.34 | 46.10 | 114006 | 1.06 | 1.04 | 31.0 |
| 22.68 | (15.40) | 105340 | 1.06 | 1.51 | 35.1 |
| 27.63 | 28.34 | 149005 | 1.07 | 1.48 | 20.1 |
| 22.42 | 2.17 | 154730 | 1.07 | 1.69 | 22.7 |
| 25.64 | (19.79) | 1854169 | 0.80 | 1.46 | 18.7 |
| 33.60 | 46.43 | 2045827 | 0.80<sup>(b)</sup> <br>| 1.38 | 31.0 |
| 23.55 | (15.18) | 1643165 | 0.81<sup>(b)</sup> <br>| 1.75 | 35.1 |
| 28.66 | 28.67 | 1914954 | 0.81<sup>(b)</sup> <br>| 1.65 | 20.1 |
| 23.22 | 2.43 | 1395164 | 0.83<sup>(b)</sup> <br>| 2.01 | 22.7 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **SAM BALANCED PORTFOLIO** | **SAM BALANCED PORTFOLIO** | **SAM BALANCED PORTFOLIO** | **SAM BALANCED PORTFOLIO** | **SAM BALANCED PORTFOLIO** | **SAM BALANCED PORTFOLIO** | **SAM BALANCED PORTFOLIO** | **SAM BALANCED PORTFOLIO** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $18.95 | $0.32 | $(3.38) | $(3.06) | $(0.30) | $(1.43) | $(1.73) |
| 2021 | 15.64 | 0.20 | 3.58 | 3.78 | (0.19) | (0.28) | (0.47) |
| 2020 | 15.73 | 0.25 | 0.25 | 0.50 | (0.23) | (0.36) | (0.59) |
| 2019 | 15.50 | 0.30 | 1.30 | 1.60 | (0.32) | (1.05) | (1.37) |
| 2018 | 16.63 | 0.36 | (0.34) | 0.02 | (0.33) | (0.82) | (1.15) |
| **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** |
| 2022 | 18.53 | 0.20 | (3.30) | (3.10) | (0.19) | (1.43) | (1.62) |
| 2021 | 15.36 | 0.06 | 3.51 | 3.57 | (0.12) | (0.28) | (0.40) |
| 2020 | 15.46 | 0.14 | 0.24 | 0.38 | (0.12) | (0.36) | (0.48) |
| 2019 | 15.25 | 0.24 | 1.22 | 1.46 | (0.20) | (1.05) | (1.25) |
| 2018 | 16.39 | 0.24 | (0.34) | (0.10) | (0.22) | (0.82) | (1.04) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 18.20 | 0.32 | (3.22) | (2.90) | (0.33) | (1.43) | (1.76) |
| 2021 | 15.05 | 0.22 | 3.43 | 3.65 | (0.22) | (0.28) | (0.50) |
| 2020 | 15.15 | 0.27 | 0.25 | 0.52 | (0.26) | (0.36) | (0.62) |
| 2019 | 14.98 | 0.32 | 1.25 | 1.57 | (0.35) | (1.05) | (1.40) |
| 2018 | 16.12 | 0.37 | (0.33) | 0.04 | (0.36) | (0.82) | (1.18) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 18.60 | 0.37 | (3.32) | (2.95) | (0.36) | (1.43) | (1.79) |
| 2021 | 15.36 | 0.25 | 3.52 | 3.77 | (0.25) | (0.28) | (0.53) |
| 2020 | 15.45 | 0.29 | 0.26 | 0.55 | (0.28) | (0.36) | (0.64) |
| 2019 | 15.25 | 0.35 | 1.27 | 1.62 | (0.37) | (1.05) | (1.42) |
| 2018 | 16.39 | 0.41 | (0.34) | 0.07 | (0.39) | (0.82) | (1.21) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

<sup>(d)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(e)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $14.16 | (17.52)%<sup>(b)</sup> <br>| $1965970 | 0.60% | –% | 1.98% | 50.4% |
| 18.95 | 24.55<sup>(b)</sup> <br>| 2523065 | 0.59 | – | 1.11 | 31.3 |
| 15.64 | 3.26<sup>(b)</sup> <br>| 2060672 | 0.61 | – | 1.64 | 17.3 |
| 15.73 | 11.57<sup>(b)</sup> <br>| 2194735 | 0.62<sup>(c)</sup> <br>| – | 1.99 | 13.4 |
| 15.50 | 0.00<sup>(b)</sup> <br>| 1957610 | 0.61<sup>(c)</sup> <br>| – | 2.24 | 26.7 |
| 13.81 | (18.16)<sup>(b)</sup> <br>| 174776 | 1.38 | – | 1.26 | 50.4 |
| 18.53 | 23.57<sup>(b)</sup> <br>| 281665 | 1.37 | – | 0.37 | 31.3 |
| 15.36 | 2.48<sup>(b)</sup> <br>| 322006 | 1.38 | – | 0.90 | 17.3 |
| 15.46 | 10.77<sup>(b)</sup> <br>| 384622 | 1.38<sup>(c)</sup> <br>| – | 1.62 | 13.4 |
| 15.25 | (0.80)<sup>(b)</sup> <br>| 648980 | 1.36<sup>(c)</sup> <br>| – | 1.50 | 26.7 |
| 13.54 | (17.39)<sup>(b)</sup> <br>| 1158071 | 0.45<sup>(d)</sup> <br>| 0.47<sup>(e)</sup> <br>| 2.11 | 50.4 |
| 18.20 | 24.65<sup>(b)</sup> <br>| 1336353 | 0.44<sup>(d)</sup> <br>| 0.47<sup>(e)</sup> <br>| 1.25 | 31.3 |
| 15.05 | 3.51<sup>(b)</sup> <br>| 1071910 | 0.44<sup>(d)</sup> <br>| 0.47<sup>(e)</sup> <br>| 1.80 | 17.3 |
| 15.15 | 11.78<sup>(b)</sup> <br>| 1092386 | 0.44<sup>(d)</sup> <br>| 0.47<sup>(e)</sup> <br>| 2.21 | 13.4 |
| 14.98 | 0.12<sup>(b)</sup> <br>| 1032835 | 0.43<sup>(d)</sup> <br>| 0.46<sup>(e)</sup> <br>| 2.40 | 26.7 |
| 13.86 | (17.32) | 649784 | 0.29 | – | 2.34 | 50.4 |
| 18.60 | 24.93 | 896603 | 0.28 | – | 1.42 | 31.3 |
| 15.36 | 3.66 | 747015 | 0.30 | – | 1.95 | 17.3 |
| 15.45 | 11.93 | 778336 | 0.29<sup>(c)</sup> <br>| – | 2.36 | 13.4 |
| 15.25 | 0.26 | 725915 | 0.29<sup>(c)</sup> <br>| – | 2.58 | 26.7 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **SAM BALANCED PORTFOLIO** | **SAM BALANCED PORTFOLIO** | **SAM BALANCED PORTFOLIO** | **SAM BALANCED PORTFOLIO** | **SAM BALANCED PORTFOLIO** | **SAM BALANCED PORTFOLIO** | **SAM BALANCED PORTFOLIO** | **SAM BALANCED PORTFOLIO** |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | $18.53 | $0.22 | $(3.29) | $(3.07) | $(0.22) | $(1.43) | $(1.65) |
| 2021 | 15.35 | 0.10 | 3.50 | 3.60 | (0.14) | (0.28) | (0.42) |
| 2020 | 15.41 | 0.17 | 0.28 | 0.45 | (0.15) | (0.36) | (0.51) |
| 2019 | 15.21 | 0.23 | 1.26 | 1.49 | (0.24) | (1.05) | (1.29) |
| 2018 | 16.34 | 0.27 | (0.33) | (0.06) | (0.25) | (0.82) | (1.07) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 18.51 | 0.29 | (3.30) | (3.01) | (0.27) | (1.43) | (1.70) |
| 2021 | 15.31 | 0.15 | 3.50 | 3.65 | (0.17) | (0.28) | (0.45) |
| 2020 | 15.40 | 0.21 | 0.26 | 0.47 | (0.20) | (0.36) | (0.56) |
| 2019 | 15.20 | 0.28 | 1.25 | 1.53 | (0.28) | (1.05) | (1.33) |
| 2018 | 16.34 | 0.32 | (0.34) | (0.02) | (0.30) | (0.82) | (1.12) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 18.57 | 0.27 | (3.27) | (3.00) | (0.29) | (1.43) | (1.72) |
| 2021 | 15.34 | 0.19 | 3.51 | 3.70 | (0.19) | (0.28) | (0.47) |
| 2020 | 15.44 | 0.23 | 0.26 | 0.49 | (0.23) | (0.36) | (0.59) |
| 2019 | 15.23 | 0.33 | 1.24 | 1.57 | (0.31) | (1.05) | (1.36) |
| 2018 | 16.36 | 0.35 | (0.33) | 0.02 | (0.33) | (0.82) | (1.15) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 18.56 | 0.32 | (3.29) | (2.97) | (0.32) | (1.43) | (1.75) |
| 2021 | 15.33 | 0.20 | 3.52 | 3.72 | (0.21) | (0.28) | (0.49) |
| 2020 | 15.43 | 0.25 | 0.25 | 0.50 | (0.24) | (0.36) | (0.60) |
| 2019 | 15.23 | 0.32 | 1.26 | 1.58 | (0.33) | (1.05) | (1.38) |
| 2018 | 16.36 | 0.39 | (0.36) | 0.03 | (0.34) | (0.82) | (1.16) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $13.81 | (17.99)% | $2220 | 1.16% | 1.41% | 50.4% |
| 18.53 | 23.78 | 2607 | 1.15 | 0.58 | 31.3 |
| 15.35 | 2.93 | 2364 | 1.16 | 1.16 | 17.3 |
| 15.41 | 10.99 | 2901 | 1.16<sup>(b)</sup> <br>| 1.53 | 13.4 |
| 15.21 | (0.54) | 3126 | 1.16<sup>(b)</sup> <br>| 1.69 | 26.7 |
| 13.80 | (17.71) | 18236 | 0.85 | 1.83 | 50.4 |
| 18.51 | 24.17 | 27419 | 0.84 | 0.84 | 31.3 |
| 15.31 | 3.08 | 22790 | 0.85 | 1.42 | 17.3 |
| 15.40 | 11.35 | 24192 | 0.85<sup>(b)</sup> <br>| 1.90 | 13.4 |
| 15.20 | (0.30) | 28330 | 0.85<sup>(b)</sup> <br>| 2.05 | 26.7 |
| 13.85 | (17.56) | 9913 | 0.66 | 1.72 | 50.4 |
| 18.57 | 24.45 | 11619 | 0.65 | 1.09 | 31.3 |
| 15.34 | 3.20 | 12631 | 0.66 | 1.56 | 17.3 |
| 15.44 | 11.58 | 13455 | 0.66<sup>(b)</sup> <br>| 2.20 | 13.4 |
| 15.23 | (0.05) | 23180 | 0.66<sup>(b)</sup> <br>| 2.24 | 26.7 |
| 13.84 | (17.45) | 29709 | 0.54 | 2.05 | 50.4 |
| 18.56 | 24.60 | 37892 | 0.53 | 1.15 | 31.3 |
| 15.33 | 3.33 | 30863 | 0.54 | 1.69 | 17.3 |
| 15.43 | 11.68 | 34650 | 0.54<sup>(b)</sup> <br>| 2.15 | 13.4 |
| 15.23 | 0.07 | 35425 | 0.54<sup>(b)</sup> <br>| 2.49 | 26.7 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **SAM CONSERVATIVE BALANCED PORTFOLIO** | **SAM CONSERVATIVE BALANCED PORTFOLIO** | **SAM CONSERVATIVE BALANCED PORTFOLIO** | **SAM CONSERVATIVE BALANCED PORTFOLIO** | **SAM CONSERVATIVE BALANCED PORTFOLIO** | **SAM CONSERVATIVE BALANCED PORTFOLIO** | **SAM CONSERVATIVE BALANCED PORTFOLIO** | **SAM CONSERVATIVE BALANCED PORTFOLIO** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $13.95 | $0.26 | $(2.41) | $(2.15) | $(0.25) | $(0.70) | $(0.95) |
| 2021 | 12.17 | 0.19 | 1.92 | 2.11 | (0.19) | (0.14) | (0.33) |
| 2020 | 12.16 | 0.22 | 0.17 | 0.39 | (0.22) | (0.16) | (0.38) |
| 2019 | 11.86 | 0.27 | 0.86 | 1.13 | (0.29) | (0.54) | (0.83) |
| 2018 | 12.52 | 0.31 | (0.36) | (0.05) | (0.29) | (0.32) | (0.61) |
| **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** |
| 2022 | 13.78 | 0.16 | (2.38) | (2.22) | (0.15) | (0.70) | (0.85) |
| 2021 | 12.03 | 0.09 | 1.90 | 1.99 | (0.10) | (0.14) | (0.24) |
| 2020 | 12.02 | 0.14 | 0.16 | 0.30 | (0.13) | (0.16) | (0.29) |
| 2019 | 11.73 | 0.21 | 0.82 | 1.03 | (0.20) | (0.54) | (0.74) |
| 2018 | 12.39 | 0.21 | (0.35) | (0.14) | (0.20) | (0.32) | (0.52) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 13.74 | 0.27 | (2.37) | (2.10) | (0.27) | (0.70) | (0.97) |
| 2021 | 11.99 | 0.21 | 1.89 | 2.10 | (0.21) | (0.14) | (0.35) |
| 2020 | 11.99 | 0.24 | 0.16 | 0.40 | (0.24) | (0.16) | (0.40) |
| 2019 | 11.71 | 0.30 | 0.83 | 1.13 | (0.31) | (0.54) | (0.85) |
| 2018 | 12.37 | 0.32 | (0.35) | (0.03) | (0.31) | (0.32) | (0.63) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 13.79 | 0.29 | (2.38) | (2.09) | (0.29) | (0.70) | (0.99) |
| 2021 | 12.03 | 0.23 | 1.90 | 2.13 | (0.23) | (0.14) | (0.37) |
| 2020 | 12.04 | 0.26 | 0.15 | 0.41 | (0.26) | (0.16) | (0.42) |
| 2019 | 11.74 | 0.32 | 0.85 | 1.17 | (0.33) | (0.54) | (0.87) |
| 2018 | 12.41 | 0.35 | (0.37) | (0.02) | (0.33) | (0.32) | (0.65) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

<sup>(d)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(e)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $10.85 | (16.39)%<sup>(b)</sup> <br>| $521254 | 0.61% | –% | 2.11% | 55.3% |
| 13.95 | 17.49<sup>(b)</sup> <br>| 650919 | 0.60 | – | 1.41 | 29.9 |
| 12.17 | 3.28<sup>(b)</sup> <br>| 545903 | 0.61 | – | 1.87 | 19.4 |
| 12.16 | 10.22<sup>(b)</sup> <br>| 553362 | 0.63<sup>(c)</sup> <br>| – | 2.34 | 15.0 |
| 11.86 | (0.51)<sup>(b)</sup> <br>| 485084 | 0.62<sup>(c)</sup> <br>| – | 2.49 | 21.9 |
| 10.71 | (17.06)<sup>(b)</sup> <br>| 70882 | 1.38 | – | 1.37 | 55.3 |
| 13.78 | 16.66<sup>(b)</sup> <br>| 114412 | 1.37 | – | 0.66 | 29.9 |
| 12.03 | 2.50<sup>(b)</sup> <br>| 137283 | 1.37 | – | 1.14 | 19.4 |
| 12.02 | 9.37<sup>(b)</sup> <br>| 160672 | 1.38<sup>(c)</sup> <br>| – | 1.82 | 15.0 |
| 11.73 | (1.26)<sup>(b)</sup> <br>| 228910 | 1.37<sup>(c)</sup> <br>| – | 1.76 | 21.9 |
| 10.67 | (16.28)<sup>(b)</sup> <br>| 776202 | 0.45<sup>(d)</sup> <br>| 0.47<sup>(e)</sup> <br>| 2.25 | 55.3 |
| 13.74 | 17.69<sup>(b)</sup> <br>| 869500 | 0.44<sup>(d)</sup> <br>| 0.47<sup>(e)</sup> <br>| 1.56 | 29.9 |
| 11.99 | 3.43<sup>(b)</sup> <br>| 691410 | 0.44<sup>(d)</sup> <br>| 0.47<sup>(e)</sup> <br>| 2.03 | 19.4 |
| 11.99 | 10.39<sup>(b)</sup> <br>| 672096 | 0.44<sup>(d)</sup> <br>| 0.47<sup>(e)</sup> <br>| 2.55 | 15.0 |
| 11.71 | (0.33)<sup>(b)</sup> <br>| 614770 | 0.43<sup>(d)</sup> <br>| 0.46<sup>(e)</sup> <br>| 2.67 | 21.9 |
| 10.71 | (16.17) | 206697 | 0.30 | – | 2.43 | 55.3 |
| 13.79 | 17.89 | 268505 | 0.29 | – | 1.71 | 29.9 |
| 12.03 | 3.48 | 239975 | 0.30 | – | 2.20 | 19.4 |
| 12.04 | 10.70 | 267892 | 0.30<sup>(c)</sup> <br>| – | 2.77 | 15.0 |
| 11.74 | (0.26) | 292828 | 0.28<sup>(c)</sup> <br>| – | 2.86 | 21.9 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **SAM CONSERVATIVE BALANCED PORTFOLIO** | **SAM CONSERVATIVE BALANCED PORTFOLIO** | **SAM CONSERVATIVE BALANCED PORTFOLIO** | **SAM CONSERVATIVE BALANCED PORTFOLIO** | **SAM CONSERVATIVE BALANCED PORTFOLIO** | **SAM CONSERVATIVE BALANCED PORTFOLIO** | **SAM CONSERVATIVE BALANCED PORTFOLIO** | **SAM CONSERVATIVE BALANCED PORTFOLIO** |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | $13.74 | $0.19 | $(2.38) | $(2.19) | $(0.18) | $(0.70) | $(0.88) |
| 2021 | 11.98 | 0.13 | 1.88 | 2.01 | (0.11) | (0.14) | (0.25) |
| 2020 | 11.98 | 0.15 | 0.16 | 0.31 | (0.15) | (0.16) | (0.31) |
| 2019 | 11.70 | 0.21 | 0.84 | 1.05 | (0.23) | (0.54) | (0.77) |
| 2018 | 12.36 | 0.24 | (0.36) | (0.12) | (0.22) | (0.32) | (0.54) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 13.76 | 0.23 | (2.38) | (2.15) | (0.22) | (0.70) | (0.92) |
| 2021 | 12.01 | 0.16 | 1.89 | 2.05 | (0.16) | (0.14) | (0.30) |
| 2020 | 12.01 | 0.20 | 0.15 | 0.35 | (0.19) | (0.16) | (0.35) |
| 2019 | 11.72 | 0.25 | 0.84 | 1.09 | (0.26) | (0.54) | (0.80) |
| 2018 | 12.38 | 0.28 | (0.36) | (0.08) | (0.26) | (0.32) | (0.58) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 13.79 | 0.23 | (2.37) | (2.14) | (0.24) | (0.70) | (0.94) |
| 2021 | 12.03 | 0.18 | 1.90 | 2.08 | (0.18) | (0.14) | (0.32) |
| 2020 | 12.03 | 0.22 | 0.15 | 0.37 | (0.21) | (0.16) | (0.37) |
| 2019 | 11.73 | 0.28 | 0.84 | 1.12 | (0.28) | (0.54) | (0.82) |
| 2018 | 12.40 | 0.29 | (0.35) | (0.06) | (0.29) | (0.32) | (0.61) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 13.78 | 0.25 | (2.36) | (2.11) | (0.26) | (0.70) | (0.96) |
| 2021 | 12.02 | 0.19 | 1.91 | 2.10 | (0.20) | (0.14) | (0.34) |
| 2020 | 12.03 | 0.23 | 0.15 | 0.38 | (0.23) | (0.16) | (0.39) |
| 2019 | 11.73 | 0.28 | 0.86 | 1.14 | (0.30) | (0.54) | (0.84) |
| 2018 | 12.40 | 0.33 | (0.38) | (0.05) | (0.30) | (0.32) | (0.62) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $10.67 | (16.88)% | $1649 | 1.16% | 1.55% | 55.3% |
| 13.74 | 16.92 | 1956 | 1.15 | 0.96 | 29.9 |
| 11.98 | 2.66 | 2577 | 1.16 | 1.30 | 19.4 |
| 11.98 | 9.64 | 2572 | 1.16<sup>(b)</sup> <br>| 1.83 | 15.0 |
| 11.70 | (1.07) | 2331 | 1.15<sup>(b)</sup> <br>| 1.97 | 21.9 |
| 10.69 | (16.60) | 8497 | 0.85 | 1.89 | 55.3 |
| 13.76 | 17.18 | 11129 | 0.84 | 1.18 | 29.9 |
| 12.01 | 2.97 | 12167 | 0.85 | 1.69 | 19.4 |
| 12.01 | 10.03 | 14217 | 0.85<sup>(b)</sup> <br>| 2.13 | 15.0 |
| 11.72 | (0.74) | 11837 | 0.84<sup>(b)</sup> <br>| 2.30 | 21.9 |
| 10.71 | (16.47) | 10647 | 0.66 | 1.94 | 55.3 |
| 13.79 | 17.47 | 11214 | 0.65 | 1.35 | 29.9 |
| 12.03 | 3.18 | 11717 | 0.66 | 1.82 | 19.4 |
| 12.03 | 10.25 | 11989 | 0.66<sup>(b)</sup> <br>| 2.39 | 15.0 |
| 11.73 | (0.63) | 20282 | 0.65<sup>(b)</sup> <br>| 2.41 | 21.9 |
| 10.71 | (16.31) | 19091 | 0.54 | 2.11 | 55.3 |
| 13.78 | 17.61 | 20710 | 0.53 | 1.46 | 29.9 |
| 12.02 | 3.22 | 17108 | 0.54 | 1.94 | 19.4 |
| 12.03 | 10.44 | 18302 | 0.54<sup>(b)</sup> <br>| 2.45 | 15.0 |
| 11.73 | (0.51) | 17177 | 0.53<sup>(b)</sup> <br>| 2.72 | 21.9 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **SAM CONSERVATIVE GROWTH PORTFOLIO** | **SAM CONSERVATIVE GROWTH PORTFOLIO** | **SAM CONSERVATIVE GROWTH PORTFOLIO** | **SAM CONSERVATIVE GROWTH PORTFOLIO** | **SAM CONSERVATIVE GROWTH PORTFOLIO** | **SAM CONSERVATIVE GROWTH PORTFOLIO** | **SAM CONSERVATIVE GROWTH PORTFOLIO** | **SAM CONSERVATIVE GROWTH PORTFOLIO** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $22.20 | $0.33 | $(4.18) | $(3.85) | $(0.26) | $(1.45) | $(1.71) |
| 2021 | 17.41 | 0.17 | 5.27 | 5.44 | (0.24) | (0.41) | (0.65) |
| 2020 | 17.55 | 0.25 | 0.30 | 0.55 | (0.25) | (0.44) | (0.69) |
| 2019 | 17.76 | 0.25 | 1.62 | 1.87 | (0.26) | (1.82) | (2.08) |
| 2018 | 19.24 | 0.39 | (0.33) | 0.06 | (0.31) | (1.23) | (1.54) |
| **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** |
| 2022 | 20.21 | 0.18 | (3.82) | (3.64) | (0.09) | (1.45) | (1.54) |
| 2021 | 15.91 | 0.01 | 4.81 | 4.82 | (0.11) | (0.41) | (0.52) |
| 2020 | 16.09 | 0.11 | 0.26 | 0.37 | (0.11) | (0.44) | (0.55) |
| 2019 | 16.45 | 0.21 | 1.40 | 1.61 | (0.15) | (1.82) | (1.97) |
| 2018 | 17.93 | 0.24 | (0.31) | (0.07) | (0.18) | (1.23) | (1.41) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 21.26 | 0.34 | (3.99) | (3.65) | (0.29) | (1.45) | (1.74) |
| 2021 | 16.70 | 0.19 | 5.05 | 5.24 | (0.27) | (0.41) | (0.68) |
| 2020 | 16.87 | 0.26 | 0.29 | 0.55 | (0.28) | (0.44) | (0.72) |
| 2019 | 17.16 | 0.28 | 1.54 | 1.82 | (0.29) | (1.82) | (2.11) |
| 2018 | 18.64 | 0.40 | (0.31) | 0.09 | (0.34) | (1.23) | (1.57) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 21.64 | 0.38 | (4.07) | (3.69) | (0.32) | (1.45) | (1.77) |
| 2021 | 16.98 | 0.23 | 5.14 | 5.37 | (0.30) | (0.41) | (0.71) |
| 2020 | 17.14 | 0.30 | 0.29 | 0.59 | (0.31) | (0.44) | (0.75) |
| 2019 | 17.40 | 0.31 | 1.57 | 1.88 | (0.32) | (1.82) | (2.14) |
| 2018 | 18.88 | 0.45 | (0.34) | 0.11 | (0.36) | (1.23) | (1.59) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

<sup>(d)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(e)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $16.64 | (18.70)%<sup>(b)</sup> <br>| $1508702 | 0.60% | –% | 1.76% | 52.4% |
| 22.20 | 31.84<sup>(b)</sup> <br>| 1979014 | 0.59 | – | 0.81 | 34.3 |
| 17.41 | 3.11<sup>(b)</sup> <br>| 1570186 | 0.61 | – | 1.46 | 16.2 |
| 17.55 | 12.74<sup>(b)</sup> <br>| 1683156 | 0.63<sup>(c)</sup> <br>| – | 1.50 | 10.9 |
| 17.76 | 0.12<sup>(b)</sup> <br>| 1432165 | 0.61<sup>(c)</sup> <br>| – | 2.10 | 33.8 |
| 15.03 | (19.39)<sup>(b)</sup> <br>| 121737 | 1.37 | – | 1.05 | 52.4 |
| 20.21 | 30.82<sup>(b)</sup> <br>| 190605 | 1.38 | – | 0.07 | 34.3 |
| 15.91 | 2.28<sup>(b)</sup> <br>| 204754 | 1.37 | – | 0.74 | 16.2 |
| 16.09 | 11.92<sup>(b)</sup> <br>| 242084 | 1.39<sup>(c)</sup> <br>| – | 1.36 | 10.9 |
| 16.45 | (0.59)<sup>(b)</sup> <br>| 480699 | 1.36<sup>(c)</sup> <br>| – | 1.38 | 33.8 |
| 15.87 | (18.59)<sup>(b)</sup> <br>| 636126 | 0.45<sup>(d)</sup> <br>| 0.47<sup>(e)</sup> <br>| 1.90 | 52.4 |
| 21.26 | 32.04<sup>(b)</sup> <br>| 778913 | 0.45<sup>(d)</sup> <br>| 0.47<sup>(e)</sup> <br>| 0.95 | 34.3 |
| 16.70 | 3.25<sup>(b)</sup> <br>| 575978 | 0.45<sup>(d)</sup> <br>| 0.48<sup>(e)</sup> <br>| 1.61 | 16.2 |
| 16.87 | 12.96<sup>(b)</sup> <br>| 582101 | 0.45<sup>(d)</sup> <br>| 0.48<sup>(e)</sup> <br>| 1.76 | 10.9 |
| 17.16 | 0.30<sup>(b)</sup> <br>| 543902 | 0.44<sup>(d)</sup> <br>| 0.47<sup>(e)</sup> <br>| 2.26 | 33.8 |
| 16.18 | (18.48) | 395979 | 0.29 | – | 2.08 | 52.4 |
| 21.64 | 32.27 | 539619 | 0.29 | – | 1.12 | 34.3 |
| 16.98 | 3.40 | 430895 | 0.30 | – | 1.79 | 16.2 |
| 17.14 | 13.14 | 474902 | 0.30<sup>(c)</sup> <br>| – | 1.92 | 10.9 |
| 17.40 | 0.44 | 456425 | 0.29<sup>(c)</sup> <br>| – | 2.45 | 33.8 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **SAM CONSERVATIVE GROWTH PORTFOLIO** | **SAM CONSERVATIVE GROWTH PORTFOLIO** | **SAM CONSERVATIVE GROWTH PORTFOLIO** | **SAM CONSERVATIVE GROWTH PORTFOLIO** | **SAM CONSERVATIVE GROWTH PORTFOLIO** | **SAM CONSERVATIVE GROWTH PORTFOLIO** | **SAM CONSERVATIVE GROWTH PORTFOLIO** | **SAM CONSERVATIVE GROWTH PORTFOLIO** |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | $21.22 | $0.21 | $(3.99) | $(3.78) | $(0.16) | $(1.45) | $(1.61) |
| 2021 | 16.70 | 0.03 | 5.08 | 5.11 | (0.18) | (0.41) | (0.59) |
| 2020 | 16.89 | 0.15 | 0.27 | 0.42 | (0.17) | (0.44) | (0.61) |
| 2019 | 17.10 | 0.18 | 1.55 | 1.73 | (0.12) | (1.82) | (1.94) |
| 2018 | 18.54 | 0.31 | (0.34) | (0.03) | (0.18) | (1.23) | (1.41) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 21.20 | 0.28 | (4.01) | (3.73) | (0.20) | (1.45) | (1.65) |
| 2021 | 16.65 | 0.11 | 5.05 | 5.16 | (0.20) | (0.41) | (0.61) |
| 2020 | 16.82 | 0.22 | 0.26 | 0.48 | (0.21) | (0.44) | (0.65) |
| 2019 | 17.11 | 0.24 | 1.52 | 1.76 | (0.23) | (1.82) | (2.05) |
| 2018 | 18.59 | 0.32 | (0.31) | 0.01 | (0.26) | (1.23) | (1.49) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 21.54 | 0.26 | (4.02) | (3.76) | (0.21) | (1.45) | (1.66) |
| 2021 | 16.91 | 0.14 | 5.13 | 5.27 | (0.23) | (0.41) | (0.64) |
| 2020 | 17.05 | 0.23 | 0.29 | 0.52 | (0.22) | (0.44) | (0.66) |
| 2019 | 17.31 | 0.26 | 1.55 | 1.81 | (0.25) | (1.82) | (2.07) |
| 2018 | 18.77 | 0.41 | (0.35) | 0.06 | (0.29) | (1.23) | (1.52) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 21.46 | 0.34 | (4.04) | (3.70) | (0.28) | (1.45) | (1.73) |
| 2021 | 16.85 | 0.17 | 5.10 | 5.27 | (0.25) | (0.41) | (0.66) |
| 2020 | 17.01 | 0.25 | 0.30 | 0.55 | (0.27) | (0.44) | (0.71) |
| 2019 | 17.28 | 0.27 | 1.55 | 1.82 | (0.27) | (1.82) | (2.09) |
| 2018 | 18.74 | 0.45 | (0.37) | 0.08 | (0.31) | (1.23) | (1.54) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $15.83 | (19.18)% | $1557 | 1.16% | 1.16% | 52.4% |
| 21.22 | 31.17 | 1839 | 1.15 | 0.16 | 34.3 |
| 16.70 | 2.47 | 1098 | 1.16 | 0.90 | 16.2 |
| 16.89 | 12.16 | 1131 | 1.16<sup>(b)</sup> <br>| 1.13 | 10.9 |
| 17.10 | (0.38) | 1140 | 1.16<sup>(b)</sup> <br>| 1.74 | 33.8 |
| 15.82 | (18.95) | 10909 | 0.85 | 1.58 | 52.4 |
| 21.20 | 31.58 | 15823 | 0.84 | 0.56 | 34.3 |
| 16.65 | 2.81 | 13833 | 0.85 | 1.35 | 16.2 |
| 16.82 | 12.52 | 17303 | 0.85<sup>(b)</sup> <br>| 1.49 | 10.9 |
| 17.11 | (0.11) | 20976 | 0.85<sup>(b)</sup> <br>| 1.79 | 33.8 |
| 16.12 | (18.80) | 5754 | 0.66 | 1.44 | 52.4 |
| 21.54 | 31.78 | 8882 | 0.65 | 0.69 | 34.3 |
| 16.91 | 3.02 | 6076 | 0.66 | 1.40 | 16.2 |
| 17.05 | 12.70 | 6943 | 0.66<sup>(b)</sup> <br>| 1.61 | 10.9 |
| 17.31 | 0.16 | 10768 | 0.66<sup>(b)</sup> <br>| 2.24 | 33.8 |
| 16.03 | (18.66) | 23881 | 0.54 | 1.86 | 52.4 |
| 21.46 | 31.91 | 30075 | 0.53 | 0.86 | 34.3 |
| 16.85 | 3.18 | 22124 | 0.54 | 1.54 | 16.2 |
| 17.01 | 12.81 | 26719 | 0.54<sup>(b)</sup> <br>| 1.66 | 10.9 |
| 17.28 | 0.25 | 25539 | 0.54<sup>(b)</sup> <br>| 2.49 | 33.8 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **SAM FLEXIBLE INCOME PORTFOLIO** | **SAM FLEXIBLE INCOME PORTFOLIO** | **SAM FLEXIBLE INCOME PORTFOLIO** | **SAM FLEXIBLE INCOME PORTFOLIO** | **SAM FLEXIBLE INCOME PORTFOLIO** | **SAM FLEXIBLE INCOME PORTFOLIO** | **SAM FLEXIBLE INCOME PORTFOLIO** | **SAM FLEXIBLE INCOME PORTFOLIO** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $13.56 | $0.28 | $(2.25) | $(1.97) | $(0.28) | $(0.53) | $(0.81) |
| 2021 | 12.38 | 0.23 | 1.29 | 1.52 | (0.23) | (0.11) | (0.34) |
| 2020 | 12.40 | 0.25 | 0.03 | 0.28 | (0.25) | (0.05) | (0.30) |
| 2019 | 12.08 | 0.34 | 0.79 | 1.13 | (0.34) | (0.47) | (0.81) |
| 2018 | 12.54 | 0.34 | (0.38) | (0.04) | (0.34) | (0.08) | (0.42) |
| **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** |
| 2022 | 13.41 | 0.19 | (2.22) | (2.03) | (0.19) | (0.53) | (0.72) |
| 2021 | 12.24 | 0.13 | 1.27 | 1.40 | (0.12) | (0.11) | (0.23) |
| 2020 | 12.26 | 0.16 | 0.03 | 0.19 | (0.16) | (0.05) | (0.21) |
| 2019 | 11.96 | 0.25 | 0.77 | 1.02 | (0.25) | (0.47) | (0.72) |
| 2018 | 12.42 | 0.25 | (0.38) | (0.13) | (0.25) | (0.08) | (0.33) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 13.43 | 0.29 | (2.22) | (1.93) | (0.30) | (0.53) | (0.83) |
| 2021 | 12.26 | 0.25 | 1.28 | 1.53 | (0.25) | (0.11) | (0.36) |
| 2020 | 12.29 | 0.27 | 0.02 | 0.29 | (0.27) | (0.05) | (0.32) |
| 2019 | 11.98 | 0.36 | 0.78 | 1.14 | (0.36) | (0.47) | (0.83) |
| 2018 | 12.44 | 0.36 | (0.38) | (0.02) | (0.36) | (0.08) | (0.44) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 13.51 | 0.31 | (2.23) | (1.92) | (0.32) | (0.53) | (0.85) |
| 2021 | 12.34 | 0.26 | 1.28 | 1.54 | (0.26) | (0.11) | (0.37) |
| 2020 | 12.36 | 0.28 | 0.03 | 0.31 | (0.28) | (0.05) | (0.33) |
| 2019 | 12.04 | 0.37 | 0.79 | 1.16 | (0.37) | (0.47) | (0.84) |
| 2018 | 12.50 | 0.38 | (0.38) | – | (0.38) | (0.08) | (0.46) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

<sup>(d)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(e)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $10.78 | (15.28)%<sup>(b)</sup> <br>| $1032096 | 0.60% | –% | 2.32% | 57.3% |
| 13.56 | 12.40<sup>(b)</sup> <br>| 1289067 | 0.59 | – | 1.72 | 29.3 |
| 12.38 | 2.30<sup>(b)</sup> <br>| 1085818 | 0.60 | – | 2.04 | 35.9 |
| 12.40 | 9.93<sup>(b)</sup> <br>| 1057769 | 0.61<sup>(c)</sup> <br>| – | 2.82 | 11.1 |
| 12.08 | (0.33)<sup>(b)</sup> <br>| 917357 | 0.60<sup>(c)</sup> <br>| – | 2.77 | 22.6 |
| 10.66 | (15.90)<sup>(b)</sup> <br>| 135741 | 1.38 | – | 1.57 | 57.3 |
| 13.41 | 11.58<sup>(b)</sup> <br>| 205567 | 1.36 | – | 0.96 | 29.3 |
| 12.24 | 1.54<sup>(b)</sup> <br>| 237410 | 1.37 | – | 1.29 | 35.9 |
| 12.26 | 9.02<sup>(b)</sup> <br>| 265220 | 1.37<sup>(c)</sup> <br>| – | 2.13 | 11.1 |
| 11.96 | (1.09)<sup>(b)</sup> <br>| 325369 | 1.37<sup>(c)</sup> <br>| – | 2.01 | 22.6 |
| 10.67 | (15.14)<sup>(b)</sup> <br>| 1086460 | 0.44<sup>(d)</sup> <br>| 0.46<sup>(e)</sup> <br>| 2.48 | 57.3 |
| 13.43 | 12.61<sup>(b)</sup> <br>| 1321469 | 0.44<sup>(d)</sup> <br>| 0.46<sup>(e)</sup> <br>| 1.88 | 29.3 |
| 12.26 | 2.42<sup>(b)</sup> <br>| 1132937 | 0.43<sup>(d)</sup> <br>| 0.46<sup>(e)</sup> <br>| 2.22 | 35.9 |
| 12.29 | 10.13<sup>(b)</sup> <br>| 1139080 | 0.43<sup>(d)</sup> <br>| 0.46<sup>(e)</sup> <br>| 3.01 | 11.1 |
| 11.98 | (0.15)<sup>(b)</sup> <br>| 1085370 | 0.43<sup>(d)</sup> <br>| 0.46<sup>(e)</sup> <br>| 2.95 | 22.6 |
| 10.74 | (15.01) | 173873 | 0.31 | – | 2.62 | 57.3 |
| 13.51 | 12.68 | 236379 | 0.31 | – | 2.00 | 29.3 |
| 12.34 | 2.60 | 200957 | 0.32 | – | 2.33 | 35.9 |
| 12.36 | 10.29 | 220903 | 0.32<sup>(c)</sup> <br>| – | 3.12 | 11.1 |
| 12.04 | (0.03) | 214476 | 0.30<sup>(c)</sup> <br>| – | 3.06 | 22.6 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **SAM FLEXIBLE INCOME PORTFOLIO** | **SAM FLEXIBLE INCOME PORTFOLIO** | **SAM FLEXIBLE INCOME PORTFOLIO** | **SAM FLEXIBLE INCOME PORTFOLIO** | **SAM FLEXIBLE INCOME PORTFOLIO** | **SAM FLEXIBLE INCOME PORTFOLIO** | **SAM FLEXIBLE INCOME PORTFOLIO** | **SAM FLEXIBLE INCOME PORTFOLIO** |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | $13.44 | $0.21 | $(2.23) | $(2.02) | $(0.21) | $(0.53) | $(0.74) |
| 2021 | 12.27 | 0.15 | 1.28 | 1.43 | (0.15) | (0.11) | (0.26) |
| 2020 | 12.29 | 0.19 | 0.02 | 0.21 | (0.18) | (0.05) | (0.23) |
| 2019 | 11.98 | 0.27 | 0.79 | 1.06 | (0.28) | (0.47) | (0.75) |
| 2018 | 12.45 | 0.27 | (0.38) | (0.11) | (0.28) | (0.08) | (0.36) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 13.48 | 0.25 | (2.24) | (1.99) | (0.25) | (0.53) | (0.78) |
| 2021 | 12.31 | 0.19 | 1.28 | 1.47 | (0.19) | (0.11) | (0.30) |
| 2020 | 12.33 | 0.22 | 0.03 | 0.25 | (0.22) | (0.05) | (0.27) |
| 2019 | 12.02 | 0.31 | 0.78 | 1.09 | (0.31) | (0.47) | (0.78) |
| 2018 | 12.48 | 0.31 | (0.38) | (0.07) | (0.31) | (0.08) | (0.39) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 13.50 | 0.27 | (2.24) | (1.97) | (0.27) | (0.53) | (0.80) |
| 2021 | 12.32 | 0.22 | 1.29 | 1.51 | (0.22) | (0.11) | (0.33) |
| 2020 | 12.34 | 0.24 | 0.03 | 0.27 | (0.24) | (0.05) | (0.29) |
| 2019 | 12.03 | 0.34 | 0.77 | 1.11 | (0.33) | (0.47) | (0.80) |
| 2018 | 12.48 | 0.33 | (0.36) | (0.03) | (0.34) | (0.08) | (0.42) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 13.48 | 0.28 | (2.22) | (1.94) | (0.29) | (0.53) | (0.82) |
| 2021 | 12.31 | 0.23 | 1.28 | 1.51 | (0.23) | (0.11) | (0.34) |
| 2020 | 12.33 | 0.26 | 0.03 | 0.29 | (0.26) | (0.05) | (0.31) |
| 2019 | 12.02 | 0.35 | 0.78 | 1.13 | (0.35) | (0.47) | (0.82) |
| 2018 | 12.48 | 0.35 | (0.38) | (0.03) | (0.35) | (0.08) | (0.43) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $10.68 | (15.73)% | $2079 | 1.16% | 1.74% | 57.3% |
| 13.44 | 11.81 | 2432 | 1.15 | 1.16 | 29.3 |
| 12.27 | 1.74 | 2307 | 1.16 | 1.53 | 35.9 |
| 12.29 | 9.37 | 3225 | 1.16<sup>(b)</sup> <br>| 2.23 | 11.1 |
| 11.98 | (0.95) | 1746 | 1.16<sup>(b)</sup> <br>| 2.20 | 22.6 |
| 10.71 | (15.51) | 3569 | 0.85 | 2.07 | 57.3 |
| 13.48 | 12.11 | 5117 | 0.84 | 1.48 | 29.3 |
| 12.31 | 2.07 | 4729 | 0.85 | 1.81 | 35.9 |
| 12.33 | 9.64 | 5088 | 0.85<sup>(b)</sup> <br>| 2.60 | 11.1 |
| 12.02 | (0.57) | 5380 | 0.85<sup>(b)</sup> <br>| 2.52 | 22.6 |
| 10.73 | (15.33) | 2843 | 0.66 | 2.26 | 57.3 |
| 13.50 | 12.39 | 5108 | 0.65 | 1.65 | 29.3 |
| 12.32 | 2.26 | 4664 | 0.66 | 1.94 | 35.9 |
| 12.34 | 9.82 | 3019 | 0.66<sup>(b)</sup> <br>| 2.87 | 11.1 |
| 12.03 | (0.30) | 5359 | 0.66<sup>(b)</sup> <br>| 2.71 | 22.6 |
| 10.72 | (15.16) | 8059 | 0.54 | 2.38 | 57.3 |
| 13.48 | 12.46 | 10225 | 0.53 | 1.78 | 29.3 |
| 12.31 | 2.38 | 7970 | 0.54 | 2.10 | 35.9 |
| 12.33 | 9.97 | 8353 | 0.54<sup>(b)</sup> <br>| 2.93 | 11.1 |
| 12.02 | (0.26) | 11471 | 0.54<sup>(b)</sup> <br>| 2.88 | 22.6 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **SAM STRATEGIC GROWTH PORTFOLIO** | **SAM STRATEGIC GROWTH PORTFOLIO** | **SAM STRATEGIC GROWTH PORTFOLIO** | **SAM STRATEGIC GROWTH PORTFOLIO** | **SAM STRATEGIC GROWTH PORTFOLIO** | **SAM STRATEGIC GROWTH PORTFOLIO** | **SAM STRATEGIC GROWTH PORTFOLIO** | **SAM STRATEGIC GROWTH PORTFOLIO** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $24.57 | $0.34 | $(4.93) | $(4.59) | $(0.34) | $(1.40) | $(1.74) |
| 2021 | 18.57 | 0.17 | 6.67 | 6.84 | (0.17) | (0.67) | (0.84) |
| 2020 | 18.67 | 0.21 | 0.53 | 0.74 | (0.25) | (0.59) | (0.84) |
| 2019 | 19.81 | 0.22 | 1.86 | 2.08 | (0.33) | (2.89) | (3.22) |
| 2018 | 21.35 | 0.44 | (0.58) | (0.14) | (0.34) | (1.06) | (1.40) |
| **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** |
| 2022 | 21.60 | 0.17 | (4.33) | (4.16) | (0.16) | (1.40) | (1.56) |
| 2021 | 16.43 | 0.01 | 5.87 | 5.88 | (0.04) | (0.67) | (0.71) |
| 2020 | 16.60 | 0.07 | 0.46 | 0.53 | (0.11) | (0.59) | (0.70) |
| 2019 | 17.98 | 0.18 | 1.54 | 1.72 | (0.21) | (2.89) | (3.10) |
| 2018 | 19.52 | 0.26 | (0.53) | (0.27) | (0.21) | (1.06) | (1.27) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 23.51 | 0.35 | (4.70) | (4.35) | (0.37) | (1.40) | (1.77) |
| 2021 | 17.80 | 0.19 | 6.39 | 6.58 | (0.20) | (0.67) | (0.87) |
| 2020 | 17.93 | 0.23 | 0.51 | 0.74 | (0.28) | (0.59) | (0.87) |
| 2019 | 19.17 | 0.26 | 1.76 | 2.02 | (0.37) | (2.89) | (3.26) |
| 2018 | 20.70 | 0.46 | (0.55) | (0.09) | (0.38) | (1.06) | (1.44) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 23.88 | 0.40 | (4.78) | (4.38) | (0.41) | (1.40) | (1.81) |
| 2021 | 18.06 | 0.23 | 6.49 | 6.72 | (0.23) | (0.67) | (0.90) |
| 2020 | 18.18 | 0.26 | 0.52 | 0.78 | (0.31) | (0.59) | (0.90) |
| 2019 | 19.39 | 0.29 | 1.78 | 2.07 | (0.39) | (2.89) | (3.28) |
| 2018 | 20.93 | 0.50 | (0.57) | (0.07) | (0.41) | (1.06) | (1.47) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

<sup>(d)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(e)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $18.24 | (19.99)%<sup>(b)</sup> <br>| $1066233 | 0.61% | –% | 1.67% | 49.5% |
| 24.57 | 37.68<sup>(b)</sup> <br>| 1401140 | 0.60 | – | 0.75 | 26.3 |
| 18.57 | 3.93<sup>(b)</sup> <br>| 1069149 | 0.62 | – | 1.15 | 19.9 |
| 18.67 | 13.89<sup>(b)</sup> <br>| 1114994 | 0.64<sup>(c)</sup> <br>| – | 1.26 | 19.9 |
| 19.81 | (0.86)<sup>(b)</sup> <br>| 943803 | 0.63<sup>(c)</sup> <br>| – | 2.10 | 49.4 |
| 15.88 | (20.59)<sup>(b)</sup> <br>| 77837 | 1.41 | – | 0.94 | 49.5 |
| 21.60 | 36.56<sup>(b)</sup> <br>| 115136 | 1.39 | – | 0.04 | 26.3 |
| 16.43 | 3.14<sup>(b)</sup> <br>| 120962 | 1.40 | – | 0.41 | 19.9 |
| 16.60 | 13.01<sup>(b)</sup> <br>| 139759 | 1.42<sup>(c)</sup> <br>| – | 1.12 | 19.9 |
| 17.98 | (1.63)<sup>(b)</sup> <br>| 284797 | 1.38<sup>(c)</sup> <br>| – | 1.37 | 49.4 |
| 17.39 | (19.87)<sup>(b)</sup> <br>| 334032 | 0.47<sup>(d)</sup> <br>| 0.49<sup>(e)</sup> <br>| 1.78 | 49.5 |
| 23.51 | 37.88<sup>(b)</sup> <br>| 410297 | 0.46<sup>(d)</sup> <br>| 0.48<sup>(e)</sup> <br>| 0.88 | 26.3 |
| 17.80 | 4.11<sup>(b)</sup> <br>| 295433 | 0.46<sup>(d)</sup> <br>| 0.49<sup>(e)</sup> <br>| 1.31 | 19.9 |
| 17.93 | 14.07<sup>(b)</sup> <br>| 308330 | 0.47<sup>(d)</sup> <br>| 0.50<sup>(e)</sup> <br>| 1.50 | 19.9 |
| 19.17 | (0.67)<sup>(b)</sup> <br>| 286265 | 0.45<sup>(d)</sup> <br>| 0.48<sup>(e)</sup> <br>| 2.27 | 49.4 |
| 17.69 | (19.73) | 271120 | 0.29 | – | 1.99 | 49.5 |
| 23.88 | 38.14 | 362447 | 0.29 | – | 1.05 | 26.3 |
| 18.06 | 4.27 | 260585 | 0.30 | – | 1.47 | 19.9 |
| 18.18 | 14.26 | 278919 | 0.30<sup>(c)</sup> <br>| – | 1.66 | 19.9 |
| 19.39 | (0.55) | 258545 | 0.29<sup>(c)</sup> <br>| – | 2.44 | 49.4 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **SAM STRATEGIC GROWTH PORTFOLIO** | **SAM STRATEGIC GROWTH PORTFOLIO** | **SAM STRATEGIC GROWTH PORTFOLIO** | **SAM STRATEGIC GROWTH PORTFOLIO** | **SAM STRATEGIC GROWTH PORTFOLIO** | **SAM STRATEGIC GROWTH PORTFOLIO** | **SAM STRATEGIC GROWTH PORTFOLIO** | **SAM STRATEGIC GROWTH PORTFOLIO** |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | $23.67 | $0.22 | $(4.77) | $(4.55) | $(0.20) | $(1.40) | $(1.60) |
| 2021 | 17.81 | 0.03 | 6.44 | 6.47 | – | (0.61) | (0.61) |
| 2020 | 17.99 | 0.04 | 0.52 | 0.56 | (0.15) | (0.59) | (0.74) |
| 2019 | 19.11 | 0.19 | 1.74 | 1.93 | (0.16) | (2.89) | (3.05) |
| 2018 | 20.54 | 0.32 | (0.57) | (0.25) | (0.12) | (1.06) | (1.18) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 23.43 | 0.32 | (4.74) | (4.42) | (0.30) | (1.40) | (1.70) |
| 2021 | 17.72 | 0.08 | 6.40 | 6.48 | (0.10) | (0.67) | (0.77) |
| 2020 | 17.86 | 0.18 | 0.48 | 0.66 | (0.21) | (0.59) | (0.80) |
| 2019 | 19.09 | 0.23 | 1.73 | 1.96 | (0.30) | (2.89) | (3.19) |
| 2018 | 20.62 | 0.39 | (0.57) | (0.18) | (0.29) | (1.06) | (1.35) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 23.66 | 0.29 | (4.74) | (4.45) | (0.23) | (1.40) | (1.63) |
| 2021 | 17.91 | 0.18 | 6.40 | 6.58 | (0.16) | (0.67) | (0.83) |
| 2020 | 18.02 | 0.19 | 0.52 | 0.71 | (0.23) | (0.59) | (0.82) |
| 2019 | 19.23 | 0.27 | 1.73 | 2.00 | (0.32) | (2.89) | (3.21) |
| 2018 | 20.78 | 0.43 | (0.58) | (0.15) | (0.34) | (1.06) | (1.40) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 23.56 | 0.33 | (4.70) | (4.37) | (0.36) | (1.40) | (1.76) |
| 2021 | 17.84 | 0.17 | 6.40 | 6.57 | (0.18) | (0.67) | (0.85) |
| 2020 | 17.97 | 0.22 | 0.51 | 0.73 | (0.27) | (0.59) | (0.86) |
| 2019 | 19.20 | 0.24 | 1.77 | 2.01 | (0.35) | (2.89) | (3.24) |
| 2018 | 20.73 | 0.47 | (0.59) | (0.12) | (0.35) | (1.06) | (1.41) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Reflects Manager's contractual expense limit.

<sup>(c)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $17.52 | (20.45)% | $319 | 1.16% | 1.11% | 49.5% |
| 23.67 | 36.96 | 420 | 1.15 | 0.15 | 26.3 |
| 17.81 | 3.07 | 344 | 1.16 | 0.22 | 19.9 |
| 17.99 | 13.32 | 413 | 1.16<sup>(b)</sup> <br>| 1.08 | 19.9 |
| 19.11 | (1.43) | 593 | 1.16<sup>(b)</sup> <br>| 1.60 | 49.4 |
| 17.31 | (20.20) | 6564 | 0.85 | 1.60 | 49.5 |
| 23.43 | 37.38 | 9782 | 0.84 | 0.36 | 26.3 |
| 17.72 | 3.66 | 6440 | 0.85 | 1.05 | 19.9 |
| 17.86 | 13.69 | 7794 | 0.85<sup>(b)</sup> <br>| 1.34 | 19.9 |
| 19.09 | (1.10) | 10910 | 0.85<sup>(b)</sup> <br>| 1.94 | 49.4 |
| 17.58 | (20.05) | 3013 | 0.66 | 1.49 | 49.5 |
| 23.66 | 37.63 | 4069 | 0.65 | 0.84 | 26.3 |
| 17.91 | 3.91 | 8355 | 0.66 | 1.10 | 19.9 |
| 18.02 | 13.88 | 9416 | 0.66<sup>(b)</sup> <br>| 1.55 | 19.9 |
| 19.23 | (0.92) | 13132 | 0.66<sup>(b)</sup> <br>| 2.12 | 49.4 |
| 17.43 | (19.95)<sup>(c)</sup> <br>| 19246 | 0.54 | 1.70 | 49.5 |
| 23.56 | 37.80<sup>(c)</sup> <br>| 24908 | 0.53 | 0.77 | 26.3 |
| 17.84 | 4.04 | 15052 | 0.54 | 1.28 | 19.9 |
| 17.97 | 13.99 | 16847 | 0.54<sup>(b)</sup> <br>| 1.39 | 19.9 |
| 19.20 | (0.79) | 14622 | 0.54<sup>(b)</sup> <br>| 2.31 | 49.4 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **SHORT-TERM INCOME FUND** | **SHORT-TERM INCOME FUND** | **SHORT-TERM INCOME FUND** | **SHORT-TERM INCOME FUND** | **SHORT-TERM INCOME FUND** | **SHORT-TERM INCOME FUND** | **SHORT-TERM INCOME FUND** | **SHORT-TERM INCOME FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $12.32 | $0.16 | $(0.86) | $(0.70) | $(0.16) | $(0.06) | $(0.22) |
| 2021 | 12.54 | 0.11 | (0.13) | (0.02) | (0.11) | (0.09) | (0.20) |
| 2020 | 12.32 | 0.20 | 0.22 | 0.42 | (0.20) | – | (0.20) |
| 2019 | 12.01 | 0.27 | 0.31 | 0.58 | (0.27) | – | (0.27) |
| 2018 | 12.21 | 0.24 | (0.20) | 0.04 | (0.24) | – | (0.24) |
| **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** |
| 2022 | 12.32 | 0.05 | (0.86) | (0.81) | (0.05) | (0.06) | (0.11) |
| 2021 | 12.55 | – | (0.13) | (0.13) | (0.01) | (0.09) | (0.10) |
| 2020 | 12.33 | 0.09 | 0.22 | 0.31 | (0.09) | – | (0.09) |
| 2019 | 12.01 | 0.16 | 0.32 | 0.48 | (0.16) | – | (0.16) |
| 2018 | 12.21 | 0.13 | (0.20) | (0.07) | (0.13) | – | (0.13) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 12.31 | 0.16 | (0.86) | (0.70) | (0.16) | (0.06) | (0.22) |
| 2021 | 12.53 | 0.12 | (0.13) | (0.01) | (0.12) | (0.09) | (0.21) |
| 2020 | 12.31 | 0.20 | 0.23 | 0.43 | (0.21) | – | (0.21) |
| 2019 | 12.00 | 0.27 | 0.31 | 0.58 | (0.27) | – | (0.27) |
| 2018 | 12.20 | 0.24 | (0.20) | 0.04 | (0.24) | – | (0.24) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 12.31 | 0.18 | (0.85) | (0.67) | (0.19) | (0.06) | (0.25) |
| 2021 | 12.53 | 0.14 | (0.13) | 0.01 | (0.14) | (0.09) | (0.23) |
| 2020 | 12.31 | 0.23 | 0.22 | 0.45 | (0.23) | – | (0.23) |
| 2019 | 12.00 | 0.30 | 0.31 | 0.61 | (0.30) | – | (0.30) |
| 2018 | 12.20 | 0.27 | (0.20) | 0.07 | (0.27) | – | (0.27) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $11.40 | (5.73)%<sup>(b)</sup> <br>| $353052 | 0.65% | –% | 1.32% | 28.4% |
| 12.32 | (0.17)<sup>(b)</sup> <br>| 470326 | 0.67 | – | 0.89 | 52.4 |
| 12.54 | 3.47<sup>(b)</sup> <br>| 445243 | 0.67 | – | 1.59 | 76.0 |
| 12.32 | 4.88<sup>(b)</sup> <br>| 310526 | 0.69 | – | 2.22 | 52.4 |
| 12.01 | 0.31<sup>(b)</sup> <br>| 292426 | 0.67 | – | 1.98 | 57.3 |
| 11.40 | (6.61)<sup>(b)</sup> <br>| 23675 | 1.57 | – | 0.38 | 28.4 |
| 12.32 | (1.09)<sup>(b)</sup> <br>| 34992 | 1.56 | – | 0.02 | 52.4 |
| 12.55 | 2.55<sup>(b)</sup> <br>| 57463 | 1.56 | – | 0.72 | 76.0 |
| 12.33 | 4.03<sup>(b)</sup> <br>| 51869 | 1.59 | – | 1.33 | 52.4 |
| 12.01 | (0.59)<sup>(b)</sup> <br>| 63169 | 1.57 | – | 1.07 | 57.3 |
| 11.39 | (5.72)<sup>(b)</sup> <br>| 127563 | 0.62<sup>(c)</sup> <br>| 0.64<sup>(d)</sup> <br>| 1.36 | 28.4 |
| 12.31 | (0.13)<sup>(b)</sup> <br>| 154334 | 0.62<sup>(c)</sup> <br>| 0.65<sup>(d)</sup> <br>| 0.94 | 52.4 |
| 12.53 | 3.49<sup>(b)</sup> <br>| 168395 | 0.65<sup>(c)</sup> <br>| 0.68<sup>(d)</sup> <br>| 1.62 | 76.0 |
| 12.31 | 4.91<sup>(b)</sup> <br>| 131795 | 0.67<sup>(c)</sup> <br>| 0.70<sup>(d)</sup> <br>| 2.24 | 52.4 |
| 12.00 | 0.33<sup>(b)</sup> <br>| 123856 | 0.66<sup>(c)</sup> <br>| 0.69<sup>(d)</sup> <br>| 1.99 | 57.3 |
| 11.39 | (5.53) | 2654929 | 0.43<sup>(e)</sup> <br>| – | 1.53 | 28.4 |
| 12.31 | 0.06 | 3531191 | 0.43<sup>(e)</sup> <br>| – | 1.14 | 52.4 |
| 12.53 | 3.72 | 5210042 | 0.43<sup>(e)</sup> <br>| – | 1.85 | 76.0 |
| 12.31 | 5.16 | 4736982 | 0.43<sup>(e)</sup> <br>| – | 2.48 | 52.4 |
| 12.00 | 0.56 | 4271619 | 0.43<sup>(e)</sup> <br>| – | 2.23 | 57.3 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **SHORT-TERM INCOME FUND** | **SHORT-TERM INCOME FUND** | **SHORT-TERM INCOME FUND** | **SHORT-TERM INCOME FUND** | **SHORT-TERM INCOME FUND** | **SHORT-TERM INCOME FUND** | **SHORT-TERM INCOME FUND** | **SHORT-TERM INCOME FUND** |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | $12.31 | $0.09 | $(0.86) | $(0.77) | $(0.09) | $(0.06) | $(0.15) |
| 2021 | 12.54 | 0.04 | (0.14) | (0.10) | (0.04) | (0.09) | (0.13) |
| 2020 | 12.32 | 0.12 | 0.23 | 0.35 | (0.13) | – | (0.13) |
| 2019 | 12.01 | 0.20 | 0.31 | 0.51 | (0.20) | – | (0.20) |
| 2018 | 12.20 | 0.17 | (0.20) | (0.03) | (0.16) | – | (0.16) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 12.32 | 0.12 | (0.86) | (0.74) | (0.12) | (0.06) | (0.18) |
| 2021 | 12.54 | 0.07 | (0.12) | (0.05) | (0.08) | (0.09) | (0.17) |
| 2020 | 12.32 | 0.16 | 0.22 | 0.38 | (0.16) | – | (0.16) |
| 2019 | 12.01 | 0.23 | 0.32 | 0.55 | (0.24) | – | (0.24) |
| 2018 | 12.21 | 0.20 | (0.20) | – | (0.20) | – | (0.20) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 12.31 | 0.15 | (0.87) | (0.72) | (0.14) | (0.06) | (0.20) |
| 2021 | 12.53 | 0.09 | (0.12) | (0.03) | (0.10) | (0.09) | (0.19) |
| 2020 | 12.31 | 0.18 | 0.23 | 0.41 | (0.19) | – | (0.19) |
| 2019 | 12.00 | 0.26 | 0.31 | 0.57 | (0.26) | – | (0.26) |
| 2018 | 12.20 | 0.22 | (0.20) | 0.02 | (0.22) | – | (0.22) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 12.32 | 0.16 | (0.86) | (0.70) | (0.16) | (0.06) | (0.22) |
| 2021 | 12.54 | 0.11 | (0.13) | (0.02) | (0.11) | (0.09) | (0.20) |
| 2020 | 12.33 | 0.20 | 0.21 | 0.41 | (0.20) | – | (0.20) |
| 2019 | 12.01 | 0.27 | 0.32 | 0.59 | (0.27) | – | (0.27) |
| 2018 | 12.21 | 0.24 | (0.20) | 0.04 | (0.24) | – | (0.24) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $11.39 | (6.33)% | $591 | 1.27% | 0.75% | 28.4% |
| 12.31 | (0.86) | 532 | 1.29 | 0.28 | 52.4 |
| 12.54 | 2.83 | 998 | 1.29<sup>(b)</sup> <br>| 0.94 | 76.0 |
| 12.32 | 4.26 | 429 | 1.29<sup>(b)</sup> <br>| 1.62 | 52.4 |
| 12.01 | (0.23) | 841 | 1.29<sup>(b)</sup> <br>| 1.38 | 57.3 |
| 11.40 | (6.03) | 9841 | 0.96 | 1.02 | 28.4 |
| 12.32 | (0.48) | 10268 | 0.98 | 0.58 | 52.4 |
| 12.54 | 3.15 | 14361 | 0.98<sup>(b)</sup> <br>| 1.30 | 76.0 |
| 12.32 | 4.58 | 13832 | 0.98<sup>(b)</sup> <br>| 1.93 | 52.4 |
| 12.01 | 0.00 | 14259 | 0.98<sup>(b)</sup> <br>| 1.67 | 57.3 |
| 11.39 | (5.86) | 13727 | 0.77<sup>(b)</sup> <br>| 1.23 | 28.4 |
| 12.31 | (0.29) | 14111 | 0.79<sup>(b)</sup> <br>| 0.76 | 52.4 |
| 12.53 | 3.35 | 6435 | 0.79<sup>(b)</sup> <br>| 1.45 | 76.0 |
| 12.31 | 4.78 | 3816 | 0.79<sup>(b)</sup> <br>| 2.12 | 52.4 |
| 12.00 | 0.19 | 8394 | 0.79<sup>(b)</sup> <br>| 1.86 | 57.3 |
| 11.40 | (5.74) | 9125 | 0.65 | 1.31 | 28.4 |
| 12.32 | (0.17) | 11377 | 0.67 | 0.90 | 52.4 |
| 12.54 | 3.38 | 12410 | 0.67<sup>(b)</sup> <br>| 1.62 | 76.0 |
| 12.33 | 4.99 | 14704 | 0.67<sup>(b)</sup> <br>| 2.23 | 52.4 |
| 12.01 | 0.31 | 9938 | 0.67<sup>(b)</sup> <br>| 1.98 | 57.3 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **SMALLCAP FUND** | **SMALLCAP FUND** | **SMALLCAP FUND** | **SMALLCAP FUND** | **SMALLCAP FUND** | **SMALLCAP FUND** | **SMALLCAP FUND** | **SMALLCAP FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $30.71 | $(0.02) | $(5.59) | $(5.61) | $– | $(2.13) | $(2.13) |
| 2021 | 20.37 | (0.10) | 11.00 | 10.90 | – | (0.56) | (0.56) |
| 2020 | 20.79 | – | 0.79 | 0.79 | – | (1.21) | (1.21) |
| 2019 | 22.60 | 0.01 | 1.09 | 1.10 | (0.01) | (2.90) | (2.91) |
| 2018 | 24.13 | 0.01 | 0.43 | 0.44 | – | (1.97) | (1.97) |
| **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** |
| 2022 | 26.12 | (0.19) | (4.71) | (4.90) | – | (2.13) | (2.13) |
| 2021 | 17.54 | (0.28) | 9.42 | 9.14 | – | (0.56) | (0.56) |
| 2020 | 18.20 | (0.14) | 0.69 | 0.55 | – | (1.21) | (1.21) |
| 2019 | 20.33 | (0.14) | 0.91 | 0.77 | – | (2.90) | (2.90) |
| 2018 | 22.06 | (0.16) | 0.40 | 0.24 | – | (1.97) | (1.97) |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | 29.11 | 0.02 | (5.28) | (5.26) | – | (2.13) | (2.13) |
| 2021 | 19.30 | (0.05) | 10.42 | 10.37 | – | (0.56) | (0.56) |
| 2020 | 19.77 | 0.02 | 0.76 | 0.78 | (0.04) | (1.21) | (1.25) |
| 2019 | 21.67 | 0.04 | 1.01 | 1.05 | (0.05) | (2.90) | (2.95) |
| 2018 | 23.18 | 0.05 | 0.42 | 0.47 | (0.01) | (1.97) | (1.98) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 33.60 | 0.06 | (6.14) | (6.08) | – | (2.13) | (2.13) |
| 2021 | 22.21 | (0.03) | 12.01 | 11.98 | – | (0.59) | (0.59) |
| 2020 | 22.56 | 0.06 | 0.88 | 0.94 | (0.08) | (1.21) | (1.29) |
| 2019 | 24.26 | 0.09 | 1.20 | 1.29 | (0.09) | (2.90) | (2.99) |
| 2018 | 25.74 | 0.11 | 0.44 | 0.55 | (0.06) | (1.97) | (2.03) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 28.35 | (0.12) | (5.13) | (5.25) | – | (2.13) | (2.13) |
| 2021 | 18.94 | (0.22) | 10.19 | 9.97 | – | (0.56) | (0.56) |
| 2020 | 19.49 | (0.09) | 0.75 | 0.66 | – | (1.21) | (1.21) |
| 2019 | 21.46 | (0.07) | 1.00 | 0.93 | – | (2.90) | (2.90) |
| 2018 | 23.11 | (0.09) | 0.41 | 0.32 | – | (1.97) | (1.97) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit.

<sup>(d)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(e)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(f)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $22.97 | (19.05)%<sup>(b)</sup> <br>| $253893 | 1.14% | –% | (0.07)% | 18.7% |
| 30.71 | 54.21<sup>(b)</sup> <br>| 348066 | 1.12 | – | (0.35) | 38.0 |
| 20.37 | 3.71<sup>(b)</sup> <br>| 202896 | 1.18 | – | (0.03) | 41.6 |
| 20.79 | 7.38<sup>(b)</sup> <br>| 218037 | 1.22 | – | 0.04 | 40.0 |
| 22.60 | 1.73<sup>(b)</sup> <br>| 218500 | 1.18 | – | 0.06 | 51.6 |
| 19.09 | (19.73)<sup>(b)</sup> <br>| 19971 | 2.00 | – | (0.94) | 18.7 |
| 26.12 | 52.89<sup>(b)</sup> <br>| 29570 | 1.96 | – | (1.18) | 38.0 |
| 17.54 | 2.85<sup>(b)</sup> <br>| 21727 | 2.03 | – | (0.87) | 41.6 |
| 18.20 | 6.44<sup>(b)</sup> <br>| 26671 | 2.04<sup>(c)</sup> <br>| – | (0.77) | 40.0 |
| 20.33 | 0.93<sup>(b)</sup> <br>| 34505 | 1.98<sup>(c)</sup> <br>| – | (0.75) | 51.6 |
| 21.72 | (18.88)<sup>(b)</sup> <br>| 193888 | 0.99<sup>(d)</sup> <br>| 1.01<sup>(e)</sup> <br>| 0.08 | 18.7 |
| 29.11 | 54.39<sup>(b)(f)</sup> <br>| 259335 | 0.98<sup>(d)</sup> <br>| 1.00<sup>(e)</sup> <br>| (0.20) | 38.0 |
| 19.30 | 3.88<sup>(b)(f)</sup> <br>| 175489 | 1.03<sup>(d)</sup> <br>| 1.06<sup>(e)</sup> <br>| 0.12 | 41.6 |
| 19.77 | 7.50<sup>(b)</sup> <br>| 189772 | 1.06<sup>(d)</sup> <br>| 1.09<sup>(e)</sup> <br>| 0.20 | 40.0 |
| 21.67 | 1.93<sup>(b)</sup> <br>| 191225 | 1.02<sup>(d)</sup> <br>| 1.05<sup>(e)</sup> <br>| 0.22 | 51.6 |
| 25.39 | (18.79) | 411643 | 0.85<sup>(c)</sup> <br>| – | 0.21 | 18.7 |
| 33.60 | 54.64 | 577259 | 0.85<sup>(c)</sup> <br>| – | (0.09) | 38.0 |
| 22.21 | 4.07 | 147591 | 0.85<sup>(c)</sup> <br>| – | 0.28 | 41.6 |
| 22.56 | 7.72<sup>(f)</sup> <br>| 107829 | 0.85<sup>(c)</sup> <br>| – | 0.41 | 40.0 |
| 24.26 | 2.12<sup>(f)</sup> <br>| 91484 | 0.81<sup>(c)</sup> <br>| – | 0.42 | 51.6 |
| 20.97 | (19.42)<sup>(f)</sup> <br>| 1948 | 1.62 | – | (0.56) | 18.7 |
| 28.35 | 53.43<sup>(f)</sup> <br>| 2847 | 1.62 | – | (0.84) | 38.0 |
| 18.94 | 3.24 | 1825 | 1.63 | – | (0.48) | 41.6 |
| 19.49 | 6.91 | 2407 | 1.63 | – | (0.37) | 40.0 |
| 21.46 | 1.25 | 2403 | 1.63 | – | (0.38) | 51.6 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **SMALLCAP FUND** | **SMALLCAP FUND** | **SMALLCAP FUND** | **SMALLCAP FUND** | **SMALLCAP FUND** | **SMALLCAP FUND** | **SMALLCAP FUND** | **SMALLCAP FUND** |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | $30.51 | $(0.06) | $(5.54) | $(5.60) | $– | $(2.13) | $(2.13) |
| 2021 | 20.28 | (0.15) | 10.94 | 10.79 | – | (0.56) | (0.56) |
| 2020 | 20.72 | (0.03) | 0.80 | 0.77 | – | (1.21) | (1.21) |
| 2019 | 22.55 | (0.01) | 1.08 | 1.07 | – | (2.90) | (2.90) |
| 2018 | 24.12 | (0.02) | 0.42 | 0.40 | – | (1.97) | (1.97) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 32.15 | (0.01) | (5.86) | (5.87) | – | (2.13) | (2.13) |
| 2021 | 21.30 | (0.10) | 11.51 | 11.41 | – | (0.56) | (0.56) |
| 2020 | 21.69 | – | 0.84 | 0.84 | (0.02) | (1.21) | (1.23) |
| 2019 | 23.46 | 0.03 | 1.14 | 1.17 | (0.04) | (2.90) | (2.94) |
| 2018 | 24.96 | 0.03 | 0.44 | 0.47 | – | (1.97) | (1.97) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 33.14 | 0.02 | (6.05) | (6.03) | – | (2.13) | (2.13) |
| 2021 | 21.91 | (0.07) | 11.86 | 11.79 | – | (0.56) | (0.56) |
| 2020 | 22.28 | 0.03 | 0.86 | 0.89 | (0.05) | (1.21) | (1.26) |
| 2019 | 24.00 | 0.06 | 1.17 | 1.23 | (0.05) | (2.90) | (2.95) |
| 2018 | 25.47 | 0.06 | 0.45 | 0.51 | (0.01) | (1.97) | (1.98) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 33.61 | 0.08 | (6.14) | (6.06) | – | (2.13) | (2.13) |
| 2021 | 22.21 | – | 12.01 | 12.01 | – | (0.61) | (0.61) |
| 2020 | 22.56 | 0.08 | 0.88 | 0.96 | (0.10) | (1.21) | (1.31) |
| 2019 | 24.25 | 0.11 | 1.20 | 1.31 | (0.10) | (2.90) | (3.00) |
| 2018 | 25.72 | 0.11 | 0.46 | 0.57 | (0.07) | (1.97) | (2.04) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Reflects Manager's contractual expense limit.

<sup>(c)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $22.78 | (19.15)% | $14119 | 1.31% | (0.24)% | 18.7% |
| 30.51 | 53.90 | 15267 | 1.31 | (0.54) | 38.0 |
| 20.28 | 3.60 | 7119 | 1.32 | (0.17) | 41.6 |
| 20.72 | 7.23 | 9247 | 1.32 | (0.06) | 40.0 |
| 22.55 | 1.55 | 11352 | 1.32 | (0.07) | 51.6 |
| 24.15 | (19.00) | 40043 | 1.12 | (0.06) | 18.7 |
| 32.15 | 54.23 | 50467 | 1.12 | (0.35) | 38.0 |
| 21.30 | 3.78 | 28740 | 1.13 | 0.01 | 41.6 |
| 21.69 | 7.42 | 25604 | 1.13 | 0.12 | 40.0 |
| 23.46 | 1.80 | 18401 | 1.13 | 0.10 | 51.6 |
| 24.98 | (18.91) | 50244 | 1.00 | 0.09 | 18.7 |
| 33.14 | 54.46 | 44522 | 1.00 | (0.23) | 38.0 |
| 21.91 | 3.88 | 26842 | 1.01 | 0.13 | 41.6 |
| 22.28 | 7.55 | 23288 | 1.01 | 0.26 | 40.0 |
| 24.00 | 1.92 | 22556 | 1.01 | 0.22 | 51.6 |
| 25.42 | (18.72) | 221952 | 0.75<sup>(b)</sup> <br>| 0.32 | 18.7 |
| 33.61 | 54.76 | 169609 | 0.75<sup>(b)</sup> <br>| 0.01 | 38.0 |
| 22.21 | 4.14 | 75621 | 0.77<sup>(b)</sup> <br>| 0.37 | 41.6 |
| 22.56 | 7.82<sup>(c)</sup> <br>| 62428 | 0.77<sup>(b)</sup> <br>| 0.49 | 40.0 |
| 24.25 | 2.20<sup>(c)</sup> <br>| 48252 | 0.77<sup>(b)</sup> <br>| 0.42 | 51.6 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>| **Net Asset**<br> **Value, End**<br> **of Period**<br>|
| **SMALLCAP GROWTH FUND I** | **SMALLCAP GROWTH FUND I** | **SMALLCAP GROWTH FUND I** | **SMALLCAP GROWTH FUND I** | **SMALLCAP GROWTH FUND I** | **SMALLCAP GROWTH FUND I** | **SMALLCAP GROWTH FUND I** | **SMALLCAP GROWTH FUND I** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $13.34 | $(0.06) | $(3.36) | $(3.42) | $(2.45) | $(2.45) | $7.47 |
| 2021 | 10.37 | (0.09) | 3.94 | 3.85 | (0.88) | (0.88) | 13.34 |
| 2020 | 9.29 | (0.07) | 2.16 | 2.09 | (1.01) | (1.01) | 10.37 |
| 2019 | 10.56 | (0.07) | 0.69 | 0.62 | (1.89) | (1.89) | 9.29 |
| 2018 | 10.88 | (0.09) | 1.04 | 0.95 | (1.27) | (1.27) | 10.56 |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 20.54 | (0.07) | (5.48) | (5.55) | (2.45) | (2.45) | 12.54 |
| 2021 | 15.56 | (0.12) | 5.98 | 5.86 | (0.88) | (0.88) | 20.54 |
| 2020 | 13.45 | (0.08) | 3.20 | 3.12 | (1.01) | (1.01) | 15.56 |
| 2019 | 14.29 | (0.07) | 1.12 | 1.05 | (1.89) | (1.89) | 13.45 |
| 2018 | 14.27 | (0.08) | 1.37 | 1.29 | (1.27) | (1.27) | 14.29 |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 15.05 | (0.12) | (3.87) | (3.99) | (2.45) | (2.45) | 8.61 |
| 2021 | 11.67 | (0.19) | 4.45 | 4.26 | (0.88) | (0.88) | 15.05 |
| 2020 | 10.40 | (0.14) | 2.42 | 2.28 | (1.01) | (1.01) | 11.67 |
| 2019 | 11.62 | (0.14) | 0.81 | 0.67 | (1.89) | (1.89) | 10.40 |
| 2018 | 11.91 | (0.17) | 1.15 | 0.98 | (1.27) | (1.27) | 11.62 |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 15.96 | (0.10) | (4.13) | (4.23) | (2.45) | (2.45) | 9.28 |
| 2021 | 12.30 | (0.16) | 4.70 | 4.54 | (0.88) | (0.88) | 15.96 |
| 2020 | 10.87 | (0.11) | 2.55 | 2.44 | (1.01) | (1.01) | 12.30 |
| 2019 | 12.02 | (0.11) | 0.85 | 0.74 | (1.89) | (1.89) | 10.87 |
| 2018 | 12.25 | (0.14) | 1.18 | 1.04 | (1.27) | (1.27) | 12.02 |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 17.51 | (0.09) | (4.59) | (4.68) | (2.45) | (2.45) | 10.38 |
| 2021 | 13.40 | (0.14) | 5.13 | 4.99 | (0.88) | (0.88) | 17.51 |
| 2020 | 11.74 | (0.10) | 2.77 | 2.67 | (1.01) | (1.01) | 13.40 |
| 2019 | 12.79 | (0.10) | 0.94 | 0.84 | (1.89) | (1.89) | 11.74 |
| 2018 | 12.94 | (0.12) | 1.24 | 1.12 | (1.27) | (1.27) | 12.79 |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 18.71 | (0.08) | (4.94) | (5.02) | (2.45) | (2.45) | 11.24 |
| 2021 | 14.25 | (0.13) | 5.47 | 5.34 | (0.88) | (0.88) | 18.71 |
| 2020 | 12.42 | (0.09) | 2.93 | 2.84 | (1.01) | (1.01) | 14.25 |
| 2019 | 13.39 | (0.09) | 1.01 | 0.92 | (1.89) | (1.89) | 12.42 |
| 2018 | 13.47 | (0.11) | 1.30 | 1.19 | (1.27) | (1.27) | 13.39 |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 20.56 | (0.05) | (5.49) | (5.54) | (2.45) | (2.45) | 12.57 |
| 2021 | 15.55 | (0.10) | 5.99 | 5.89 | (0.88) | (0.88) | 20.56 |
| 2020 | 13.43 | (0.06) | 3.19 | 3.13 | (1.01) | (1.01) | 15.55 |
| 2019 | 14.27 | (0.06) | 1.11 | 1.05 | (1.89) | (1.89) | 13.43 |
| 2018 | 14.25 | (0.08) | 1.37 | 1.29 | (1.27) | (1.27) | 14.27 |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

<sup>(f)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| (29.78)%<sup>(b)</sup> <br>| $63827<br> 1.11%<sup>(c)</sup> <br>| 1.15%<sup>(d)</sup> <br>| (0.64)% | 50.7% |
| 38.18<sup>(b)</sup> <br>| 103343<br> 1.07<sup>(c)</sup> <br>| 1.11<sup>(d)</sup> <br>| (0.74) | 62.1 |
| 24.24<sup>(b)</sup> <br>| 78084<br> 1.16<sup>(c)</sup> <br>| 1.22<sup>(d)</sup> <br>| (0.75) | 67.6 |
| 10.17<sup>(b)</sup> <br>| 69567<br> 1.33<sup>(c)</sup> <br>| 1.45<sup>(d)</sup> <br>| (0.81) | 57.4 |
| 8.82<sup>(b)</sup> <br>| 66138<br> 1.29<sup>(c)</sup> <br>| 1.41<sup>(d)</sup> <br>| (0.81) | 68.8 |
| (29.74)<sup>(e)</sup> <br>| 195117<br> 0.94<sup>(f)</sup> <br>| – | (0.47) | 50.7 |
| 38.44<sup>(e)</sup> <br>| 300718<br> 0.93<sup>(f)</sup> <br>| – | (0.60) | 62.1 |
| 24.51<sup>(e)</sup> <br>| 222802<br> 0.97<sup>(f)</sup> <br>| – | (0.57) | 67.6 |
| 10.50<sup>(e)</sup> <br>| 148229<br> 1.02<sup>(f)</sup> <br>| – | (0.50) | 57.4 |
| 9.12 | 152106<br> 1.02<sup>(f)</sup> <br>| – | (0.54) | 68.8 |
| (30.30)<sup>(e)</sup> <br>| 1688<br> 1.71<sup>(f)</sup> <br>| – | (1.25) | 50.7 |
| 37.37<sup>(e)</sup> <br>| 2523<br> 1.71<sup>(f)</sup> <br>| – | (1.38) | 62.1 |
| 23.53<sup>(e)</sup> <br>| 1980<br> 1.75<sup>(f)</sup> <br>| – | (1.34) | 67.6 |
| 9.59 | 1757<br> 1.87<sup>(f)</sup> <br>| – | (1.35) | 57.4 |
| 8.27 | 2255<br> 1.87<sup>(f)</sup> <br>| – | (1.39) | 68.8 |
| (30.07)<sup>(e)</sup> <br>| 13703<br> 1.40<sup>(f)</sup> <br>| – | (0.94) | 50.7 |
| 37.78 | 18489<br> 1.40<sup>(f)</sup> <br>| – | (1.07) | 62.1 |
| 23.92 | 13013<br> 1.44<sup>(f)</sup> <br>| – | (1.03) | 67.6 |
| 9.90 | 13075<br> 1.56<sup>(f)</sup> <br>| – | (1.04) | 57.4 |
| 8.54 | 14357<br> 1.56<sup>(f)</sup> <br>| – | (1.08) | 68.8 |
| (29.95)<sup>(e)</sup> <br>| 9817<br> 1.21<sup>(f)</sup> <br>| – | (0.75) | 50.7 |
| 38.13<sup>(e)</sup> <br>| 21478<br> 1.21<sup>(f)</sup> <br>| – | (0.88) | 62.1 |
| 24.12 | 15438<br> 1.25<sup>(f)</sup> <br>| – | (0.84) | 67.6 |
| 10.11 | 12710<br> 1.37<sup>(f)</sup> <br>| – | (0.85) | 57.4 |
| 8.72 | 12526<br> 1.37<sup>(f)</sup> <br>| – | (0.89) | 68.8 |
| (29.79) | 32559<br> 1.09<sup>(f)</sup> <br>| – | (0.63) | 50.7 |
| 38.24 | 50285<br> 1.09<sup>(f)</sup> <br>| – | (0.75) | 62.1 |
| 24.17 | 42541<br> 1.13<sup>(f)</sup> <br>| – | (0.72) | 67.6 |
| 10.29 | 37322<br> 1.25<sup>(f)</sup> <br>| – | (0.73) | 57.4 |
| 8.91 | 43250<br> 1.25<sup>(f)</sup> <br>| – | (0.77) | 68.8 |
| (29.67)<sup>(e)</sup> <br>| 1935411<br> 0.84<sup>(f)</sup> <br>| – | (0.37) | 50.7 |
| 38.60 | 2780704<br> 0.83<sup>(f)</sup> <br>| – | (0.50) | 62.1 |
| 24.63<sup>(e)</sup> <br>| 1817204<br> 0.86<sup>(f)</sup> <br>| – | (0.46) | 67.6 |
| 10.52<sup>(e)</sup> <br>| 1497648<br> 0.99<sup>(f)</sup> <br>| – | (0.48) | 57.4 |
| 9.13 | 1457244<br> 0.99<sup>(f)</sup> <br>| – | (0.52) | 68.8 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **SMALLCAP S&P 600 INDEX FUND** | **SMALLCAP S&P 600 INDEX FUND** | **SMALLCAP S&P 600 INDEX FUND** | **SMALLCAP S&P 600 INDEX FUND** | **SMALLCAP S&P 600 INDEX FUND** | **SMALLCAP S&P 600 INDEX FUND** | **SMALLCAP S&P 600 INDEX FUND** | **SMALLCAP S&P 600 INDEX FUND** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $31.18 | $0.27 | $(3.84) | $(3.57) | $(0.25) | $(2.49) | $(2.74) |
| 2021 | 20.17 | 0.24 | 11.32 | 11.56 | (0.24) | (0.31) | (0.55) |
| 2020 | 23.55 | 0.21 | (1.85) | (1.64) | (0.26) | (1.48) | (1.74) |
| 2019 | 26.23 | 0.23 | 0.04 | 0.27 | (0.27) | (2.68) | (2.95) |
| 2018 | 26.68 | 0.24 | 1.10 | 1.34 | (0.25) | (1.54) | (1.79) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 33.36 | 0.34 | (4.12) | (3.78) | (0.30) | (2.49) | (2.79) |
| 2021 | 21.54 | 0.31 | 12.09 | 12.40 | (0.27) | (0.31) | (0.58) |
| 2020 | 25.03 | 0.27 | (1.98) | (1.71) | (0.30) | (1.48) | (1.78) |
| 2019 | 27.68 | 0.30 | 0.05 | 0.35 | (0.32) | (2.68) | (3.00) |
| 2018 | 28.06 | 0.31 | 1.15 | 1.46 | (0.30) | (1.54) | (1.84) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 32.59 | 0.10 | (4.03) | (3.93) | (0.02) | (2.49) | (2.51) |
| 2021 | 21.08 | 0.06 | 11.85 | 11.91 | (0.09) | (0.31) | (0.40) |
| 2020 | 24.50 | 0.09 | (1.95) | (1.86) | (0.08) | (1.48) | (1.56) |
| 2019 | 27.11 | 0.10 | 0.07 | 0.17 | (0.10) | (2.68) | (2.78) |
| 2018 | 27.53 | 0.07 | 1.14 | 1.21 | (0.09) | (1.54) | (1.63) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 34.04 | 0.20 | (4.22) | (4.02) | (0.14) | (2.49) | (2.63) |
| 2021 | 21.99 | 0.16 | 12.35 | 12.51 | (0.15) | (0.31) | (0.46) |
| 2020 | 25.52 | 0.16 | (2.02) | (1.86) | (0.19) | (1.48) | (1.67) |
| 2019 | 28.12 | 0.18 | 0.08 | 0.26 | (0.18) | (2.68) | (2.86) |
| 2018 | 28.49 | 0.17 | 1.17 | 1.34 | (0.17) | (1.54) | (1.71) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 34.52 | 0.25 | (4.27) | (4.02) | (0.18) | (2.49) | (2.67) |
| 2021 | 22.28 | 0.22 | 12.53 | 12.75 | (0.20) | (0.31) | (0.51) |
| 2020 | 25.84 | 0.21 | (2.07) | (1.86) | (0.22) | (1.48) | (1.70) |
| 2019 | 28.43 | 0.23 | 0.08 | 0.31 | (0.22) | (2.68) | (2.90) |
| 2018 | 28.77 | 0.23 | 1.19 | 1.42 | (0.22) | (1.54) | (1.76) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 34.76 | 0.29 | (4.30) | (4.01) | (0.23) | (2.49) | (2.72) |
| 2021 | 22.44 | 0.26 | 12.60 | 12.86 | (0.23) | (0.31) | (0.54) |
| 2020 | 26.00 | 0.23 | (2.06) | (1.83) | (0.25) | (1.48) | (1.73) |
| 2019 | 28.59 | 0.27 | 0.08 | 0.35 | (0.26) | (2.68) | (2.94) |
| 2018 | 28.93 | 0.26 | 1.19 | 1.45 | (0.25) | (1.54) | (1.79) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 33.35 | 0.35 | (4.11) | (3.76) | (0.32) | (2.49) | (2.81) |
| 2021 | 21.54 | 0.33 | 12.08 | 12.41 | (0.29) | (0.31) | (0.60) |
| 2020 | 25.03 | 0.27 | (1.96) | (1.69) | (0.32) | (1.48) | (1.80) |
| 2019 | 27.67 | 0.31 | 0.06 | 0.37 | (0.33) | (2.68) | (3.01) |
| 2018 | 28.05 | 0.32 | 1.15 | 1.47 | (0.31) | (1.54) | (1.85) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Reflects Manager's contractual expense limit.

<sup>(f)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $24.87 | (12.25)%<sup>(b)</sup> <br>| $175397 | 0.40%<sup>(c)</sup> <br>| 0.42%<sup>(d)</sup> <br>| 1.01% | 15.9% |
| 31.18 | 57.97<sup>(b)</sup> <br>| 209971 | 0.39<sup>(c)</sup> <br>| 0.41<sup>(d)</sup> <br>| 0.83 | 11.9 |
| 20.17 | (7.93)<sup>(b)</sup> <br>| 136338 | 0.42<sup>(c)</sup> <br>| 0.45<sup>(d)</sup> <br>| 1.02 | 21.4 |
| 23.55 | 2.86<sup>(b)</sup> <br>| 171912 | 0.44<sup>(c)</sup> <br>| 0.47<sup>(d)</sup> <br>| 1.01 | 16.8 |
| 26.23 | 5.14<sup>(b)</sup> <br>| 182777 | 0.41<sup>(c)</sup> <br>| 0.44<sup>(d)</sup> <br>| 0.89 | 17.4 |
| 26.79 | (12.08) | 229566 | 0.21<sup>(e)</sup> <br>| – | 1.19 | 15.9 |
| 33.36 | 58.26 | 291508 | 0.21<sup>(e)</sup> <br>| – | 1.01 | 11.9 |
| 21.54 | (7.75) | 218125 | 0.24<sup>(e)</sup> <br>| – | 1.22 | 21.4 |
| 25.03 | 3.04 | 330036 | 0.24<sup>(e)</sup> <br>| – | 1.21 | 16.8 |
| 27.68 | 5.32 | 359661 | 0.22<sup>(e)</sup> <br>| – | 1.08 | 17.4 |
| 26.15 | (12.81)<sup>(f)</sup> <br>| 6738 | 1.04 | – | 0.37 | 15.9 |
| 32.59 | 56.98<sup>(f)</sup> <br>| 8077 | 1.04 | – | 0.18 | 11.9 |
| 21.08 | (8.48) | 6987 | 1.04 | – | 0.42 | 21.4 |
| 24.50 | 2.24 | 10201 | 1.04 | – | 0.41 | 16.8 |
| 27.11 | 4.46 | 12877 | 1.04 | – | 0.26 | 17.4 |
| 27.39 | (12.54) | 79204 | 0.73 | – | 0.67 | 15.9 |
| 34.04 | 57.42 | 103119 | 0.73 | – | 0.49 | 11.9 |
| 21.99 | (8.19) | 71759 | 0.73 | – | 0.72 | 21.4 |
| 25.52 | 2.55 | 101745 | 0.73 | – | 0.73 | 16.8 |
| 28.12 | 4.77 | 109187 | 0.73 | – | 0.57 | 17.4 |
| 27.83 | (12.35) | 34056 | 0.54 | – | 0.86 | 15.9 |
| 34.52 | 57.78 | 45339 | 0.54 | – | 0.68 | 11.9 |
| 22.28 | (8.07) | 39413 | 0.54 | – | 0.92 | 21.4 |
| 25.84 | 2.75 | 57686 | 0.54 | – | 0.92 | 16.8 |
| 28.43 | 5.01 | 74989 | 0.54 | – | 0.76 | 17.4 |
| 28.03 | (12.25) | 103304 | 0.42 | – | 0.99 | 15.9 |
| 34.76 | 57.89 | 128741 | 0.42 | – | 0.80 | 11.9 |
| 22.44 | (7.91) | 92028 | 0.42 | – | 1.04 | 21.4 |
| 26.00 | 2.89 | 132921 | 0.42 | – | 1.04 | 16.8 |
| 28.59 | 5.10 | 179867 | 0.42 | – | 0.88 | 17.4 |
| 26.78 | (12.04) | 533682 | 0.16<sup>(e)</sup> <br>| – | 1.24 | 15.9 |
| 33.35 | 58.33 | 646055 | 0.16<sup>(e)</sup> <br>| – | 1.06 | 11.9 |
| 21.54 | (7.67) | 459359 | 0.16<sup>(e)</sup> <br>| – | 1.28 | 21.4 |
| 25.03 | 3.14 | 464412 | 0.17<sup>(e)</sup> <br>| – | 1.28 | 16.8 |
| 27.67 | 5.37 | 383063 | 0.16<sup>(e)</sup> <br>| – | 1.12 | 17.4 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Distributions**<br> **from Realized**<br> **Gains**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>|
| **SMALLCAP VALUE FUND II** | **SMALLCAP VALUE FUND II** | **SMALLCAP VALUE FUND II** | **SMALLCAP VALUE FUND II** | **SMALLCAP VALUE FUND II** | **SMALLCAP VALUE FUND II** | **SMALLCAP VALUE FUND II** | **SMALLCAP VALUE FUND II** |
| **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** | **Class J shares** |
| 2022 | $14.02 | $0.05 | $(0.75) | $(0.70) | $(0.06) | $(1.85) | $(1.91) |
| 2021 | 8.63 | 0.04 | 5.39 | 5.43 | (0.04) | – | (0.04) |
| 2020 | 10.19 | 0.04 | (1.55) | (1.51) | (0.05) | – | (0.05) |
| 2019 | 11.78 | 0.05 | 0.19 | 0.24 | (0.05) | (1.78) | (1.83) |
| 2018 | 13.42 | 0.02 | (0.35) | (0.33) | (0.01) | (1.30) | (1.31) |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 14.50 | 0.09 | (0.77) | (0.68) | (0.09) | (1.85) | (1.94) |
| 2021 | 8.94 | 0.09 | 5.56 | 5.65 | (0.09) | – | (0.09) |
| 2020 | 10.55 | 0.08 | (1.59) | (1.51) | (0.10) | – | (0.10) |
| 2019 | 12.12 | 0.10 | 0.20 | 0.30 | (0.09) | (1.78) | (1.87) |
| 2018 | 13.77 | 0.07 | (0.36) | (0.29) | (0.06) | (1.30) | (1.36) |
| **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** | **R-1 shares** |
| 2022 | 12.79 | (0.01) | (0.68) | (0.69) | – | (1.85) | (1.85) |
| 2021 | 7.90 | (0.02) | 4.92 | 4.90 | (0.01) | – | (0.01) |
| 2020 | 9.32 | 0.01 | (1.43) | (1.42) | – | – | – |
| 2019 | 10.93 | 0.01 | 0.16 | 0.17 | – | (1.78) | (1.78) |
| 2018 | 12.59 | (0.04) | (0.32) | (0.36) | – | (1.30) | (1.30) |
| **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** | **R-3 shares** |
| 2022 | 13.76 | 0.02 | (0.73) | (0.71) | (0.03) | (1.85) | (1.88) |
| 2021 | 8.48 | 0.02 | 5.29 | 5.31 | (0.03) | – | (0.03) |
| 2020 | 10.01 | 0.03 | (1.52) | (1.49) | (0.04) | – | (0.04) |
| 2019 | 11.59 | 0.04 | 0.18 | 0.22 | (0.02) | (1.78) | (1.80) |
| 2018 | 13.23 | – | (0.34) | (0.34) | – | (1.30) | (1.30) |
| **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** | **R-4 shares** |
| 2022 | 14.02 | 0.05 | (0.76) | (0.71) | (0.05) | (1.85) | (1.90) |
| 2021 | 8.63 | 0.05 | 5.39 | 5.44 | (0.05) | – | (0.05) |
| 2020 | 10.19 | 0.05 | (1.55) | (1.50) | (0.06) | – | (0.06) |
| 2019 | 11.77 | 0.06 | 0.18 | 0.24 | (0.04) | (1.78) | (1.82) |
| 2018 | 13.41 | 0.02 | (0.35) | (0.33) | (0.01) | (1.30) | (1.31) |
| **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** | **R-5 shares** |
| 2022 | 14.20 | 0.06 | (0.75) | (0.69) | (0.07) | (1.85) | (1.92) |
| 2021 | 8.75 | 0.06 | 5.45 | 5.51 | (0.06) | – | (0.06) |
| 2020 | 10.33 | 0.06 | (1.57) | (1.51) | (0.07) | – | (0.07) |
| 2019 | 11.91 | 0.07 | 0.19 | 0.26 | (0.06) | (1.78) | (1.84) |
| 2018 | 13.55 | 0.04 | (0.35) | (0.31) | (0.03) | (1.30) | (1.33) |
| **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** | **R-6 shares** |
| 2022 | 14.50 | 0.09 | (0.77) | (0.68) | (0.10) | (1.85) | (1.95) |
| 2021 | 8.93 | 0.10 | 5.56 | 5.66 | (0.09) | – | (0.09) |
| 2020 | 10.54 | 0.09 | (1.60) | (1.51) | (0.10) | – | (0.10) |
| 2019 | 12.12 | 0.10 | 0.19 | 0.29 | (0.09) | (1.78) | (1.87) |
| 2018 | 13.76 | 0.07 | (0.35) | (0.28) | (0.06) | (1.30) | (1.36) |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Reflects Manager's contractual expense limit and/or Distributor's voluntary distribution fee limit.

<sup>(d)</sup>

Excludes expense reimbursement from Manager and/or Distributor.

<sup>(e)</sup>

Reflects Manager's contractual expense limit.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Asset**<br> **Value, End**<br> **of Period**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Gross**<br> **Expenses to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| $11.41 | (5.41)%<sup>(b)</sup> <br>| $20790<br> 1.28%<sup>(c)</sup> <br>| 1.32%<sup>(d)</sup> <br>| 0.40% | 55.4% |
| 14.02 | 63.03<sup>(b)</sup> <br>| 23564<br> 1.29<sup>(c)</sup> <br>| 1.33<sup>(d)</sup> <br>| 0.35 | 87.5 |
| 8.63 | (14.92)<sup>(b)</sup> <br>| 11752<br> 1.48<sup>(c)</sup> <br>| 1.54<sup>(d)</sup> <br>| 0.42 | 92.2 |
| 10.19 | 4.60<sup>(b)</sup> <br>| 16348<br> 1.45<sup>(c)</sup> <br>| 1.52<sup>(d)</sup> <br>| 0.46 | 76.1 |
| 11.78 | (3.18)<sup>(b)</sup> <br>| 17180<br> 1.36<sup>(c)</sup> <br>| 1.43<sup>(d)</sup> <br>| 0.13 | 84.1 |
| 11.88 | (5.02) | 185308<br> 0.96<sup>(e)</sup> <br>| – | 0.73 | 55.4 |
| 14.50 | 63.45 | 204526<br> 0.96<sup>(e)</sup> <br>| – | 0.70 | 87.5 |
| 8.94 | (14.51) | 103672<br> 0.98<sup>(e)</sup> <br>| – | 0.90 | 92.2 |
| 10.55 | 5.09 | 116450<br> 0.99<sup>(e)</sup> <br>| – | 0.92 | 76.1 |
| 12.12 | (2.80) | 129984<br> 1.00<sup>(e)</sup> <br>| – | 0.49 | 84.1 |
| 10.25 | (5.84) | 772<br> 1.80<sup>(e)</sup> <br>| – | (0.13) | 55.4 |
| 12.79 | 62.06 | 741<br> 1.80<sup>(e)</sup> <br>| – | (0.13) | 87.5 |
| 7.90 | (15.21) | 583<br> 1.84<sup>(e)</sup> <br>| – | 0.06 | 92.2 |
| 9.32 | 4.21 | 871<br> 1.84<sup>(e)</sup> <br>| – | 0.07 | 76.1 |
| 10.93 | (3.61) | 983<br> 1.84<sup>(e)</sup> <br>| – | (0.35) | 84.1 |
| 11.17 | (5.59) | 5063<br> 1.49<sup>(e)</sup> <br>| – | 0.19 | 55.4 |
| 13.76 | 62.67 | 6089<br> 1.49<sup>(e)</sup> <br>| – | 0.14 | 87.5 |
| 8.48 | (14.99) | 3599<br> 1.53<sup>(e)</sup> <br>| – | 0.39 | 92.2 |
| 10.01 | 4.51 | 6798<br> 1.53<sup>(e)</sup> <br>| – | 0.39 | 76.1 |
| 11.59 | (3.27) | 9087<br> 1.53<sup>(e)</sup> <br>| – | (0.04) | 84.1 |
| 11.41 | (5.45) | 2703<br> 1.30<sup>(e)</sup> <br>| – | 0.39 | 55.4 |
| 14.02 | 63.15 | 4153<br> 1.30<sup>(e)</sup> <br>| – | 0.37 | 87.5 |
| 8.63 | (14.84) | 2278<br> 1.34<sup>(e)</sup> <br>| – | 0.59 | 92.2 |
| 10.19 | 4.67 | 4746<br> 1.34<sup>(e)</sup> <br>| – | 0.57 | 76.1 |
| 11.77 | (3.14) | 4824<br> 1.34<sup>(e)</sup> <br>| – | 0.15 | 84.1 |
| 11.59 | (5.28) | 13339<br> 1.18<sup>(e)</sup> <br>| – | 0.51 | 55.4 |
| 14.20 | 63.22 | 16754<br> 1.18<sup>(e)</sup> <br>| – | 0.49 | 87.5 |
| 8.75 | (14.74) | 14788<br> 1.22<sup>(e)</sup> <br>| – | 0.69 | 92.2 |
| 10.33 | 4.80 | 19469<br> 1.22<sup>(e)</sup> <br>| – | 0.70 | 76.1 |
| 11.91 | (2.99) | 23256<br> 1.22<sup>(e)</sup> <br>| – | 0.28 | 84.1 |
| 11.87 | (5.07) | 895326<br> 0.93<sup>(e)</sup> <br>| – | 0.76 | 55.4 |
| 14.50 | 63.66 | 1150438<br> 0.93<sup>(e)</sup> <br>| – | 0.72 | 87.5 |
| 8.93 | (14.51) | 663938<br> 0.96<sup>(e)</sup> <br>| – | 0.94 | 92.2 |
| 10.54 | 5.05 | 840894<br> 0.97<sup>(e)</sup> <br>| – | 0.94 | 76.1 |
| 12.12 | (2.70) | 885580<br> 0.96<sup>(e)</sup> <br>| – | 0.54 | 84.1 |

---

------

**Financial Highlights**

**Principal Funds, Inc. (Continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net Asset**<br> **Value,**<br> **Beginning**<br> **of Period**<br>| **Net**<br> **Investment**<br> **Income (Loss)**<sup>(a)</sup> <br>| **Net Realized**<br> **and Unrealized**<br> **Gain (Loss) on**<br> **Investments**<br>| **Total From**<br> **Investment**<br> **Operations**<br>| **Dividends**<br> **from Net**<br> **Investment**<br> **Income**<br>| **Total**<br> **Dividends**<br> **and**<br> **Distributions**<br>| **Net Asset**<br> **Value, End**<br> **of Period**<br>|
| **TAX-EXEMPT BOND FUND** | **TAX-EXEMPT BOND FUND** | **TAX-EXEMPT BOND FUND** | **TAX-EXEMPT BOND FUND** | **TAX-EXEMPT BOND FUND** | **TAX-EXEMPT BOND FUND** | **TAX-EXEMPT BOND FUND** | **TAX-EXEMPT BOND FUND** |
| **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** | **Class A shares** |
| 2022 | $7.61 | $0.17 | $(1.30) | $(1.13) | $(0.17) | $(0.17) | $6.31 |
| 2021 | 7.40 | 0.17 | 0.21 | 0.38 | (0.17) | (0.17) | 7.61 |
| 2020 | 7.43 | 0.18 | (0.04) | 0.14 | (0.17) | (0.17) | 7.40 |
| 2019 | 6.95 | 0.24 | 0.47 | 0.71 | (0.23) | (0.23) | 7.43 |
| 2018 | 7.24 | 0.28 | (0.31) | (0.03) | (0.26) | (0.26) | 6.95 |
| **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** | **Class C shares** |
| 2022 | 7.63 | 0.11 | (1.30) | (1.19) | (0.11) | (0.11) | 6.33 |
| 2021 | 7.43 | 0.11 | 0.20 | 0.31 | (0.11) | (0.11) | 7.63 |
| 2020 | 7.46 | 0.12 | (0.04) | 0.08 | (0.11) | (0.11) | 7.43 |
| 2019 | 6.97 | 0.19 | 0.47 | 0.66 | (0.17) | (0.17) | 7.46 |
| 2018 | 7.27 | 0.22 | (0.32) | (0.10) | (0.20) | (0.20) | 6.97 |
| **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** | **Institutional shares** |
| 2022 | 7.61 | 0.19 | (1.30) | (1.11) | (0.19) | (0.19) | 6.31 |
| 2021 | 7.41 | 0.19 | 0.20 | 0.39 | (0.19) | (0.19) | 7.61 |
| 2020 | 7.44 | 0.21 | (0.05) | 0.16 | (0.19) | (0.19) | 7.41 |
| 2019 | 6.95 | 0.26 | 0.48 | 0.74 | (0.25) | (0.25) | 7.44 |
| 2018 | 7.25 | 0.29 | (0.31) | (0.02) | (0.28) | (0.28) | 6.95 |

---

<sup>(a)</sup>

Calculated based on average shares outstanding during the period.

<sup>(b)</sup>

Total return is calculated without the front-end sales charge or contingent deferred sales charge, if applicable.

<sup>(c)</sup>

Excludes interest expense and fees paid through inverse floater agreements. See "Operating Policies" in notes to financial statements.

<sup>(d)</sup>

Reflects Manager's contractual expense limit.

<sup>(e)</sup>

Total return is calculated using the traded net asset value which may differ from the reported net asset value. The traded net asset value is the net asset value which a shareholder would have paid or received from a subscription or redemption.

------

**Financial Highlights**

**Principal Funds, Inc.**

**Selected data for a share of Capital Stock outstanding throughout each year ended October 31 (except as noted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Total**<br> **Return**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Assets,**<br> **End of Period**<br> **(in thousands)**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of**<br> **Expenses**<br> **to Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Ratio of Net**<br> **Investment**<br> **Income to**<br> **Average**<br> **Net Assets**<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Portfolio**<br> **Turnover**<br> **Rate**<br>|
| (14.99)%<sup>(b)</sup> <br>| $299054 | 0.77%<br> 0.73%<sup>(c)</sup> <br>| 2.44% | 59.3% |
| 5.19<sup>(b)</sup> <br>| 417381 | 0.79<br> 0.76<sup>(c)</sup> <br>| 2.18 | 24.8 |
| 1.89<sup>(b)</sup> <br>| 356581 | 0.81<br> 0.77<sup>(c)</sup> <br>| 2.50 | 66.7 |
| 10.28<sup>(b)</sup> <br>| 358580 | 0.86<br> 0.79<sup>(c)</sup> <br>| 3.36 | 64.0 |
| (0.42)<sup>(b)</sup> <br>| 269439 | 0.85<br> 0.78<sup>(c)</sup> <br>| 3.87 | 65.8 |
| (15.67)<sup>(b)</sup> <br>| 22134 | 1.61<sup>(d)</sup> <br>1.57<sup>(c)(d)</sup> <br>| 1.59 | 59.3 |
| 4.17<sup>(b)</sup> <br>| 35338 | 1.61<sup>(d)</sup> <br>1.58<sup>(c)(d)</sup> <br>| 1.37 | 24.8 |
| 1.05<sup>(b)</sup> <br>| 38229 | 1.63<sup>(d)</sup> <br>1.59<sup>(c)(d)</sup> <br>| 1.69 | 66.7 |
| 9.51<sup>(b)</sup> <br>| 39162 | 1.67<sup>(d)</sup> <br>1.60<sup>(c)(d)</sup> <br>| 2.55 | 64.0 |
| (1.38)<sup>(b)</sup> <br>| 26337 | 1.67<sup>(d)</sup> <br>1.60<sup>(c)(d)</sup> <br>| 3.05 | 65.8 |
| (14.88)<sup>(e)</sup> <br>| 278642 | 0.50<sup>(d)</sup> <br>0.46<sup>(c)(d)</sup> <br>| 2.72 | 59.3 |
| 5.44<sup>(e)</sup> <br>| 345082 | 0.54<sup>(d)</sup> <br>0.51<sup>(c)(d)</sup> <br>| 2.42 | 24.8 |
| 2.14 | 248148 | 0.56<sup>(d)</sup> <br>0.52<sup>(c)(d)</sup> <br>| 2.85 | 66.7 |
| 10.73 | 163406 | 0.59<sup>(d)</sup> <br>0.52<sup>(c)(d)</sup> <br>| 3.57 | 64.0 |
| (0.31) | 70842 | 0.59<sup>(d)</sup> <br>0.52<sup>(c)(d)</sup> <br>| 4.11 | 65.8 |

---

------

**ADDITIONAL INFORMATION**

Additional information about the Funds is available in the SAI dated March 1, 2023, which is incorporated by reference into this Prospectus. Additional information about each Fund's investments is available in the Registrant's Annual and Semi-Annual Reports to Shareholders. In the Registrant'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. The SAI and the Registrant's Annual and Semi-Annual Reports can be obtained free of charge by writing Principal Funds, P.O. Box 219971, Kansas City, MO 64121-9971. In addition, the Registrant makes its SAI and Annual and Semi-Annual Reports available, free of charge, on www.PrincipalAM.com/Prospectuses. 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 Registrant 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 Registrant has entered into a management agreement with PGI. The Registrant 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 Registrant 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 Registrant 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 Registrant's registration statement are not intended to give rise to any agreement or contract between the Registrant 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. There can be no assurance that the Government Money Market or Money Market Funds will be able to maintain a stable share price of $1.00 per share.

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 Funds, Inc. SEC File 811-07572

D

------

**PRINCIPAL FUNDS, INC.** 

**("PFI" or the "Registrant")** 

**Statement of Additional Information** 

Dated March 1, 2023

This Statement of Additional Information ("SAI") is not a prospectus. It contains information in addition to the information in the Registrant'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 Prospectus dated March 1, 2023.

**Incorporation by Reference**: The audited financial statements, schedules of investments, and auditor's report included in the Registrant's [<u>Annual Report to Shareholders</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874522000215/primary-document.htm), for the fiscal year ended October 31, 2022, are hereby incorporated by reference into and are legally a part of this SAI.

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

Principal Funds

P.O. Box 219971

Kansas City, MO 64121-9971

The Prospectus may be viewed at www.PrincipalAM.com/Prospectuses.

*The proposed merger of the Principal LifeTime 2010 Fund into the Principal LifeTime Strategic Income Fund is expected to occur on or about May 12, 2023 (the "Merger Date"). The Fund's officers, however, have the discretion to change this date. On the Merger Date, delete all references to the Principal LifeTime 2010 Fund from this SAI.* 

The ticker symbols for series and share classes begin on the next page.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** |
| **Fund/Portfolio** | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| California Municipal | SRCMX | SRCCX |  | PCMFX |  |  |  |  |  |
| Core Fixed Income | CMPIX | CNMCX | PIOJX | PIOIX | PIOMX | PIOOX | PIOPX | PIOQX | PICNX |
| Core Plus Bond | PRBDX |  | PBMJX | PMSIX | PBOMX | PBMMX | PBMSX | PBMPX |  |
| Diversified Income | PGBAX | PGDCX |  | PGDIX |  |  |  |  | PGBLX |
| Diversified International | PRWLX |  | PIIJX | PIIIX | PDVIX | PINRX | PINLX | PINPX | PDIFX |
| Equity Income | PQIAX | PEUCX | PEIJX | PEIIX | PIEMX | PEIOX | PEIPX | PEIQX |  |
| Finisterre Emerging Markets Total Return Bond |  |  |  | PFUMX |  |  |  |  |  |
| Global Emerging Markets | PRIAX |  | PIEJX | PIEIX | PIXEX | PEAPX | PESSX | PEPSX | PIIMX |
| Global Real Estate Securities | POSAX |  |  | POSIX |  | PGRKX | PGRVX | PGRUX | PGRSX |
| Government & High Quality Bond | CMPGX |  | PMRJX | PMRIX | PMGRX | PRCMX | PMRDX | PMREX |  |
| Government Money Market |  |  |  | PGVXX |  |  |  |  | PGWXX |
| High Income |  |  |  | PYHIX |  |  |  |  |  |
| High Yield | CPHYX | CCHIX |  | PHYTX |  |  |  |  | PHYFX |
| Inflation Protection |  |  | PIPJX | PIPIX | PISPX | PIFPX | PIFSX | PBPPX |  |
| International I |  |  |  | PINIX | PPISX | PRPPX | PUPPX | PTPPX | PIIDX |
| LargeCap Growth I | PLGAX |  | PLGJX | PLGIX | PCRSX | PPUMX | PPUSX | PPUPX | PLCGX |
| LargeCap S&P 500 Index | PLSAX | PLICX | PSPJX | PLFIX | PLPIX | PLFMX | PLFSX | PLFPX |  |
| LargeCap Value III |  |  | PLVJX | PLVIX | PESAX | PPSFX | PPSSX | PPSRX |  |
| MidCap | PEMGX | PMBCX | PMBJX | PCBIX | PMSBX | PMBMX | PMBSX | PMBPX | PMAQX |
| MidCap Growth |  |  | PMGJX | PGWIX | PMSGX | PFPPX | PIPPX | PHPPX |  |
| MidCap Growth III |  |  | PPQJX | PPIMX | PHASX | PPQMX | PPQSX | PPQPX |  |
| MidCap S&P 400 Index |  |  | PMFJX | MPSIX | PMSSX | PMFMX | PMFSX | PMFPX | PMAPX |
| MidCap Value I | PCMVX |  | PVEJX | PVMIX | PLASX | PMPRX | PABWX | PABVX | PCMSX |
| Money Market | PCSXX |  | PMJXX |  |  |  |  |  |  |
| Overseas |  |  |  | PINZX |  | PINTX | PINUX |  |  |
| Principal Capital Appreciation | CMNWX | CMNCX |  | PWCIX | PCAMX | PCAOX | PCAPX | PCAQX |  |
| Principal LifeTime Strategic Income | PALTX |  | PLSJX | PLSIX | PLAIX | PLSMX | PLSSX | PLSPX |  |
| Principal LifeTime 2010 | PENAX |  | PTAJX | PTTIX | PVASX | PTAMX | PTASX | PTAPX |  |
| Principal LifeTime 2015 |  |  |  | LTINX | LTSGX | LTAPX | LTSLX | LTPFX |  |
| Principal LifeTime 2020 | PTBAX |  | PLFJX | PLWIX | PWASX | PTBMX | PTBSX | PTBPX |  |
| Principal LifeTime 2025 |  |  |  | LTSTX | LTSNX | LTVPX | LTEEX | LTPDX |  |
| Principal LifeTime 2030 | PTCAX |  | PLTJX | PMTIX | PXASX | PTCMX | PTCSX | PTCPX |  |
| Principal LifeTime 2035 |  |  |  | LTIUX | LTANX | LTAOX | LTSEX | LTPEX |  |
| Principal LifeTime 2040 | PTDAX |  | PTDJX | PTDIX | PYASX | PTDMX | PTDSX | PTDPX |  |
| Principal LifeTime 2045 |  |  |  | LTRIX | LTRGX | LTRVX | LTRLX | LTRDX |  |
| Principal LifeTime 2050 | PPEAX |  | PFLJX | PPLIX | PZASX | PTERX | PTESX | PTEFX |  |
| Principal LifeTime 2055 |  |  |  | LTFIX | LTFGX | LTFDX | LTFLX | LTFPX |  |
| Principal LifeTime 2060 |  |  | PLTAX | PLTZX | PLTRX | PLTCX | PLTMX | PLTOX |  |
| Principal LifeTime 2065 |  |  |  | PLJIX | PLJAX | PLJCX | PLJDX | PLJEX |  |
| Principal LifeTime 2070 |  |  | PLTLX | PLTGX | PLTSX | PLTDX | PLTBX | PLTFX |  |
| Principal LifeTime Hybrid Income |  |  | PHJFX | PHTFX |  |  |  |  | PLTYX |
| Principal LifeTime Hybrid 2015 |  |  | PHJMX | PHTMX |  |  |  |  | PLRRX |
| Principal LifeTime Hybrid 2020 |  |  | PHJTX | PHTTX |  |  |  |  | PLTTX |
| Principal LifeTime Hybrid 2025 |  |  | PHJQX | PHTQX |  |  |  |  | PLFTX |
| Principal LifeTime Hybrid 2030 |  |  | PHJNX | PHTNX |  |  |  |  | PLZTX |
| Principal LifeTime Hybrid 2035 |  |  | PHJJX | PHTJX |  |  |  |  | PLRTX |
| Principal LifeTime Hybrid 2040 |  |  | PHJEX | PLTQX |  |  |  |  | PLMTX |
| Principal LifeTime Hybrid 2045 |  |  | PHJYX | PHTYX |  |  |  |  | PLNTX |
| Principal LifeTime Hybrid 2050 |  |  | PHJUX | PHTUX |  |  |  |  | PLJTX |
| Principal LifeTime Hybrid 2055 |  |  | PHJBX | PLTNX |  |  |  |  | PLHTX |
| Principal LifeTime Hybrid 2060 |  |  | PHJGX | PLTHX |  |  |  |  | PLKTX |
| Principal LifeTime Hybrid 2065 |  |  | PHJDX | PLHHX |  |  |  |  | PLHRX |
| Principal LifeTime Hybrid 2070 |  |  | PLKJX | PLKSX |  |  |  |  | PLKRX |
| Real Estate Securities | PRRAX | PRCEX | PREJX | PIREX | PRAEX | PRERX | PRETX | PREPX | PFRSX |
| SAM Balanced | SABPX | SCBPX | PSAJX | PSBIX | PSBGX | PBAPX | PSBLX | PSBFX |  |

---

------

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** | **Ticker Symbols by Share Class** |
| **Fund/Portfolio** | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| SAM Conservative Balanced | SAIPX | SCIPX | PCBJX | PCCIX | PCSSX | PCBPX | PCBLX | PCBFX |  |
| SAM Conservative Growth | SAGPX | SCGPX | PCGJX | PCWIX | PCGGX | PCGPX | PCWSX | PCWPX |  |
| SAM Flexible Income | SAUPX | SCUPX | PFIJX | PIFIX | PFIGX | PFIPX | PFILX | PFIFX |  |
| SAM Strategic Growth | SACAX | SWHCX | PSWJX | PSWIX | PSGGX | PSGPX | PSGLX | PSGFX |  |
| Short-Term Income | SRHQX | STCCX | PSJIX | PSHIX | PSIMX | PSIOX | PSIPX | PSIQX |  |
| SmallCap | PLLAX | PSMCX | PSBJX | PSLIX | PSABX | PSBMX | PSBSX | PSBPX | PSMLX |
| SmallCap Growth I |  |  | PSIJX | PGRTX | PNASX | PPNMX | PPNSX | PPNPX | PCSMX |
| SmallCap S&P 600 Index |  |  | PSSJX | PSSIX | PSAPX | PSSMX | PSSSX | PSSPX | PSPIX |
| SmallCap Value II |  |  | PSMJX | PPVIX | PCPTX | PJARX | PSTWX | PLARX | PSMVX |
| Tax-Exempt Bond | PTEAX | PTBCX |  | PITEX |  |  |  |  |  |

---

------

**Table of Contents** 

---

| | |
|:---|:---|
| [HISTORY OF THE FUNDS](#xx_6862db35-155a-4121-b93c-3d6f4946c965_1) | 3 |
| [MULTIPLE CLASS STRUCTURE](#xx_6862db35-155a-4121-b93c-3d6f4946c965_2) | 4 |
| [DESCRIPTION OF THE FUNDS' INVESTMENTS AND RISKS](#xx_6862db35-155a-4121-b93c-3d6f4946c965_9) | 11 |
| [LEADERSHIP STRUCTURE AND BOARD](#xx_6862db35-155a-4121-b93c-3d6f4946c965_42) | 44 |
| [INVESTMENT ADVISORY AND OTHER SERVICES](#xx_6862db35-155a-4121-b93c-3d6f4946c965_51) | 53 |
| [INTERMEDIARY COMPENSATION](#xx_6862db35-155a-4121-b93c-3d6f4946c965_62) | 64 |
| [BROKERAGE ALLOCATION AND OTHER PRACTICES](#xx_6862db35-155a-4121-b93c-3d6f4946c965_64) | 66 |
| [Purchase and Redemption Of Shares](#xx_6862db35-155a-4121-b93c-3d6f4946c965_70) | 72 |
| [Government Money Market and Money Market Funds Material Events](#xx_6862db35-155a-4121-b93c-3d6f4946c965_73) | 75 |
| [Pricing Of Fund Shares](#xx_6862db35-155a-4121-b93c-3d6f4946c965_73) | 75 |
| [Tax Considerations](#xx_6862db35-155a-4121-b93c-3d6f4946c965_75) | 77 |
| [Portfolio Holdings Disclosure](#xx_6862db35-155a-4121-b93c-3d6f4946c965_76) | 78 |
| [Proxy Voting Policies and Procedures](#xx_6862db35-155a-4121-b93c-3d6f4946c965_77) | 79 |
| [Financial Statements](#xx_6862db35-155a-4121-b93c-3d6f4946c965_78) | 80 |
| [Independent Registered Public Accounting Firm](#xx_6862db35-155a-4121-b93c-3d6f4946c965_78) | 80 |
| [General Information](#xx_6862db35-155a-4121-b93c-3d6f4946c965_78) | 80 |
| [Control Persons and Principal Holders Of Securities](#xx_6862db35-155a-4121-b93c-3d6f4946c965_79) | 81 |
| [Portfolio Manager Disclosure](#xx_17973057-4337-44aa-be80-141782e280ba_1) | 150 |
| [APPENDIX A—DESCRIPTION OF BOND RATINGS](#xx_8c77b8eb-7d8a-4a9f-8b23-77a3cc231727_1) | A-1 |
| [Appendix B—Price Make Up Sheet](#xx_efe66f34-a6e9-443c-a70f-e8b4146c96fc_1) | B-1 |
| [Appendix C—Proxy Voting Policies](#xx_ee3e0798-4e5f-4a4c-96cc-932f04c39c3a_1) | C-1 |

---

------

**HISTORY OF THE FUNDS**

Principal Funds, Inc. ("PFI" or the "Registrant") was organized as Principal Special Markets Fund, Inc. on January 28, 1993, as a Maryland corporation. The Registrant changed its name to Principal Investors Fund, Inc. effective September 14, 2000 and to Principal Funds, Inc. effective June 13, 2008.

On January 12, 2007, the Registrant acquired WM Trust I, WM Trust II, and WM Strategic Asset Management Portfolios, LLC.

Classes offered by each series of the Registrant (each, a "Fund" and, together, the "Funds") are shown in the following table.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
| **Fund/Portfolio** | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| California Municipal | X | X |  | X |  |  |  |  |  |
| Core Fixed Income | X | X | X | X | X | X | X | X | X |
| Core Plus Bond | X |  | X | X | X | X | X | X |  |
| Diversified Income | X | X |  | X |  |  |  |  | X |
| Diversified International | X |  | X | X | X | X | X | X | X |
| Equity Income | X | X | X | X | X | X | X | X |  |
| Finisterre Emerging Markets Total Return Bond |  |  |  | X |  |  |  |  |  |
| Global Emerging Markets | X |  | X | X | X | X | X | X | X |
| Global Real Estate Securities | X |  |  | X |  | X | X | X | X |
| Government & High Quality Bond | X |  | X | X | X | X | X | X |  |
| Government Money Market |  |  |  | X |  |  |  |  | X |
| High Income |  |  |  | X |  |  |  |  |  |
| High Yield | X | X |  | X |  |  |  |  | X |
| Inflation Protection |  |  | X | X | X | X | X | X |  |
| International I |  |  |  | X | X | X | X | X | X |
| LargeCap Growth I | X |  | X | X | X | X | X | X | X |
| LargeCap S&P 500 Index | X | X | X | X | X | X | X | X |  |
| LargeCap Value III |  |  | X | X | X | X | X | X |  |
| MidCap | X | X | X | X | X | X | X | X | X |
| MidCap Growth |  |  | X | X | X | X | X | X |  |
| MidCap Growth III |  |  | X | X | X | X | X | X |  |
| MidCap S&P 400 Index |  |  | X | X | X | X | X | X | X |
| MidCap Value I | X |  | X | X | X | X | X | X | X |
| Money Market | X |  | X |  |  |  |  |  |  |
| Overseas |  |  |  | X | X | X | X |  |  |
| Principal Capital Appreciation | X | X |  | X | X | X | X | X |  |
| Principal LifeTime Strategic Income | X |  | X | X | X | X | X | X |  |
| Principal LifeTime 2010 | X |  | X | X | X | X | X | X |  |
| Principal LifeTime 2015 |  |  |  | X | X | X | X | X |  |
| Principal LifeTime 2020 | X |  | X | X | X | X | X | X |  |
| Principal LifeTime 2025 |  |  |  | X | X | X | X | X |  |
| Principal LifeTime 2030 | X |  | X | X | X | X | X | X |  |
| Principal LifeTime 2035 |  |  |  | X | X | X | X | X |  |
| Principal LifeTime 2040 | X |  | X | X | X | X | X | X |  |
| Principal LifeTime 2045 |  |  |  | X | X | X | X | X |  |
| Principal LifeTime 2050 | X |  | X | X | X | X | X | X |  |
| Principal LifeTime 2055 |  |  |  | X | X | X | X | X |  |
| Principal LifeTime 2060 |  |  | X | X | X | X | X | X |  |
| Principal LifeTime 2065 |  |  |  | X | X | X | X | X |  |
| Principal LifeTime 2070 |  |  | X | X | X | X | X | X |  |
| Principal LifeTime Hybrid Income |  |  | X | X |  |  |  |  | X |
| Principal LifeTime Hybrid 2015 |  |  | X | X |  |  |  |  | X |
| Principal LifeTime Hybrid 2020 |  |  | X | X |  |  |  |  | X |
| Principal LifeTime Hybrid 2025 |  |  | X | X |  |  |  |  | X |
| Principal LifeTime Hybrid 2030 |  |  | X | X |  |  |  |  | X |
| Principal LifeTime Hybrid 2035 |  |  | X | X |  |  |  |  | X |

---

------

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
| **Fund/Portfolio** | **A** | **C** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Principal LifeTime Hybrid 2040 |  |  | X | X |  |  |  |  | X |
| Principal LifeTime Hybrid 2045 |  |  | X | X |  |  |  |  | X |
| Principal LifeTime Hybrid 2050 |  |  | X | X |  |  |  |  | X |
| Principal LifeTime Hybrid 2055 |  |  | X | X |  |  |  |  | X |
| Principal LifeTime Hybrid 2060 |  |  | X | X |  |  |  |  | X |
| Principal LifeTime Hybrid 2065 |  |  | X | X |  |  |  |  | X |
| Principal LifeTime Hybrid 2070 |  |  | X | X |  |  |  |  | X |
| Real Estate Securities | X | X | X | X | X | X | X | X | X |
| SAM Balanced | X | X | X | X | X | X | X | X |  |
| SAM Conservative Balanced | X | X | X | X | X | X | X | X |  |
| SAM Conservative Growth | X | X | X | X | X | X | X | X |  |
| SAM Flexible Income | X | X | X | X | X | X | X | X |  |
| SAM Strategic Growth | X | X | X | X | X | X | X | X |  |
| Short-Term Income | X | X | X | X | X | X | X | X |  |
| SmallCap | X | X | X | X | X | X | X | X | X |
| SmallCap Growth I |  |  | X | X | X | X | X | X | X |
| SmallCap S&P 600 Index |  |  | X | X | X | X | X | X | X |
| SmallCap Value II |  |  | X | X | X | X | X | X | X |
| Tax-Exempt Bond | X | X |  | X |  |  |  |  |  |

---

Each class has different expenses. Because of these different expenses, the investment performance of the classes will vary. For more information, including your eligibility to purchase certain classes of shares, call Principal Funds at 1-800-222-5852.

Principal Global Investors, LLC ("PGI" or the "Manager") may recommend to the Board of Directors (the "Board"), and the Board may elect, to close certain Funds to new investors or close certain Funds to new and existing investors. PGI may make such a recommendation when a Fund approaches a size where additional investments in the Fund have the potential to adversely impact Fund performance and make it increasingly difficult to keep the Fund fully invested in a manner consistent with its investment objective. PGI may also recommend to the Board, and the Board may elect, to close certain share classes to new or new and existing investors.

**MULTIPLE CLASS STRUCTURE** 

The Board has adopted a multiple class plan (the "Multiple Class Plan") pursuant to U.S. Securities and Exchange Commission ("SEC") Rule 18f-3. The share classes each Fund offers are identified in the chart included under the heading "History of the Funds." The share classes offered under the Multiple Class Plan include: Classes A, C, J, Institutional, R-1, R-3, R-4, R-5, and R-6.

Class A shares are generally sold with a sales charge that is a variable percentage based on the amount of the purchase, as described in the Prospectus. Certain redemptions of Class A shares within 12 months of purchase may be subject to a contingent deferred sales charge ("CDSC"), as described in the Prospectus.

Class C shares are not subject to a sales charge at the time of purchase but are subject to a 1% CDSC on shares redeemed within 12 months of purchase, as described in the Prospectus.

Class J shares are sold without any front-end sales charge. A CDSC of 1% is imposed if Class J shares are redeemed within 18 months of purchase, as described in the Prospectus.

Sales charge waivers and reductions may be available depending on whether shares are purchased directly from the Fund or through a financial intermediary, as described in the Prospectus and Appendix B to the Prospectus, titled "Intermediary-Specific Sales Charge Waivers and Reductions."

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For Classes A, C, and J shares purchased from the Fund or through an intermediary not identified on Appendix B to the Prospectus, the CDSC is waived on shares:

<sup>•</sup>

redeemed within 90 days after an account is re-registered due to a shareholder's death;

<sup>•</sup>

redeemed to pay surrender fees;

<sup>•</sup>

redeemed to pay retirement plan fees;

<sup>•</sup>

redeemed involuntarily from accounts with small balances;

<sup>•</sup>

redeemed due to the shareholder's disability (as defined by the Internal Revenue Code) provided the shares were purchased prior to the disability;

<sup>•</sup>

redeemed from retirement plans to satisfy minimum distribution rules under the Internal Revenue Code;

<sup>•</sup>

redeemed from a retirement plan to assure the plan complies with the Internal Revenue Code;

<sup>•</sup>

redeemed from retirement plans qualified under Section 401(a) of the Internal Revenue Code due to the plan participant's death, disability, retirement, or separation from service after attaining age 55;

<sup>•</sup>

redeemed from retirement plans to satisfy excess contribution rules under the Internal Revenue Code; or

<sup>•</sup>

redeemed using a systematic withdrawal plan (up to 1% per month (measured cumulatively with respect to non-monthly plans) of the value of the fund account at the time, and beginning on the date, the systematic withdrawal plan begins). (The free withdrawal privilege not used in a calendar year is not added to the free withdrawal privileges for any following year.)

For Class J shares purchased from the Fund or through an intermediary not identified on Appendix B to the Prospectus, the CDSC also is waived on shares:

<sup>•</sup>

redeemed that were purchased pursuant to the Small Amount Force Out program (SAFO); or

<sup>•</sup>

of the Money Market Fund redeemed within 30 days of the initial purchase if the redemption proceeds are transferred to another Principal IRA, defined as either a fixed or variable annuity issued by Principal Life Insurance Company to fund an IRA, a Principal Bank IRA product, or a WRAP account IRA sponsored by Principal Securities, Inc. (PSI).

Institutional Class and Classes R-1, R-3, R-4, R-5, and R-6 shares are available without any front-end sales charge or CDSC. Classes R-1, R-3, R-4, and R-5 shares are available through employer-sponsored retirement plans. Such plans may impose fees in addition to those charged by the Funds. Classes R-1, R-3, R-4, and R-5 shares are subject to asset-based charges (described below). Class R-6 shares are generally available through the defined contribution investment only channel.

PGI receives a fee for providing investment advisory and certain corporate administrative services under the terms of the Management Agreement between the Registrant and PGI. In addition to the management fee, the Funds' Classes R-1, R-3, R-4, and R-5 shares pay PGI a service fee and an administrative services fee under the terms of a Service Agreement between the Registrant and PGI and an Administrative Services Agreement between the Registrant and PGI, respectively.

<u>Service Agreement (Classes R-1, R-3, R-4, and R-5 Shares)</u> 

The Service Agreement provides for PGI to provide certain personal services to shareholders (plan sponsors) and beneficial owners (plan members) of those classes. These personal services include:

<sup>•</sup>

responding to plan sponsor and plan member inquiries;

<sup>•</sup>

providing information regarding plan sponsor and plan member investments; and

<sup>•</sup>

providing other similar personal services or services related to the maintenance of shareholder accounts as contemplated by National Association of Securities Dealers (NASD) Rule 2830 (or any successor thereto).

As compensation for these services, Principal Funds will pay PGI service fees equal to 0.25% of the average daily net assets attributable to each of the R-1, R-3, R-4, and R-5 Classes. The service fees are calculated and accrued daily and paid monthly to PGI (or at such other intervals as Principal Funds and PGI may agree).

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<u>Administrative Services Agreement (Classes R-1, R-3, R-4, and R-5 Shares)</u> 

The Administrative Services Agreement provides for PGI to provide services to beneficial owners of Fund shares. Such services include:

<sup>•</sup>

receiving, aggregating, and processing purchase, exchange, and redemption requests from plan shareholders;

<sup>•</sup>

providing plan shareholders with a service that invests the assets of their accounts in shares pursuant to pre-authorized instructions submitted by plan members;

<sup>•</sup>

processing dividend payments from the Funds on behalf of plan shareholders and changing shareholder account designations;

<sup>•</sup>

acting as shareholder of record and nominee for plans;

<sup>•</sup>

maintaining account records for shareholders and/or other beneficial owners;

<sup>•</sup>

providing notification to plan shareholders of transactions affecting their accounts;

<sup>•</sup>

forwarding prospectuses, financial reports, tax information, and other communications from the Fund to beneficial owners;

<sup>•</sup>

distributing, receiving, tabulating, and transmitting proxy ballots of plan shareholders; and

<sup>•</sup>

other similar administrative services.

As compensation for these services, Principal Funds will pay PGI service fees equal to 0.28% of the average daily net assets attributable to the R-1 Class, 0.07% of the average daily net assets of the R-3 Class, 0.03% of the average daily net assets of the R-4 Class, and 0.01% of the average daily net assets of the R-5 Class. The service fees are calculated and accrued daily and paid monthly to PGI (or at such other intervals as Principal Funds and PGI may agree).

PGI will generally, at its discretion, appoint (and may at any time remove) other parties, including companies affiliated with PGI, as its agent to carry out the provisions of the Service Agreement and/or the Administrative Services Agreement. However, the appointment of an agent shall not relieve PGI of any of its responsibilities or liabilities under those agreements. Any fees paid to agents under these agreements shall be the sole responsibility of PGI.

<u>Rule 12b-1 Fees / Distribution Plans and Agreements</u> 

The Distributor for the Funds is Principal Funds Distributor, Inc. ("PFD" or the "Distributor"). The address for PFD is as follows: 711 High Street, Des Moines, IA 50392.

In addition to the management and service fees, certain of the Funds' share classes are subject to a Rule 12b-1 Distribution Plan and Agreement (each, a "Plan" and, together, the "Plans"). The Board and initial shareholders of Classes A, C, J, R-1, R-3, and R-4 shares have approved and entered into a Plan. In adopting the Plans, the Board (including a majority of board members who are not interested persons of the Funds (as defined in the Investment Company Act of 1940, as amended) determined that there was a reasonable likelihood that the Plans would benefit the Funds and the shareholders of the affected classes. Among the possible benefits of the Plans include the potential for building and retaining Fund assets, as well as the ability to offer an incentive for registered representatives to provide ongoing servicing to shareholders.

The Plans provide that each Fund makes payments to the Fund's Distributor from assets of each share class that has a Plan to compensate the Distributor and other selling dealers, various banks, broker-dealers, and other financial intermediaries, for providing certain services to the Fund. Such services may include, but are not limited to:

<sup>•</sup>

formulation and implementation of marketing and promotional activities;

<sup>•</sup>

preparation, printing, and distribution of sales literature;

<sup>•</sup>

preparation, printing, and distribution of prospectuses and the Fund reports to other-than-existing shareholders;

<sup>•</sup>

obtaining such information with respect to marketing and promotional activities as the Distributor deems advisable;

<sup>•</sup>

making payments to dealers and others engaged in the sale of shares or who engage in shareholder support services; and

<sup>•</sup>

providing training, marketing, and support with respect to the sale of shares.

------

Each Fund pays the Distributor a fee after the end of each month at an annual rate as a percentage of the daily net asset value of the assets attributable to each share class as follows:

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| | |
|:---|:---|
| **Share Class** | &nbsp;&nbsp; **Maximum Annualized Rule**<br> **12b-1 Fee**<br>|
| A<sup>(1)(2)</sup> <br>| 0.25%<sup>(3)</sup> <br>|
| C<sup>(2)</sup> <br>| 1.00% |
| J<sup>(2)</sup> <br>| 0.15% |
| R-1 | 0.35% |
| R-3 | 0.25% |
| R-4 | 0.10% |

---

<sup>(1)</sup>

Class A shares of the Money Market Fund are not subject to Rule 12b-1 fees.

<sup>(2)</sup>

The Distributor also receives the proceeds of any CDSC imposed.

<sup>(3)</sup>

The maximum annualized Rule 12b-1 fee for Class A shares of the Government & High Quality Bond, LargeCap S&P 500 Index, and Short-Term Income Funds is 0.15%.

Effective December 31, 2015, the Distributor has contractually agreed to limit the distribution fees attributable to Class J normally payable by the Money Market Fund. This waiver is in place through February 29, 2024 and will reduce the Money Market Fund's distribution fees by 0.15%. It is expected that the fee waiver will continue to the period disclosed; however, PFI and the Distributor, the parties to the agreement, may agree to terminate the fee waiver prior to the end of the period.

Effective January 1, 2021, the Distributor has voluntarily agreed to limit the distribution fees attributable to Class J, reducing the Funds' distribution fees for Class J shares by 0.020%.\* This voluntary waiver may be revised or terminated at any time without notice to shareholders.

\*

For the period from December 31, 2016 to December 31, 2020, the voluntary waiver was 0.030%.

The Distributor may remit on a continuous basis all of these sums to its investment representatives and other financial intermediaries as a trail fee in recognition of their services and assistance.

Currently, the Distributor makes payments to dealers on accounts for which such dealer is designated dealer of record. Payments are based on the average net asset value of the accounts invested in Classes A, C, J, R-1, R-3, or R-4 shares.

Under the Plans, the Funds have no legal obligation to pay any amount that exceeds the compensation limit. The Funds do not pay, directly or indirectly, interest, carrying charges, or other financing costs in association with these Plans. All fees paid under a Fund's Plan are paid to the Distributor, which is entitled to retain such fees paid by the Fund without regard to the expenses that it incurs.

For the fiscal year ended October 31, 2022, each Fund made the following 12b-1 payments to PFD, and PFD, from these 12b-1 payments, made the following payments to financial intermediaries that distribute and/or service the Fund's shares. The "Retained by PFD" column reflects the difference between the amount paid by the Fund to PFD and the amount of that 12b-1 fee paid by PFD to financial intermediaries. That difference/remainder is then used by PFD to pay for other 12b-1-eligible expenses. For the fiscal year ended October 31, 2022, the 12b-1-eligible expenses for each Fund were greater than the amount of the Fund's 12b-1 payments to PFD.

---

| | | | |
|:---|:---|:---|:---|
| **Fund/Portfolio** | **Paid by Fund to PFD**<br> **(amounts in thousands)**<br>| **Paid by PFD to** <br> **Financial Intermediaries**<br> **(amounts in thousands)**<br>| **Retained by PFD**<br> **(amounts in thousands)**<br>|
| California Municipal | $1327 | $1281 | $46 |
| Core Fixed Income | 1071 | 1071 |  |
| Core Plus Bond | 452 | 445 | 7 |
| Diversified Income | 7001 | 7001 |  |
| Diversified International | 890 | 875 | 15 |
| Equity Income | 4610 | 4404 | 206 |
| Finisterre Emerging Markets Total Return Bond | 5 | 5 |  |
| Global Emerging Markets | 362 | 354 | 8 |
| Global Real Estate Securities | 365 | 352 | 13 |
| Government & High Quality Bond | 535 | 528 | 7 |
| Government Money Market |  |  |  |
| High Income |  |  |  |
| High Yield | 1719 | 1689 | 30 |

---

------

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| | | | |
|:---|:---|:---|:---|
| **Fund/Portfolio** | **Paid by Fund to PFD**<br> **(amounts in thousands)**<br>| **Paid by PFD to** <br> **Financial Intermediaries**<br> **(amounts in thousands)**<br>| **Retained by PFD**<br> **(amounts in thousands)**<br>|
| Inflation Protection | $55 | $51 | $4 |
| International I | 12 | 12 |  |
| LargeCap Growth I | 2011 | 1934 | 77 |
| LargeCap S&P 500 Index | 3338 | 3166 | 172 |
| LargeCap Value III | 159 | 155 | 4 |
| MidCap | 6172 | 6172 |  |
| MidCap Growth | 209 | 206 | 3 |
| MidCap Growth III | 85 | 83 | 2 |
| MidCap S&P 400 Index | 456 | 423 | 33 |
| MidCap Value I | 443 | 432 | 11 |
| Money Market | 752 |  | 752 |
| Overseas | 2 | 2 |  |
| Principal Capital Appreciation | 3203 | 3143 | 60 |
| Principal LifeTime 2010 | 404 | 395 | 9 |
| Principal LifeTime 2015 | 78 | 75 | 3 |
| Principal LifeTime 2020 | 1761 | 1735 | 26 |
| Principal LifeTime 2025 | 358 | 339 | 19 |
| Principal LifeTime 2030 | 2676 | 2630 | 46 |
| Principal LifeTime 2035 | 307 | 297 | 10 |
| Principal LifeTime 2040 | 1893 | 1867 | 26 |
| Principal LifeTime 2045 | 230 | 227 | 3 |
| Principal LifeTime 2050 | 926 | 912 | 14 |
| Principal LifeTime 2055 | 132 | 130 | 2 |
| Principal LifeTime 2060 | 90 | 89 | 1 |
| Principal LifeTime 2065 | 13 | 12 | 1 |
| Principal LifeTime 2070<sup>(1)</sup> |  |  |  |
| Principal LifeTime Hybrid 2015 | 116 | 116 |  |
| Principal LifeTime Hybrid 2020 | 302 | 302 |  |
| Principal LifeTime Hybrid 2025 | 367 | 367 |  |
| Principal LifeTime Hybrid 2030 | 294 | 294 |  |
| Principal LifeTime Hybrid 2035 | 230 | 230 |  |
| Principal LifeTime Hybrid 2040 | 195 | 195 |  |
| Principal LifeTime Hybrid 2045 | 119 | 119 |  |
| Principal LifeTime Hybrid 2050 | 96 | 96 |  |
| Principal LifeTime Hybrid 2055 | 43 | 43 |  |
| Principal LifeTime Hybrid 2060 | 19 | 19 |  |
| Principal LifeTime Hybrid 2065 | 8 | 8 |  |
| Principal LifeTime Hybrid 2070<sup>(2)</sup> |  |  |  |
| Principal LifeTime Hybrid Income | 59 | 59 |  |
| Principal LifeTime Strategic Income | 180 | 173 | 7 |
| Real Estate Securities | 1597 | 1495 | 102 |
| SAM Balanced | 9837 | 9683 | 154 |
| SAM Conservative Balanced | 3717 | 3637 | 80 |
| SAM Conservative Growth | 6977 | 6844 | 133 |
| SAM Flexible Income | 6551 | 6330 | 221 |
| SAM Strategic Growth | 4568 | 4461 | 107 |
| Short-Term Income | 1142 | 1057 | 85 |
| SmallCap | 1341 | 1262 | 79 |

---

------

---

| | | | |
|:---|:---|:---|:---|
| **Fund/Portfolio** | **Paid by Fund to PFD**<br> **(amounts in thousands)**<br>| **Paid by PFD to** <br> **Financial Intermediaries**<br> **(amounts in thousands)**<br>| **Retained by PFD**<br> **(amounts in thousands)**<br>|
| SmallCap Growth I | $172 | $164 | $8 |
| SmallCap S&P 600 Index | 566 | 535 | 31 |
| SmallCap Value II | 53 | 51 | 2 |
| Tax-Exempt Bond | 1225 | 1170 | 55 |

---

<sup>(1)</sup>

The Principal LifeTime 2070 Fund is new since October 31, 2022.

<sup>(</sup><sup>2</sup><sup>)</sup>

The Principal LifeTime Hybrid 2070 Fund is new since October 31, 2022.

<u>Principal Underwriter</u> 

PFD acts as the principal underwriter in the continuous public offering of the Funds' shares. The table below shows the aggregate dollar amount of underwriting commissions and the amount retained by PFD for the last three fiscal years ended October 31:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Underwriting Fees for Periods Ended October 31**<br> **(amounts in thousands)** | **Underwriting Fees for Periods Ended October 31**<br> **(amounts in thousands)** | **Underwriting Fees for Periods Ended October 31**<br> **(amounts in thousands)** | **Underwriting Fees for Periods Ended October 31**<br> **(amounts in thousands)** | **Underwriting Fees for Periods Ended October 31**<br> **(amounts in thousands)** | **Underwriting Fees for Periods Ended October 31**<br> **(amounts in thousands)** | **Underwriting Fees for Periods Ended October 31**<br> **(amounts in thousands)** |
|  | **2022** | **2022** | **2021** | **2021** | **2020** | **2020** |
| **Fund/Portfolio** | &nbsp;&nbsp; **Total**<br> **Underwriting** <br> **Commissions**<br>| &nbsp;&nbsp; **Amount**<br> **Retained** <br> **by PFD**<br>| &nbsp;&nbsp; **Total**<br> **Underwriting** <br> **Commissions**<br>| &nbsp;&nbsp; **Amount**<br> **Retained** <br> **by PFD**<br>| &nbsp;&nbsp; **Total**<br> **Underwriting** <br> **Commissions**<br>| &nbsp;&nbsp; **Amount**<br> **Retained** <br> **by PFD**<br>|
| California Municipal | $77 | $59 | $94 | $31 | $286 | $194 |
| Core Fixed Income | 87 | 28 | 249 | 77 | 240 | 78 |
| Core Plus Bond | 48 | 14 | 72 | 21 | 107 | 29 |
| Diversified Income | 267<sup>(1)</sup> | 73 | 411 | 114 | 738 | 218 |
| Diversified International | 161 | 33 | 214 | 37 | 159 | 29 |
| Equity Income | 682 | 133 | 895 | 159 | 939 | 196 |
| Finisterre Emerging Markets Total Return <br> Bond<br>| 3 | 1 | 17<sup>(2)</sup> | 5 | 11 | 2 |
| Global Emerging Markets | 76<sup>(3)</sup> | 15 | 117 | 23 | 74 | 13 |
| Global Real Estate Securities | 100 | 18 | 62 | 11 | 102 | 20 |
| Government & High Quality Bond | 71 | 23 | 103 | 32 | 183 | 36 |
| High Income |  |  | 1 |  | 9 | 2 |
| High Yield | 139 | 39 | 169 | 44 | 222 | 65 |
| Inflation Protection | 5 | 5 | 3 | 1 | 13 | 3 |
| International I |  |  | 3 | 1 | 40 | 6 |
| LargeCap Growth I | 273 | 59 | 409 | 80 | 346 | 63 |
| LargeCap S&P 500 Index | 516 | 139 | 557 | 141 | 620 | 150 |
| LargeCap Value III | 2 | 2 |  |  | 1 | 1 |
| MidCap | 574 | 106 | 838 | 152 | 665 | 114 |
| MidCap Growth | 6 | 6 | 8 | 8 | 4 | 4 |
| MidCap Growth III |  |  | 1 | 1 | 1 | 1 |
| MidCap S&P 400 Index | 4 | 4 | 6 | 6 | 10 | 10 |
| MidCap Value I | 130 | 25 | 132 | 22 | 89 | 15 |
| Money Market | 175 | 175 | 103 | 103 | 76 | 76 |
| Principal Capital Appreciation | 376 | 66 | 456 | 74 | 459 | 76 |
| Principal Lifetime Strategic Income | 33 | 18 | 27 | 6 | 20 | 5 |
| Principal LifeTime 2010 | 10 | 5 | 16 | 6 | 29 | 8 |
| Principal LifeTime 2020 | 104 | 50 | 140 | 60 | 137 | 47 |
| Principal LifeTime 2030 | 335 | 84 | 387 | 82 | 378 | 76 |
| Principal LifeTime 2040 | 342 | 74 | 368 | 81 | 358 | 79 |
| Principal LifeTime 2050 | 506 | 90 | 462 | 79 | 404 | 73 |
| Principal LifeTime 2060 | 4 | 4 | 6 | 6 | 2 | 2 |
| Principal LifeTime Hybrid Income | 22 | 22 | 4 | 4 | 6 | 6 |
| Principal LifeTime Hybrid 2015 | 45 | 45 | 7 | 7 | 9 | 9 |
| Principal LifeTime Hybrid 2020 | 103 | 103 | 57 | 57 | 26 | 26 |
| Principal LifeTime Hybrid 2025 | 157 | 157 | 76 | 76 | 34 | 34 |
| Principal LifeTime Hybrid 2030 | 92 | 92 | 46 | 46 | 23 | 23 |
| Principal LifeTime Hybrid 2035 | 85 | 85 | 43 | 43 | 36 | 36 |
| Principal LifeTime Hybrid 2040 | 77 | 77 | 37 | 37 | 31 | 31 |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Underwriting Fees for Periods Ended October 31**<br> **(amounts in thousands)** | **Underwriting Fees for Periods Ended October 31**<br> **(amounts in thousands)** | **Underwriting Fees for Periods Ended October 31**<br> **(amounts in thousands)** | **Underwriting Fees for Periods Ended October 31**<br> **(amounts in thousands)** | **Underwriting Fees for Periods Ended October 31**<br> **(amounts in thousands)** | **Underwriting Fees for Periods Ended October 31**<br> **(amounts in thousands)** | **Underwriting Fees for Periods Ended October 31**<br> **(amounts in thousands)** |
|  | **2022** | **2022** | **2021** | **2021** | **2020** | **2020** |
| **Fund/Portfolio** | &nbsp;&nbsp; **Total**<br> **Underwriting** <br> **Commissions**<br>| &nbsp;&nbsp; **Amount**<br> **Retained** <br> **by PFD**<br>| &nbsp;&nbsp; **Total**<br> **Underwriting** <br> **Commissions**<br>| &nbsp;&nbsp; **Amount**<br> **Retained** <br> **by PFD**<br>| &nbsp;&nbsp; **Total**<br> **Underwriting** <br> **Commissions**<br>| &nbsp;&nbsp; **Amount**<br> **Retained** <br> **by PFD**<br>|
| Principal LifeTime Hybrid 2045 | $57 | $57 | $20 | $20 | $21 | $21 |
| Principal LifeTime Hybrid 2050 | 51 | 51 | 23 | 23 | 12 | 12 |
| Principal LifeTime Hybrid 2055 | 28 | 28 | 9 | 9 | 4 | 4 |
| Principal LifeTime Hybrid 2060 | 11 | 11 | 3 | 3 | 4 | 4 |
| Principal LifeTime Hybrid 2065 | 3 | 3 | 1 | 1 |  |  |
| Real Estate Securities | 280 | 55 | 243 | 46 | 367 | 70 |
| SAM Balanced | 2044 | 542 | 2277 | 444 | 2067 | 417 |
| SAM Conservative Balanced | 844 | 311 | 1098 | 260 | 927 | 227 |
| SAM Conservative Growth | 1791 | 396 | 1858 | 379 | 1704 | 322 |
| SAM Flexible Income | 918 | 399 | 1172 | 375 | 1176 | 361 |
| SAM Strategic Growth | 1447 | 283 | 1465 | 262 | 1519 | 291 |
| Short-Term Income | 469 | 137 | 553 | 159 | 450 | 136 |
| SmallCap | 247 | 56 | 380 | 61 | 210 | 36 |
| SmallCap Growth I | 2 | 2 | 10 | 10 | 4 | 4 |
| SmallCap S&P 600 Index | 4 | 4 | 4 | 4 | 3 | 3 |
| SmallCap Value II | 1 | 1 | 6 | 2 | 18 | 3 |
| Tax-Exempt Bond | 155 | 85 | 164 | 56 | 177 | 72 |

---

<sup>(</sup><sup>1</sup><sup>)</sup>

Effective March 1, 2022, Global Diversified Income Fund changed its name to Diversified Income Fund.

<sup>(</sup><sup>2</sup><sup>)</sup>

Effective February 1, 2021, Finisterre Unconstrained Emerging Markets Bond Fund changed its name to Finisterre Emerging Markets Total Return Bond Fund.

<sup>(</sup><sup>3</sup><sup>)</sup>

Effective January 1, 2022, International Emerging Markets Fund changed its name to Global Emerging Markets Fund.

PFD does not charge fees on redemptions or repurchases of Fund shares. The amounts in the table above for Total Underwriting Commissions include any applicable contingent deferred sales charges and front-end sales charges.

<u>Transfer Agency Agreement (Classes A, C, J, Institutional, R-1, R-3, R-4, R-5, and R-6)</u> 

The Transfer Agency Agreement provides for Principal Shareholder Services, Inc. ("PSS") (711 High Street, Des Moines, IA 50392) an affiliate of PGI, to act as transfer and shareholder servicing agent for the Classes A, C, J, Institutional, R-1, R-3, R-4, R-5, and R-6.

<sup>•</sup>

For Classes A and C, and Institutional Class shares, the Registrant pays PSS a fee for the services provided pursuant to the Transfer Agency Agreement in an amount equal to the costs incurred by PSS for providing such services.

<sup>•</sup>

For Class J shares, the Registrant pays PSS a fee for the services provided pursuant to the Transfer Agency Agreement in an amount that includes profit.

The Registrant pays PSS for the following services for Classes A, C, and J, and Institutional Class shares:

<sup>•</sup>

issuance, transfer, conversion, cancellation, and registry of ownership of Fund shares, and maintenance of open account system;

<sup>•</sup>

preparation and distribution of dividend and capital gain payments to shareholders;

<sup>•</sup>

delivery, redemption, and repurchase of shares, and remittances to shareholders;

<sup>•</sup>

the tabulation of proxy ballots and the preparation and distribution to shareholders of notices, proxy statements and proxies, reports, confirmation of transactions, prospectuses, and tax information;

<sup>•</sup>

communication with shareholders concerning the above items; and

<sup>•</sup>

use of its best efforts to qualify the capital stock of the Funds for sale in states and jurisdictions as directed by the Funds.

The Registrant does not pay for these services for Classes R-1, R-3, R-4, R-5, and R-6 shares. PSS will pay operating expenses attributable to Classes R-1, R-3, R-4, and R-5 shares related to (a) the cost of meetings of shareholders and (b) the costs of initial and ongoing qualification of the capital stock of the Funds for sale in states and jurisdictions.

------

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

The Registrant is a registered, open-end management investment company, commonly called a mutual fund. The Registrant consists of multiple investment portfolios, which are referred to as "Funds." Each Fund has its own investment objective, strategies, and portfolio management team. As described below, each Fund has adopted a fundamental policy regarding diversification, as that term is used in the Investment Company Act of 1940, as amended (the "1940 Act"), and as interpreted, modified, or otherwise permitted by regulatory authority having jurisdiction, from time to time.

**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, with fractional shares voting proportionately. Shares of all classes of a Fund will vote together as a single class, except when otherwise required by law or as determined by the Board.

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)

has adopted a commodities policy, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The California Municipal Fund may not purchase or sell commodities, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The remaining Funds 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 each 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 adopted a policy regarding diversification, as follows:

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The LargeCap Growth I and Real Estate Securities Funds have elected to be non-diversified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All other Funds have 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)

has adopted a concentration policy, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Global Real Estate Securities and Real Estate Securities Funds will concentrate their investments in a particular industry or group of industries as described in the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The LargeCap S&P 500 Index, MidCap S&P 400 Index, and SmallCap S&P 600 Index Funds will not concentrate their investments in a particular industry or group of industries, except to the extent that their related Index is also so concentrated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The remaining Funds 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; however:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Government Money Market and Money Market Funds may each not invest more than 5% 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) International Fund I, the Principal LifeTime Funds, Principal LifeTime Hybrid Funds, and the Strategic Asset Management (SAM) Portfolios have not adopted this non-fundamental restriction.

2)

Pledge, mortgage, or hypothecate its assets, except to secure permitted borrowings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) With respect to the Principal LifeTime Funds, Principal LifeTime Hybrid Funds, and Strategic Asset Management (SAM) Portfolios, 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, by the underlying funds are not deemed to be pledges, mortgages, hypothecations, or other encumbrances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) For all Funds, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) International Fund I has not adopted this non-fundamental restriction.

3)

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) International Fund I has not adopted this non-fundamental restriction.

4)

Invest more than 25% of its assets in foreign securities; however:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The High Yield Fund may not invest more than 35% of its assets in foreign securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Diversified Income, Diversified International, Finisterre Emerging Markets Total Return Bond, Global Emerging Markets, Global Real Estate Securities, Money Market, and Overseas Funds each may invest up to 100% of its assets in foreign securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The LargeCap S&P 500 Index, MidCap S&P 400 Index, and SmallCap S&P 600 Index Funds each may invest in foreign securities to the extent that the relevant index is so invested;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The California Municipal, Government & High Quality Bond, Government Money Market, and Tax-Exempt Bond Funds may not invest in foreign securities; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) International Fund I, the Principal LifeTime Funds, Principal LifeTime Hybrid Funds, and the Strategic Asset Management (SAM) Portfolios have not adopted this non-fundamental restriction.

5)

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Diversified Income, Global Real Estate Securities, International I, and Real Estate Securities Funds and the Principal LifeTime Funds, Principal LifeTime Hybrid Funds, and the Strategic Asset Management (SAM) Portfolios have not adopted this non-fundamental restriction.

6)

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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Principal LifeTime Funds, Principal LifeTime Hybrid Funds, and the Strategic Asset Management (SAM) Portfolios have not adopted this non-fundamental restriction.

International Fund I has adopted additional non-fundamental restrictions as noted below. The Fund:

1)

may not purchase securities on margin, except that the Fund may obtain such short-term credits as are necessary for the clearance of transactions, and provided that margin payments in connection with futures contracts and options on futures contracts shall not constitute purchasing securities on margin.

2)

may not purchase any security if, as a result, more than 15% of its net assets would be invested in securities that are deemed to be illiquid because they are subject to legal or contractual restrictions on resale or because they cannot be sold or disposed of in the ordinary course of business at approximately the prices at which they are valued.

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

Except as specifically noted, 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 its net assets, plus any borrowings for investment purposes, in the type of investments, industry, or geographic region (as described in the Prospectus) as suggested by the name of the Fund.

This policy applies at the time of purchase. A Fund will provide 60 days' notice to shareholders prior to implementing a change in this policy for the Fund. For purposes of this non-fundamental policy, each Fund tests market capitalization ranges monthly.

For purposes of testing this requirement with respect to:

<sup>•</sup>

<u>Forward foreign currency contracts and other investments that have economic characteristics similar to foreign currency</u>: the value of such contracts and investments may include the Fund's investments in cash and/or cash equivalents to the extent such cash and/or cash equivalents are maintained with respect to the Fund's exposure under its forward foreign currency contracts and similar investments.

<sup>•</sup>

<u>Derivatives instruments</u>: each Fund will typically count the mark-to-market value of such derivatives. However, a Fund may use a derivative contract's notional value when it determines that notional value is an appropriate measure of the Fund's exposure to investments. For example, with respect to single-name equity swaps that are "fully paid" (equity swaps in which cash and/or cash equivalents are posted as collateral for the purpose of covering the full notional value of the swap), each Fund will count the value of such cash and/or cash equivalents.

<sup>•</sup>

<u>Investments in underlying funds (including ETFs)</u>: each Fund will count all investments in an underlying fund toward the requirement as long as 80% of the value of such underlying fund's holdings focus on the particular type of investment suggested by the Fund name.

The California Municipal, Diversified Income, Diversified International, High Income, Inflation Protection, International I, Principal Capital Appreciation, Short-Term Income, and Tax-Exempt Bond Funds, Principal LifeTime Funds, Principal LifeTime Hybrid Funds, and Strategic Asset Management (SAM) Portfolios have not adopted this non-fundamental policy.

------

The Tax-Exempt Bond Fund has also adopted a fundamental policy that requires it, under normal circumstances, to invest at least 80% of its net assets in investments, the income from which is exempt from federal income tax or so that at least 80% of the income the Fund distributes will be exempt from federal income tax.

The California Municipal Fund has adopted a fundamental policy that requires it, under normal circumstances, to invest at least 80% of its net assets in investments, the income from which is exempt from federal income tax and California state personal income tax or so that at least 80% of the income the Fund distributes will be exempt from federal income tax and California state personal income tax. The Fund also has adopted a non-fundamental policy that requires it, under normal circumstances, to invest at least 80% of its net assets in municipal obligations.

**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** 

<u>All Funds Except the Finisterre Emerging Markets Total Return Bond Fund</u> 

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 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, 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 the Funds, therefore, are not considered regulated commodity pools and are not subject to registration or regulation under the CEA. The CFTC amended Rule 4.5 exclusions for certain otherwise regulated persons from the definition of the term "commodity pool operator." Rule 4.5 provides that an investment company does not meet the definition of "commodity pool operator" 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>Finisterre Emerging Markets Total Return Bond Fund</u> 

Based on its current investment strategies, the Finisterre Emerging Markets Total Return Bond Fund is deemed to be a "commodity pool" under the CEA, and PGI is considered a "commodity pool operator" with respect to the Fund. PGI is, therefore, subject to dual regulation by the SEC and the CFTC. The CFTC or the SEC could alter the regulatory requirements governing the use of commodity futures (which include futures on broad-based securities indexes, interest rate futures, and currency futures) or options on commodity futures or swaps transactions by investment companies, including this 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.

<sup>•</sup>

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. To the extent a Fund invests its assets in underlying investment companies, 25% or more of such Fund's total assets may be indirectly exposed to a particular industry or group of related industries through its investments in one or more underlying investment companies.

<sup>•</sup>

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 the Funds' industry concentration restrictions.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

<sup>•</sup>

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 the Fund's investment objective 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**

**Commodity Index-Linked Notes** 

A commodity index-linked note is a type of structured note that is a derivative instrument. Over the long term, the returns on a fund's investments in commodity index-linked notes are expected to exhibit low or negative correlation with stocks and bonds, which means the prices of commodity-linked notes may move in a different direction than investments in traditional equity and debt securities. As an example, during periods of rising inflation, debt securities have historically tended to decrease in value and the prices of certain commodities, such as oil and metals, have historically tended to increase. The reverse may be true during "bull markets," when the value of traditional securities such as stocks and bonds is increasing. Under such economic conditions, a fund's investments in commodity index-linked notes may be expected not to perform as well as investments in traditional securities. There can be no assurance, however, that derivative instruments will perform in that manner in the future and, at certain times in the past, the price movements of commodity-linked investments have been parallel to debt and equity securities. If commodities prices move in tandem with the prices of financial assets, they may not provide overall portfolio diversification benefits.

**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.

<u>Synthetic Convertibles</u> 

------

investing in non-convertible, income-producing securities such as bonds, preferred stocks and money market instruments, which may be represented by derivative instruments. The convertible component is achieved by investing in securities or instruments such as warrants or options to buy common stock at a certain exercise price, or options on a stock index. Unlike a traditional convertible security, which is a single security having a single market value, a synthetic convertible comprises two or more separate securities, each with its own market value. Therefore, the "market value" of a synthetic convertible security is the sum of the values of its income-producing component and its convertible component. For this reason, the values of a synthetic convertible security and a traditional convertible security may respond differently to market fluctuations.

More flexibility is possible in the assembly of a synthetic convertible security than in the purchase of a convertible security. Although synthetic convertible securities may be selected where the two components are issued by a single issuer, thus making the synthetic convertible security similar to the traditional convertible security, the character of a synthetic convertible security allows the combination of components representing distinct issuers, when such a combination may better achieve a fund's investment objective. A synthetic convertible security also is a more flexible investment in that its two components may be purchased separately. For example, a fund may purchase a warrant for inclusion in a synthetic convertible security but temporarily hold short-term investments while postponing the purchase of a corresponding bond pending development of more favorable market conditions.

A holder of a synthetic convertible security faces the risk of a decline in the price of the security or the level of the index involved in the convertible component, causing a decline in the value of the security or instrument, such as a call option or warrant, purchased to create the synthetic convertible security. Should the price of the stock fall below the exercise price and remain there throughout the exercise period, the entire amount paid for the call option or warrant would be lost. Because a synthetic convertible security includes the income-producing component as well, the holder of a synthetic convertible security also faces the risk that interest rates will rise, causing a decline in the value of the income-producing instrument.

**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, the market price of the securities may decline below the purchase price paid by a fund.

In general, securities which 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 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 of Fund shareholders to transact business, 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. 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 risk management processes, there can be no guarantee that a fund will avoid losses relating to cyber security risks or other information security breaches.

**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.

<sup>•</sup>

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.

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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.

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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.

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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.

*Index Warrants.* A Fund may purchase put warrants and call warrants whose values vary depending on the change in the value of one or more specified securities indices ("index warrants"). Index warrants are generally issued by banks or other financial institutions and give the holder the right, at any time during the term of the warrant, to receive upon exercise of the warrant a cash payment from the issuer based on the value of the underlying index at the time of exercise. In general, if the value of the underlying index rises above the exercise price of the index warrant, the holder of a call warrant will be entitled to receive a cash payment from the issuer upon exercise based on the difference between the value of the index and the exercise price of the warrant; if the value of the underlying index falls, the holder of a put warrant will be entitled to receive a cash payment from the issuer upon exercise based on the difference between the exercise price of the warrant and the value of the index. The holder of a warrant would not be entitled to any payments from the issuer at a time when, in the case of a call warrant, the exercise price is more than the value of the underlying index, or in the case of a put warrant, the exercise price is less than the value of the underlying index. If a Fund were not to exercise an index warrant prior to its expiration, then a Fund would lose the amount of the purchase price paid by it for the warrant. A Fund will normally use index warrants in a manner similar to its use of options on securities indices.

*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 for 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

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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

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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>Debt-Linked and Equity-Linked Securities</u> 

Each Fund may invest in debt-linked and equity-linked securities. The investment results of such instruments are intended to correspond generally to the performance of one or more specified equity or debt securities, or of a specific index or analogous "basket" of equity or debt securities. Therefore, investing in these instruments involves risks similar to the risks of investing in the underlying stocks or bonds directly. In addition, a Fund bears the risk that the issuer of an equity- or debt-linked security may default on its obligations under the instrument. Equity- and debt-linked securities are often used for many of the same purposes as, and share many of the same risks with, other derivative instruments as well as structured notes. Like many derivatives and structured notes, equity- and debt-linked securities may be considered illiquid, potentially limiting a Fund's ability to dispose of them.

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<u>Hybrid Instruments</u> 

A hybrid instrument is a type of derivative that combines a traditional stock or bond with an option or forward contract. Generally, the principal amount, amount payable upon maturity or redemption, or interest rate of a hybrid is tied (positively or negatively) to the price of some currency or securities index or another interest rate or some other economic factor (each a "benchmark"). The interest rate or (unlike most fixed income securities) the principal amount payable at maturity of a hybrid security may be increased or decreased, depending on changes in the value of the benchmark. An example of a hybrid could be a bond issued by an oil company that pays a small base level of interest with additional interest that accrues in correlation to the extent to which oil prices exceed a certain predetermined level. Such a hybrid instrument would be economically similar to a combination of a bond and a call option on oil.

Hybrids can be used as an efficient means of pursuing a variety of investment goals, including currency hedging, duration management and increased total return. Hybrids may not bear interest or pay dividends. The value of a hybrid or its interest rate may be a multiple of a benchmark and, as a result, may be leveraged and move (up or down) more steeply and rapidly than the benchmark. These benchmarks may be sensitive to economic and political events, such as currency devaluations, which cannot be readily foreseen by the purchaser of a hybrid. Under certain conditions, the redemption value of a hybrid could be zero. Thus, an investment in a hybrid may entail significant market risks that are not associated with a similar investment in a traditional, U.S. dollar-denominated bond that has a fixed principal amount and pays a fixed rate or floating rate of interest. The purchase of hybrids also exposes the Fund to the credit risk of the issuer of the hybrids. These risks may cause significant fluctuations in the NAV of a Fund.

Certain hybrid instruments may provide exposure to the commodities markets. These are derivative securities with one or more commodity-linked components that have payment features similar to commodity futures contracts, commodity options or similar instruments. Commodity-linked hybrid instruments may be either equity or debt securities, leveraged or unleveraged, and are considered hybrid instruments because they have both security and commodity-like characteristics. A portion of the value of these instruments may be derived from the value of a commodity, futures contract, index or other economic variable and therefore are subject to many of the same risks as investments in those underlying securities, instruments or commodities.

Certain issuers of structured products such as hybrid instruments may be deemed to be investment companies as defined in the 1940 Act. As a result, a Fund's investments in these products may be subject to limits applicable to investments in investment companies and may be subject to restrictions contained in the 1940 Act.

<u>Spread Transactions</u> 

Funds may engage in spread trades, which typically represent a simultaneous purchase and sale of two different contracts designed to capture the change in the relationship in price between the two contracts. Spread transactions are typically accompanied by lower margin requirements and lower volatility than an outright purchase. Funds may purchase spread options. The purchase of a covered spread option gives the Fund the right to put, or sell, a security that it owns at a fixed dollar spread or fixed yield spread in relationship to another security that the Fund does not own, but which is used as a benchmark. The risk to the Fund in purchasing covered spread options is the cost of the premium paid for the spread option and any transaction costs. In addition, there is no assurance that closing transactions will be available. The security covering the spread option is maintained in segregated accounts either with the Fund's custodian or on the Fund's records. The Funds do not consider a security covered by a spread option to be "pledged" as that term is used in the Fund's policy limiting the pledging or mortgaging of assets. The purchase of spread options can be used to protect Funds against adverse changes in prevailing credit quality spreads, i.e., the yield spread between high quality and lower quality securities.

<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

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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.

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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.

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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.

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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).

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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.

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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 London InterBank Offered Rate (LIBOR), 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.

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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.

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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.

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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.

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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.

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*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:

<sup>•</sup>

the frequency of trades and quotations,

<sup>•</sup>

the number of dealers and prospective purchasers in the marketplace,

<sup>•</sup>

dealer undertakings to make a market,

<sup>•</sup>

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

<sup>•</sup>

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> 

*All Funds except the Finisterre Emerging Markets Total Return Bond Fund.* 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 the rules the CFTC has adopted under it

*Finisterre Emerging Markets Total Return Bond Fund.* The Finisterre Emerging Markets Total Return Bond Fund is deemed to be a regulated "commodity pool" under the CEA and, as a result, may invest in futures contracts, options on futures contracts, and swaps in excess of the limitations imposed by the CFTC under Rule 4.5.

<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.

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

*(Applicable to all Funds or portions of the Funds, other than Government & High Quality Bond Fund, Government Money Market Fund, portion of High Income Fund managed by Insight North America, LLC, Inflation Protection Fund, LargeCap S&P 500 Index Fund, Midcap S&P 400 Index Fund, Money Market Fund, and SmallCap S&P 600 Index Fund.)* 

The portfolio managers of the Funds noted above 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.

Further, the portfolio managers of the Finisterre Emerging Markets Total Return Bond Fund and a portion of the emerging market debt investments in the Diversified Income Fund use filtering techniques based on ESG criteria, which can result in the exclusion of companies that have exposures to certain controversial sectors. The exclusion of companies from the investable universe may, under certain circumstances, detract from investment performance.

**Environmental, Social, and Governance Factors in the Selection of Investment Advisors and Asset Classes** 

The Diversified Income Fund is structured as an asset allocation fund, in which PGI is responsible for selecting sub-advisors and investment teams within PGI that, in turn, are responsible for selecting underlying investments. In selecting sub-advisors, investment teams, and asset classes, the PGI asset allocation team considers ESG factors. ESG factors are generally no more significant than other factors in the selection process, such that ESG factors may not be determinative in deciding to include or exclude any particular sub-advisor, investment team, or asset class in the portfolio. 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>ETNs</u> 

Certain funds may invest in, or sell short, exchange-traded notes ("ETNs"). ETNs are typically senior, unsecured, unsubordinated debt securities whose returns are linked to the performance of a particular market index less applicable fees and expenses. ETNs are listed on an exchange and traded in the secondary market. The fund may hold the ETN until maturity, at which time the issuer is obligated to pay a return linked to the performance of the relevant market index. ETNs do not make periodic interest payments and principal is not protected.

ETNs are subject to credit risk and the value of the ETN may drop due to a downgrade in the issuer's credit rating, despite the underlying market benchmark or strategy remaining unchanged. The value of an ETN may also be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying assets, changes in the applicable interest rates, changes in the issuer's credit rating, and economic, legal, political, or geographic events that affect the referenced underlying asset. When a Fund invests in ETNs, it will bear their proportionate share of any fees and expenses borne by the ETN. The Fund's decision to sell its ETN holdings may be limited by the availability of a secondary market. ETNs are also subject to tax risk. The Internal Revenue Service ("IRS") and Congress are considering proposals that would change the timing and character of income and gains from ETNs. There may also be times when an ETN share trades at a premium or discount to its market benchmark or strategy.

<u>Funding Agreements</u> 

Some Funds may invest in Guaranteed Investment Contracts ("GICs") and similar funding agreements. In connection with these investments, a Fund makes cash contributions to a deposit fund of an insurance company's general account. The insurance company then credits to a Fund on a monthly basis guaranteed interest, which is based on an index (such as LIBOR, SOFR, or a similar reference rate). The funding agreements provide that this guaranteed interest will not be less than a certain minimum rate. The purchase price paid for a funding agreement becomes part of the general assets of the insurance company. GICs are considered illiquid securities and will be subject to any limitations on such investments, unless there is an active and substantial secondary market for the particular instrument and market quotations are readily available. Generally, funding agreements are not assignable or transferable without the permission of the issuing company, and an active secondary market in some funding agreements does not currently exist. Investments in GICs are subject to the risks associated with fixed-income instruments generally, and are specifically subject to the credit risk associated with an investment in the issuing insurance company.

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<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>Structured Notes</u> 

Some Funds may invest in a broad category of instruments known as "structured notes." These instruments are debt obligations issued by industrial corporations, financial institutions or governmental or international agencies. Traditional debt obligations typically obligate the issuer to repay the principal plus a specified rate of interest. Structured notes, by contrast, obligate the issuer to pay amounts of principal or interest that are determined by reference to changes in some external factor or factors, or the principal and interest rate may vary from the stated rate because of changes in these factors. For example, the issuer's obligations could be determined by reference to changes in the value of a foreign currency, an index of securities (such as the S&P 500 Index) or an interest rate (such as the U.S. Treasury bill rate). In some cases, the issuer's obligations are determined by reference to changes over time in the difference (or "spread") between two or more external factors (such as the U.S. prime lending rate and the total return of the stock market in a particular country, as measured by a stock index). In some cases, the issuer's obligations may fluctuate inversely with changes in an external factor or factors (for example, if the U.S. prime lending rate goes up, the issuer's interest payment obligations are reduced). In some cases, the issuer's obligations may be determined by some multiple of the change in an external factor or factors (for example, three times the change in the U.S. Treasury bill rate). In some cases, the issuer's obligations remain fixed (as with a traditional debt instrument) so long as an external factor or factors do not change by more than the specified amount (for example, if the value of a stock index does not exceed some specified maximum), but if the external factor or factors change by more than the specified amount, the issuer's obligations may be sharply reduced.

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Structured notes can serve many different purposes in the management of a fund. For example, they can be used to increase a fund's exposure to changes in the value of assets that a fund would not ordinarily purchase directly (such as stocks traded in a market that is not open to U.S. investors). They also can be used to hedge the risks associated with other investments a fund holds. For example, if a structured note has an interest rate that fluctuates inversely with general changes in a country's stock market index, the value of the structured note would generally move in the opposite direction to the value of holdings of stocks in that market, thus moderating the effect of stock market movements on the value of a fund's portfolio as a whole. The cash flow on the underlying instruments may be apportioned among the newly issued structured notes to create securities with different investment characteristics such as varying maturities, payment priorities or interest rate provisions; the extent of the payments made with respect to structured notes is dependent on the extent of the cash flow on the underlying instruments.

Structured notes involve special risks. As with any debt obligation, structured notes involve the risk that the issuer will become insolvent or otherwise default on its payment obligations. This risk is in addition to the risk that the issuer's obligations (and thus the value of a fund's investment) will be reduced because of adverse changes in the external factor or factors to which the obligations are linked. The value of structured notes will in many cases be more volatile (that is, will change more rapidly or severely) than the value of traditional debt instruments. Volatility will be especially high if the issuer's obligations are determined by reference to some multiple of the change in the external factor or factors. Structured notes also may be more difficult to accurately price than less complex securities and instruments or more traditional debt securities. Many structured notes have limited or no liquidity, so that a fund would be unable to dispose of the investment prior to maturity. As with all investments, successful use of structured notes depends in significant part on the accuracy of the analysis of those managing the fund's investments of the issuer's creditworthiness and financial prospects, and of their forecast as to changes in relevant economic and financial market conditions and factors. In instances where the issuer of a structured note is a foreign entity, the usual risks associated with investments in foreign securities apply. Structured notes 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.

**Foreign Currency Transactions** 

<u>Options on Foreign Currencies</u> 

A Fund may buy and write options on foreign currencies in a manner similar to that in which futures or forward contracts on foreign currencies will be utilized. Each Fund may use options on foreign currencies to hedge against adverse changes in foreign currency conversion rates. For example, a decline in the U.S. dollar value of a foreign currency in which portfolio securities are denominated will reduce the U.S. dollar value of such securities, even if their value in the foreign currency remains constant. In order to protect against such diminutions in the value of the portfolio securities, a Fund may buy put options on the foreign currency. If the value of the currency declines, a Fund will have the right to sell such currency for a fixed amount in U.S. dollars, thereby offsetting, in whole or in part, the adverse effect on its portfolio. Conversely, when a rise in the U.S. dollar value of a currency in which securities to be acquired are denominated is projected, thereby increasing the cost of such securities, a Fund may buy call options on the foreign currency. The purchase of such options could offset, at least partially, the effects of the adverse movements in exchange rates. As in the case of other types of options, however, the benefit to a Fund from purchases of foreign currency options will be reduced by the amount of the premium and related transaction costs. In addition, if currency exchange rates do not move in the direction or to the extent desired, a Fund could sustain losses or lesser gains on transactions in foreign currency options that would require a Fund to forgo a portion or all of the benefits of advantageous changes in those rates.

Each Fund also may write options on foreign currencies. For example, to hedge against a potential decline in the U.S. dollar due to adverse fluctuations in exchange rates, a Fund could, instead of purchasing a put option, write a call option on the relevant currency. If the decline expected by a Fund occurs, the option will most likely not be exercised and the diminution in value of portfolio securities will be offset at least in part by the amount of the premium received. Similarly, instead of purchasing a call option to hedge against a potential increase in the U.S. dollar cost of securities to be acquired, a Fund could write a put option on the relevant currency which, if rates move in the manner projected by a Fund, will expire unexercised and allow a Fund to hedge the increased cost up to the amount of the premium. If exchange rates do not move in the expected direction, the option may be exercised and a Fund would be required to buy or sell the underlying currency at a loss, which may not be fully offset by the amount of the premium. Through the writing of options on foreign currencies, a Fund also may lose all or a portion of the benefits that might otherwise have been obtained from favorable movements in exchange rates.

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<u>Futures on Currency</u> 

A foreign currency future provides for the future sale by one party and purchase by another party of a specified quantity of foreign currency at a specified price and time. A public market exists in futures contracts covering a number of foreign currencies. Currency futures contracts are exchange-traded and change in value to reflect movements of a currency or a basket of currencies. Settlement must be made in a designated currency.

<u>Forward Foreign Currency Exchange Contracts</u> 

Each Fund may, but is not obligated to, enter into forward foreign currency exchange contracts. Currency transactions include forward currency contracts and exchange listed or over-the-counter options on currencies. A forward currency contract involves a privately negotiated obligation to purchase or sell a specific currency at a specified future date at a price set at the time of the contract.

The typical use of a forward contract is to "lock in" the price of a security in U.S. dollars or some other foreign currency which a Fund is holding in its portfolio. By entering into a forward contract for the purchase or sale, for a fixed amount of dollars or other currency, of the amount of foreign currency involved in the underlying security transactions, a Fund may be able to protect itself against a possible loss resulting from an adverse change in the relationship between the U.S. dollar or other currency which is being used for the security purchase and the foreign currency in which the security is denominated in or exposed to during the period between the date on which the security is purchased or sold and the date on which payment is made or received.

Those managing the fund's investments also may from time to time utilize forward contracts for other purposes. For example, they may be used to hedge a foreign security held in the portfolio or a security which pays out principal tied to an exchange rate between the U.S. dollar and a foreign currency, against a decline in value of the applicable foreign currency. They also may be used to lock in the current exchange rate of the currency in which those securities anticipated to be purchased are denominated in or exposed to. At times, each Fund may enter into "cross-currency" hedging transactions involving currencies other than those in which securities are held or proposed to be purchased are denominated.

It should be noted that the use of forward foreign currency exchange contracts does not eliminate fluctuations in the underlying prices of the securities. It simply establishes a rate of exchange between the currencies that can be achieved at some future point in time. Additionally, although such contracts tend to minimize the risk of loss due to a decline in the value of the hedged currency, they also tend to limit any potential gain that might result if the value of the currency increases.

**Foreign Securities** 

Investing in foreign securities carries political and economic risks distinct from those associated with investing in the United States. Investments in foreign securities also involve the risk of possible adverse changes in investment or exchange control regulations, expropriation or confiscatory taxation, limitation on or delays in the removal of funds or other assets of a fund, political or financial instability or diplomatic and other developments that could affect such investments. Foreign investments may be affected by actions of foreign governments adverse to the interests of U.S. investors, including the possibility of expropriation or nationalization of assets, confiscatory taxation, restrictions on U.S. investment or on the ability to repatriate assets or to convert currency into U.S. Dollars. There may be a greater possibility of default by foreign governments or foreign-government sponsored enterprises. Investments in foreign countries also involve a risk of local political, economic or social instability, military action or unrest or adverse diplomatic developments.

<u>Asia-Pacific Countries</u> 

In addition to the risks of foreign investing and the risks of investing in emerging markets, the developing market Asia-Pacific countries in which a Fund may invest are subject to certain additional or specific risks. In the Asia-Pacific markets, there is a high concentration of market capitalization and trading volume in a small number of issuers representing a limited number of industries, as well as a high concentration of investors and financial intermediaries. Many of these markets also may be affected by developments with respect to more established markets in the region, such as Japan and Hong Kong. Brokers in developing market Asia-Pacific countries typically are fewer in number and less well capitalized than brokers in the United States.

Many of the developing market Asia-Pacific countries may be subject to a greater degree of economic, political and social instability than is the case in the United States and Western European countries. Such instability may result from, among other things: (i) authoritarian governments or military involvement in political and economic decision- making, including changes in government through extra-constitutional means; (ii) popular unrest associated with demands for improved political, economic and social conditions; (iii) internal insurgencies; (iv) hostile relations with neighboring countries; and/or (v) ethnic, religious and racial disaffection. In addition, the governments of many of such countries, such as Indonesia, have a heavy role in regulating and supervising the economy.

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An additional risk common to most such countries is that the economy is heavily export-oriented and, accordingly, is dependent upon international trade. The existence of overburdened infrastructure and obsolete financial systems also present risks in certain countries, as do environmental problems. Certain economies also depend to a significant degree upon exports of primary commodities and, therefore, are vulnerable to changes in commodity prices that, in turn, may be affected by a variety of factors. The legal systems in certain developing market Asia-Pacific countries also may have an adverse impact on a Fund. The rights of investors in developing market Asia-Pacific companies may be more limited than those of shareholders of U.S. corporations. It may be difficult or impossible to obtain and/or enforce a judgment in a developing market Asia-Pacific country.

<u>China</u> 

Investing in China involves special considerations, including: the risk of nationalization or expropriation of assets or confiscatory taxation; greater governmental involvement in and control over the economy, interest rates and currency exchange rates; controls on foreign investment and limitations on repatriation of invested capital; greater social, economic and political uncertainty; dependency on exports and the corresponding importance of international trade; and currency exchange rate fluctuations. The government of China maintains strict currency controls in support of economic, trade and political objectives and regularly intervenes in the currency market. The government's actions in this respect may not be transparent or predictable. Furthermore, it is difficult for foreign investors to directly access money market securities in China because of investment and trading restrictions. These and other factors may decrease the value and liquidity of a fund's investments.

A fund may obtain exposure to companies based or operated in China by investing through legal structures known as variable interest entities ("VIEs"). VIEs are not formally recognized under Chinese law and are subject to risks, such as the risk that China could cease to allow VIEs, could impose new restrictions on VIEs, or could deem the contractual arrangements of VIEs unenforceable. These risks could limit or eliminate the remedies and rights available to VIEs and their investors, such as a fund. If these risks materialize, the value of a fund's investments in VIEs could be adversely affected, and a fund could incur significant losses with no available recourse.

<u>Investments in Stock Connect and Bond Connect</u> 

Funds may invest in China A shares, which are shares of certain Chinese companies listed and traded through the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect programs ("Stock Connect"). Stock Connect is a securities trading and clearing program established by Hong Kong Exchanges and Clearing Limited, the Shanghai Stock Exchange ("SSE"), the Shenzhen Stock Exchange ("SZSE") and China Securities Depository and Clearing Corporation Limited, which seeks to provide mutual stock market access between Mainland China and Hong Kong. Trading through Stock Connect is subject to numerous restrictions and risks that could impair the Fund's ability to invest in or sell China A shares and adversely affect the Fund's performance, such as the following:

<sup>•</sup>

China A shares generally may not be sold, purchased or otherwise transferred other than through Stock Connect in accordance with applicable rules, regulations, and restrictions. Such securities may lose their eligibility, in which case they presumably could be sold but could no longer be purchased through Stock Connect. Market volatility and settlement difficulties in the China A share markets may result in significant fluctuations in the prices and liquidity of the securities traded on such markets. Further regulations or restrictions, such as limitations on redemptions or suspension of trading, may adversely impact the Fund.

<sup>•</sup>

Stock Connect is generally only available on business days when both the China and Hong Kong markets are open and when banking services are available in both markets on the corresponding settlement days. As a result, a Fund may not be able trade when it would be otherwise attractive to do so, and the Fund may not be able to dispose of its China A shares in a timely manner.

<sup>•</sup>

Investing in China A shares is subject to Stock Connect's clearance and settlement procedures, which could pose risks to the Fund. Certain requirements must be completed before the market opening, or a Fund cannot sell the shares on that trading day. Stock Connect also imposes quotas that limit aggregate net purchases on an exchange on a particular day, and an investor cannot purchase and sell the same security through Stock Connect on the same trading day. Once the daily quota is reached, orders to purchase additional China A shares through Stock Connect will be rejected. Such restrictions could limit a Fund's ability to sell its China A shares in a timely manner, or to sell them at all.

<sup>•</sup>

If a Fund holds 5% or more of a China A share issuer's total shares through Stock Connect investments, the Fund must return any profits obtained from the purchase and sale of those shares if both transactions occur within a six-month period. All accounts managed by the Funds' Advisor and/or its affiliates will be aggregated for purposes of this 5% limitation, which makes it more likely that a Fund's profits may be subject to these limitations.

<sup>•</sup>

Stock Connect uses an omnibus clearing structure, and the Fund's shares will be registered in its custodian's name on the Central Clearing and Settlement System. This may limit the ability of the Fund's advisor to effectively manage a Fund, and may expose the Fund to the credit risk of its custodian or to greater risk of expropriation. Investment in

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China A shares through Stock Connect may be available only through a single broker that is an affiliate of the Fund's custodian, which may affect the quality of execution provided by such broker.

<sup>•</sup>

China A shares purchased through Stock Connect will be held via a book entry omnibus account in the name of Hong Kong Securities Clearing Company Limited ("HKSCC"), Hong Kong's clearing entity, and not the Fund's name as the beneficial owner. Therefore, a Fund's ability to exercise its rights as a shareholder and to pursue claims against the issuer of China A shares may be limited. While Chinese regulations and the Hong Kong Stock Exchange have issued clarifications and guidance supporting the concept of beneficial ownership through Stock Connect, the interpretation of beneficial ownership in China by regulators and courts may continue to evolve.

<sup>•</sup>

The Fund's investments in China A shares through Stock Connect are generally subject to Chinese securities regulations and listing rules, among other restrictions. The Fund will not benefit from access to Hong Kong investor compensation funds, which are set up to protect against defaults of trades, when investing through Stock Connect. Investments in China A shares may not be covered by the securities investor protection programs of the exchanges and, without the protection of such programs, will be subject to the risk of default by the broker. If the depository of the SSE and the SZSE defaulted, a Fund may not be able to recover fully its losses from the depository or may be delayed in receiving proceeds as part of any recovery process.

<sup>•</sup>

Fees, costs and taxes imposed on foreign investors (such as the Fund) may be higher than comparable fees, costs and taxes imposed on owners of other securities that provide similar investment exposure. Trades using Stock Connect may also be subject to various fees, taxes and market charges imposed by Chinese market participants and regulatory authorities. Uncertainties in China's tax rules related to the taxation of income and gains from investments in China A shares could result in unexpected tax liabilities for the Fund, and the withholding tax treatment of dividends and capital gains payable to overseas investors currently is unsettled.

<sup>•</sup>

Because trades of eligible China A shares on Stock Connect must be settled in Renminbi (RMB), the Chinese currency, Funds investing through Stock Connect will be exposed to RMB currency risks. The ability to hedge RMB currency risks may be limited. The RMB is subject to exchange control restrictions, and the Fund could be adversely affected by delays in converting currencies into RMB and vice versa.

<sup>•</sup>

Because Stock Connect is in its early stages, the effect on the market for trading China A shares with the introduction of numerous foreign investors is currently unknown. Stock Connect is relatively new and may be subject to further interpretation and guidance. There can be no assurance as to Stock Connect's continued existence or whether future developments regarding the program may restrict or adversely affect the Fund's investments or returns.

Funds may also invest in China Interbank bonds traded on the China Interbank Bond Market ("CIBM") through the China - Hong Kong Bond Connect program ("Bond Connect"). In China, the Hong Kong Monetary Authority Central Money Markets Unit holds Bond Connect securities on behalf of investors (such as the Fund) in accounts maintained with maintained with a China-based custodian (either the China Central Depository & Clearing Co. or the Shanghai Clearing House). Investments using Bond Connect are subject to risks similar to those described above with respect to Stock Connect.

<u>Europe</u> 

The economies and markets of European countries are often closely connected and interdependent, and events in one European country can have an adverse impact on other European countries. Certain funds may invest in securities of issuers that are domiciled in, or have significant operations in, member countries of the Economic and Monetary Union of the European Union (the "EU"), which requires member countries to comply with restrictions on inflation rates, deficits, interest rates, debt levels and fiscal and monetary controls. Decreasing imports or exports, changes in governmental or EU regulations on trade, changes in the exchange rate of the euro (the common currency of certain EU countries), the default or threat of default by an EU member country on its sovereign debt, and/or an economic recession in an EU member country may have a significant adverse effect on the economies of EU member countries and their trading partners, including some or all of the emerging markets countries. Although certain European countries do not use the euro, many of these countries are obliged to meet the criteria for joining the euro zone. Consequently, these countries must comply with many of the restrictions noted above. The European financial markets have experienced volatility and adverse trends in recent years due to concerns about economic downturns, rising government debt levels and the possible default of government debt in several European countries. Further defaults or restructurings by governments and other entities of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. In addition, one or more countries may abandon the euro and/or withdraw from the EU, including, with respect to the latter, the United Kingdom (the "UK"), which is a significant market in the global economy. The impact of these actions, especially if they occur in a disorderly fashion, is not clear but could be significant and far-reaching and could adversely impact the value of investments in the region.

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The UK's departure from the EU (commonly referred to as "Brexit") continues to cause significant uncertainty and may adversely impact the financial results and operations of various European companies and economies. The political, regulatory, and economic consequences of Brexit are uncertain, and the ultimate ramifications may not be known for some time. Brexit may continue to cause legal and tax uncertainty and divergent national laws and regulations as the UK determines which EU laws to replace or replicate. The UK may be less stable than it has been in recent years and investments in the UK may be more volatile. Additionally, Brexit could lead to global economic uncertainty and result in significant volatility in the global stock markets and currency exchange rate fluctuations. Brexit could adversely affect the value of a fund's investments.

<u>Japan</u> 

Japanese investments may be significantly affected by events influencing Japan's economy and the exchange rate between the Japanese yen and the U.S. Dollar. Japan's economy fell into a long recession in the 1990s. After a few years of mild recovery in the mid-2000s, Japan's economy fell into another recession as a result of the recent global economic crisis. Japan is heavily dependent on exports and foreign oil. Japan is located in a seismically active area, and in 2011 experienced an earthquake of a sizable magnitude and a tsunami that significantly affected important elements of its infrastructure and resulted in a nuclear crisis. Since these events, Japan's financial markets have fluctuated dramatically. The full extent of the impact of these events on Japan's economy and on foreign investment in Japan is difficult to estimate. Japan's economic prospects may be affected by the political and military situations of its near neighbors, notably North and South Korea, China, and Russia.

<u>Latin America</u> 

Most Latin American countries have experienced, at one time or another, severe and persistent levels of inflation, including, in some cases, hyperinflation. This has, in turn, led to high interest rates, extreme measures by governments to keep inflation in check, and a generally debilitating effect on economic growth. Although inflation in many countries has lessened, there is no guarantee it will remain at lower levels. In addition, the political history of certain Latin American countries has been characterized by political uncertainty, intervention by the military in civilian and economic spheres, and political corruption. Such developments, if they were to reoccur, could reverse favorable trends toward market and economic reform, privatization, and removal of trade barriers, and result in significant disruption in securities markets. Certain Latin American countries may also have managed currencies which are maintained at artificial levels to the U.S. Dollar rather than at levels determined by the market. This type of system can lead to sudden and large adjustments in the currency which, in turn, can have a disruptive and negative effect on foreign investors. There is no significant foreign exchange market for many currencies and it would, as a result, be difficult for the Fund to engage in foreign currency transactions designed to protect the value of the Fund's interests in securities denominated in such currencies. Finally, a number of Latin American countries are among the largest debtors of developing markets. There have been moratoria on, and reschedulings of, repayment with respect to these debts. Such events can restrict the flexibility of these debtor nations in the international markets and result in the imposition of onerous conditions on their economies.

**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 those agencies, that rating will determine whether the bond is below investment grade; if the bond has not been rated by either of those agencies, those managing the fund's investments will determine whether the bond is of a quality comparable to those rated below investment grade). 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.

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**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.

**Interfund Lending and Borrowing** 

The SEC has granted an exemption permitting Principal Funds to borrow money from and lend money to each other for temporary or emergency purposes. The loans are subject to a number of conditions designed to ensure fair and equitable treatment of all participating funds, including the following: (1) no fund may borrow money through the program unless it receives a more favorable interest rate than a rate approximating the lowest interest rate at which bank loans would be available to any of the participating funds under a loan agreement; and (2) no fund may lend money through the program unless it receives a more favorable return than that available from an investment in overnight repurchase agreements. In addition, a fund may participate in the program only if and to the extent that such participation is consistent with a fund's investment objectives and policies. Interfund loans and borrowings have a maximum duration of seven days. Loans may be called on one day's notice. A fund may have to borrow from a bank at a higher interest rate if an interfund loan is called or not renewed. Any delay in repayment to a lending fund could result in a lost investment opportunity or additional costs. The Board is responsible for overseeing and periodically reviewing the interfund lending program.

**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.

**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

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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

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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.

<sup>•</sup>

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.

<sup>•</sup>

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

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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.

<sup>•</sup>

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. The California Municipal and Tax-Exempt Bond Funds will only purchase construction loan notes that are subject to GNMA or bank purchase commitments.

<sup>•</sup>

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.

<sup>•</sup>

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.

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<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.

<u>Special Considerations Relating to California Municipal Obligations</u> 

The California Municipal Fund concentrates its investments in California municipal obligations, and therefore may be significantly impacted by political, economic, or regulatory developments that affect issuers in California and their ability to pay principal and interest on their obligations. The ability of issuers to pay interest on, and repay principal of, California municipal obligations may be affected by 1) amendments to the California Constitution and related statutes that limit the taxing and spending authority of California government entities, 2) voter initiatives, 3) a wide variety of California laws and regulations, including laws related to the operation of health care institutions and laws related to secured interests in real property, and 4) the general financial condition of the State of California and the California economy. The Tax-Exempt Bond Fund also invests in California municipal obligations.

<u>Taxable Investments of the Municipal Funds</u> 

The California Municipal and Tax-Exempt Bond Funds may invest a portion of their assets, as described in the Prospectus, in taxable short-term investments consisting of: Obligations issued or guaranteed by the U.S. Government or its agencies or instrumentalities, domestic bank certificates of deposit and bankers' acceptances, short-term corporate debt securities such as commercial paper, and repurchase agreements ("Taxable Investments"). These investments must have a stated maturity of one year or less at the time of purchase and must meet the following standards: banks must have assets of

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at least $1 billion; commercial paper must be rated at least "A" by S&P Global or "Prime" by Moody's or, if not rated, must be issued by companies having an outstanding debt issue rated at least "A" by S&P Global or Moody's; corporate bonds and debentures must be rated at least "A" by S&P Global or Moody's. Interest earned from Taxable Investments is taxable to investors. When, in the opinion of the Fund's Manager, it is advisable to maintain a temporary "defensive" posture, the California Municipal and Tax-Exempt Bond Funds may invest without limitation in Taxable Investments. At other times, the following investments will not exceed 20% of the Fund's total assets: Taxable Investments; Municipal Obligations that do not meet quality standards required for the 80% portion of the portfolio; and Municipal Obligations, the interest on which is treated as a tax preference item for purposes of the federal individual alternative minimum tax.

<u>Insurance</u> 

The insured municipal obligations in which the California Municipal and Tax-Exempt Bond Funds may invest are insured under insurance policies that relate to the specific municipal obligation in question. This insurance is generally non-cancelable and will continue in force so long as the municipal obligations are outstanding, and the insurer remains in business.

The insured municipal obligations are generally insured as to the scheduled payment of all installments of principal and interest as they fall due. The insurance covers only credit risk and therefore does not guarantee the market value of the obligations in a Fund's investment portfolio or a Fund's NAV. The Fund's NAV will continue to fluctuate in response to fluctuations in interest rates. A Fund's investment policy requiring investment in insured municipal obligations will not affect the Fund's ability to hold its assets in cash or to invest in escrow-secured and defeased bonds or in certain short-term tax-exempt obligations, or affect its ability to invest in uninsured taxable obligations for temporary or liquidity purposes or on a defensive basis.

**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.

The following Funds had significant variation in portfolio turnover rates over the two most recently completed fiscal years:

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| | | | |
|:---|:---|:---|:---|
| **Fund** | &nbsp;&nbsp; **2022**<br> **Turnover**<br>| &nbsp;&nbsp; **2021**<br> **Turnover**<br>| **Comments** |
| California Municipal | 38.9% | 13.2% | Turnover increased in 2022 due to interest rate volatility resulting in investor redemptions. |
| SmallCap | 18.7% | 38.0% | Turnover decreased in 2022 due to weakened market conditions. |
| Tax-Exempt Bond | 59.3% | 24.8% | Turnover increased in 2022 due to interest rate volatility resulting in investor redemptions. |

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**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.

<sup>•</sup>

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.

<sup>•</sup>

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.

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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

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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. In addition, foreign REIT-like entities will be subject to foreign securities risks. (See "Foreign Securities")

**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

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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(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 Board. As described above, some of the Funds have adopted investment restrictions that limit investments in illiquid securities. The Board has adopted procedures to determine the liquidity of Rule 4(2) short-term paper and of restricted securities that may be resold under Rule 144A. Securities determined to be liquid under these procedures are excluded from the preceding investment restriction.

**Royalty Trusts** 

A royalty trust generally acquires an interest in natural resource or chemical companies and distributes the income it receives to its investors. A sustained decline in demand for natural resource and related products could adversely affect royalty trust revenues and cash flows. Such a decline could result from a recession or other adverse economic conditions, an increase in the market price of the underlying commodity, higher taxes or other regulatory actions that increase costs, or a shift in consumer demand. Rising interest rates could harm the performance and limit the capital appreciation of royalty trusts because of the increased availability of alternative investments at more competitive yields. Fund shareholders will indirectly bear their proportionate share of the royalty trusts' expenses.

**Securitized Products - Mortgage- and Asset-Backed Securities** 

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.

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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.

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 which 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.

**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:

<sup>•</sup>

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.

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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.

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

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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.

<sup>•</sup>

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

**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.

**Synthetic Securities** 

Incidental to other transactions in fixed income securities and/or for investment purposes, a Fund also may combine options on securities with cash, cash equivalent investments or other fixed income securities in order to create "synthetic" securities which approximate desired risk and return profiles. This may be done where a "non-synthetic" security having the desired risk/return profile either is unavailable (e.g., short-term securities of certain non-U.S. governments) or possesses undesirable characteristics (e.g., interest payments on the security would be subject to non-U.S. withholding taxes). A Fund also may purchase forward non-U.S. exchange contracts in conjunction with U.S. dollar-denominated securities in order to create a synthetic non-U.S. currency denominated security which approximates desired risk and return characteristics where the non-synthetic securities either are not available in non-U.S. markets or possess undesirable characteristics. The use of synthetic bonds and other synthetic securities may involve risks different from, or potentially greater than, risks associated with direct investments in securities and other assets. Synthetic securities may increase other Fund risks, including market risk, liquidity risk, and credit risk, and their value may or may not correlate with the value of the relevant underlying asset.

**Temporary Defensive Measures/Money Market Instruments** 

The Government Money Market and Money Market Funds invest all of their available assets in money market instruments maturing in 397 days or less, with certain exceptions permitted by applicable regulations. In addition, 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:

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

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;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

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.

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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.

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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.

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

<sup>•</sup>

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.

<sup>•</sup>

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.

<sup>•</sup>

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

**Warrants and Rights** 

The Funds may invest in warrants and rights. A warrant is an instrument that gives the holder a right to purchase a given number of shares of a particular security at a specified price until a stated expiration date. Buying a warrant generally can provide a greater potential for profit or loss than an investment of equivalent amounts in the underlying common stock. The market value of a warrant does not necessarily move with the value of the underlying securities. If a holder does not sell the warrant, it risks the loss of its entire investment if the market price of the underlying security does not, before the expiration date, exceed the exercise price of the warrant. Investment in warrants is a speculative activity. Warrants pay no dividends and confer no rights (other than the right to purchase the underlying securities) with respect to the assets of the issuer. A right is a privilege granted to existing shareholders of a corporation to subscribe for shares of a new issue of common stock before it is issued. Rights normally have a short life, usually two to four weeks, are freely transferable and entitle the holder to buy the new common stock at a lower price than the public offering price.

**When-Issued, Delayed Delivery, and Forward Commitment Transactions** 

Each of the Funds may purchase or sell securities on a when-issued, delayed delivery, or forward commitment basis. Typically, no income accrues on securities a Fund has committed to purchase prior to the time delivery of the securities is made.

When purchasing a security on a when-issued, delayed delivery, or forward commitment basis, the Fund assumes the rights and risks of ownership of the security, including the risk of price and yield fluctuations, and takes such fluctuations into account when determining its net asset value. Because the Fund is not required to pay for the security until the delivery date, these risks are in addition to the risks associated with the Fund's other investments. If the Fund remains substantially fully invested at a time when when-issued, delayed delivery, or forward commitment purchases are outstanding, the purchases may result in a form of leverage.

When the Fund has sold a security on a when-issued, delayed delivery, or forward commitment basis, the Fund does not participate in future gains or losses with respect to the security. If the other party to a transaction fails to deliver or pay for the securities, the Fund could miss a favorable price or yield opportunity or could suffer a loss. A Fund may dispose of or

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renegotiate a transaction after it is entered into, and may sell when-issued, delayed delivery, or forward commitment securities before they are delivered, which may result in a capital gain or loss. There is no percentage limitation on the extent to which the Funds may purchase or sell securities on a when-issued, delayed delivery, or forward commitment basis.

**LEADERSHIP STRUCTURE AND BOARD**

PFI's Board has overall responsibility for overseeing PFI's operations in accordance with the 1940 Act, other applicable laws, and PFI's charter. Each Board Member serves on the Boards of the following investment companies: Principal Funds, Inc. ("PFI"), Principal Variable Contracts Funds, Inc. ("PVC"), Principal Exchange-Traded Funds ("PETF"), and Principal Diversified Select Real Asset Fund ("PDSRA"), which are collectively referred to in this SAI as the "Fund Complex." Board Members who are affiliated persons of any investment advisor, the principal distributor, or the principal underwriter of the Fund Complex 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 Fund Complex. Officers serve at the pleasure of the Board, and each officer has the same position with each investment company in the Fund Complex.

The Board meets in regularly scheduled meetings eight times 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 Fund Complex. 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 Fund Complex 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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| | | |
|:---|:---|:---|
| **Committee and**<br> **Independent Board**<br> **Members**<br>| **Primary Purpose and Responsibilities** | &nbsp;&nbsp; **Meetings Held**<br> **During the Last**<br> **Fiscal Year**<br>|
| <u>15(c) Committee</u><br> Karen McMillan, Chair<br> Fritz S. Hirsch<br> Padelford L. Lattimer<br> Mary M. VanDeWeghe<br>| &nbsp;&nbsp; The Committee's primary purpose is to assist the Board in performing the annual review of <br> the Funds' advisory and sub-advisory agreements pursuant to Section 15(c) of the 1940 Act. <br> The Committee is responsible for requesting and reviewing related materials.<br>| 6 |
| <u>Audit Committee</u><br> Victor L. Hymes, Chair<br> Leroy T. Barnes, Jr.<br> Frances P. Grieb<br> Elizabeth A. Nickels <br> Mary M. VanDeWeghe<br>| &nbsp;&nbsp; The Committee's primary purpose is to assist the Board by serving as an independent and <br> objective party to monitor the Fund Complex's accounting policies, financial reporting, and <br> internal control system, as well as the work of the independent registered public accountants. <br> The Audit Committee assists Board oversight of 1) the integrity of the Fund Complex's <br> financial statements; 2) the Fund Complex's compliance with certain legal and regulatory <br> requirements; 3) the independent registered public accountants' qualifications and <br> independence; and 4) the performance of the Fund Complex's independent registered public <br> accountants. The Audit Committee also provides an open avenue of communication among <br> the independent registered public accountants, PGI's internal auditors, Fund Complex <br> management, and the Board.<br>| 10 |
| <u>Executive Committee</u><br> Timothy M. Dunbar, Chair<br> Craig Damos<br> Patrick G. Halter<br>| &nbsp;&nbsp; The Committee's primary purpose is to exercise certain powers of the Board when the Board <br> is not in session. When the Board is not in session, the Committee may exercise all powers of <br> the Board in the management of the Fund Complex's business except the power to 1) issue <br> stock, except as permitted by law; 2) recommend to the shareholders any action that requires <br> shareholder approval; 3) amend the bylaws; or 4) approve any merger or share exchange that <br> does not require shareholder approval.<br>|  |

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| | | |
|:---|:---|:---|
| **Committee and**<br> **Independent Board**<br> **Members**<br>| **Primary Purpose and Responsibilities** | &nbsp;&nbsp; **Meetings Held**<br> **During the Last**<br> **Fiscal Year**<br>|
| <u>Nominating and Governance</u> <br> <u>Committee</u><br> Elizabeth A. Nickels, Chair<br> Craig Damos<br> Fritz S. Hirsch<br> Victor L. Hymes<br>| &nbsp;&nbsp; The Committee's primary purpose is to oversee the structure and efficiency of the Board and <br> the committees. The Committee is responsible for evaluating Board membership and <br> functions, committee membership and functions, insurance coverage, and legal matters. The <br> Committee's nominating functions include selecting and nominating Independent Board <br> Member candidates for election to the Board. Generally, the Committee requests nominee <br> suggestions from Board Members and management. In addition, the Committee considers <br> candidates recommended by shareholders of the Fund Complex. Recommendations should <br> be submitted in writing to the Principal Funds Complex Secretary, in care of the Principal <br> Funds Complex, 711 High Street, Des Moines, IA 50392. Such recommendations must <br> include all information specified in the Committee's charter and must conform with the <br> procedures set forth in Appendix A thereto, which can be found at <u>https://</u><br> <u>secure02.principal.com/publicvsupply/GetFile?fm=MM13013&ty=VOP&EXT=.VOP</u>. <br> Examples of such information include the nominee's biographical information; relevant <br> educational and professional background of the nominee; the number of shares of each <br> Fund owned of record and beneficially by the nominee and by the recommending <br> shareholder; any other information regarding the nominee that would be required to be <br> disclosed in a proxy statement or other filing required to be made in connection with the <br> solicitation of proxies for the election of board members; whether the nominee is an <br> "interested person" of the Funds as defined in the 1940 Act; and the written consent of the <br> 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 <br> consider, among other factors: educational background; relevant business and industry <br> experience; whether the person is an "interested person" of the Funds as defined in the 1940 <br> Act; and whether the person is willing to serve, and willing and able to commit the time <br> necessary to attend meetings and perform the duties of an Independent Board Member. In <br> addition, the Committee may consider whether a candidate's background, experience, skills <br> and views would complement the background, experience, skills and views of other Board <br> Members and would contribute to the diversity of the Board. The final decision is based on a <br> combination of factors, including the strengths and the experience an individual may bring to <br> the Board. The Board does not regularly use the services of professional search firms to <br> identify or evaluate potential candidates or nominees.<br>| 6 |
| <u>Operations Committee</u><br> Padelford L. Lattimer, Chair<br> Craig Damos<br> Katharin S. Dyer<br> Karen McMillan<br>| &nbsp;&nbsp; The Committee's primary purpose is to review and oversee the provision of administrative <br> and distribution services to the Fund Complex, communications with the Fund Complex's <br> shareholders, and the Fund Complex's operations.<br>| 6 |

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Risk oversight forms part of the Board's general oversight of the Fund Complex. 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 Funds and principal service providers. As part of its regular risk oversight functions, the Board, directly or through a Committee, interacts with and reviews reports from, among others: Fund Complex management, sub-advisors, the Chief Compliance Officer, independent registered public accounting firm, and internal auditors for PGI or its affiliates, as appropriate. The Board, with the assistance of Fund management and PGI, reviews investment policies and risks in connection with its review of Fund Complex performance. In addition, as part of the Board's periodic review of advisory, sub-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> 

**Leroy T. Barnes, Jr.** Mr. Barnes has served as an Independent Board Member of the Fund Complex since 2012. From 2001-2005, Mr. Barnes served as Vice President and Treasurer of PG&E Corporation. From 1997-2001, Mr. Barnes served as Vice President and Treasurer of Gap, Inc. Through his education, employment experience, and experience as a board member, Mr. Barnes is experienced with financial, accounting, regulatory, and investment matters.

**Craig Damos.** Mr. Damos has served as an Independent Board Member of the Fund Complex 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 2006-2010; Vertical Growth Officer of Weitz Company

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from 2004-2006; and Chief Financial Officer of Weitz Company from 2000-2004. From 2005-2008, 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 Fund Complex since January 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 previously served as a director of Providence Health from 2019-2021, Noora Health from 2018-2021, YWCA of Nashville and Middle Tennessee from 2016-2022, and CARE from 2001-2013. She was formerly employed by IBM Global Services as a Global Partner and a member of the senior leadership team from 2016-2018. Ms. Dyer was a member of the Global Management Team at American Express Company from 2013-2015. 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 Fund Complex since January 2023. Ms. Grieb currently serves as a director of First Interstate BancSystem, Inc. and 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 2014-2022, 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 1982-2010. 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.

**Fritz S. Hirsch.** Mr. Hirsch has served as an Independent Board Member of the Fund Complex since 2005. From 2011-2015, Mr. Hirsch served as CEO of MAM USA. He served as President and Chief Executive Officer of Sassy, Inc. from 1986-2009, and Chief Financial Officer of Sassy, Inc. from 1983-1985. Through his education, employment experience, and experience as a board member, Mr. Hirsch is experienced with financial, accounting, regulatory, and investment matters.

**Victor L. Hymes.** Mr. Hymes has served as an Independent Board Member of the Fund Complex 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 CEO, COO, CIO, 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.

**Padelford L. Lattimer.** Mr. Lattimer has served as an Independent Board Member of the Fund Complex 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 Fund Complex since 2014. Ms. McMillan is the founder and owner of Tyche Consulting LLC. She served as a Managing Director of Patomak Global Partners, LLC from 2014-2021. From 2007-2014, Ms. McMillan served as general counsel to the Investment Company Institute. From 1999-2007, she worked as an attorney in private practice, specializing in the mutual fund industry. From 1991-1999, 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.

**Elizabeth A. Nickels.** Ms. Nickels has served as an Independent Board Member of the Fund Complex since 2015. From 2000-2022, Ms. Nickels served as a director of SpartanNash. From 2008 to 2017, she served as a director of the not-for-profit Spectrum Health System; from 2014 to 2016, she served as a director of Charlotte Russe; from 2014 to 2015, she served as a director of Follet Corporation; and from 2013 to 2015, she served as a director of PetSmart. Ms. Nickels was formerly employed by Herman Miller, Inc. in several capacities: from 2012 to 2014, as the Executive Director of the Herman Miller Foundation; from 2007 to 2012, as President of Herman Miller Healthcare; and from 2000 to 2007, as Chief Financial Officer. Through her education, employment experience, and experience as a board member, Ms. Nickels is experienced with financial, accounting, and regulatory matters.

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**Mary M. VanDeWeghe.** Ms. VanDeWeghe has served as an Independent Board Member of the Fund Complex since 2018. She is CEO and President of Forte Consulting, Inc. and was previously employed as a Finance Professor at Georgetown University from 2009-2016, Senior Vice President - Finance at Lockheed Martin Corporation from 2006-2009, a Finance Professor at the University of Maryland from 1996-2006, and in various positions at J.P. Morgan from 1983-1996. Ms. VanDeWeghe currently serves as a director of Helmerich & Payne (2019-present) and previously served as a director of Denbury Resources Inc. from 2019-2020, Brown Advisory from 2003-2018, B/E Aerospace from 2014-2017, WP Carey from 2014-2017, and Nalco (and its successor Ecolab) from 2009-2014. Through her education, employment experience, and experience as a board member, Ms. VanDeWeghe is experienced with financial, accounting, investment, and regulatory matters.

<u>Interested Board Members</u> 

**Timothy M. Dunbar.** Mr. Dunbar has served as Chair of the Fund Complex since 2019. From 2018 through November 2020, Mr. Dunbar served as President of Global Asset Management for Principal<sup>®</sup>, overseeing all of Principal's asset management capabilities, including with respect to PGI, PLIC, and PFSI, among others. He also has served on numerous boards of directors of Principal<sup>®</sup> affiliates, including PGI and Post, and in various other positions since joining Principal<sup>®</sup> in 1986 through his retirement in January 2021. Through his education and employment experience, Mr. Dunbar is experienced with financial, accounting, regulatory, and investment matters.

**Patrick G. Halter.** Mr. Halter has served as a Board Member of the Fund Complex since 2017. Mr. Halter also serves as President for Principal<sup>®</sup> Asset Management and as Chief Executive Officer, President, and Chair of PGI, and Chief Executive Officer, President, and Chair of Principal Real Estate Investors. He serves on numerous boards of directors of Principal<sup>®</sup> affiliates and has served in various other positions since joining Principal<sup>®</sup> in 1984. Through his education and employment experience, Mr. Halter 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 Fund Complex 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**<br>| &nbsp;&nbsp;&nbsp; **Board Positions Held**<br> **with Fund Complex**<br>| &nbsp;&nbsp;&nbsp; **Principal Occupation(s)**<br> **During Past 5 Years**<br>| &nbsp;&nbsp;&nbsp; **Number of**<br> **Portfolios**<br> **Overseen**<br> **in Fund**<br> **Complex**<br>| &nbsp;&nbsp;&nbsp; **Other**<br> **Directorships**<br> **Held During**<br> **Past 5 Years**<br>|
| Leroy T. Barnes, Jr.<br> 711 High Street<br> Des Moines, IA 50392<br> 1951 | Director, PFI and PVC (since 2012) | Retired | 132 | &nbsp;&nbsp;&nbsp; McClatchy Newspapers, <br> Inc. (2000 – 2020);<br> Frontier Communi-<br> cations, Inc. (2005 – <br> 2019) |
| Leroy T. Barnes, Jr.<br> 711 High Street<br> Des Moines, IA 50392<br> 1951 | Trustee, PETF (since 2014) | Retired | 132 | &nbsp;&nbsp;&nbsp; McClatchy Newspapers, <br> Inc. (2000 – 2020);<br> Frontier Communi-<br> cations, Inc. (2005 – <br> 2019) |
| Leroy T. Barnes, Jr.<br> 711 High Street<br> Des Moines, IA 50392<br> 1951 | Trustee, PDSRA (since 2019) | Retired | 132 | &nbsp;&nbsp;&nbsp; McClatchy Newspapers, <br> Inc. (2000 – 2020);<br> Frontier Communi-<br> cations, Inc. (2005 – <br> 2019) |
| Craig Damos<br> 711 High Street<br> Des Moines, IA 50392<br> 1954 | &nbsp;&nbsp;&nbsp; Lead Independent Board Member <br> (since 2020)<br>| &nbsp;&nbsp;&nbsp; President, C.P. Damos <br> Consulting, LLC (consulting <br> services) | 132 |  |
| Craig Damos<br> 711 High Street<br> Des Moines, IA 50392<br> 1954 | Director, PFI and PVC (since 2008) | &nbsp;&nbsp;&nbsp; President, C.P. Damos <br> Consulting, LLC (consulting <br> services) | 132 |  |
| Craig Damos<br> 711 High Street<br> Des Moines, IA 50392<br> 1954 | Trustee, PETF (since 2014) | &nbsp;&nbsp;&nbsp; President, C.P. Damos <br> Consulting, LLC (consulting <br> services) | 132 |  |
| Craig Damos<br> 711 High Street<br> Des Moines, IA 50392<br> 1954 | Trustee, PDSRA (since 2019) | &nbsp;&nbsp;&nbsp; President, C.P. Damos <br> Consulting, LLC (consulting <br> services) | 132 |  |
| Katharin S. Dyer<br> 711 High Street<br> Des Moines, IA 50392<br> 1957 | Director, PFI and PVC (since 2023) | &nbsp;&nbsp;&nbsp; Founder and Chief <br> Executive Officer, PivotWise <br> (consulting services)<br> Global Partner, IBM <br> (technology company) from <br> 2016–2018 | 132 | &nbsp;&nbsp;&nbsp; Liquidity Services, Inc. <br> (2020 – present) |
| Katharin S. Dyer<br> 711 High Street<br> Des Moines, IA 50392<br> 1957 | &nbsp;&nbsp;&nbsp; Trustee, PDSRA and PETF (since <br> 2023)<br>| &nbsp;&nbsp;&nbsp; Founder and Chief <br> Executive Officer, PivotWise <br> (consulting services)<br> Global Partner, IBM <br> (technology company) from <br> 2016–2018 | 132 | &nbsp;&nbsp;&nbsp; Liquidity Services, Inc. <br> (2020 – present) |
| Frances P. Grieb<br> 711 High Street<br> Des Moines, IA 50392<br> 1960 | Director, PFI and PVC (since 2023) | Retired | 132 | &nbsp;&nbsp;&nbsp; First Interstate <br> BancSystem, Inc. (2022 <br> – present);<br> Great Western Bancorp, <br> Inc. and Great Western <br> Bank (2014 – 2022) |
| Frances P. Grieb<br> 711 High Street<br> Des Moines, IA 50392<br> 1960 | &nbsp;&nbsp;&nbsp; Trustee, PDSRA and PETF (since <br> 2023)<br>| Retired | 132 | &nbsp;&nbsp;&nbsp; First Interstate <br> BancSystem, Inc. (2022 <br> – present);<br> Great Western Bancorp, <br> Inc. and Great Western <br> Bank (2014 – 2022) |
| Fritz S. Hirsch<br> 711 High Street<br> Des Moines, IA 50392<br> 1951 | Director, PFI and PVC (since 2005) | &nbsp;&nbsp;&nbsp; Interim CEO, MAM USA <br> (manufacturer of infant and <br> juvenile products) from <br> February 2020 to October <br> 2020 | 132 | &nbsp;&nbsp;&nbsp; MAM USA (2011 – <br> present) |
| Fritz S. Hirsch<br> 711 High Street<br> Des Moines, IA 50392<br> 1951 | Trustee, PETF (since 2014) | &nbsp;&nbsp;&nbsp; Interim CEO, MAM USA <br> (manufacturer of infant and <br> juvenile products) from <br> February 2020 to October <br> 2020 | 132 | &nbsp;&nbsp;&nbsp; MAM USA (2011 – <br> present) |
| Fritz S. Hirsch<br> 711 High Street<br> Des Moines, IA 50392<br> 1951 | Trustee, PDSRA (since 2019) | &nbsp;&nbsp;&nbsp; Interim CEO, MAM USA <br> (manufacturer of infant and <br> juvenile products) from <br> February 2020 to October <br> 2020 | 132 | &nbsp;&nbsp;&nbsp; MAM USA (2011 – <br> present) |
| Victor L. Hymes<br> 711 High Street<br> Des Moines, IA 50392<br> 1957 | Director, PFI and PVC (since 2020) | &nbsp;&nbsp;&nbsp; Founder, CEO, CIO, Legato <br> Capital Management, LLC <br> (investment management <br> company) | 132 |  |
| Victor L. Hymes<br> 711 High Street<br> Des Moines, IA 50392<br> 1957 | &nbsp;&nbsp;&nbsp; Trustee, PDSRA and PETF<br> (since 2020)<br>| &nbsp;&nbsp;&nbsp; Founder, CEO, CIO, Legato <br> Capital Management, LLC <br> (investment management <br> company) | 132 |  |
| Victor L. Hymes<br> 711 High Street<br> Des Moines, IA 50392<br> 1957 |  | &nbsp;&nbsp;&nbsp; Founder, CEO, CIO, Legato <br> Capital Management, LLC <br> (investment management <br> company) | 132 |  |

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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**<br>| &nbsp;&nbsp;&nbsp; **Board Positions Held**<br> **with Fund Complex**<br>| &nbsp;&nbsp;&nbsp; **Principal Occupation(s)**<br> **During Past 5 Years**<br>| &nbsp;&nbsp;&nbsp; **Number of**<br> **Portfolios**<br> **Overseen**<br> **in Fund**<br> **Complex**<br>| &nbsp;&nbsp;&nbsp; **Other**<br> **Directorships**<br> **Held During**<br> **Past 5 Years**<br>|
| Padelford L. Lattimer<br> 711 High Street<br> Des Moines, IA 50392<br> 1961 | Director, PFI and PVC (since 2020) | &nbsp;&nbsp;&nbsp; Managing Partner, TBA <br> Management Consulting <br> LLC (management <br> consulting and staffing <br> company) | 132 |  |
| Padelford L. Lattimer<br> 711 High Street<br> Des Moines, IA 50392<br> 1961 | &nbsp;&nbsp;&nbsp; Trustee, PDSRA and PETF<br> (since 2020)<br>| &nbsp;&nbsp;&nbsp; Managing Partner, TBA <br> Management Consulting <br> LLC (management <br> consulting and staffing <br> company) | 132 |  |
| Padelford L. Lattimer<br> 711 High Street<br> Des Moines, IA 50392<br> 1961 |  | &nbsp;&nbsp;&nbsp; Managing Partner, TBA <br> Management Consulting <br> LLC (management <br> consulting and staffing <br> company) | 132 |  |
| Karen McMillan<br> 711 High Street<br> Des Moines, IA 50392<br> 1961 | Director, PFI and PVC (since 2014) | &nbsp;&nbsp;&nbsp; Founder/Owner, Tyche <br> Consulting LLC (consulting <br> services)<br> Managing Director, <br> Patomak Global Partners, <br> LLC<br> (financial services <br> consulting) from 2014 – <br> 2021 | 132 |  |
| Karen McMillan<br> 711 High Street<br> Des Moines, IA 50392<br> 1961 | Trustee, PETF (since 2014) | &nbsp;&nbsp;&nbsp; Founder/Owner, Tyche <br> Consulting LLC (consulting <br> services)<br> Managing Director, <br> Patomak Global Partners, <br> LLC<br> (financial services <br> consulting) from 2014 – <br> 2021 | 132 |  |
| Karen McMillan<br> 711 High Street<br> Des Moines, IA 50392<br> 1961 | Trustee, PDSRA (since 2019) | &nbsp;&nbsp;&nbsp; Founder/Owner, Tyche <br> Consulting LLC (consulting <br> services)<br> Managing Director, <br> Patomak Global Partners, <br> LLC<br> (financial services <br> consulting) from 2014 – <br> 2021 | 132 |  |
| Elizabeth A. Nickels<br> 711 High Street<br> Des Moines, IA 50392<br> 1962 | Director, PFI and PVC (since 2015) | Retired | 132 | &nbsp;&nbsp;&nbsp; SpartanNash (2000 – <br> 2022) |
| Elizabeth A. Nickels<br> 711 High Street<br> Des Moines, IA 50392<br> 1962 | Trustee, PETF (since 2015) | Retired | 132 | &nbsp;&nbsp;&nbsp; SpartanNash (2000 – <br> 2022) |
| Elizabeth A. Nickels<br> 711 High Street<br> Des Moines, IA 50392<br> 1962 | Trustee, PDSRA (since 2019) | Retired | 132 | &nbsp;&nbsp;&nbsp; SpartanNash (2000 – <br> 2022) |
| Mary M. VanDeWeghe<br> 711 High Street<br> Des Moines, IA 50392<br> 1959 | Director, PFI and PVC (since 2018) | &nbsp;&nbsp;&nbsp; CEO and President, Forte <br> Consulting, Inc. (financial <br> and management <br> consulting) | 132 | &nbsp;&nbsp;&nbsp; Helmerich & Payne <br> (2019 – present); <br> Denbury Resources Inc. <br> (2019 – 2020) |
| Mary M. VanDeWeghe<br> 711 High Street<br> Des Moines, IA 50392<br> 1959 | Trustee, PETF (since 2018) | &nbsp;&nbsp;&nbsp; CEO and President, Forte <br> Consulting, Inc. (financial <br> and management <br> consulting) | 132 | &nbsp;&nbsp;&nbsp; Helmerich & Payne <br> (2019 – present); <br> Denbury Resources Inc. <br> (2019 – 2020) |
| Mary M. VanDeWeghe<br> 711 High Street<br> Des Moines, IA 50392<br> 1959 | Trustee, PDSRA (since 2019) | &nbsp;&nbsp;&nbsp; CEO and President, Forte <br> Consulting, Inc. (financial <br> and management <br> consulting) | 132 | &nbsp;&nbsp;&nbsp; Helmerich & Payne <br> (2019 – present); <br> Denbury Resources Inc. <br> (2019 – 2020) |

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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**<br>| &nbsp;&nbsp;&nbsp; **Board Positions Held**<br> **with Fund Complex**<br>| &nbsp;&nbsp;&nbsp; **Positions with PGI**<br> **and its affiliates;**<br> **Principal Occupation(s)**<br> **During Past 5 Years\*\***<br> **(unless noted otherwise)**<br>| &nbsp;&nbsp;&nbsp; **Number of**<br> **Portfolios**<br> **Overseen**<br> **in Fund**<br> **Complex**<br>| &nbsp;&nbsp;&nbsp; **Other**<br> **Directorships**<br> **Held During**<br> **Past 5 Years**<br>|
| Timothy M. Dunbar<br> 711 High Street<br> Des Moines, IA 50392<br> 1957 | Chair (since 2019) | &nbsp;&nbsp;&nbsp; <u>PGI</u><br> President (2018-2021)<br> Director (2018-2020)<br><u>PFGI, PFSI, and PLIC</u><br> Division President (2020-2021)<br> President (2018-2020)<br><u>Post</u><br> Director (2018-2020)<br> <u>RobustWealth</u><br> Chair and Executive Vice President<br> (2018-2021) | 132 |  |
| Timothy M. Dunbar<br> 711 High Street<br> Des Moines, IA 50392<br> 1957 | Director, PFI and PVC (since 2019) | &nbsp;&nbsp;&nbsp; <u>PGI</u><br> President (2018-2021)<br> Director (2018-2020)<br><u>PFGI, PFSI, and PLIC</u><br> Division President (2020-2021)<br> President (2018-2020)<br><u>Post</u><br> Director (2018-2020)<br> <u>RobustWealth</u><br> Chair and Executive Vice President<br> (2018-2021) | 132 |  |
| Timothy M. Dunbar<br> 711 High Street<br> Des Moines, IA 50392<br> 1957 | &nbsp;&nbsp;&nbsp; Trustee, PDSRA and PETF<br> (since 2019)<br>| &nbsp;&nbsp;&nbsp; <u>PGI</u><br> President (2018-2021)<br> Director (2018-2020)<br><u>PFGI, PFSI, and PLIC</u><br> Division President (2020-2021)<br> President (2018-2020)<br><u>Post</u><br> Director (2018-2020)<br> <u>RobustWealth</u><br> Chair and Executive Vice President<br> (2018-2021) | 132 |  |
| Timothy M. Dunbar<br> 711 High Street<br> Des Moines, IA 50392<br> 1957 |  | &nbsp;&nbsp;&nbsp; <u>PGI</u><br> President (2018-2021)<br> Director (2018-2020)<br><u>PFGI, PFSI, and PLIC</u><br> Division President (2020-2021)<br> President (2018-2020)<br><u>Post</u><br> Director (2018-2020)<br> <u>RobustWealth</u><br> Chair and Executive Vice President<br> (2018-2021) | 132 |  |
| Patrick G. Halter<br> 711 High Street<br> Des Moines, IA 50392<br> 1959 | Director, PFI and PVC (since 2017) | &nbsp;&nbsp;&nbsp; <u>PGI</u><br> Chair (since 2018)<br> Chief Executive Officer and <br> President (since 2018)<br> Director (since 2003)<br><u>PFGI, PFSI, and PLIC</u><br> President and Chief Executive <br> Officer - PAM (since 2022)<br> President - PGAM (2020-2022)<br><u>Post</u><br> Director (since 2017)<br> Chair (2017-2020)<br><u>Principal-REI</u><br> President - PGAM (since 2022)<br> Director and Chair (since 2004)<br> Chief Executive Officer and <br> President (2018-2021)<br><u>Origin</u><br> Director (2018-2019) | 132 |  |
| Patrick G. Halter<br> 711 High Street<br> Des Moines, IA 50392<br> 1959 | Trustee, PETF (since 2017) | &nbsp;&nbsp;&nbsp; <u>PGI</u><br> Chair (since 2018)<br> Chief Executive Officer and <br> President (since 2018)<br> Director (since 2003)<br><u>PFGI, PFSI, and PLIC</u><br> President and Chief Executive <br> Officer - PAM (since 2022)<br> President - PGAM (2020-2022)<br><u>Post</u><br> Director (since 2017)<br> Chair (2017-2020)<br><u>Principal-REI</u><br> President - PGAM (since 2022)<br> Director and Chair (since 2004)<br> Chief Executive Officer and <br> President (2018-2021)<br><u>Origin</u><br> Director (2018-2019) | 132 |  |
| Patrick G. Halter<br> 711 High Street<br> Des Moines, IA 50392<br> 1959 | Trustee, PDSRA (since 2019) | &nbsp;&nbsp;&nbsp; <u>PGI</u><br> Chair (since 2018)<br> Chief Executive Officer and <br> President (since 2018)<br> Director (since 2003)<br><u>PFGI, PFSI, and PLIC</u><br> President and Chief Executive <br> Officer - PAM (since 2022)<br> President - PGAM (2020-2022)<br><u>Post</u><br> Director (since 2017)<br> Chair (2017-2020)<br><u>Principal-REI</u><br> President - PGAM (since 2022)<br> Director and Chair (since 2004)<br> Chief Executive Officer and <br> President (2018-2021)<br><u>Origin</u><br> Director (2018-2019) | 132 |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

------

---

| | | |
|:---|:---|:---|
| **FUND COMPLEX OFFICERS** | **FUND COMPLEX OFFICERS** | **FUND COMPLEX OFFICERS** |
| **Name, Address,**<br> **and Year of Birth**<br>| &nbsp;&nbsp; **Position(s) Held**<br> **with Fund Complex**<br>| &nbsp;&nbsp; **Positions with PGI and its Affiliates;**<br> **Principal Occupations During Past 5 Years\*\***<br>|
| Kamal Bhatia<br> 711 High Street<br> Des Moines, IA 50392<br> 1972<br>| &nbsp;&nbsp; President and Chief Executive Officer<br> (since 2019)<br>| &nbsp;&nbsp; <u>PGI</u><br> Director (since 2019)<br> President-Principal Funds (since 2019)<br><u>PFD</u><br> Director (since 2019)<br> <u>PFGI, PFSI, and PLIC</u><br> Senior Executive Director and Chief Operating Officer - PAM (since 2022)<br> Senior Executive Director and Chief Operating Officer - PGI<br> (2020-2022)<br> President-Principal Funds (2019-2020)<br><u>Post</u><br> Director (since 2020)<br> <u>Principal-REI</u><br> Senior Executive Director and Chief Operating Officer - PGI<br> (since 2022)<br> Director (since 2020)<br><u>PSS</u><br> Executive Vice President (since 2019)<br> Director and Chair (2019-2022)<br><u>Spectrum</u><br> Director (since 2021)<br> <u>Origin</u><br> Additional Director (since 2022)<br> <u>Oppenheimer Funds</u><br> Senior Vice President (2011-2019) |
| Randy D. Bolin<br> 711 High Street<br> Des Moines, IA 50392<br> 1961<br>| Assistant Tax Counsel (since 2020) | &nbsp;&nbsp; Vice President/Associate General Counsel, PGI (since 2016)<br> Vice President/Associate General Counsel, PFSI (since 2013)<br> Vice President/Associate General Counsel, PLIC (since 2013)<br>|
| Beth Graff<br> 711 High Street<br> Des Moines, IA 50392<br> 1968<br>| &nbsp;&nbsp; Vice President and Assistant Controller <br> (since 2021)<br>| Director – Fund Accounting, PLIC (since 2016) |
| Gina L. Graham<br> 711 High Street<br> Des Moines, IA 50392<br> 1965<br>| Treasurer (since 2016) | &nbsp;&nbsp; Vice President and Treasurer, PGI (since 2016)<br> Vice President and Treasurer, PFD (since 2016)<br> Vice President and Treasurer, PFSI (since 2016)<br> Vice President and Treasurer, PLIC (since 2016)<br> Vice President and Treasurer, Principal - REI (since 2017)<br> Vice President and Treasurer, PSI (since 2016)<br> Vice President and Treasurer, PSS (since 2016)<br> Vice President and Treasurer, RobustWealth, Inc. (since 2018)<br>|
| Megan Hoffmann<br> 711 High Street<br> Des Moines, IA 50392<br> 1979<br>| &nbsp;&nbsp; Vice President and Controller<br> (since 2021)<br>| &nbsp;&nbsp; Director – Accounting, PLIC (since 2020)<br> Assistant Director – Accounting, PLIC (2017-2020)<br>|
| Laura B. Latham<br> 711 High Street<br> Des Moines, IA 50392<br> 1986<br>| &nbsp;&nbsp; Assistant Counsel and Assistant <br> Secretary (since 2018)<br>| &nbsp;&nbsp; Counsel, PGI (since 2018)<br> Counsel, PLIC (since 2018)<br>|
| Diane K. Nelson<br> 711 High Street<br> Des Moines, IA 50392<br> 1965<br>| AML Officer (since 2016) | Chief Compliance Officer/AML Officer, PSS (since 2015) |
| Tara Parks<br> 711 High Street<br> Des Moines, IA 50392<br> 1983<br>| &nbsp;&nbsp; Vice President and Assistant Controller <br> (since 2021)<br>| &nbsp;&nbsp; Director – Accounting, PLIC (since 2019)<br> Tax Manager – ALPS Fund Services (2011-2019)<br>|
| Deanna Y. Pellack<br> 711 High Street<br> Des Moines, IA 50392<br> 1987<br>| &nbsp;&nbsp; Assistant Counsel and Assistant <br> Secretary (since 2022)<br>| &nbsp;&nbsp; Counsel, PLIC (since 2022)<br> Vice President, The Northern Trust Company (2019-2022)<br> Second Vice President, The Northern Trust Company (2014-2019)<br> Secretary, Advisers Investment Trust (2021-2022)<br> Assistant Secretary, Advisers Investment Trust (2018-2021)<br>|

---

------

---

| | | |
|:---|:---|:---|
| **FUND COMPLEX OFFICERS** | **FUND COMPLEX OFFICERS** | **FUND COMPLEX OFFICERS** |
| **Name, Address,**<br> **and Year of Birth**<br>| &nbsp;&nbsp; **Position(s) Held**<br> **with Fund Complex**<br>| &nbsp;&nbsp; **Positions with PGI and its Affiliates;**<br> **Principal Occupations During Past 5 Years\*\***<br>|
| Sara L. Reece<br> 711 High Street<br> Des Moines, IA 50392<br> 1975<br>| &nbsp;&nbsp; Vice President and Chief Operating <br> Officer (since 2021)<br> Vice President and Controller <br> (2016-2021)<br>| &nbsp;&nbsp; Managing Director – Global Fund Ops, PLIC (since 2021)<br> Managing Director – Financial Analysis/ Planning, PLIC (2021)<br> Director – Accounting, PLIC (2015-2021)<br>|
| Teri R. Root<br> 711 High Street<br> Des Moines, IA 50392<br> 1979<br>| &nbsp;&nbsp; Chief Compliance Officer (since 2018)<br> Interim Chief Compliance Officer <br> (2018)<br>| &nbsp;&nbsp; Chief Compliance Officer - Funds, PGI (since 2018)<br> Vice President, PSS (since 2015)<br>|
| Michael Scholten<br> 711 High Street<br> Des Moines, IA 50392<br> 1979<br>| Chief Financial Officer (since 2021) | &nbsp;&nbsp; Chief Operations Officer, PFD (since 2022)<br> Chief Financial Officer, PFD (2016-2022)<br> Assistant Vice President and Actuary, PLIC (since 2021)<br> Chief Financial Officer – Funds/Platforms, PLIC (since 2015)<br> Chief Financial Officer, PSS (since 2015)<br>|
| Adam U. Shaikh<br> 711 High Street<br> Des Moines, IA 50392<br> 1972<br>| &nbsp;&nbsp; Assistant Secretary (since 2022)<br> Assistant Counsel (since 2006)<br>| &nbsp;&nbsp; Assistant General Counsel, PGI (since 2018)<br> Counsel, PLIC (since 2006)<br>|
| John L. Sullivan<br> 711 High Street<br> Des Moines, IA 50392<br> 1970<br>| &nbsp;&nbsp; Assistant Counsel and Assistant <br> Secretary (since 2019)<br>| &nbsp;&nbsp; Counsel, PGI (since 2020)<br> Counsel, PLIC (since 2019)<br> Prior thereto, Attorney in Private Practice<br>|
| Dan L. Westholm<br> 711 High Street<br> Des Moines, IA 50392<br> 1966<br>| Assistant Treasurer (since 2006) | &nbsp;&nbsp; Assistant Vice President-Treasury, PGI (since 2013)<br> Assistant Vice President-Treasury, PFD (since 2013)<br> Assistant Vice President-Treasury, PLIC (since 2014)<br> Assistant Vice President-Treasury, PSI (since 2013)<br> Assistant Vice President-Treasury, PSS (since 2013)<br>|
| Beth C. Wilson<br> 711 High Street<br> Des Moines, IA 50392<br> 1956<br>| &nbsp;&nbsp; Vice President and Secretary<br> (since 2007)<br>| Director and Secretary-Funds, PLIC (since 2007) |

---

------

---

| | | |
|:---|:---|:---|
| **FUND COMPLEX OFFICERS** | **FUND COMPLEX OFFICERS** | **FUND COMPLEX OFFICERS** |
| **Name, Address,**<br> **and Year of Birth**<br>| &nbsp;&nbsp; **Position(s) Held**<br> **with Fund Complex**<br>| &nbsp;&nbsp; **Positions with PGI and its Affiliates;**<br> **Principal Occupations During Past 5 Years\*\***<br>|
| Clint L. Woods<br> 711 High Street<br> Des Moines, IA 50392<br> 1961<br>| &nbsp;&nbsp; Counsel, Vice President, and Assistant <br> Secretary (since 2018)<br>| &nbsp;&nbsp; <u>PGI</u><br> Vice President, Associate General Counsel, and Assistant Secretary<br> (since 2021) <br> Vice President, Associate General Counsel, and Secretary (2020-2021)<br> Vice President, Associate General Counsel, Governance Officer, and <br> Assistant Corporate Secretary (2018-2020)<br><u>PFD</u><br> Vice President, Associate General Counsel, and Secretary (since 2021)<br> Vice President, Associate General Counsel, and <br> Assistant Corporate Secretary (2019-2021)<br><u>PFSI</u><br> Vice President, Associate Counsel, Governance Officer, and <br> Assistant Corporate Secretary (since 2015)<br><u>PLIC</u><br> Vice President, Associate General Counsel, Governance Officer, and <br> Assistant Corporate Secretary (since 2015)<br><u>Post</u><br> Assistant Secretary (since 2021)<br> Secretary (2020-2021)<br><u>Principal-REI</u><br> Vice President, Associate General Counsel, Governance Officer, <br> and Secretary (since 2020)<br> Vice President, Associate Counsel, Governance Officer, and <br> Assistant Corporate Secretary (2020)<br><u>PSI</u><br> Vice President, Associate General Counsel, and Secretary (2021-2022)<br> Vice President, Associate General Counsel, and Assistant Corporate <br> Secretary (2019-2021)<br><u>PSS</u><br> Vice President, Associate General Counsel, and Secretary (since 2021)<br> Vice President, Associate General Counsel, and Assistant Corporate <br> Secretary (2019-2021)<br><u>RobustWealth, Inc.</u><br> Vice President, Associate General Counsel, and Assistant Corporate <br> Secretary (since 2019)<br><u>Spectrum</u><br> Assistant Secretary (since 2021)<br> Secretary (2020-2021)<br>|
| Jared A. Yepsen<br> 711 High Street<br> Des Moines, IA 50392<br> 1981<br>| Assistant Tax Counsel (since 2017) | &nbsp;&nbsp; Counsel, PGI (2017-2019)<br> Counsel, PLIC (since 2015)<br>|

---

**\*\*Abbreviations used:** 

Origin Asset Management LLP (Origin)

Post Advisory Group, LLC (Post)

Principal Asset Management (PAM)

Principal Financial Group, Inc. (PFGI)

Principal Financial Services, Inc. (PFSI)

Principal Funds Distributor, Inc. (PFD)

Principal Global Asset Management (PGAM)

Principal Global Investors, LLC (PGI)

Principal Life Insurance Company (PLIC)

Principal Real Estate Investors, LLC (Principal - REI)

Principal Securities, Inc. (PSI)

Principal Shareholder Services, Inc. (PSS)

Spectrum Asset Management, Inc. (Spectrum)

------

**Board Member Ownership of Securities** 

The following tables set forth the dollar range of the equity securities of Funds included in this SAI, and aggregate dollar range of the equity securities of the funds in the Fund Complex, that were beneficially owned by the Board Members as of December 31, 2022. As of that date, Board Members did not own shares of the Funds included in this SAI that are not listed.

For the purpose of these tables, beneficial ownership means a direct or indirect pecuniary interest. Only Interested Board Members are eligible to participate in an employee benefit program that invests in the Fund Complex. Board Members who beneficially owned shares of the series of PVC did so through variable life insurance and variable annuity contracts. Please note that exact dollar amounts of securities held are not listed. Rather, ownership is listed based on the following dollar ranges:

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| | |
|:---|:---|
| A | $0 |
| B | $1 up to and including $10,000 |
| C | $10,001 up to and including $50,000 |
| D | $50,001 up to and including $100,000 |
| E | $100,001 or more |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| |
|:---|
| **Independent Board Members** |
| **Fund/Portfolio**<br>**McMillan** |
| Core Fixed Income<br> A<br> E |
| Core Plus Bond<br> A<br> E<br> C<br> B |
| Diversified Income<br> E<br> A<br> C |
| Diversified International<br> A<br> C<br> D |
| Equity Income<br> A<br> D |
| Global Emerging Markets<br> A<br> C |
| Global Real Estate Securities<br> A<br> C<br> D |
| High Yield<br> A<br> C<br> B |
| LargeCap S&P 500 Index<br> A<br> D |
| MidCap<br> A<br> E |
| Principal LifeTime 2030<br> A<br> E |
| Real Estate Securities<br> A<br> C |
| SAM Conservative Growth<br> A<br> E |
| SmallCap<br> A<br> D |
| **Total Fund Complex**<br> E<br> A<br> C |

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<sup>(1)</sup>

Appointment effective January 26, 2023.

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| | | |
|:---|:---|:---|
| **Interested Board Members** | **Interested Board Members** | **Interested Board Members** |
| **Fund** | **Dunbar** | **Halter** |
| Equity Income | A | E |
| Government & High Quality Bond | A | C |
| LargeCap Growth I | C | E |
| Money Market | A | B |
| Principal Capital Appreciation | D | A |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| |
|:---|
| **Ownership through participation in** <br> **an Employee Benefit Plan**<br>|
| LargeCap S&P 500 Index<br> A<br> E |
| Principal LifeTime Hybrid 2015<br> E<br> A |
| Principal LifeTime Hybrid 2020<br> D<br> A |
| Principal LifeTime Hybrid 2030<br> D<br> A |
| **Total Fund Complex**<br> **E**<br> **E** |

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**Board Member and Officer Compensation** 

The Fund Complex does not pay any remuneration to its 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 Fund Complex 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 to each of the Funds based on the net assets of each relative to combined net assets of the Fund Complex.

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 October 31, 2022. On that date, there were 4 investment companies in the Fund Complex. The Fund Complex does not provide retirement benefits or pensions to any of the Board Members.

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| | | |
|:---|:---|:---|
| **Board Member** | **Funds in this SAI**<sup>(1)</sup> <br>| **Fund Complex** |
| Leroy T. Barnes, Jr. | $234792 | $310000 |
| Craig Damos | $282712 | $373250 |
| Katharin S. Dyer<sup>(2)</sup> <br>| $0 | $0 |
| Frances P. Grieb<sup>(2)</sup> <br>| $0 | $0 |
| Fritz S. Hirsch | $251441 | $332000 |
| Victor L. Hymes | $253719 | $335000 |
| Padelford L. Lattimer | $240084 | $317000 |
| Karen McMillan | $249576 | $329500 |
| Elizabeth A. Nickels | $257504 | $340000 |
| Mary M. VanDeWeghe | $242363 | $320000 |

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<sup>(1)</sup>

The Principal LifeTime 2070 and Principal LifeTime Hybrid 2070 Funds are new since October 31, 2022.

<sup>(</sup><sup>2</sup><sup>)</sup>

Ms. Dyer and Ms. Grieb were both elected to the Board effective January 26, 2023 and, therefore, did not receive compensation from the Funds or the Fund Complex for the fiscal year ended October 31, 2022.

**INVESTMENT ADVISORY AND OTHER SERVICES**

**Investment Advisors** 

Principal Global Investors, LLC (doing business as Principal Asset Management) ("PGI"), an indirect subsidiary of Principal Financial Group, Inc. ("Principal<sup>®</sup>"), serves as the manager for the Funds. Principal Management Corporation, previously an affiliate of PGI, served as manager to the Funds prior to its merger with and into PGI on May 1, 2017.

PGI directly makes decisions to purchase or sell securities for each Fund, except for those Funds or portions of Funds for which PGI has retained a sub-advisor to provide such services, as described below.

PGI has executed agreements with various sub-advisors. Under those sub-advisory agreements, the sub-advisor agrees to assume the obligations of PGI to provide investment advisory services for a specific Fund. For these services, PGI pays each sub-advisor a fee.

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| | |
|:---|:---|
| **Sub-Advisor:** | &nbsp;&nbsp; **AllianceBernstein L.P. ("AllianceBernstein")** is a Delaware limited partnership, the majority limited <br> partnership units in which are held, directly and indirectly, by its parent company Equitable Holdings, Inc. <br> ("EQH"), a publicly traded holding company for a diverse group of financial services companies. <br> AllianceBernstein Corporation, an indirect wholly-owned subsidiary of EQH, is the general partner of <br> both AllianceBernstein and AllianceBernstein Holding L.P. ("ABH"), a publicly traded partnership. As of <br> September 30, 2022, ABH owned approximately 36.5% of the issued and outstanding AllianceBernstein <br> Units; EQH and its subsidiaries had an approximate 62.8% economic interest in AllianceBernstein <br> (including both the general partnership and limited partnership interests in ABH and AllianceBernstein); <br> and unaffiliated holders 0.7%.<br>|
| **Fund(s):** | a portion of the assets of SmallCap Growth I |
| **Sub-Advisor:** | &nbsp;&nbsp; **Barrow, Hanley, Mewhinney & Strauss, LLC** (doing business as Barrow Hanley Global Investors) <br> **("Barrow Hanley")** is an indirect subsidiary of Perpetual Limited ("Perpetual") (ASX:PPT), an Australian <br> financial services firm.<br>|
| **Fund(s):** | a portion of the assets of LargeCap Value III and a portion of the assets of Overseas |
| **Sub-Advisor:** | &nbsp;&nbsp; **BlackRock Financial Management, Inc. ("BlackRock")** is an indirect wholly-owned subsidiary of <br> BlackRock, Inc.<br>|

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| | |
|:---|:---|
|  | &nbsp;&nbsp; <u>Sub-Sub-Advisor:</u> **BlackRock International Limited** is an indirect wholly-owned subsidiary of <br> BlackRock, Inc.<br>|
| **Fund(s):** | Inflation Protection |
| **Sub-Advisor:** | **Brown Advisory, LLC ("Brown")** is a wholly-owned subsidiary of Brown Advisory Management, LLC. |
| **Fund(s):** | a portion of the assets of LargeCap Growth I and a portion of the assets of SmallCap Growth I |
| **Sub-Advisor:** | &nbsp;&nbsp; **Causeway Capital Management LLC ("Causeway")** is wholly owned by Causeway Capital Holdings <br> LLC.<br>|
| **Fund(s):** | a portion of the assets of Overseas |
| **Sub-Advisor:** | &nbsp;&nbsp; **Eagle Asset Management, Inc.** is a wholly-owned subsidiary of Carillon Tower Advisers, Inc., which is <br> a wholly-owned subsidiary of Raymond James Financial, Inc.<br>|
| **Fund(s):** | a portion of the assets of MidCap Growth III |
| **Sub-Advisor:** | &nbsp;&nbsp; **Emerald Advisers, LLC ("Emerald")** is a wholly-owned subsidiary of Emerald Asset Management PA, <br> LLC, which is 51% owned by a subsidiary of 1251 Capital Group, Inc., a financial services holding <br> company.<br>|
| **Fund(s):** | SmallCap Growth I |
| **Sub-Advisor:** | &nbsp;&nbsp; **Hotchkis and Wiley Capital Management, LLC** is a limited liability company, the primary members of <br> which are HWCap Holdings, LLC, a limited liability company whose members are current and former <br> employees, and Stephens-H&W, LLC, a limited liability company whose primary member is SF Holding <br> Corp., a diversified holding company.<br>|
| **Fund(s):** | a portion of the assets of SmallCap Value II |
| **Sub-Advisor:** | &nbsp;&nbsp; **Insight North America LLC ("INA")** is a wholly-owned subsidiary of The Bank of New York Mellon <br> Corporation, a banking and financial services company. INA is a registered investment advisor under the <br> Investment Advisers Act of 1940, is regulated by the U.S. Securities and Exchange Commission, and is <br> organized as a New York State limited liability company.<br>|
| **Fund(s):** | a portion of the assets of High Income |
| **Sub-Advisor:** | &nbsp;&nbsp; **Los Angeles Capital Management LLC ("Los Angeles Capital")** is a California limited liability <br> company. It is owned by key employees through its parent holding companies, LACM Holdings Inc. and <br> LACM Equity LLC (collectively, the "Parent Company"). Thomas D. Stevens, Chairman, and Hal W. <br> Reynolds, Co-Chief Investment Officer, hold a controlling equity interest in the Parent Company.<br>|
| **Fund(s):** | a portion of the assets of MidCap Value I |
| **Sub-Advisor:** | &nbsp;&nbsp; **Nuveen Asset Management, LLC ("Nuveen Asset Management")** is an investment advisor <br> registered with the SEC, whose sole managing member is Nuveen Funds Advisors, LLC. Nuveen Asset <br> Management is an indirect subsidiary of Teachers Insurance and Annuity Association of America, which <br> constitutes the ultimate principal owner of Nuveen Asset Management.<br>|
| **Fund(s):** | a portion of the assets of Diversified Income |
| **Sub-Advisor:** | &nbsp;&nbsp; **Origin Asset Management LLP** (doing business as Principal Origin) **("Origin")** is an indirect <br> majority-owned subsidiary of Principal Financial Services, Inc., an affiliate of PGI, and a member of <br> Principal<sup>®</sup>.<br>|
| **Fund(s):** | International Fund I |
| **Sub-Advisor:** | &nbsp;&nbsp; **PineBridge Investments LLC ("PineBridge")** is a wholly-owned subsidiary of PineBridge Investments <br> Holdings US LLC, which is a wholly-owned subsidiary of PineBridge Investments, L.P., a company <br> owned by Pacific Century Group, an Asia-based private investment group. Pacific Century Group is <br> majority owned by Mr. Richard Li Tzar Kai.<br>|
| **Fund(s):** | a portion of the assets of Diversified Income |

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| | |
|:---|:---|
| **Sub-Advisor:** | &nbsp;&nbsp; **Polen Capital Credit, LLC** (f/k/a DDJ Capital Management, LLC) **("Polen Credit")** is a private <br> Massachusetts limited liability company that is wholly owned by Polen Capital Management, LLC. Polen <br> Capital Management, LLC, which controls Polen Credit, is controlled by its Management Committee, <br> which consists of Stan C. Moss, CEO; Daniel Davidowitz, Portfolio Manager and Analyst; and Damon <br> Ficklin, Head of Team, Portfolio Manager, and Analyst. The Management Committee is controlled by <br> Messrs. Moss and Davidowitz.<br>|
| **Fund(s):** | a portion of the assets of Diversified Income and a portion of the assets of High Income |
| **Sub-Advisor:** | &nbsp;&nbsp; **Post Advisory Group, LLC ("Post")** is an indirect majority-owned subsidiary of Principal Financial <br> Group, Inc.<br>|
| **Fund(s):** | a portion of the assets of Diversified Income and a portion of the assets of High Income |
| **Sub-Advisor:** | &nbsp;&nbsp; **Principal Real Estate Investors, LLC** (doing business as Principal Real Estate) **("Principal - REI")** is <br> an indirect subsidiary of Principal Financial Group, Inc.<br>|
| **Fund(s):** | Global Real Estate Securities, Real Estate Securities, and a portion of the assets of Diversified Income |
| **Sub-Advisor:** | &nbsp;&nbsp; **Robert W. Baird & Co. Incorporated ("Baird")** is owned directly by Baird Financial Corporation <br> ("BFC"). BFC is, in turn, owned by Baird Financial Group, Inc. ("BFG"), which is the ultimate parent <br> company of Baird. Employees of Baird own substantially all of the outstanding stock of BFG.<br>|
| **Fund(s):** | a portion of the assets of MidCap Growth III |
| **Sub-Advisor:** | &nbsp;&nbsp; **Spectrum Asset Management, Inc. ("Spectrum")** is an indirect subsidiary of Principal Financial <br> Group, Inc.<br>|
| **Fund(s):** | a portion of the assets of Diversified Income |
| **Sub-Advisor:** | &nbsp;&nbsp; **T. Rowe Price Associates, Inc. ("T. Rowe Price")** is a wholly-owned subsidiary of T. Rowe Price <br> Group, Inc., a financial services holding company.<br>|
| **Fund(s):** | a portion of the assets of LargeCap Growth I |
| **Sub-Advisor:** | &nbsp;&nbsp; **Vaughan Nelson Investment Management, L.P. ("Vaughan Nelson")** is a subsidiary of Natixis <br> Investment Managers, LLC.<br>|
| **Fund(s):** | a portion of the assets of SmallCap Value II |
| **Sub-Advisor:** | &nbsp;&nbsp; **Victory Capital Management Inc. ("Victory Capital")** is an indirect wholly-owned subsidiary of Victory <br> Capital Holdings, Inc. ("VCH"), a publicly traded Delaware corporation.<br>|
| **Fund(s):** | a portion of the assets of MidCap Value I |
| **Sub-Advisor:** | &nbsp;&nbsp; **Westwood Management Corp. ("Westwood")**, a New York corporation, is a wholly-owned subsidiary <br> of Westwood Holdings Group, Inc., a publicly held company traded on the New York Stock Exchange.<br>|
| **Fund(s):** | a portion of the assets of LargeCap Value III |

---

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

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

**Codes of Ethics** 

The Registrant, PGI, PFD, and each of the sub-advisors have adopted Codes of Ethics ("Codes") under Rule 17j-1 of the 1940 Act. PGI and the sub-advisors have each 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 Registrant prohibits portfolio managers from personally trading securities that are held or traded in the actively managed portfolios for which they are responsible. Certain sub-advisors have adopted Codes that do not permit personnel subject to such Code to invest in securities that may be purchased or held by a Fund. However, other sub-advisors' Codes do permit, subject to conditions, personnel subject to the Code to invest in securities that may be

------

purchased or held by a Fund. The Registrant's Board reviews reports at least annually regarding the operation of the Code of Ethics of the Registrant, PGI, PFD, and each sub-advisor. A copy of the Registrant's Code will be provided upon request, which may be made by contacting the Registrant.

**Management Agreement** 

Under the terms of the Management Agreement with the Registrant, 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):

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Fund** | **First**<br> **$500 million**<br>| **Next**<br> **$500 million**<br>| **Next**<br> **$500 million**<br>| **Over**<br> **$1.5 billion**<br>|
| California Municipal | 0.40% | 0.38% | 0.36% | 0.35% |
| Finisterre Emerging Markets Total Return Bond | 0.75 | 0.74 | 0.73 | 0.72 |
| Government & High Quality Bond | 0.49 | 0.47 | 0.45 | 0.44 |
| MidCap Growth | 0.65 | 0.63 | 0.61 | 0.60 |
| MidCap Growth III | 0.82 | 0.80 | 0.78 | 0.77 |
| SmallCap | 0.75 | 0.73 | 0.71 | 0.70 |
| Tax-Exempt Bond | 0.40 | 0.38 | 0.36 | 0.35 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Fund** | **All Assets** |
| Principal LifeTime Strategic Income | 0.00% |
| Principal LifeTime 2010 | 0.00 |
| Principal LifeTime 2015 | 0.00 |
| Principal LifeTime 2020 | 0.00 |
| Principal LifeTime 2025 | 0.00 |
| Principal LifeTime 2030 | 0.00 |
| Principal LifeTime 2035 | 0.00 |
| Principal LifeTime 2040 | 0.00 |
| Principal LifeTime 2045 | 0.00 |
| Principal LifeTime 2050 | 0.00 |
| Principal LifeTime 2055 | 0.00 |
| Principal LifeTime 2060 | 0.00 |
| Principal LifeTime 2065 | 0.00 |
| Principal LifeTime 2070 | 0.00 |
| Principal LifeTime Hybrid Income | 0.00 |
| Principal LifeTime Hybrid 2015 | 0.00 |
| Principal LifeTime Hybrid 2020 | 0.00 |
| Principal LifeTime Hybrid 2025 | 0.00 |
| Principal LifeTime Hybrid 2030 | 0.00 |
| Principal LifeTime Hybrid 2035 | 0.00 |
| Principal LifeTime Hybrid 2040 | 0.00 |
| Principal LifeTime Hybrid 2045 | 0.00 |
| Principal LifeTime Hybrid 2050 | 0.00 |
| Principal LifeTime Hybrid 2055 | 0.00 |
| Principal LifeTime Hybrid 2060 | 0.00 |
| Principal LifeTime Hybrid 2065 | 0.00 |
| Principal LifeTime Hybrid 2070 | 0.00 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Fund** | **First**<br> **$500 million**<br>| **Next**<br> **$500 million**<br>| **Next**<br> **$500 million**<br>| **Next**<br> **$500 million**<br>| **Next**<br> **$1 billion**<br>| **Over**<br> **$3 billion**<br>|
| Core Plus Bond | 0.49% | 0.47% | 0.45% | 0.44% | 0.42% | 0.39% |
| Diversified Income | 0.69 | 0.67 | 0.65 | 0.64 | 0.63 | 0.62 |
| Global Emerging Markets | 0.99 | 0.97 | 0.95 | 0.94 | 0.93 | 0.92 |
| Global Real Estate Securities | 0.90 | 0.88 | 0.86 | 0.85 | 0.84 | 0.83 |
| High Income | 0.65 | 0.63 | 0.61 | 0.60 | 0.59 | 0.58 |
| Inflation Protection | 0.40 | 0.38 | 0.36 | 0.35 | 0.34 | 0.33 |
| International I | 0.65 | 0.63 | 0.61 | 0.60 | 0.59 | 0.58 |
| LargeCap Value III | 0.80 | 0.78 | 0.76 | 0.75 | 0.73 | 0.70 |
| MidCap Value I | 0.68 | 0.66 | 0.64 | 0.63 | 0.62 | 0.61 |
| Money Market | 0.40 | 0.39 | 0.38 | 0.37 | 0.36 | 0.35 |
| Overseas | 0.93 | 0.91 | 0.89 | 0.88 | 0.87 | 0.86 |
| SmallCap Growth I | 0.88 | 0.86 | 0.84 | 0.83 | 0.82 | 0.81 |
| SmallCap Value II | 0.95 | 0.93 | 0.91 | 0.90 | 0.89 | 0.88 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

------

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Fund** | **First**<br> **$500 million**<br>| **Next**<br> **$500 million**<br>| **Next**<br> **$500 million**<br>| **Next**<br> **$500 million**<br>| **Next**<br> **$1 billion**<br>| **Next**<br> **$9 billion**<br>| **Over**<br> **$12 billion**<br>|
| LargeCap Growth I | 0.66% | 0.64% | 0.62% | 0.61% | 0.60% | 0.59% | 0.58% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Fund** | **First**<br> **$500 million**<br>| **Next**<br> **$500 million**<br>| **Next**<br> **$500 million**<br>| **Next**<br> **$500 million**<br>| **Next**<br> **$1 billion**<br>| **Next**<br> **$2 billion**<br>| **Next**<br> **$2 billion**<br>| **Next**<br> **$3 billion**<br>| **Next**<br> **$10 billion**<br>|
| Real Estate Securities | 0.85% | 0.83% | 0.81% | 0.80% | 0.79% | 0.78% | 0.77% | 0.76% | 0.75% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Fund** | **First**<br> **$1 billion**<br>| **Next**<br> **$3 billion**<br>| **Next**<br> **$3 billion**<br>| **Next**<br> **$3 billion**<br>| **Over**<br> **$10 billion**<br>|
| Core Fixed Income | 0.39% | 0.38% | 0.37% | 0.36% | 0.34% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Fund** | **First**<br> **$500 million**<br>| **Next**<br> **$500 million**<br>| **Next**<br> **$500 million**<br>| **Next**<br> **$500 million**<br>| **Next**<br> **$1 billion**<br>| **Next**<br> **$7 billion**<br>| **Over**<br> **$10 billion**<br>|
| Diversified International | 0.80% | 0.78% | 0.76% | 0.75% | 0.73% | 0.70% | 0.69% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Fund** | **First**<br> **$250 million**<br>| **Next**<br> **$250 million**<br>| **Next**<br> **$6.5 billion**<br>| **Next**<br> **$3 billion**<br>| **Next**<br> **$2 billion**<br>| **Next**<br> **$3 billion**<br>| **Over**<br> **$15 billion**<br>|
| Equity Income | 0.60% | 0.55% | 0.50% | 0.49% | 0.48% | 0.46% | 0.44% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| **Fund** | **First**<br> **$250 million**<br>| **Over**<br> **$250 million**<br>|
| High Yield | 0.625% | 0.50% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | |
|:---|:---|:---|:---|
| **Fund** | **First**<br> **$3 billion**<br>| **Next**<br> **$3 billion**<br>| **Over**<br> **$6 billion**<br>|
| LargeCap S&P 500 Index | 0.15% | 0.13% | 0.10% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Fund** | **First**<br> **$500 million**<br>| **Next**<br> **$500 million**<br>| **Next**<br> **$500 million**<br>| **Next**<br> **$500 million**<br>| **Next**<br> **$1 billion**<br>| **Next**<br> **$9.5 billion**<br>| **Next**<br> **$2.5 billion**<br>| **Next**<br> **$3 billion**<br>| **Next**<br> **$4 billion**<br>| **Next**<br> **$3 billion**<br>| **Over**<br> **$25 billion**<br>|
| MidCap | 0.65% | 0.63% | 0.61% | 0.60% | 0.59% | 0.58% | 0.57% | 0.56% | 0.55% | 0.53% | 0.51% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Fund** | **All Assets** |
| Government Money Market | 0.15% |
| MidCap S&P 400 Index | 0.15 |
| SmallCap S&P 600 Index | 0.15 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | |
|:---|:---|:---|:---|
| **Fund** | **First**<br> **$500 million**<br>| **Next**<br> **$500 million**<br>| **Over**<br> **$1 billion**<br>|
| Principal Capital Appreciation | 0.625% | 0.50% | 0.375% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Portfolio** | **First**<br> **$3 billion**<br>| **Next**<br> **$4 billion**<br>| **Next**<br> **$4 billion**<br>| **Next**<br> **$4 billion**<br>| **Over**<br> **$15 billion**<br>|
| SAM Balanced\* | 0.35% | 0.30% | 0.25% | 0.20% | 0.18% |
| SAM Conservative Balanced\* | 0.35 | 0.30 | 0.25 | 0.20 | 0.18 |
| SAM Conservative Growth\* | 0.35 | 0.30 | 0.25 | 0.20 | 0.18 |
| SAM Flexible Income\* | 0.35 | 0.30 | 0.25 | 0.20 | 0.18 |
| SAM Strategic Growth\* | 0.35 | 0.30 | 0.25 | 0.20 | 0.18 |

---

\*

Breakpoints are based on aggregate SAM Portfolio net assets.

---

| | | | |
|:---|:---|:---|:---|
| **Fund** | **First**<br> **$2 billion**<br>| **Next**<br> **$2 billion**<br>| **Over**<br> **$4 billion**<br>|
| Short-Term Income | 0.38% | 0.36% | 0.33% |

---

<u>Fund Operating Expenses</u> 

Each Fund pays all of its operating expenses. Under the terms of the Management Agreement, PGI is responsible for paying the expenses associated with the organization of each Fund, including the expenses incurred in the initial registration of each Fund with the SEC; compensation of personnel, officers, and Board Members who are affiliated with PGI; and expenses and compensation associated with furnishing office space and all necessary office facilities and equipment and personnel necessary to perform the general corporate functions of the Funds. Accounting services customarily required by investment companies are provided to each Fund by PGI, under the terms of the Management Agreement. Principal

------

Shareholder Services, Inc., an affiliate of PGI, provides transfer agent services for Classes A, C, J, Institutional, R-1, R-3, R-4, R-5, and R-6 shares, including qualifying shares of the Funds for sale in states and other jurisdictions. PGI is also responsible for providing certain shareholder and administrative services to Classes R-1, R-3, R-4, and R-5 shares pursuant to a Service Agreement and an Administrative Services Agreement.

<u>Contractual Limits on Total Annual Fund Operating Expenses</u> 

PGI has contractually agreed to limit Fund expenses (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) on certain share classes of certain of the Funds. The reductions and reimbursements are in amounts that maintain total operating expenses at or below certain limits. The limits are expressed as a percentage of average daily net assets attributable to each respective class on an annualized basis. Subject to applicable expense limits, the Funds may reimburse PGI for expenses incurred during the current fiscal year.

In addition, PGI has contractually agreed to reduce the Government Money Market Fund's management fees in an amount equal to all Acquired Fund Fees and Expenses through the period ending February 29, 2024.

The operating expense limits and the agreement terms are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Contractual Limits on Total Annual Fund Operating Expenses** | **Contractual Limits on Total Annual Fund Operating Expenses** | **Contractual Limits on Total Annual Fund Operating Expenses** | **Contractual Limits on Total Annual Fund Operating Expenses** | **Contractual Limits on Total Annual Fund Operating Expenses** | **Contractual Limits on Total Annual Fund Operating Expenses** |
| **Fund** | **A** | **C** | **J** | **Inst.** | **Expiration** |
| California Municipal | N/A | N/A | N/A | 0.46% | 2/29/2024 |
| Core Fixed Income | N/A | N/A | N/A | 0.46% | 2/29/2024 |
| Core Plus Bond | 0.84% | N/A | N/A | 0.56% | 2/29/2024 |
| Diversified Income | N/A | N/A | N/A | 0.68% | 2/29/2024 |
| Diversified International | N/A | N/A | N/A | 0.85% | 2/29/2024 |
| Equity Income | N/A | N/A | N/A | 0.52% | 2/29/2024 |
| Finisterre Emerging Markets Total Return Bond | N/A | N/A | N/A | 0.85% | 2/29/2024 |
| Global Emerging Markets | 1.45% | N/A | 1.30% | 1.10% | 2/29/2024 |
| Global Real Estate Securities | N/A | N/A | N/A | 0.94% | 2/29/2024 |
| Government & High Quality Bond | N/A | N/A | N/A | 0.53% | 2/29/2024 |
| Government Money Market | N/A | N/A | N/A | 0.20% | 2/29/2024 |
| High Yield | N/A | N/A | N/A | 0.61% | 2/29/2024 |
| International I | N/A | N/A | N/A | 0.79% | 2/29/2024 |
| LargeCap S&P 500 Index | N/A | 1.30% | N/A | N/A | 2/29/2024 |
| MidCap Growth | N/A | N/A | N/A | 0.75% | 2/29/2024 |
| MidCap Value I | N/A | N/A | N/A | 0.69% | 2/29/2024 |
| Money Market | 0.50% | N/A | N/A | N/A | 2/29/2024 |
| Principal LifeTime 2010 | 0.38% | N/A | N/A | N/A | 2/29/2024 |
| Principal LifeTime 2040 | 0.38% | N/A | N/A | N/A | 2/29/2024 |
| Principal LifeTime 2050 | 0.38% | N/A | N/A | N/A | 2/29/2024 |
| Principal LifeTime 2060 | N/A | N/A | 0.38% | N/A | 2/29/2024 |
| Principal LifeTime 2070 | N/A | N/A | 0.30% | 0.05% | 2/28/2025 |
| Principal LifeTime Strategic Income | 0.38% | N/A | N/A | N/A | 2/29/2024 |
| Principal LifeTime Hybrid 2015 | N/A | N/A | N/A | 0.05% | 2/29/2024 |
| Principal LifeTime Hybrid 2020 | N/A | N/A | N/A | 0.05% | 2/29/2024 |
| Principal LifeTime Hybrid 2025 | N/A | N/A | N/A | 0.05% | 2/29/2024 |
| Principal LifeTime Hybrid 2030 | N/A | N/A | N/A | 0.05% | 2/29/2024 |
| Principal LifeTime Hybrid 2035 | N/A | N/A | N/A | 0.05% | 2/29/2024 |
| Principal LifeTime Hybrid 2040 | N/A | N/A | N/A | 0.05% | 2/29/2024 |
| Principal LifeTime Hybrid 2045 | N/A | N/A | N/A | 0.05% | 2/29/2024 |
| Principal LifeTime Hybrid 2050 | N/A | N/A | N/A | 0.05% | 2/29/2024 |
| Principal LifeTime Hybrid 2055 | N/A | N/A | 0.30% | 0.05% | 2/29/2024 |
| Principal LifeTime Hybrid 2060 | N/A | N/A | 0.30% | 0.05% | 2/29/2024 |
| Principal LifeTime Hybrid 2065 | N/A | N/A | 0.30% | 0.05% | 2/29/2024 |
| Principal LifeTime Hybrid 2070 | N/A | N/A | 0.30% | 0.05% | 2/28/2025 |
| Principal LifeTime Hybrid Income | N/A | N/A | N/A | 0.05% | 2/29/2024 |
| Real Estate Securities | N/A | N/A | N/A | 0.86% | 2/29/2024 |
| SmallCap | N/A | N/A | N/A | 0.85% | 2/29/2024 |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Contractual Limits on Total Annual Fund Operating Expenses** | **Contractual Limits on Total Annual Fund Operating Expenses** | **Contractual Limits on Total Annual Fund Operating Expenses** | **Contractual Limits on Total Annual Fund Operating Expenses** | **Contractual Limits on Total Annual Fund Operating Expenses** | **Contractual Limits on Total Annual Fund Operating Expenses** |
| **Fund** | **A** | **C** | **J** | **Inst.** | **Expiration** |
| SmallCap S&P 600 Index | N/A | N/A | N/A | 0.21% | 2/29/2024 |
| SmallCap Value II | N/A | N/A | N/A | 0.96% | 2/29/2024 |
| Tax-Exempt Bond | N/A | N/A | N/A | 0.45% | 2/29/2024 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Contractual Limits on Total Annual Fund Operating Expenses** | **Contractual Limits on Total Annual Fund Operating Expenses** | **Contractual Limits on Total Annual Fund Operating Expenses** | **Contractual Limits on Total Annual Fund Operating Expenses** | **Contractual Limits on Total Annual Fund Operating Expenses** | **Contractual Limits on Total Annual Fund Operating Expenses** |
| **Fund** | **R-1** | **R-3** | **R-4** | **R-5** | **Expiration** |
| Government & High Quality Bond | 1.29% | 0.98% | 0.79% | 0.67% | 2/29/2024 |
| Principal LifeTime 2070 | 0.93% | 0.62% | 0.43% | 0.31% | 2/28/2025 |

---

<u>Contractual Limits on Other Expenses</u> 

PGI has contractually agreed to limit the expenses identified as "Other Expenses" related to certain share classes of certain of the Funds by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and tax reclaim recovery expenses and other extraordinary expenses) to maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) at or below certain limits.

The other expenses limits and the agreement terms are as follows:

---

| | | |
|:---|:---|:---|
| **Contractual Limits on Other Expenses** | **Contractual Limits on Other Expenses** | **Contractual Limits on Other Expenses** |
| **Fund** | **R-6** | **Expiration** |
| Diversified Income | 0.02% | 2/29/2024 |
| Global Emerging Markets | 0.04% | 2/29/2024 |
| Government Money Market | 0.00% | 2/29/2024 |
| International I | 0.04% | 2/29/2024 |
| Principal LifeTime Hybrid Income | 0.02% | 2/29/2024 |
| Principal LifeTime Hybrid 2015 | 0.02% | 2/29/2024 |
| Principal LifeTime Hybrid 2020 | 0.02% | 2/29/2024 |
| Principal LifeTime Hybrid 2025 | 0.02% | 2/29/2024 |
| Principal LifeTime Hybrid 2030 | 0.02% | 2/29/2024 |
| Principal LifeTime Hybrid 2035 | 0.02% | 2/29/2024 |
| Principal LifeTime Hybrid 2040 | 0.02% | 2/29/2024 |
| Principal LifeTime Hybrid 2045 | 0.02% | 2/29/2024 |
| Principal LifeTime Hybrid 2050 | 0.02% | 2/29/2024 |
| Principal LifeTime Hybrid 2055 | 0.02% | 2/29/2024 |
| Principal LifeTime Hybrid 2060 | 0.02% | 2/29/2024 |
| Principal LifeTime Hybrid 2065 | 0.02% | 2/29/2024 |
| Principal LifeTime Hybrid 2070 | 0.02% | 2/28/2025 |
| SmallCap | 0.02% | 2/29/2024 |
| SmallCap Growth I | 0.01% | 2/29/2024 |

---

<u>Contractual Management Fee Waivers</u> 

PGI has contractually agreed to waive a portion of certain Fund's management fees. The fee waiver will reduce the Fund's management fees by the amounts listed below:

---

| | | |
|:---|:---|:---|
| **Contractual Management Fee Waivers** | **Contractual Management Fee Waivers** | **Contractual Management Fee Waivers** |
| **Fund** | **Waiver** | **Expiration** |
| High Income | 0.015% | 2/29/2024 |
| LargeCap Growth I | 0.016% | 2/29/2024 |
| LargeCap Value III | 0.065% | 2/29/2024 |
| MidCap Growth III | 0.020% | 2/29/2024 |
| MidCap Value I | 0.020% | 2/29/2024 |
| Overseas | 0.020% | 2/29/2024 |
| SmallCap Growth I | 0.020% | 2/29/2024 |
| SmallCap Value II | 0.020% | 2/29/2024 |

---

------

<u>Limits on Distribution Fees and/or Service (12b-1) Fees</u> 

Effective December 31, 2015, the Distributor has contractually agreed to limit the distribution fees attributable to Class J normally payable by the Money Market Fund. This waiver is in place through February 29, 2024 and will reduce the Money Market Fund's distribution fees by 0.15%. It is expected that the fee waiver will continue to the period disclosed; however, PFI and the Distributor, the parties to the agreement, may agree to terminate the fee waiver prior to the end of the period.

Effective January 1, 2021, the Distributor has voluntarily agreed to limit the distribution fees attributable to Class J, reducing the Funds' distribution fees for Class J shares by 0.020%.\* This voluntary waiver may be revised or terminated at any time without notice to shareholders.

\* For the period from December 31, 2016 to December 31, 2020, the voluntary waiver was 0.030%.

<u>Voluntary Expense Limit</u> 

PGI has voluntarily agreed to limit the Government Money Market and Money Market Funds' expenses to the extent necessary to maintain a 0% yield. The voluntary expense limit may be revised or terminated at any time without notice to the shareholders.

<u>Management Fees Paid</u> 

Management fees paid for investment management services (before any waivers/reimbursements from PGI) during the periods indicated were as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Management Fees Paid for Periods Ended October 31**<br> **(amounts in thousands)** | **Management Fees Paid for Periods Ended October 31**<br> **(amounts in thousands)** | **Management Fees Paid for Periods Ended October 31**<br> **(amounts in thousands)** | **Management Fees Paid for Periods Ended October 31**<br> **(amounts in thousands)** |
| **Fund/Portfolio** | **2022** | **2021** | **2020** |
| California Municipal | $2609 | $3131 | $2845 |
| Core Fixed Income | 37559 | 42275 | 36919 |
| Core Plus Bond | 3577 | 3807 | 3450 |
| Diversified Income | 27267<sup>(1)</sup> | 34945 | 45991 |
| Diversified International | 36027 | 64677 | 89822 |
| Equity Income | 50039 | 50710 | 38888 |
| Finisterre Emerging Markets Total Return Bond | 4574 | 4255<sup>(2)</sup> | 1742 |
| Global Emerging Markets | 2634<sup>(3)</sup> | 3248 | 3113 |
| Global Real Estate Securities | 25456 | 31046 | 25893 |
| Government & High Quality Bond | 5709 | 6299 | 8297 |
| Government Money Market | 6011 | 5744 | 5474 |
| High Income | 20221 | 21522 | 18032 |
| High Yield | 12994 | 15327 | 14861 |
| Inflation Protection | 5707 | 6099 | 6413 |
| International I | 2229 | 2562 | 2562 |
| LargeCap Growth I | 69781 | 79586 | 64062 |
| LargeCap S&P 500 Index | 8732 | 8942 | 8950 |
| LargeCap Value III | 24738 | 22166 | 15252 |
| MidCap | 119959 | 129006 | 104065 |
| MidCap Growth | 1768 | 1829 | 1109 |
| MidCap Growth III | 9616 | 10240 | 9880 |
| MidCap S&P 400 Index | 1948 | 1987 | 1619 |
| MidCap Value I | 22016 | 17373 | 14640 |
| Money Market | 3246 | 2933 | 2634 |
| Overseas | 21032 | 27536 | 24669 |
| Principal Capital Appreciation | 13307 | 9848 | 8454 |
| Real Estate Securities | 52836 | 44740 | 38244 |
| SAM Balanced | 12439 | 13123 | 12100 |
| SAM Conservative Balanced | 4928 | 4968 | 4606 |
| SAM Conservative Growth | 8497 | 8999 | 8045 |
| SAM Flexible Income | 7679 | 7863 | 7443 |
| SAM Strategic Growth | 5541 | 5850 | 5015 |
| Short-Term Income | 14435 | 21762 | 22102 |
| SmallCap | 9556 | 8827 | 4750 |
| SmallCap Growth I | 21565 | 24764 | 17309 |

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| | | | |
|:---|:---|:---|:---|
| **Management Fees Paid for Periods Ended October 31**<br> **(amounts in thousands)** | **Management Fees Paid for Periods Ended October 31**<br> **(amounts in thousands)** | **Management Fees Paid for Periods Ended October 31**<br> **(amounts in thousands)** | **Management Fees Paid for Periods Ended October 31**<br> **(amounts in thousands)** |
| **Fund/Portfolio** | **2022** | **2021** | **2020** |
| SmallCap S&P 600 Index | $1898 | $2100 | $1671 |
| SmallCap Value II | 11701 | 11863 | 8425 |
| Tax-Exempt Bond | 2991 | 3192 | 2752 |

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<sup>(</sup><sup>1</sup><sup>)</sup>

Effective March 1, 2022, Global Diversified Income Fund changed its name to Diversified Income Fund.

<sup>(</sup><sup>2</sup><sup>)</sup>

Effective February 1, 2021, Finisterre Unconstrained Emerging Markets Bond Fund changed its name to Finisterre Emerging Markets Total Return Bond Fund.

<sup>(</sup><sup>3</sup><sup>)</sup>

Effective January 1, 2022, International Emerging Markets Fund changed its name to Global Emerging Markets Fund.

<u>Management Fees Waived</u> 

For the following Funds, PGI waived a portion of the management fee during the periods indicated as follows:

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| | | | |
|:---|:---|:---|:---|
| **Management Fees Waived for Periods Ended October 31**<br> **(amounts in thousands)** | **Management Fees Waived for Periods Ended October 31**<br> **(amounts in thousands)** | **Management Fees Waived for Periods Ended October 31**<br> **(amounts in thousands)** | **Management Fees Waived for Periods Ended October 31**<br> **(amounts in thousands)** |
| **Fund** | **2022** | **2021** | **2020** |
| Core Plus Bond | $393 | $420 | $379 |
| Diversified Income | 1868<sup>(1)</sup> | 3794 | 5056 |
| Diversified International |  |  | 4122 |
| Global Emerging Markets | —<sup>(2)</sup> |  | 162 |
| Government Money Market | 371 | 396 | 304 |
| High Income | 498 | 532 | 442 |
| International I |  |  | 178 |
| LargeCap Growth I | 1868 | 2136 | 1714 |
| LargeCap Value III | 2136 | 1904 | 1285 |
| MidCap Growth III | 224 | 234 | 333 |
| MidCap Value I | 691 | 539 | 452 |
| Overseas | 784 | 1034 | 1035 |
| SmallCap Growth I | 510 | 588 | 620 |
| SmallCap Value II | 251 | 254 | 291 |

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<sup>(1)</sup>

Effective March 1, 2022, Global Diversified Income Fund changed its name to Diversified Income Fund.

<sup>(</sup><sup>2</sup><sup>)</sup>

Effective January 1, 2022, International Emerging Markets Fund changed its name to Global Emerging Markets Fund.

<u>Expenses Reimbursed</u> 

For the following Funds, PGI reimbursed certain expenses during the periods indicated as follows:

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| | | | |
|:---|:---|:---|:---|
| **Expenses Reimbursed for Periods Ended October 31**<br> **(amounts in thousands)** | **Expenses Reimbursed for Periods Ended October 31**<br> **(amounts in thousands)** | **Expenses Reimbursed for Periods Ended October 31**<br> **(amounts in thousands)** | **Expenses Reimbursed for Periods Ended October 31**<br> **(amounts in thousands)** |
| **Fund** | **2022** | **2021** | **2020** |
| California Municipal | $42 | $60 | $55 |
| Core Fixed Income | 260 |  | —<sup>(1)</sup> |
| Core Plus Bond | 403 | 347 | 263 |
| Diversified Income | 1643<sup>(2)</sup> | 2042 | 2934 |
| Diversified International | 155 | 83 | 24 |
| Equity Income | 1724 | 1494 | 1317 |
| Finisterre Emerging Markets Total Return Bond | 6 | 64<sup>(3)</sup> | 195 |
| Global Emerging Markets | 272<sup>(4)</sup> | 218 | 408 |
| Global Real Estate Securities | 877 | 756 | 1550 |
| Government & High Quality Bond | 36 | 44 | 225 |
| Government Money Market | 240 | 3887 | 993 |
| High Income |  | 8 | 32 |
| High Yield | 259 | 226 | 356 |
| Inflation Protection |  |  | 13 |
| International I | 50 | 70 | 57 |
| MidCap Growth | 32 | 22 | 18 |
| MidCap Value I | 316 | 116 | 166 |
| Money Market | 122 | 3005 | 861 |
| Principal Capital Appreciation |  | 106 | 288 |
| Principal LifeTime Strategic Income | 19 | 19 | 24 |

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| | | | |
|:---|:---|:---|:---|
| **Expenses Reimbursed for Periods Ended October 31**<br> **(amounts in thousands)** | **Expenses Reimbursed for Periods Ended October 31**<br> **(amounts in thousands)** | **Expenses Reimbursed for Periods Ended October 31**<br> **(amounts in thousands)** | **Expenses Reimbursed for Periods Ended October 31**<br> **(amounts in thousands)** |
| **Fund** | **2022** | **2021** | **2020** |
| Principal LifeTime 2010 | $13 | $7 | $11 |
| Principal LifeTime 2040 | 3 |  | 17 |
| Principal LifeTime 2050 | 49 | 36 | 57 |
| Principal LifeTime 2060 | 5 | 5 | 19 |
| Principal LifeTime 2065 |  | 4 | 21 |
| Principal LifeTime Hybrid Income | 36 | 42 | 53 |
| Principal LifeTime Hybrid 2015 | 32 | 34 | 34 |
| Principal LifeTime Hybrid 2020 | 16 | 21 | 15 |
| Principal LifeTime Hybrid 2025 | 16 | 22 | 17 |
| Principal LifeTime Hybrid 2030 | 18 | 26 | 11 |
| Principal LifeTime Hybrid 2035 | 14 | 22 | 25 |
| Principal LifeTime Hybrid 2040 | 15 | 21 | 21 |
| Principal LifeTime Hybrid 2045 | 26 | 33 | 37 |
| Principal LifeTime Hybrid 2050 | 29 | 34 | 48 |
| Principal LifeTime Hybrid 2055 | 61 | 66 | 71 |
| Principal LifeTime Hybrid 2060 | 79 | 79 | 79 |
| Principal LifeTime Hybrid 2065 | 74 | 79 | 83 |
| Real Estate Securities | 1276 |  | 273 |
| Short-Term Income | 36 | 144 | 177 |
| SmallCap | 53 | 19 | 33 |
| SmallCap Growth I | 9 | 1 | 46 |
| SmallCap S&P 600 Index | 67 | 52 |  |
| SmallCap Value II | 194 | 182 | 172 |
| Tax-Exempt Bond | 177 | 73 | 92 |

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<sup>(1)</sup>

Effective December 30, 2019, Income Fund changed its name to Core Fixed Income Fund.

<sup>(2)</sup>

Effective March 1, 2022, Global Diversified Income Fund changed its name to Diversified Income Fund.

<sup>(3)</sup>

Effective February 1, 2021, Finisterre Unconstrained Emerging Markets Bond Fund changed its name to Finisterre Emerging Markets Total Return Bond Fund.

<sup>(4)</sup>

Effective January 1, 2022, International Emerging Markets Fund changed its name to Global Emerging Markets Fund.

**Sub-Advisory Agreements for the Funds** 

PGI (and not the Funds) pays the sub-advisors fees determined pursuant to a sub-advisory agreement with each sub-advisor, including those sub-advisors that are at least 95% owned, directly or indirectly, by PGI or its affiliates ("Wholly-Owned Sub-Advisors") and the sub-advisors for the Funds listed in the tables below. Fees paid to sub-advisors are individually negotiated between PGI and each sub-advisor and may vary.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Aggregate Fees Paid to Sub-Advisors**<br> **(other than Wholly-Owned Sub-Advisors, Origin and Post)**<br> **for Fiscal Years Ended October 31 (dollar amounts in thousands)** | **Aggregate Fees Paid to Sub-Advisors**<br> **(other than Wholly-Owned Sub-Advisors, Origin and Post)**<br> **for Fiscal Years Ended October 31 (dollar amounts in thousands)** | **Aggregate Fees Paid to Sub-Advisors**<br> **(other than Wholly-Owned Sub-Advisors, Origin and Post)**<br> **for Fiscal Years Ended October 31 (dollar amounts in thousands)** | **Aggregate Fees Paid to Sub-Advisors**<br> **(other than Wholly-Owned Sub-Advisors, Origin and Post)**<br> **for Fiscal Years Ended October 31 (dollar amounts in thousands)** | **Aggregate Fees Paid to Sub-Advisors**<br> **(other than Wholly-Owned Sub-Advisors, Origin and Post)**<br> **for Fiscal Years Ended October 31 (dollar amounts in thousands)** | **Aggregate Fees Paid to Sub-Advisors**<br> **(other than Wholly-Owned Sub-Advisors, Origin and Post)**<br> **for Fiscal Years Ended October 31 (dollar amounts in thousands)** | **Aggregate Fees Paid to Sub-Advisors**<br> **(other than Wholly-Owned Sub-Advisors, Origin and Post)**<br> **for Fiscal Years Ended October 31 (dollar amounts in thousands)** |
|  | **2022** | **2022** | **2021** | **2021** | **2020** | **2020** |
| **Fund** | &nbsp;&nbsp; **Dollar**<br> **Amount**<br>| &nbsp;&nbsp; **Percent of**<br> **Average Daily**<br> **Net Assets**<br>| &nbsp;&nbsp; **Dollar**<br> **Amount**<br>| &nbsp;&nbsp; **Percent of**<br> **Average Daily**<br> **Net Assets**<br>| &nbsp;&nbsp; **Dollar**<br> **Amount**<br>| &nbsp;&nbsp; **Percent of**<br> **Average Daily**<br> **Net Assets**<br>|
| Diversified Income | $3998 | 0.37% | $4188 | 0.34% | $5463 | 0.33% |
| High Income | 4289 | 0.21 | 4902 | 0.22 | 4285 | 0.24 |
| Inflation Protection | 935 | 0.06 | 997 | 0.06 | 1258 | 0.07 |
| LargeCap Growth I | 23602 | 0.23 | 27296 | 0.23 | 21933 | 0.23 |
| LargeCap Value III | 5486 | 0.20 | 4974 | 0.20 | 3543 | 0.21 |
| MidCap Growth III | 3506 | 0.36 | 3769 | 0.36 | 3579 | 0.37 |
| MidCap Value I | 8005 | 0.27 | 6477 | 0.27 | 5594 | 0.28 |
| Overseas | 6875 | 0.35 | 8887 | 0.34 | 7938 | 0.36 |
| SmallCap Growth I | 9720 | 0.42 | 11138 | 0.42 | 7828 | 0.43 |
| SmallCap Value II | 4229 | 0.37 | 4289 | 0.38 | 3177 | 0.41 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Fees Paid to Origin and Post for Fiscal Years Ended October 31**<br> **(dollar amounts in thousands)** | **Fees Paid to Origin and Post for Fiscal Years Ended October 31**<br> **(dollar amounts in thousands)** | **Fees Paid to Origin and Post for Fiscal Years Ended October 31**<br> **(dollar amounts in thousands)** | **Fees Paid to Origin and Post for Fiscal Years Ended October 31**<br> **(dollar amounts in thousands)** | **Fees Paid to Origin and Post for Fiscal Years Ended October 31**<br> **(dollar amounts in thousands)** | **Fees Paid to Origin and Post for Fiscal Years Ended October 31**<br> **(dollar amounts in thousands)** | **Fees Paid to Origin and Post for Fiscal Years Ended October 31**<br> **(dollar amounts in thousands)** |
|  | **2022** | **2022** | **2021** | **2021** | **2020** | **2020** |
| **Fund** | &nbsp;&nbsp; **Dollar**<br> **Amount**<br>| &nbsp;&nbsp; **Percent of**<br> **Average Daily**<br> **Net Assets**<br>| &nbsp;&nbsp; **Dollar**<br> **Amount**<br>| &nbsp;&nbsp; **Percent of**<br> **Average Daily**<br> **Net Assets**<br>| &nbsp;&nbsp; **Dollar**<br> **Amount**<br>| &nbsp;&nbsp; **Percent of**<br> **Average Daily**<br> **Net Assets**<br>|
| Diversified Income (Post) | $1629 | 0.29% | $1798 | 0.29% | $2919 | 0.29% |
| High Income (Post) | 3789 | 0.29 | 3816 | 0.28 | 3283 | 0.28 |
| International I (Origin) | 1048 | 0.34 | 1176 | 0.34 | 1115 | 0.35 |

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**Custodian** 

The custodian of the portfolio securities and cash assets of the Funds is The Bank of New York Mellon, One Wall Street, New York, NY 10286. The custodian performs no managerial or policy-making functions for the Funds.

**Securities Lending Agent** 

The Bank of New York Mellon serves as the securities lending agent for the Funds. Information regarding securities lending during the Funds' fiscal year ended October 31, 2022 is as follows:

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Fund** | **Gross income**<br> **(including**<br> **from cash**<br> **collateral**<br> **reinvestment)**<br>| **Fees paid**<br> **to securities**<br> **lending**<br> **agent from a**<br> **revenue**<br> **split**<br>| **Fees paid for**<br> **any cash**<br> **collateral**<br> **management**<br> **service that**<br> **are not**<br> **included in**<br> **revenue split**<br>| **Administrative**<br> **fees not**<br> **included in**<br> **revenue split**<br>| **Indemnification**<br> **fees not**<br> **included in**<br> **revenue split**<br>| **Net**<br> **rebate**<br> **paid to**<br> **borrower**<br>| **Other**<br> **fees not** <br> **included**<br> **in**<br> **revenue** <br> **split**<br>| **Aggregate**<br> **fees/**<br> **compensation**<br>| **Net**<br> **income**<br> **from**<br> **securities** <br> **lending**<br>|
| Core Fixed <br> Income<br>| $99995 | $7613 | $— | $— | $— | $23846 | $— | $31459 | $68536 |
| Core Plus Bond | 31569 | 7325 |  |  |  | (41689) |  | (34365) | 65934 |
| Diversified <br> Income<br>| 220843 | 49153 |  |  |  | (270758) |  | (221605) | 442448 |
| Diversified <br> International<br>| 391419 | 32772 |  |  |  | 63695 |  | 96467 | 294953 |
| Equity Income | 247520 | 67140 |  |  |  | (423884) |  | (356744) | 604264 |
| Finisterre <br> Emerging <br> Markets Total <br> Return Bond<br>| 1747 | 177 |  |  |  | (22) |  | 155 | 1592 |
| Global <br> Emerging <br> Markets<br>| 12199 | 1302 |  |  |  | (821) |  | 480 | 11719 |
| Global Real <br> Estate <br> Securities<br>| 34237 | 4865 |  |  |  | (14416) |  | (9551) | 43788 |
| Government & <br> High Quality <br> Bond<br>| 8104 | 1053 |  |  |  | (2423) |  | (1371) | 9475 |
| High Income | 189930 | 49004 |  |  |  | (300202) |  | (251198) | 441128 |
| High Yield | 137050 | 20763 |  |  |  | (70598) |  | (49835) | 186884 |
| Inflation <br> Protection<br>| 82589 | 1922 |  |  |  | 63369 |  | 65291 | 17298 |
| International I | 34579 | 4143 |  |  |  | (6851) |  | (2708) | 37287 |
| LargeCap <br> Growth I<br>| 441871 | 37769 |  |  |  | 64106 |  | 101875 | 339996 |
| LargeCap S&P <br> 500 Index<br>| 8522 | 2608 |  |  |  | (17564) |  | (14956) | 23478 |
| LargeCap Value <br> III<br>| 14262 | 3965 |  |  |  | (25430) |  | (21465) | 35727 |
| MidCap | 4590 | 755 |  |  |  | (2966) |  | (2211) | 6801 |
| MidCap Growth | 20207 | 884 |  |  |  | 11363 |  | 12247 | 7960 |
| MidCap Growth <br> III<br>| 58590 | 5846 |  |  |  | 82 |  | 5927 | 52662 |
| MidCap S&P <br> 400 Index<br>| 56895 | 42256 |  |  |  | (365678) |  | (323422) | 380316 |
| MidCap Value I | 45524 | 10848 |  |  |  | (63009) |  | (52161) | 97685 |
| Overseas | 233433 | 44493 |  |  |  | (211528) |  | (167035) | 400468 |

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---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Fund** | **Gross income**<br> **(including**<br> **from cash**<br> **collateral**<br> **reinvestment)**<br>| **Fees paid**<br> **to securities**<br> **lending**<br> **agent from a**<br> **revenue**<br> **split**<br>| **Fees paid for**<br> **any cash**<br> **collateral**<br> **management**<br> **service that**<br> **are not**<br> **included in**<br> **revenue split**<br>| **Administrative**<br> **fees not**<br> **included in**<br> **revenue split**<br>| **Indemnification**<br> **fees not**<br> **included in**<br> **revenue split**<br>| **Net**<br> **rebate**<br> **paid to**<br> **borrower**<br>| **Other**<br> **fees not** <br> **included**<br> **in**<br> **revenue** <br> **split**<br>| **Aggregate**<br> **fees/**<br> **compensation**<br>| **Net**<br> **income**<br> **from**<br> **securities** <br> **lending**<br>|
| Principal Capital <br> Appreciation<br>| $23565 | $2392 | $— | $— | $— | $(354) | $— | $2037 | $21528 |
| Short-Term <br> Income<br>| 6392 | 772 |  |  |  | (1330) |  | (559) | 6951 |
| SmallCap | 191007 | 60368 |  |  |  | (412757) |  | (352389) | 543396 |
| SmallCap <br> Growth I<br>| 306538 | 99591 |  |  |  | (689766) |  | (590175) | 896713 |
| SmallCap S&P <br> 600 Index<br>| 36370 | 10506 |  |  |  | (68718) |  | (58211) | 94581 |
| SmallCap Value <br> II<br>| 104754 | 21456 |  |  |  | (110070) |  | (88614) | 193367 |

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The services provided by The Bank of New York Mellon, 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**

<u>Additional Payments to Intermediaries.</u> 

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.

In addition to payments pursuant to 12b-1 plans, PGI or its affiliates enter into agreements with some intermediaries pursuant to which the intermediaries receive payments for providing services relating to Fund shares. Examples of such services are administrative, networking, recordkeeping, sub-transfer agency, and/or shareholder services. In some situations, the Funds will reimburse PGI or its affiliates for making such payments; in others, the Funds make such payments directly to intermediaries.

For Classes R-1, R-3, R-4, and R-5 shares, such compensation is generally paid out of the Service Fees and Administrative Services Fees that are disclosed in the Prospectus as Other Expenses. Such compensation is generally based on the average asset value of Fund shares for the relevant share class held by clients of the intermediary.

In addition, PGI or its affiliates pay, without reimbursement from the Funds, compensation from their own resources, to certain intermediaries that support the distribution of shares of the Funds or provide services to Fund shareholders. In addition, PGI or its affiliates pay, without reimbursement from the Funds, compensation from their own resources to certain large plan sponsors to help cover the cost of providing educational materials to plan participants.

The amounts paid to intermediaries vary by share class and by Fund.

Principal Life Insurance Company is one such intermediary that provides services relating to Fund shares held in employee benefit plans, and it is typically paid all of the Service Fees and Administrative Services Fees pertaining to such plans.

Plan recordkeepers, who may have affiliated financial intermediaries that sell shares of the Funds, may be paid additional amounts. In addition, some financial intermediaries or their affiliates receive compensation from PGI or its affiliates for maintaining retirement plan platforms that facilitate trading by affiliated and non-affiliated financial intermediaries and recordkeeping for retirement plans.

A number of factors may be considered in determining the amount of these additional payments, including each financial intermediary's Fund sales and assets, as well as the willingness and ability of the financial intermediary to give the Distributor access to its Financial Professionals for educational and marketing purposes. In some cases, intermediaries will include the Funds on a preferred list. The Distributor's goals include making the Financial Professionals who interact with current and prospective investors and shareholders more knowledgeable about the Funds so that they can provide suitable information and advice about the Funds and related investor services. The amounts paid to intermediaries vary by Fund and by share class.

Additionally, in some cases, the Distributor and its affiliates will provide payments or reimbursements in connection with the costs of conferences, educational seminars, training, and marketing efforts related to the Funds. Such activities may be sponsored by intermediaries or the Distributor. The costs associated with such activities may include travel, lodging,

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entertainment, and meals. In some cases, the Distributor will also provide payment or reimbursement for expenses associated with transactions ("ticket") charges and general marketing expenses. Other compensation may be paid to the extent not prohibited by applicable laws, regulations, or the rules of any self-regulatory agency, such as FINRA.

The payments described in this SAI may create a conflict of interest by influencing your Financial Professional or your intermediary to recommend a Fund over another investment, or to recommend one share class of a Fund over another share class. 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 the Prospectus. Ask your Financial Professional about any fees and commissions they charge.

Although a Fund may use brokers who sell shares of the Funds to effect portfolio transactions, the sale of shares is not considered as a factor by the Fund's sub-advisors when selecting brokers to effect portfolio transactions.

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As of February 14, 2023, the Distributor anticipates that the firms that will receive additional payments as described in the Additional Payments to Intermediaries section above (other than sales charges, Rule 12b-1 fees, and expense reimbursement) include, but are not necessarily limited to, the following:

ADP Broker Dealer Inc

Advisor Group

Alight Financial Solutions LLC

American Century Investments

American Enterprise Investment Services Inc.

American General Life Insurance Co.

American Portfolios Financial Services, Inc.

American United Life Insurance Co.

Ameriprise Financial Services

Ameritas Investments Corp

Ascensus

Ascensus College Savings Record Keeping Services, LLC

AXA Equitable Life Insurance Co.

AXOS Clearing LLC

Baird

Benefit Plan Administrators

Benefit Solutions

Benefit Trust Company

BNY Mellon NA

Broadridge Business Process Outsourcing, LLC

Cambridge Investment Research Inc.

Cantella & Company, Inc.

Cetera Advisor Networks LLC

Charles Schwab & Co., Inc.

Charles Schwab Trust Company

Citigroup Global Markets Inc.

Columbia Management Investment Advisers, LLC

Commonwealth Financial Network

Concourse Financial Group Securities, Inc

CPI Qualified Consultants

Digital Retirement Solutions

Empower Annuity Insurance Company of America

Empower Financial Services Inc

ePlan Services, Inc.

Fidelity Investment Institutional Operations Co.

Financial Data Services LLC

First Republic Securities Co., LLC

FSC Securities Corporation

G.A. Repple & Company

GBM International Inc

Goldman Sachs & Co.

ICMA-Retirement Corp.

Infinex Investments, Inc.

J.P. Morgan Securities, Inc.

Janney Montgomery Scott

John Hancock Life Insurance Company of New York

John Hancock Life Insurance Company USA

John Hancock Trust Co.

Kestra Investment Services, LLC

Lincoln Retirement Services Co.

LPL Financial Corporation

Massachusetts Mutual Life Insurance Company

Mercer HR Services

Merrill Lynch

MidAtlantic Capital Corporation

Midland National Life Insurance Company

Minnesota Life Insurance Company

MML Investors Services Inc.

Morgan Stanley Smith Barney LLC

National Financial Services

Nationwide Investment Services Corp

Newport Group Retirement Plan Services

NFP Retirement Inc

Northwestern Mutual Investment Services

NYLIFE Securities, LLC

Oppenheimer & Co.

Pershing LLC

Plan Administrators, Inc.

Principal Bank

Principal Life Insurance Company

Principal Securities, Inc.

Prudential Retirement Services

Putnam Investors Services

Raymond James & Associates, Inc.

Raymond James Financial Services, Inc.

RBC Capital Markets Corp.

RBC Correspondent Services

Reliance Trust Company

Resources Investment Advisors, LLC

Retirement Clearinghouse

Robert W. Baird & Co.

Royal Alliance Associates, Inc.

SagePoint Financial, Inc.

Sageview Advisory Group

Sammons Institutional Group

Securities America, Inc.

Standard Insurance Company

Stifel Nicolaus & Company, Inc.

T. Rowe Price Retirement Plan Services

TD Ameritrade Inc.

TD Ameritrade Trust Company

Ten Capital Investment Advisors

Thrivent Financial for Lutherans

TIAA-CREF

Total Administrative Services Corporation

Triad Advisors, Inc.

UBS Financial Services, Inc.

US Bancorp Investments

VALIC Retirement Services Company

Vanguard Brokerage Services

Vanguard Group, The

Voya Financial Advisors, Inc.

Voya Institutional Plan Services, LLC

Voya Institutional Trust Co.

Wells Fargo Advisors FINET, LLC

Wells Fargo Advisors, LLC

Wells Fargo Bank, N.A.

Wells Fargo Clearing Services LLC

Woodbury Financial Services

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 the date noted above are not reflected. To obtain a current list, call 1-800-222-5852.

**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 or by the Fund's sub-advisor pursuant to the terms of the applicable sub-advisory agreement. 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 and of each Fund's sub-advisor is to obtain the best overall terms. In pursuing this objective, PGI or the sub-advisor 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

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the specific transaction and on a continuing basis). This may mean in some instances that PGI or a sub-advisor 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 or the sub-advisor 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 or the sub-advisor 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 or a sub-advisor 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 or a sub-advisor 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 or a sub-advisor 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 either a particular transaction or a sub-advisor's overall responsibilities to the accounts under its management. PGI or a sub-advisor 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 or a sub-advisor may use it in servicing some or all of the accounts it manages.

PGI and the sub-advisors allocated portfolio transactions for the Funds indicated in the following table to certain brokers for the year ended October 31, 2022 due to research services provided by such brokers. The table also indicates the commissions paid to such brokers as a result of these portfolio transactions.

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| | | |
|:---|:---|:---|
| **Fund** | **Amount of**<br> **Transactions because**<br> **of Research**<br> **Services Provided**<br>| **Related**<br> **Commissions**<br> **Paid**<br>|
| Diversified Income | $136695178 | $89694 |
| Diversified International | 2673114537 | 1571125 |
| Equity Income | 2955463528 | 1166072 |
| Global Emerging Markets | 62059243 | 36796 |
| Global Real Estate Securities | 787234975 | 490222 |
| International I | 342232847 | 48692 |
| LargeCap Growth I | 902227088 | 185278 |
| LargeCap S&P 500 Index | 332380235 | 84608 |
| LargeCap Value III | 2630790579 | 879087 |
| MidCap | 4801053294 | 1368570 |
| MidCap Growth | 611403304 | 260332 |
| MidCap Growth III | 477082651 | 126293 |
| MidCap S&P 400 Index | 88837296 | 32516 |
| MidCap Value I | 3623202273 | 1258642 |
| Overseas | 1229744698 | 1170761 |
| Principal Capital Appreciation | 2992400009 | 725575 |
| Real Estate Securities | 1854858106 | 1066531 |
| SmallCap | 296612860 | 247958 |
| SmallCap Growth I | 1028907482 | 704976 |
| SmallCap S&P 600 Index | 36696284 | 27207 |
| SmallCap Value II | 560149716 | 1016321 |

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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 sub-advisor affiliate or PGI affiliate in connection with such underwritings. In addition, for underwritings where a sub-advisor affiliate or 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 sub-advisor or affiliate. The Board will receive quarterly reports on these transactions.

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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.

The Board has also approved procedures that permit a Fund's sub-advisor(s) to place portfolio trades with an affiliated broker under circumstances prescribed by SEC Rules 17e-1 and 17a-10. The procedures require that total commissions, fees, or other remuneration received or to be received by an affiliated broker must be reasonable and fair compared to the commissions, fees, or other remuneration received by other brokers in connection with comparable transactions involving similar securities being purchased or sold on a securities exchange during a comparable time period. 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 marketmakers 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 marketmakers include the spread between the bid and asked prices.

The following table shows the brokerage commissions paid during the periods indicated.

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| | | | |
|:---|:---|:---|:---|
| **Total Brokerage Commissions Paid for Periods Ended October 31** | **Total Brokerage Commissions Paid for Periods Ended October 31** | **Total Brokerage Commissions Paid for Periods Ended October 31** | **Total Brokerage Commissions Paid for Periods Ended October 31** |
| **Fund** | **2022** | **2021** | **2020** |
| California Municipal Fund | $1587 | $801 | $3290 |
| Core Fixed Income Fund | 1516 |  |  |
| Core Plus Bond | 9048 | 15956 | 16172 |
| Diversified Income | 547346 | 1637794 | 1492047 |
| Diversified International | 4146318 | 7756328 | 8382170 |
| Equity Income | 1806331 | 1399777 | 1334450 |
| Global Emerging Markets | 160353 | 252012 | 314253 |
| Global Real Estate Securities | 1289510 | 1385168 | 1766085 |
| High Income |  | 23 | 1888 |
| High Yield |  | 3132 | 47036 |
| Inflation Protection | 24931 | 7576 | 4106 |
| International I | 138673 | 149981 | 152478 |
| LargeCap Growth I | 969005 | 823663 | 1319454 |
| LargeCap S&P 500 Index | 131460 | 199065 | 153014 |
| LargeCap Value III | 993907 | 954086 | 881284 |
| MidCap | 2293609 | 2734986 | 2183860 |
| MidCap Growth | 474068 | 257783 | 234942 |
| MidCap Growth III | 276555 | 231154 | 320801 |
| MidCap S&P 400 Index | 77050 | 39848 | 121143 |
| MidCap Value I | 1398096 | 949168 | 1126888 |
| Overseas | 2161059 | 1825373 | 2280378 |
| Principal Capital Appreciation | 1257461 | 356313 | 521687 |
| Real Estate Securities | 1950816 | 1501016 | 2473748 |
| SAM Balanced Portfolio | 181918 | 105330 | 77184 |
| SAM Conservative Balanced Portfolio | 60359 | 35810 | 14242 |
| SAM Conservative Growth Portfolio | 150440 | 75010 | 37530 |
| SAM Flexible Income Portfolio | 207037 | 11390 | 162488 |
| SAM Strategic Growth Portfolio | 79019 | 18910 | 61420 |
| Short-Term Income |  |  |  |
| SmallCap | 522311 | 855323 | 538900 |
| SmallCap Growth I | 1488070 | 1572443 | 1218085 |
| SmallCap S&P 600 Index | 81994 | 49801 | 167498 |
| SmallCap Value II | 1169210 | 1365112 | 1362063 |
| Tax-Exempt Bond | 8664 | 4111 | 3300 |

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Primary reasons for changes in several Funds' brokerage commissions for the three years were changes in commission rates; changes in Fund size; changes in market conditions; changes in money managers of certain Funds; and implementation of investment strategies. In some cases, such events required substantial portfolio restructurings, resulting in increased securities transactions and brokerage commissions.

In particular, primary reasons for changes in brokerage commissions for those Funds with relatively greater variations for the three years were, in part: for the LargeCap S&P 500 Index Fund in 2021 and for the MidCap Growth Fund, Principal Capital Appreciation Fund, and SAM Flexible Income Portfolio in 2022, changes in trading volumes, with higher volumes resulting in higher commissions.

Brokerage commissions from the portfolio transactions effected for the Funds were paid to brokers affiliated with PGI or such Fund's sub-advisors for the fiscal years ended October 31 as follows:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Fund** | &nbsp;&nbsp; **Sub-Advisor Employed**<br> **by the Fund Complex**<br>| &nbsp;&nbsp; **Affiliated Broker**<br> **Receiving Commissions**<br>| &nbsp;&nbsp; **2022**<br> **Commissions**<br> **Paid to** <br> **Affiliated** <br> **Broker**<br>| &nbsp;&nbsp; **% of Fund's**<br> **Total**<br> **Commissions**<br>| &nbsp;&nbsp; **% of**<br> **Dollar Amount**<br> **of Fund's**<br> **Commissionable**<br> **Transactions**<br>|
| **Diversified Income** | **Diversified Income** | **Diversified Income** | **Diversified Income** | **Diversified Income** | **Diversified Income** |
|  | Principal Financial Group | SAMI Brokerage LLC | $10719 | 1.96% | 0.72% |
|  |  | **Total** | **$10719** | **1.96%** | **0.72%** |
| **MidCap Growth III** | **MidCap Growth III** | **MidCap Growth III** | **MidCap Growth III** | **MidCap Growth III** | **MidCap Growth III** |
|  | Eagle Asset Management, Inc. | Raymond James Financial Services | $8250 | 2.98% | 8.42% |
|  |  | **Total** | **$8250** | **2.98%** | **8.42%** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Fund** | &nbsp;&nbsp; **Sub-Advisor Employed**<br> **by the Fund Complex**<br>| &nbsp;&nbsp; **Affiliated Broker**<br> **Receiving Commissions**<br>| &nbsp;&nbsp; **2021**<br> **Commissions**<br> **Paid to** <br> **Affiliated** <br> **Broker**<br>| &nbsp;&nbsp; **% of Fund's**<br> **Total**<br> **Commissions**<br>| &nbsp;&nbsp; **% of**<br> **Dollar Amount**<br> **of Fund's**<br> **Commissionable**<br> **Transactions**<br>|
| **Diversified Income** | **Diversified Income** | **Diversified Income** | **Diversified Income** | **Diversified Income** | **Diversified Income** |
|  | Principal Financial Group | SAMI Brokerage LLC | $13294 | 0.81% | 0.37% |
|  |  | **Total** | **$13294** | **0.81%** | **0.37%** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Fund** | &nbsp;&nbsp; **Sub-Advisor Employed**<br> **by the Fund Complex**<br>| &nbsp;&nbsp; **Affiliated Broker**<br> **Receiving Commissions**<br>| &nbsp;&nbsp; **2020**<br> **Commissions**<br> **Paid to** <br> **Affiliated** <br> **Broker**<br>| &nbsp;&nbsp; **% of Fund's**<br> **Total**<br> **Commissions**<br>| &nbsp;&nbsp; **% of**<br> **Dollar Amount**<br> **of Fund's**<br> **Commissionable**<br> **Transactions**<br>|
| **Diversified Income** | **Diversified Income** | **Diversified Income** | **Diversified Income** | **Diversified Income** | **Diversified Income** |
|  | Principal Financial Group | SAMI Brokerage LLC | $38686 | 2.59% | 1.26% |
|  |  | **Total** | **$38686** | **2.59%** | **1.26%** |

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Material differences, if any, between the percentage of a Fund's brokerage commissions paid to a broker and the percentage of transactions effected through that broker reflect the commission rates the sub-advisor has negotiated with the broker. Commission rates a sub-advisor 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 following table indicates the value of each Fund's aggregate holdings, in thousands, of the securities of its regular brokers or dealers for the fiscal year ended October 31, 2022.

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| | | |
|:---|:---|:---|
| **Holdings of Securities of Principal Funds, Inc. Regular Brokers and Dealers** | **Holdings of Securities of Principal Funds, Inc. Regular Brokers and Dealers** | **Holdings of Securities of Principal Funds, Inc. Regular Brokers and Dealers** |
| **Fund** | **Broker or Dealer** | **Holdings**<br> **(in thousands)**<br>|
| Core Fixed Income | Bank of America | $77114 |
| Core Fixed Income | &nbsp;&nbsp; Bank of New York Mellon <br> Corp/The<br>| 96263 |
| Core Fixed Income | Citigroup Inc | 79530 |
| Core Fixed Income | Goldman Sachs Group Inc/The | 86171 |
| Core Fixed Income | Jefferies Group LLC | 54051 |
| Core Fixed Income | JPMorgan Chase & Co | 74526 |
| Core Fixed Income | Morgan Stanley | 80352 |

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| | | |
|:---|:---|:---|
| **Holdings of Securities of Principal Funds, Inc. Regular Brokers and Dealers** | **Holdings of Securities of Principal Funds, Inc. Regular Brokers and Dealers** | **Holdings of Securities of Principal Funds, Inc. Regular Brokers and Dealers** |
| **Fund** | **Broker or Dealer** | **Holdings**<br> **(in thousands)**<br>|
| Core Plus Bond | Bank of America | $7906 |
| Core Plus Bond | Barclays PLC | 2648 |
| Core Plus Bond | BNP Paribas SA | 715 |
| Core Plus Bond | Citigroup Inc | 3877 |
| Core Plus Bond | Credit Suisse Group AG | 3999 |
| Core Plus Bond | Goldman Sachs Group Inc/The | 4690 |
| Core Plus Bond | HSBC Holdings PLC | 812 |
| Core Plus Bond | JPMorgan Chase & Co | 3365 |
| Core Plus Bond | Morgan Stanley | 7983 |
| Core Plus Bond | UBS Group AG | 678 |
| Diversified Income | Bank of America | 42030 |
| Diversified Income | &nbsp;&nbsp; Bank of New York Mellon <br> Corp/The<br>| 10727 |
| Diversified Income | Barclays PLC | 11533 |
| Diversified Income | BNP Paribas SA | 12075 |
| Diversified Income | Citigroup Inc | 33770 |
| Diversified Income | Credit Suisse Group AG | 8792 |
| Diversified Income | Goldman Sachs Group Inc/The | 26820 |
| Diversified Income | HSBC Holdings PLC | 12201 |
| Diversified Income | JPMorgan Chase & Co | 36392 |
| Diversified Income | Mizuho Bank Ltd/New York NY | 2621 |
| Diversified Income | Morgan Stanley | 16865 |
| Diversified Income | UBS Group AG | 13930 |
| Equity Income | Bank of America | 162043 |
| Equity Income | JPMorgan Chase & Co | 223259 |
| Equity Income | Morgan Stanley | 237655 |
| High Yield | Barclays PLC | 15835 |
| High Yield | JPMorgan Chase & Co | 10387 |
| International Fund I | UBS Group AG | 2759 |
| LargeCap S&P 500 Index | Bank of America | 42284 |
| LargeCap S&P 500 Index | &nbsp;&nbsp; Bank of New York Mellon <br> Corp/The<br>| 5197 |
| LargeCap S&P 500 Index | Citigroup Inc | 14906 |
| LargeCap S&P 500 Index | Goldman Sachs Group Inc/The | 19737 |
| LargeCap S&P 500 Index | JPMorgan Chase & Co | 61955 |
| LargeCap S&P 500 Index | Morgan Stanley | 18467 |
| LargeCap Value III | Bank of America | 42876 |
| LargeCap Value III | &nbsp;&nbsp; Bank of New York Mellon <br> Corp/The<br>| 756 |
| LargeCap Value III | Citigroup Inc | 2182 |
| LargeCap Value III | Goldman Sachs Group Inc/The | 26592 |
| LargeCap Value III | Jefferies Group LLC | 172 |
| LargeCap Value III | JPMorgan Chase & Co | 40172 |
| LargeCap Value III | Morgan Stanley | 2523 |
| LargeCap Value III | Virtu Financial Inc | 53 |
| MidCap S&P 400 Index | Jefferies Group LLC | 3696 |
| MidCap Value I | &nbsp;&nbsp; Bank of New York Mellon <br> Corp/The<br>| 39445 |
| MidCap Value I | Jefferies Group LLC | 540 |
| MidCap Value I | Virtu Financial Inc | 168 |
| Money Market | Barclays PLC | 23878 |
| Money Market | Credit Suisse Group AG | 4994 |
| Money Market | Goldman Sachs Group Inc/The | 17896 |
| Money Market | HSBC Holdings PLC | 12571 |
| Money Market | Mizuho Bank Ltd/New York NY | 19826 |

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| | | |
|:---|:---|:---|
| **Holdings of Securities of Principal Funds, Inc. Regular Brokers and Dealers** | **Holdings of Securities of Principal Funds, Inc. Regular Brokers and Dealers** | **Holdings of Securities of Principal Funds, Inc. Regular Brokers and Dealers** |
| **Fund** | **Broker or Dealer** | **Holdings**<br> **(in thousands)**<br>|
| Overseas | Barclays PLC | $16954 |
| Overseas | BNP Paribas SA | 7365 |
| Overseas | Credit Suisse Group AG | 158 |
| Overseas | HSBC Holdings PLC | 32246 |
| Overseas | Mizuho Bank Ltd/New York NY | 578 |
| Overseas | UBS Group AG | 1236 |
| Principal Capital Appreciation | JPMorgan Chase & Co | 64577 |
| Principal Capital Appreciation | Morgan Stanley | 34690 |
| Short-Term Income | Bank of America | 86130 |
| Short-Term Income | Barclays PLC | 12949 |
| Short-Term Income | BNP Paribas SA | 9687 |
| Short-Term Income | Citigroup Inc | 40931 |
| Short-Term Income | Credit Suisse Group AG | 21820 |
| Short-Term Income | Goldman Sachs Group Inc/The | 61932 |
| Short-Term Income | HSBC Holdings PLC | 8499 |
| Short-Term Income | JPMorgan Chase & Co | 44683 |
| Short-Term Income | Morgan Stanley | 37831 |
| Short-Term Income | UBS Group AG | 21227 |
| SmallCap Value Fund II | Virtu Financial Inc | 1428 |

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**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. PGI also provides advisory services to funds that have multiple investment advisors ("Multi-Managed Funds"). These services include determining the portion of a Multi-Managed Fund's portfolio to be allocated to an advisor. 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 and Multi-Managed Funds, for the following reasons:

<sup>•</sup>

PGI serves as the investment advisor to the underlying funds in which the funds of funds invest, sometimes as the discretionary advisor, and an affiliated investment advisor may serve as sub-advisor to the 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.

<sup>•</sup>

PGI or an affiliated person may serve as investment advisor to a portion of a Multi-Managed Fund. In addition, PGI might recommend that an affiliated person serve as sub-advisor to a portion of a Multi-Managed Fund. This raises a

------

potential conflict because PGI's or an affiliated investment advisor's profit margin may vary depending on the extent to which a Multi-Managed Fund's assets are managed by PGI or allocated to an affiliated advisor.

<sup>•</sup>

A sub-advisor may determine that the asset class PFI has hired it to manage (for example, small capitalization growth stocks) can be managed effectively only by limiting the amount of money devoted to the purchase of securities in the asset class. In such a case, a sub-advisor may impose a limit on the amount of money PFI may place with the sub-advisor for management. When a sub-advisor for two or more PFI Funds imposes such a limit, PGI and/or the sub-advisor may need to determine which Fund will be required to limit its investment in the asset class and the degree to which the Fund will be so limited. PGI and the sub-advisor may face a conflict of interest in making its determination.

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:

<sup>•</sup>

PGI implements a process for selecting underlying funds that emphasizes the selection of funds within the Principal Funds Complex that are determined to be consistent with the fund of fund's objective and principal investment strategies. However, PGI will select an unaffiliated underlying fund managed by an unaffiliated sub-advisor 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.

<sup>•</sup>

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.

<sup>•</sup>

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

**By the Sub-Advisors.** The portfolio managers of each sub-advisor manage a number of accounts other than the Funds' portfolios, 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. Each 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 the sub-advisor deems 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 the Fund's portfolio and other accounts. In such circumstances, the sub-advisor may determine that orders for the purchase or sale of the same security for the 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 the sub-advisor to be equitable and in the best interests of the Fund's portfolio and such other accounts. While in some instances combined orders could adversely affect the price or volume of a security, the Fund believes that its participation in such transactions on balance will produce better overall results for the Fund.

**Purchase and Redemption Of Shares**

**Purchase of Shares** 

Participating insurance companies and certain other designated organizations are authorized to receive purchase orders on the Funds' behalf, and those organizations are authorized to designate their agents and affiliates as intermediaries to receive purchase orders. Purchase orders are deemed received by a Fund when authorized organizations, their agents, or affiliates receive the order. The Funds are not responsible for the failure of any designated organization or its agents or affiliates to carry out its obligations to its customers. Class A shares of the Funds are purchased at their public offering price, and other share classes of the Funds are purchased at the net asset value ("NAV") per share, as determined at the close of the regular trading session of the NYSE next occurring after a purchase order is received and accepted by an authorized agent of a Fund. In order to receive a day's price, an order must be received in good order by the close of the regular trading session of the NYSE as described below in "Pricing of Fund Shares."

All income dividends and capital gains distributions, if any, on a Fund's Institutional Class and Classes R-1, R-3, R-4, R-5, and R-6 shares are reinvested automatically in additional shares of the same class of the same Fund. Dividends and capital gains distributions, if any, on a Fund's Classes A, C, and J shares are reinvested automatically in additional shares of the same Class of shares of the same Fund unless the shareholder elects to take dividends in cash. The reinvestment will be made at the NAV determined on the first business day following the record date.

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The Fund, at its discretion, may permit the purchase of shares using securities as consideration (a purchase in-kind).

<u>MidCap Fund</u> 

For retail investors (i.e., non-employer sponsored retirement plan investors), effective as of the close of the NYSE on June 14, 2013, and for employer-sponsored retirement plan investors, effective as of the close of the NYSE on August 15, 2013, the MidCap Fund (the "Fund") is no longer available for purchases from new investors except in limited circumstances, such as the following:

<sup>•</sup>

Shareholders, including those in omnibus accounts, who own shares of the Fund as of June 14, 2013 (for retail investors, i.e., non-employer sponsored retirement plan investors) or August 15, 2013 (for employer-sponsored retirement plan investors), may continue to make purchases, exchanges, and dividend or capital gains reinvestment in existing accounts.

<sup>•</sup>

Registered Investment Advisor (RIA) and bank trust firms that have an investment allocation to the MidCap Strategy (i.e., investments in the same strategy used in collective investment trust, separately managed accounts, individually managed accounts, or insurance separate accounts) in a fee-based, wrap, or advisory account, may continue to add new clients, purchase shares, and exchange into the Fund. The Fund will not be available to new RIA and bank trust firms.

<sup>•</sup>

Shareholders through accounts at private banks may continue to purchase shares and exchange into the Fund. Private banks that have an investment allocation to the MidCap Strategy may add new clients to the Fund. The Fund will not be available to private bank or private bank platforms not already investing in the MidCap Strategy.

<sup>•</sup>

Shareholders in broker/dealer wrap or fee-based programs that have an investment allocation to the Fund may continue to purchase shares and exchange into the Fund. Existing broker/dealer wrap or fee-based programs may add new participants.

<sup>•</sup>

Shareholders in certain types of retirement plans (including 401(k)s, SEPs, SIMPLEs, 403(b)s, etc.) may continue to purchase shares and exchange into the Fund. New participants in these plans may elect to purchase shares of the Fund.

<sup>•</sup>

Shareholders within brokerage accounts may continue to purchase shares of the Fund; however, new brokerage accounts will not be permitted to begin investing in the Fund after June 14, 2013.

<sup>•</sup>

529 plans that include the Fund within their investment options may continue to purchase shares and exchange into the Fund.

<sup>•</sup>

Investors who have a direct investment in the MidCap Strategy may, subject to the approval of the Distributor, purchase shares in the Fund.

<sup>•</sup>

Shareholders that invest through accounts with Principal Securities, Inc.

At the sole discretion of the Distributor, the Fund may permit certain types of investors to open new accounts, impose further restrictions on purchases, or reject any purchase orders, all without prior notice.

<u>Money Market Fund</u> 

Effective as of the close of the NYSE January 18, 2018, Class C and Institutional Class Shares of the Fund are no longer available for purchases or for exchanges from other series of the Principal Funds, Inc.

<u>Class R-1 Shares</u> 

Effective January 31, 2017, the Registrant no longer offers Class R-1 shares for purchase from new retirement plans, except in limited circumstances. However, if a retirement plan currently offers Class R-1 shares, such plan will be allowed to continue to invest in this share class through Funds it currently offers in its plans or Funds it adds to its plans.

<u>Abandoned or Orphaned Accounts</u> 

In order to invest in shares of Principal Funds, a shareholder's account must have a registered broker-dealer on file with us when the account is established. If an active account does not have a registered broker-dealer on file, we consider the account to be an "abandoned or orphaned account". If we determine in our discretion that an account is abandoned or orphaned, we will take the following actions:

<sup>•</sup>

Notify the shareholder in writing as to the account's status and request that the account(s) be moved to another registered broker-dealer;

<sup>•</sup>

Remove the broker/dealer from the account. If the shareholder does not request another registered broker/dealer to be added to the account, Principal Shareholder Services, Inc. ("PSS"), the Funds' Transfer Agent, will hold the accounts until another registered broker/dealer is added to the account. PSS is not a broker-dealer and does not offer investment advice; and

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

<sup>•</sup>

No initial sales charge will apply to purchases of Fund shares while PSS is holding the account.

**Sales of Shares** 

Payment for shares tendered for redemption is ordinarily made in cash. The Fund may determine, however, that it would be detrimental to the remaining shareholders to make payment of a redemption order wholly or partly in cash. The Fund may, therefore, pay the redemption proceeds in whole or in part by a distribution "in kind" of securities from the Fund's portfolio in lieu of cash. If the Fund pays the redemption proceeds in kind, the redeeming shareholder might incur brokerage or other costs in selling the securities for cash. The Fund will value securities used to pay redemptions in kind using the same method the Fund uses to value its portfolio securities as described below in "Pricing of Fund Shares."

The right to require the Funds to redeem their shares may be suspended, or the date of payment may be postponed, whenever: 1) trading on the NYSE is restricted, as determined by the SEC, or the NYSE is closed except for holidays and weekends; 2) the SEC permits such suspension and so orders; or 3) an emergency exists as determined by the SEC so that disposal of securities or determination of NAV is not reasonably practicable.

Certain designated organizations are authorized to receive sell orders on the Fund's behalf and those organizations are authorized to designate their agents and affiliates as intermediaries to receive redemption orders. Redemption orders are deemed received by the Fund when authorized organizations, their agents, or affiliates receive the order. The Fund is not responsible for the failure of any designated organization or its agents or affiliates to carry out its obligations to its customers.

**Exchanges Between Classes of Shares** 

Through your financial intermediary, in certain limited circumstances, you may become eligible to exchange shares of a Fund you own for shares of a different class of the same Fund, if you become eligible to purchase shares of such different class of the same Fund through your account with your financial intermediary. The following shows the permitted exchanges, subject to the conditions described herein:

---

| | |
|:---|:---|
| **Exchange From Class** | **Exchange To Class** |
| A | Institutional |
| C | A, Institutional |
| Institutional | A, C, R-6 |

---

Such same-Fund exchanges between share classes are permitted, subject to conditions including, but not limited to, the following:

<sup>•</sup>

You or your retirement plan sponsor must be eligible to purchase shares of the class into which the exchange is to occur;

<sup>•</sup>

Your financial intermediary or the retirement plan sponsor's financial intermediary must have an agreement with the underwriter or transfer agent of Principal Funds allowing the purchase of such share class for you;

<sup>•</sup>

The Fund must offer shares of such class of such Fund in your state or the state of the retirement plan sponsor;

<sup>•</sup>

In order to exchange into Class A shares, you must be eligible to: (i) purchase Class A shares with no initial sales charge; or (ii) exchange into Class A shares through your financial intermediary with no initial sales charge;

<sup>•</sup>

Depending on the circumstances, for exchanges from Classes A and C, shares there may be a contingent deferred sales charge in connection with the exchange;

<sup>•</sup>

Any such exchange must be requested by your financial intermediary or retirement plan sponsor (with approval by the Distributor) and, except as otherwise approved by the Distributor, must result from either (i) the financial intermediary seeking to have shares of the Funds on their platform held in a particular share class, (ii) the share class becoming available to your financial intermediary or Financial Professional through a new relationship, or (iii) your retirement plan sponsor electing to have shares of the Funds offered as part of the plan investment options held in a particular share class; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

The Government Money Market Fund does not permit exchanges.

If, after purchasing Institutional Class shares, you become ineligible to invest in Institutional Class shares, you may be permitted to exchange from Institutional Class shares into other share classes issued by the same Fund if your financial intermediary determines you qualify for such an exchange.

You should check with your financial intermediary to see if the exchange you wish to complete will satisfy the conditions. Your ability to exchange between share classes of the same Fund may be limited by the operational limitations of your financial intermediary. Please consult your Financial Professional for more information.

------

While such an exchange may not be considered a taxable event for income tax purposes, you should consult with your tax advisor regarding possible federal, state, local, and foreign tax consequences.

**Money Market Fund - Investor Transaction Considerations Regarding Liquidity Fees and Redemption Gates\*** 

<sup>•</sup>

If a shareholder submits a redemption order while a redemption gate is in effect, the redemption order is invalid and a shareholder must submit a new redemption order after the gate is lifted.

<sup>•</sup>

If the Money Market Fund received, but has not yet processed, a purchase order prior to notifying investors of the imposition of liquidity fees or redemption gates, such purchase order will be considered a valid purchase and will be processed normally.

<sup>•</sup>

If a liquidity fee is imposed during the day, an intermediary that receives both purchase and redemption orders from a single underlying accountholder will not apply the liquidity fee to the net amount of redemptions made by that same accountholder, since the purchase order was received before the time the liquidity fee was implemented.

<sup>•</sup>

If a redemption request was verifiably submitted to the Money Market Fund's agent before a liquidity fee or redemption gate is imposed but is received by the Money Market Fund after a liquidity fee or redemption gate is imposed, the fund will pay the proceeds of the redemption request despite the gate and will not impose a liquidity fee on the redemption request.

<sup>•</sup>

A checkwriting redemption request which is verifiably submitted to the Money Market Fund's agent before a liquidity fee or redemption gate is imposed will be considered a valid redemption and will be processed normally.

\*

This does not apply to the Government Money Market Fund.

**Government Money Market and Money Market Funds Material Events** 

<u>Imposition of Liquidity Fees and Temporary Suspensions of Fund Redemptions</u> 

Since October 14, 2016, there has not been any occasion on which the Money Market Fund has: (i) invested less than ten percent, and/or (ii) invested less than thirty percent, but more than ten percent, of its total assets in weekly liquid assets.

<u>Financial Support Provided to the Government Money Market Fund or Money Market Fund</u> 

Since October 14, 2016 (or, for the Government Money Market Fund, since inception), there has not been any occasion on which the Government Money Market Fund or Money Market Fund has: (i) been provided financial support from an affiliated person, promoter, or principal underwriter of the Fund, or an affiliated person of such a person, and/or (ii) participated in one or more mergers with another investment company.

<u>Form N-CR</u> 

If applicable, the Fund was required to disclose additional information about this event (or these events, as appropriate) on Form N-CR and to file this form with the SEC. Any Form N-CR filing submitted by the Fund is available on the EDGAR Database on the SEC's Internet site at www.sec.gov.

**Pricing Of Fund Shares**

Each Fund's shares are bought and sold at the current net asset value ("NAV") per share. Each Fund's NAV for each class is calculated each day the New York Stock Exchange ("NYSE") is open, as of the close of business of the NYSE (normally 3:00 p.m. Central Time). The NAV of Fund shares is not determined on 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). 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.

The Funds will not treat an intraday unscheduled disruption in NYSE trading as a closure of the NYSE and will price shares as of 3:00 p.m. Central Time, if the particular disruption directly affects only the NYSE.

For all Funds except the Government Money Market and Money Market Funds, the share price is calculated by:

<sup>•</sup>

taking the current market value of the total assets of the Fund,

<sup>•</sup>

subtracting liabilities of the Fund,

<sup>•</sup>

dividing the remainder proportionately into the classes of the Fund,

<sup>•</sup>

subtracting the liability of each class, and

<sup>•</sup>

dividing the remainder by the total number of shares owned in that class.

In determining NAV, securities listed on an Exchange, the Nasdaq National Market, and any foreign markets within the Western Hemisphere are valued at the closing prices on such markets, or if such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price.

------

Municipal securities held by the Funds are traded primarily in the over-the-counter market. Valuations of such securities are furnished by one or more pricing services employed by the Funds and are based upon appraisals obtained by a pricing service, in reliance upon information concerning market transactions and quotations from recognized municipal securities dealers.

Other securities that are traded on the over-the-counter market are valued at their closing bid prices. Each Fund will determine the market value of individual securities held by it, by using prices provided by one or more professional pricing services that may provide market prices to other funds, or, as needed, by obtaining market quotations from independent broker-dealers. 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. Securities for which quotations are not readily available, and other assets, are valued at fair value determined in good faith under procedures established by and under the supervision of the Board.

A Fund's securities may be traded on foreign securities markets that close each day prior to the time the NYSE closes. In addition, foreign securities trading generally or in a particular country or countries may not take place on all business days in New York. The Fund has adopted policies and procedures to "fair value" some or all securities held by a Fund. These fair valuation procedures are intended to discourage shareholders from investing in the Fund for the purpose of engaging in market timing or arbitrage transactions. The values of foreign securities used in computing share price are determined at the time the foreign market closes. Foreign securities and currencies are converted to U.S. dollars using the exchange rate in effect at the close of the NYSE. Occasionally, events affecting the value of foreign securities occur when the foreign market is closed and the NYSE is open. The NAV of a Fund investing in foreign securities may change on days when shareholders are unable to purchase or redeem shares. If the Manager believes that the market value is materially affected, the share price will be calculated using the policy adopted by the Fund.

Certain securities issued by companies in emerging markets may have more than one quoted valuation at any point in time, sometimes referred to as a "local" price and a "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. It is the policy of the Funds to value such securities at prices at which it is expected those shares may be sold, and PGI is authorized to make such determinations subject to the oversight of the Board as may from time to time be necessary.

Appendix B provides a specimen price-make-up sheet showing how the Fund calculates the total offering price per share.

<u>Government Money Market and Money Market Funds (the "Money Market Funds")</u> 

The share price of each Class of shares of the Money Market Funds is determined at the same time and on the same days as the Funds described above. All securities held by the Money Market Funds are valued on an amortized cost basis. Under this method of valuation, a security is initially valued at cost; thereafter, the Money Market Funds assume a constant proportionate amortization in value until maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the market value of the security. While this method provides certainty in valuation, it may result in periods during which value, as determined by amortized cost, is higher or lower than the price that would be received upon sale of the security.

Use of the amortized cost valuation method by the Money Market Funds requires the Funds to maintain a dollar weighted average maturity of 60 days or less and to purchase only obligations that have remaining maturities of 397 days or less, with certain exceptions permitted by applicable regulations, or have a variable or floating rate of interest. In addition, the Funds invest only in obligations determined by the Board to be of high quality with minimal credit risks.

The Board has established procedures for the Money Market Funds designed to stabilize, to the extent reasonably possible, the Funds' price per share as computed for the purpose of sales and redemptions at $1.00. Such procedures include a directive to PGI to test price the portfolio or specific securities on a weekly basis using a mark-to-market method of valuation to determine possible deviations in the net asset value from $1.00 per share. If such deviation exceeds ½ of 1%, the Board promptly considers what action, if any, will be initiated. In the event the Board determines that a deviation exists that may result in material dilution or other unfair results to shareholders, it takes such corrective action as it regards as appropriate, including: sale of portfolio instruments prior to maturity; the withholding of dividends; redemptions of shares in kind; the establishment of a net asset value per share based upon available market quotations; or splitting, combining, or otherwise recapitalizing outstanding shares. The Funds may also reduce the number of shares outstanding by redeeming proportionately from shareholders, without the payment of any monetary compensation, such number of full and fractional shares as is necessary to maintain the net asset value at $1.00 per share.

The Board has approved policies and procedures for PGI to conduct monthly stress testing of the Money Market Funds' ability to maintain a stable net asset value per share and a weekly liquid asset level of at least 10%.

------

**Tax Considerations**

**Qualification as a Regulated Investment Company** 

The Funds intend to qualify annually to be treated as regulated investment companies ("RICs") 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 RICs, the Funds 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, the Funds' ability to invest in certain derivatives, swaps, commodity-linked derivatives, and other commodity/natural resource-related securities may be restricted. Further, if the Funds invest in these types of securities and the income is not determined to be Qualifying Income, it may cause such Fund to fail to qualify as a RIC under the IRC for a given year. If a Fund fails to qualify as a RIC for a particular year, it will be liable for taxes, significantly reducing its distributions to shareholders and eliminating shareholders' ability to treat distributions (as long or short-term capital gains or qualifying dividends) of the Fund in the manner they were received by the Fund.

**Futures Contracts and Options** 

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, the Funds 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 IRC 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 IRC may also require recharacterization of all or a part of losses on certain offsetting positions from short-term to long-term, as well as adjustment of the holding periods of straddle positions.

**International Funds** 

Some foreign securities purchased by the Funds may be subject to foreign withholding taxes that could reduce the yield on such securities. The amount of such foreign taxes is expected to be insignificant. Shareholders of the Funds that invest in foreign securities may be entitled to claim a credit or deduction with respect to foreign taxes. The Funds 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 each affected Fund that will reduce its investment company taxable income. Certain Funds may purchase securities of certain foreign corporations considered to be passive foreign investment companies by the IRS. In order to avoid taxes and interest that must be paid by the Funds if these instruments appreciate in value, the Funds may make various elections permitted by the tax laws. However, these elections could require that the Funds recognize additional taxable income, which in turn must be distributed. In addition, the Fund's investments in foreign securities or foreign currencies may increase or accelerate the Fund's recognition of ordinary income and may affect the timing or amount of the Fund's distributions.

Under the Foreign Account Tax Compliance Act ("FATCA"), a 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 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. A 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 a Fund fails to provide the Fund with appropriate certifications or other documentation concerning its status under FATCA.

**Special Tax Considerations for the California Municipal and Tax-Exempt Bond Funds (collectively the "Municipal Funds" or singly the "Fund")** 

The Municipal Funds also intend to qualify to pay "exempt-interest dividends" to its shareholders. An exempt-interest dividend is that part of dividend distributions made by the Fund that consist of interest received by that Fund on tax-exempt municipal obligations. Shareholders incur no federal income taxes on exempt-interest dividends. However, these exempt-interest dividends may be taxable under state or local law. Exempt-interest dividends that derive from certain private activity bonds must be included by individuals as a preference item in determining whether they are subject to the alternative minimum tax. The Fund may also pay ordinary income dividends and distribute capital gains from time to time. Ordinary income dividends and distributions of capital gains, if any, are taxable for federal purposes.

------

If a shareholder receives an exempt-interest dividend with respect to shares of the Fund held for six months or less, then any loss on the sale or exchange of such shares, to the extent of the amount of such dividend, is disallowed. If a shareholder receives a capital gain dividend with respect to shares held for six months or less, then any loss on the sale or exchange of such shares is treated as a long-term capital loss to the extent the loss exceeds any exempt-interest dividend received with respect to such shares, and is disallowed to the extent of such exempt-interest dividend.

Interest on indebtedness incurred or continued by a shareholder to purchase or carry shares of this Fund is not deductible. Furthermore, entities or persons who are "substantial users" (or related persons) under Section 147(a) of the IRC of facilities financed by private activity bonds should consult their tax advisors before purchasing shares of the Fund.

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. If legislation is enacted that eliminates or significantly reduces the availability of municipal obligations, it could adversely affect the ability of the Fund to continue to pursue its investment objective and policies. In such event, the Fund would reevaluate its investment objective and policies.

**Portfolio Holdings Disclosure**

The portfolio holdings of any Fund that is a fund of funds are shares of underlying mutual funds; holdings of any fund of funds may be made available upon request. In addition, the Funds may publish month-end portfolio holdings information for each Fund's portfolio on the www.principal.com website and on the www.PrincipalAM.com website on the thirteenth business day of the following month. The Funds may also occasionally publish information on the websites relating to specific events, such as the impact of a natural disaster, corporate debt default, or similar events on portfolio holdings. The Funds may also occasionally publish information on the websites concerning the removal, addition, or change in weightings of underlying funds in which the funds of funds invest. The Government Money Market and Money Market Funds also publish on the website www.principal.com, within five business days after the end of each month, certain information required to be made publicly available by SEC rule. It is the Funds' policy to disclose only public information regarding portfolio holdings (i.e., information published on the websites or filed with the SEC), except as described below.

**Non-Specific Information.** Under the Portfolio Holdings Disclosure Policy, the Funds may distribute non-specific information about the Funds and/or summary information about the Funds as requested. Such information will not identify any specific portfolio holding, but may reflect, among other things, the quality, character, or sector distribution of a Fund's holdings. This information may be made available at any time (or without delay).

**Policy.** The Funds and PGI have adopted a policy of disclosing non-public portfolio holdings information to third parties only to the extent required by federal law, and to the following third parties, so long as such third party has agreed, or is legally obligated, to maintain the confidentiality of the information and to refrain from using such information to engage in securities transactions:

1)

Daily to the Funds' portfolio pricing services, Bloomberg LP, ICE Data Services, J.P. Morgan PricingDirect, Inc., and IHS Markit Partners, to obtain prices for portfolio securities;

2)

Upon proper request to government regulatory agencies or to self-regulatory organizations;

3)

As needed to Ernst & Young LLP, the independent registered public accounting firm, in connection with the performance of the services provided by Ernst & Young LLP to the Funds;

4)

To the sub-advisors' proxy service providers (Broadridge Financial Solutions, LLC, Glass Lewis & Co., and Institutional Shareholder Services (ISS)) to facilitate voting of proxies;

5)

To the Funds' custodian, The Bank of New York Mellon, in connection with the custodial services it provides to the Funds; and

6)

Kessler, Topaz, Meltzer & Check, LLP, in connection with legal services it provides to the Funds.

------

The Funds are also permitted to enter into arrangements to disclose portfolio holdings to other third parties in connection with the performance of a legitimate business purpose if such third party agrees in writing to maintain the confidentiality of the information prior to the information being disclosed. Any such written agreement must be approved by an officer of the Funds, PGI, or the Fund's sub-advisor. Approval must be based on a reasonable belief that disclosure to such other third party is in the best interests of the Fund's shareholders. If a conflict of interest is identified in connection with disclosure to any such third party, the Fund's or PGI's Chief Compliance Officer ("CCO") must approve such disclosure, in writing, before it occurs. The Funds currently have disclosure agreements with the following:

Abacus Group LLC

Abel Noser

ACA Compliance Alpha

ACA Market Abuse Surveillance Module

Accenture

Advent Axys

Advent APX

Advent Geneva

Allvue Systems Holdings – Everest

Ashland Partners

Askia LLC

Assette

Axioma

Barra

Black Mountain Systems

BlackRock Aladdin

Bloomberg AIM

Bloomberg LP

Bloomberg Port

Bloomberg Professional Services

BNY Mellon

Broadridge Business Process Outsourcing Solutions, LLC

Broadridge Financial Solutions Inc. / Proxy Edge

Brown Brothers Harriman

Charles River

Charles River Development

Charles River Trading System

Clearpar (Markit)

Confluence Technologies

Deutsche Bank

DTCC OASYS

Dynamo Software

Eagle

Eagle Investment Systems Corp.

Eze Castle Software LLC

FactSet

FactSet Research Systems Inc.

Financial Recovery Technologies (FRT)

Financial Tracking Technologies LLC

FIS Global Asset Management

FIS PTA

Global Trading Analytics

Gresham Technologies

ICE Liquidity

IHS Markit LTD

INDATA

Indus Valley Partners (IVP)

InvestCloud Inc

Investment Company Institute (ICI)

LexisNexis

LiquidNet

Markit WSO Services

Microsoft Azure

Morgan Stanley

Morningstar, Inc.

MSCI ESG Risk Metrics

MSCI - Risk Metrics

Natixis Investment Managers

Nomura International

Northern Trust

Northern Trust Integrated Trading Solutions

Omgeo LLC

Qontigo (Axioma Risk System)

Russell Investments Implementation Services, LLC

SEI Global Services, Inc.

SEI Investments Co

SS&C Advent

SS&C (Evare)

SS&C Technologies

SS&C Technologies Holdings

SS&C Vision FI

State Street Bank & Trust

SWIFT

TSI (Virtus)

Virtu Americas LLC

Any agreement by which any Fund or any party acting on behalf of the Fund agrees to provide Fund portfolio information to a third party, other than a third party identified in the policy described above, must be approved prior to information being provided to the third party, unless the third party is a regulator or has a duty to maintain the confidentiality of such information and to refrain from using such information to engage in securities transactions. A written record of approval will be made by the person granting approval.

The Funds' non-public portfolio holdings information policy applies without variation to individual investors, institutional investors, intermediaries that distribute the Funds' shares, third-party service providers, rating and ranking organizations, and affiliated persons of the Funds. Neither the Funds nor PGI nor any other party receives compensation in connection with the disclosure of Fund portfolio information. The Funds' CCO will periodically, but no less frequently than annually, review the Funds' portfolio holdings disclosure policy and recommend changes the CCO believes are appropriate, if any, to the Board. In addition, the Board must approve any change in the Funds' portfolio holdings disclosure policy that would expand the distribution of such information.

**Proxy Voting Policies and Procedures** 

The Board has delegated responsibility for decisions regarding proxy voting for securities held by each Fund to 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 Board, and which are found in Appendix C. 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.

Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, 2022, is available, without charge, upon request, by calling 1-800-222-5852 or by accessing the Funds' most recently filed Form N-PX on the SEC website at www.sec.gov.

**Financial Statements** 

The financial statements of the Funds at October 31, 2022, are incorporated herein by reference to the Funds' most recent [<u>Annual Report to Shareholders</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874522000215/primary-document.htm) filed with the SEC on Form N-CSR.

**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 Fund Complex.

**General Information** 

<u>Midcap S&P 400 Index Fund, LargeCap S&P 500 Index Fund, and SmallCap S&P 600 Index Fund</u> 

The Funds are not sponsored, endorsed, sold, or promoted by S&P Global ("S&P Global"). S&P Global makes no representation or warranty, express or implied, to Fund shareholders or any member of the public regarding the advisability of investing in securities generally or in these Funds particularly or the ability of the S&P 500 Index, S&P MidCap 400 Index, or S&P SmallCap 600 Index to track general stock market performance. S&P Global's only relationship to Principal Life Insurance Company and PGI is the licensing of certain trademarks and trade names of S&P Global and the S&P 500 Index, S&P MidCap 400 Index, or S&P SmallCap 600 Index which are determined, composed, and calculated by S&P Global without regard to Principal Life Insurance Company, PGI, or the Funds. S&P Global has no obligation to take the needs of Principal Life Insurance Company, PGI or Fund shareholders into consideration in determining, composing or calculating the S&P 500 Index, S&P MidCap 400 Index, or S&P SmallCap 600 Index. S&P Global is not responsible for and has not participated in the determination of the prices of the Funds or the timing of the issuance or sale of the Funds or in the determination or calculation of the equation by which the Funds are to be converted into cash. S&P Global has no obligation or liability in connection with the administration, marketing, or trading of the Funds.

S&P GLOBAL DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500 INDEX, THE S&P MIDCAP 400 INDEX, OR THE S&P SMALLCAP 600 INDEX OR ANY DATA CONTAINED THEREIN AND S&P GLOBAL SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P GLOBAL MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY PRINCIPAL LIFE INSURANCE COMPANY, PRINCIPAL, FUND SHAREHOLDERS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX, THE S&P MIDCAP 400 INDEX, OR THE S&P SMALLCAP 600 INDEX OR ANY DATA INCLUDED THEREIN. S&P GLOBAL MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P 500 INDEX, THE S&P MIDCAP 400 INDEX, OR THE S&P SMALLCAP 600 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P GLOBAL HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

------

**Control Persons and Principal Holders Of Securities**

The following list identifies shareholders who own more than 25% of the voting securities of a Fund as of February 6, 2023. It is presumed that a person who owns more than 25% of the voting securities of a Fund controls the Fund. A control person could control the outcome of proposals presented to shareholders for approval. The information is listed in alphabetical order by Fund.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Fund** | &nbsp;&nbsp; **Percent of**<br> **Ownership**<br>| **Shareholder Name and Address** | &nbsp;&nbsp; **Jurisdiction**<br> **Under Which**<br> **Control Person**<br> **is Organized**<br> **(when control**<br> **person is a**<br> **company)**<br>| &nbsp;&nbsp; **Parent of**<br> **Control Person**<br> **(when control person**<br> **is a company)**<br>|
| CALIFORNIA <br> MUNICIPAL<br>| 25.56% | &nbsp;&nbsp; WELLS FARGO CLEARING SERVICES <br> LLC SPECIAL CUSTODY ACCT FOR THE <br> EXCLUSIVE BENEFIT OF CUSTOMER <br> 2801 MARKET ST <br> SAINT LOUIS MO 63103-2523<br>| CALIFORNIA | &nbsp;&nbsp; WELLS FARGO & <br> COMPANY<br>|
| CORE PLUS BOND | 68.04% | &nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC <br> FOR EXCLUSIVE BENEFIT OF OUR <br> CUSTOMERS <br> 499 WASHINGTON BLVD <br> ATTN MUTUAL FUNDS <br> DEPT 4TH FL <br> JERSEY CITY NJ 07310-1995<br>| DELAWARE | &nbsp;&nbsp; FIDELITY GLOBAL <br> BROKERAGE GROUP, <br> INC. a wholly owned <br> subsidiary of FMR, <br> LLC<br>|
| FINISTERRE <br> EMERGING <br> MARKETS TOTAL <br> RETURN BOND<br>| 25.84% | &nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC <br> FOR EXCLUSIVE BENEFIT OF OUR <br> CUSTOMERS <br> 499 WASHINGTON BLVD <br> ATTN MUTUAL FUNDS <br> DEPT 4TH FL <br> JERSEY CITY NJ 07310-1995<br>| DELAWARE | &nbsp;&nbsp; FIDELITY GLOBAL <br> BROKERAGE GROUP, <br> INC. a wholly owned <br> subsidiary of FMR, <br> LLC<br>|
| GOVERNMENT <br> MONEY MARKET<br>| 100.00% | &nbsp;&nbsp; PRINCIPAL GLOBAL INVESTORS LLC <br> ATTN SEAN CLINES 801-9A08<br> 801 GRAND AVE<br> DES MOINES, IA 50309-8000<br>| IOWA | &nbsp;&nbsp; PRINCIPAL GLOBAL <br> HOLDING COMPANY <br> &nbsp;&nbsp;&nbsp;&nbsp;(US) LLC<sup>(1)</sup><br>|
| HIGH INCOME | 55.15% | &nbsp;&nbsp; PRINCIPAL GLOBAL INVESTORS TRUST <br> CO PRINCIPAL LIFETIME HYBRID <br> COLLECTIVE INVESTMENT FUNDS <br> 1300 SW 5TH AVE STE 3300<br> PORTLAND OR 97201-5640<br>| DELAWARE | &nbsp;&nbsp; PRINCIPAL HOLDING <br> COMPANY, LLC<sup>(1)</sup><br>|
| INFLATION <br> PROTECTION<br>| 38.19% | &nbsp;&nbsp; PRINCIPAL GLOBAL INVESTORS TRUST <br> CO PRINCIPAL LIFETIME HYBRID <br> COLLECTIVE INVESTMENT FUNDS <br> 1300 SW 5TH AVE STE 3300<br> PORTLAND OR 97201-5640<br>| DELAWARE | &nbsp;&nbsp; PRINCIPAL HOLDING <br> COMPANY, LLC<sup>(1)</sup><br>|
| INTERNATIONAL I | 51.01% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA | &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|
| INTERNATIONAL I | 27.68% | &nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC <br> FOR EXCLUSIVE BENEFIT OF OUR <br> CUSTOMERS <br> 499 WASHINGTON BLVD <br> ATTN MUTUAL FUNDS <br> DEPT 4TH FL <br> JERSEY CITY NJ 07310-1995<br>| DELAWARE | &nbsp;&nbsp; FIDELITY GLOBAL <br> BROKERAGE GROUP, <br> INC. a wholly owned <br> subsidiary of FMR, <br> LLC<br>|
| LARGECAP GROWTH <br> I<br>| 38.91% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA | &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|

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| | | | |
|:---|:---|:---|:---|
| **Fund** | &nbsp;&nbsp; **Percent of**<br> **Ownership**<br>| **Shareholder Name and Address** | &nbsp;&nbsp; **Jurisdiction**<br> **Under Which**<br> **Control Person**<br> **is Organized**<br> **(when control**<br> **person is a**<br> **company)**<br>|
| MIDCAP GROWTH III | 35.89% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA<br> &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|
| MIDCAP VALUE I | 32.76% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA<br> &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> STRATEGIC INCOME<br>| 62.96% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA<br> &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> 2010<br>| 49.80% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA<br> &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> 2015<br>| 72.23% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA<br> &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> 2015<br>| 25.88% | &nbsp;&nbsp; DCGT AS TTEE AND/OR CUST FBO PLIC <br> VARIOUS RETIREMENT PLANS <br> OMNIBUS <br> ATTN NPIO TRADE DESK <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| DELAWARE<br> &nbsp;&nbsp; PRINCIPAL HOLDING <br> COMPANY, LLC<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> 2020<br>| 53.89% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA<br> &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> 2025<br>| 73.49% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA<br> &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> 2030<br>| 60.98% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA<br> &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|

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| | | | |
|:---|:---|:---|:---|
| **Fund** | &nbsp;&nbsp; **Percent of**<br> **Ownership**<br>| **Shareholder Name and Address** | &nbsp;&nbsp; **Jurisdiction**<br> **Under Which**<br> **Control Person**<br> **is Organized**<br> **(when control**<br> **person is a**<br> **company)**<br>|
| PRINCIPAL LIFETIME <br> 2035<br>| 74.41% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA<br> &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> 2040<br>| 61.85% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA<br> &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> 2045<br>| 71.70% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA<br> &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> 2045<br>| 26.27% | &nbsp;&nbsp; DCGT AS TTEE AND/OR CUST FBO PLIC <br> VARIOUS RETIREMENT PLANS <br> OMNIBUS <br> ATTN NPIO TRADE DESK <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| DELAWARE<br> &nbsp;&nbsp; PRINCIPAL HOLDING <br> COMPANY, LLC<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> 2050<br>| 67.25% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA<br> &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> 2055<br>| 72.54% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA<br> &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> 2060<br>| 78.78% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA<br> &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> 2065<br>| 73.46% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA<br> &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> HYBRID INCOME<br>| 35.67% | &nbsp;&nbsp; DCGT AS TTEE AND/OR CUST FBO PLIC <br> VARIOUS RETIREMENT PLANS <br> OMNIBUS <br> ATTN NPIO TRADE DESK <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| DELAWARE<br> &nbsp;&nbsp; PRINCIPAL HOLDING <br> COMPANY, LLC<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> HYBRID 2015<br>| 29.54% | &nbsp;&nbsp; DCGT AS TTEE AND/OR CUST FBO PLIC <br> VARIOUS RETIREMENT PLANS <br> OMNIBUS <br> ATTN NPIO TRADE DESK <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| DELAWARE<br> &nbsp;&nbsp; PRINCIPAL HOLDING <br> COMPANY, LLC<sup>(1)</sup><br>|

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| | | | | |
|:---|:---|:---|:---|:---|
| **Fund** | &nbsp;&nbsp; **Percent of**<br> **Ownership**<br>| **Shareholder Name and Address** | &nbsp;&nbsp; **Jurisdiction**<br> **Under Which**<br> **Control Person**<br> **is Organized**<br> **(when control**<br> **person is a**<br> **company)**<br>| &nbsp;&nbsp; **Parent of**<br> **Control Person**<br> **(when control person**<br> **is a company)**<br>|
| PRINCIPAL LIFETIME <br> HYBRID 2020<br>| 41.96% | &nbsp;&nbsp; DCGT AS TTEE AND/OR CUST FBO PLIC <br> VARIOUS RETIREMENT PLANS <br> OMNIBUS <br> ATTN NPIO TRADE DESK <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| DELAWARE | &nbsp;&nbsp; PRINCIPAL HOLDING <br> COMPANY, LLC<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> HYBRID 2025<br>| 35.95% | &nbsp;&nbsp; DCGT AS TTEE AND/OR CUST FBO PLIC <br> VARIOUS RETIREMENT PLANS <br> OMNIBUS <br> ATTN NPIO TRADE DESK <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| DELAWARE | &nbsp;&nbsp; PRINCIPAL HOLDING <br> COMPANY, LLC<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> HYBRID 2030<br>| 45.16% | &nbsp;&nbsp; DCGT AS TTEE AND/OR CUST FBO PLIC <br> VARIOUS RETIREMENT PLANS <br> OMNIBUS <br> ATTN NPIO TRADE DESK <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| DELAWARE | &nbsp;&nbsp; PRINCIPAL HOLDING <br> COMPANY, LLC<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> HYBRID 2035<br>| 44.88% | &nbsp;&nbsp; DCGT AS TTEE AND/OR CUST FBO PLIC <br> VARIOUS RETIREMENT PLANS <br> OMNIBUS <br> ATTN NPIO TRADE DESK <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| DELAWARE | &nbsp;&nbsp; PRINCIPAL HOLDING <br> COMPANY, LLC<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> HYBRID 2040<br>| 47.81% | &nbsp;&nbsp; DCGT AS TTEE AND/OR CUST FBO PLIC <br> VARIOUS RETIREMENT PLANS <br> OMNIBUS <br> ATTN NPIO TRADE DESK <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| DELAWARE | &nbsp;&nbsp; PRINCIPAL HOLDING <br> COMPANY, LLC<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> HYBRID 2045<br>| 52.21% | &nbsp;&nbsp; DCGT AS TTEE AND/OR CUST FBO PLIC <br> VARIOUS RETIREMENT PLANS <br> OMNIBUS <br> ATTN NPIO TRADE DESK <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| DELAWARE | &nbsp;&nbsp; PRINCIPAL HOLDING <br> COMPANY, LLC<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> HYBRID 2050<br>| 56.17% | &nbsp;&nbsp; DCGT AS TTEE AND/OR CUST FBO PLIC <br> VARIOUS RETIREMENT PLANS <br> OMNIBUS <br> ATTN NPIO TRADE DESK <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| DELAWARE | &nbsp;&nbsp; PRINCIPAL HOLDING <br> COMPANY, LLC<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> HYBRID 2055<br>| 58.96% | &nbsp;&nbsp; DCGT AS TTEE AND/OR CUST FBO PLIC <br> VARIOUS RETIREMENT PLANS <br> OMNIBUS <br> ATTN NPIO TRADE DESK <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| DELAWARE | &nbsp;&nbsp; PRINCIPAL HOLDING <br> COMPANY, LLC<sup>(1)</sup><br>|
| PRINCIPAL LIFETIME <br> HYBRID 2060<br>| 53.15% | &nbsp;&nbsp; DCGT AS TTEE AND/OR CUST FBO PLIC <br> VARIOUS RETIREMENT PLANS <br> OMNIBUS <br> ATTN NPIO TRADE DESK <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| DELAWARE | &nbsp;&nbsp; PRINCIPAL HOLDING <br> COMPANY, LLC<sup>(1)</sup><br>|
| SMALLCAP | 28.87% | &nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC <br> 499 WASHINGTON BLVD <br> JERSEY CITY NJ 07310-1995<br>| DELAWARE | &nbsp;&nbsp; FIDELITY GLOBAL <br> BROKERAGE GROUP, <br> INC. a wholly owned <br> subsidiary of FMR, <br> LLC<br>|
| SMALLCAP GROWTH <br> I<br>| 40.73% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA | &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|

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| | | | |
|:---|:---|:---|:---|
| **Fund** | &nbsp;&nbsp; **Percent of**<br> **Ownership**<br>| **Shareholder Name and Address** | &nbsp;&nbsp; **Jurisdiction**<br> **Under Which**<br> **Control Person**<br> **is Organized**<br> **(when control**<br> **person is a**<br> **company)**<br>|
| SMALLCAP VALUE II | 50.03% | &nbsp;&nbsp; PRINCIPAL LIFE INS. COMPANY CUST <br> FBO PFG OMNIBUS WRAPPED AND <br> CUSTOM <br> ATTN PLIC PROXY COORDINATOR <br> FUNDS <br> 711 HIGH ST <br> DES MOINES IA 50392-0001<br>| IOWA<br> &nbsp;&nbsp; PRINCIPAL <br> FINANCIAL <br> SERVICES, INC.<sup>(1)</sup><br>|

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<sup>(1)</sup>

Principal Financial Group, Inc. is the parent of Principal Financial Services, Inc.; Principal Financial Services, Inc. is the parent both of Principal Life Insurance Company and of Principal Global Holding Company (US), LLC; Principal Life Insurance Company is the parent of Principal Holding Company, LLC.; Principal Global Holding Company (US), LLC is the parent of Principal Global Investors, LLC.

The Board Members and officers of the Funds, member companies of the Principal Financial Group, and certain other persons may purchase shares of the Funds without the payment of any sales charge. The sales charge is waived on these transactions because there are either no distribution costs or only minimal distribution costs associated with the transactions. For a description of the persons entitled to a waiver of sales charge in connection with their purchase of shares of the Funds, see the discussion of the waiver of sales charges under the caption "Choosing a Share Class and the Costs of Investing" in the Prospectus.

Funds that operate as funds of funds and Principal Life Insurance Company will vote in the same proportion as shares of the Funds owned by other shareholders. Therefore, neither the funds of funds nor Principal Life Insurance Company exercise voting discretion.

The Bylaws of PFI set the quorum requirement (a quorum must be present at a meeting of shareholders for business to be transacted). The Bylaws of PFI state that a quorum is the presence in person or by proxy of the holders of one-third of the shares of capital stock of PFI 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 (a "Majority of the Outstanding Voting Securities").

**Principal Holders of Securities** 

The Registrant is unaware of any persons who own beneficially (but are not shareholders of record) 5% or more of any class of the Funds' outstanding shares. The following list identifies the shareholders of record who own 5% or more of any class of the Funds' outstanding shares as of February 6, 2023. The list is presented in alphabetical order by Fund.

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| CALIFORNIA MUNICIPAL (A) | 24.50% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| CALIFORNIA MUNICIPAL (A) | 22.83% | &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;J. P. MORGAN SECURITIES LLC<br> FBO EXCLUSIVE BENEFIT OF OUR CUST<br> 4 CHASE METROTECH CTR<br> BROOKLYN NY 11245-0003<br>|
| CALIFORNIA MUNICIPAL (A) | 12.71% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| CALIFORNIA MUNICIPAL (A) | 8.09% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| CALIFORNIA MUNICIPAL (A) | 7.49% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|
| CALIFORNIA MUNICIPAL (A) | 5.79% | &nbsp;&nbsp;&nbsp;&nbsp; MLPF&S FOR THE SOLE<br> BENEFIT OF ITS CUSTOMERS<br> ATTN FUND ADMINISTRATION<br> 4800 DEER LAKE DR EAST<br> BUILDING ONE, 2ND FLOOR<br> JACKSONVILLE FL 32246-6484<br>|
| CALIFORNIA MUNICIPAL (C) | 36.93% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| CALIFORNIA MUNICIPAL (C) | 14.93% | &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;J. P. MORGAN SECURITIES LLC<br> FBO EXCLUSIVE BENEFIT OF OUR CUST<br> 4 CHASE METROTECH CTR<br> BROOKLYN NY 11245-0003<br>|
| CALIFORNIA MUNICIPAL (C) | 13.84% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| CALIFORNIA MUNICIPAL (C) | 8.64% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|
| CALIFORNIA MUNICIPAL (C) | 7.35% | &nbsp;&nbsp;&nbsp;&nbsp; LPL FINANCIAL<br> OMNIBUS CUSTOMER ACCOUNT<br> ATTN MUTUAL FUND TRADING<br> 4707 EXECUTIVE DR<br> SAN DIEGO CA 92121-3091<br>|
| CALIFORNIA MUNICIPAL (I) | 25.78% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| CALIFORNIA MUNICIPAL (I) | 14.86% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|
| CALIFORNIA MUNICIPAL (I) | 12.71% | &nbsp;&nbsp;&nbsp;&nbsp; AMERICAN ENTERPRISE INVESTMENT SVC<br> FBO #41999970<br> 707 2ND AVE S<br> MINNEAPOLIS MN 55402-2405<br>|
| CALIFORNIA MUNICIPAL (I) | 8.95% | &nbsp;&nbsp;&nbsp;&nbsp; MLPF&S FOR THE SOLE<br> BENEFIT OF ITS CUSTOMERS<br> ATTN FUND ADMINISTRATION<br> 4800 DEER LAKE DR E FL 2<br> JACKSONVILLE FL 32246-6484<br>|
| CALIFORNIA MUNICIPAL (I) | 6.66% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| CALIFORNIA MUNICIPAL (I) | 6.46% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| CALIFORNIA MUNICIPAL (I) | 5.69% | &nbsp;&nbsp;&nbsp;&nbsp; LPL FINANCIAL<br> OMNIBUS CUSTOMER ACCOUNT<br> ATTN MUTUAL FUND TRADING<br> 4707 EXECUTIVE DR<br> SAN DIEGO CA 92121-3091<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| CALIFORNIA MUNICIPAL (I) | 5.02% | &nbsp;&nbsp;&nbsp;&nbsp; TD AMERITRADE INC FOR THE<br> EXCLUSIVE BENEFIT OF OUR CLIENTS<br> PO BOX 2226<br> OMAHA NE 68103-2226<br>|
| CORE FIXED INCOME (A) | 28.14% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| CORE FIXED INCOME (A) | 10.04% | &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;J. P. MORGAN SECURITIES LLC<br> FBO EXCLUSIVE BENEFIT OF OUR CUST<br> 4 CHASE METROTECH CTR<br> BROOKLYN NY 11245-0003<br>|
| CORE FIXED INCOME (C) | 22.86% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| CORE FIXED INCOME (C) | 12.58% | &nbsp;&nbsp;&nbsp;&nbsp; RAYMOND JAMES<br> OMNIBUS FOR MUTUAL FUNDS<br> HOUSE ACCT FIRM 92500015<br> ATTN: COURTNEY WALLER<br> 880 CARILLON PKWY<br> ST PETERSBURG FL 33716-1102<br>|
| CORE FIXED INCOME (C) | 10.91% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| CORE FIXED INCOME (I) | 60.49% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| CORE FIXED INCOME (I) | 11.27% | &nbsp;&nbsp;&nbsp;&nbsp; AMERICAN ENTERPRISE INVESTMENT SVC<br> FBO #41999970<br> 707 2ND AVE S<br> MINNEAPOLIS MN 55402-2405<br>|
| CORE FIXED INCOME (I) | 6.71% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| CORE FIXED INCOME (R1) | 95.97% | &nbsp;&nbsp;&nbsp;&nbsp; VOYA INSTITUTIONAL TRUST COMPANY<br> 1 ORANGE WAY<br> WINDSOR CT 06095-4773<br>|
| CORE FIXED INCOME (R3) | 62.68% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| CORE FIXED INCOME (R3) | 12.42% | &nbsp;&nbsp;&nbsp;&nbsp; SAMMONS RETIREMENT SOLUTIONS<br> 8300 MILLS CIVIC PKWY<br> WDM IA 50266-3833<br>|
| CORE FIXED INCOME (R3) | 10.08% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO GU & IM DDS PS DEFINED BENEFIT<br> PLAN<br> 9954 RAINIER AVE S<br> SEATTLE WA 98118-5941<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| CORE FIXED INCOME (R4) | 95.35% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| CORE FIXED INCOME (R5) | 87.13% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| CORE FIXED INCOME (R5) | 6.59% | &nbsp;&nbsp;&nbsp;&nbsp; T ROWE PRICE RETIREMENT PLAN<br> SERVICES INC<br> FBO RETIREMENT PLAN CLIENTS<br> 4515 PAINTERS MILL RD<br> OWINGS MILLS MD 21117-4903<br>|
| CORE FIXED INCOME (R6) | 19.90% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2030 FUND<br> ATTN MUTUAL FUND ACCOUNTING- H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| CORE FIXED INCOME (R6) | 16.11% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| CORE FIXED INCOME (R6) | 9.71% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2020 FUND<br> ATTN MUTUAL FUND ACCOUNTING H-221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| CORE FIXED INCOME (R6) | 8.22% | &nbsp;&nbsp;&nbsp;&nbsp; SAM FLEXIBLE INCOME PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| CORE FIXED INCOME (R6) | 6.62% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2040 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| CORE FIXED INCOME (R6) | 6.51% | &nbsp;&nbsp;&nbsp;&nbsp; SAM BALANCED PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING - H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| CORE FIXED INCOME (R6) | 5.35% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2025 FUND<br> ATTN MUTUAL FUND ACCOUNTING- H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| CORE PLUS BOND (A) | 12.08% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| CORE PLUS BOND (I) | 79.40% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| CORE PLUS BOND (I) | 9.01% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| CORE PLUS BOND (R1) | 88.44% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| CORE PLUS BOND (R1) | 11.38% | &nbsp;&nbsp;&nbsp;&nbsp; MID ATLANTIC TRUST COMPANY FBO<br> UNITED STATES SQUASH RACQUETS 401(K<br> 1251 WATERFRONT PLACE SUITE 525<br> PITTSBURGH PA 15222-4228<br>|
| CORE PLUS BOND (R3) | 70.33% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| CORE PLUS BOND (R3) | 6.48% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO SCOTT CONTRACTING CASH<br> BALANCE PLAN<br> 702 OLD PEACHTREE RD NW STE 100<br> SUWANEE GA 30024-4923<br>|
| CORE PLUS BOND (R4) | 74.28% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| CORE PLUS BOND (R4) | 7.44% | &nbsp;&nbsp;&nbsp;&nbsp; RANGER PIPELINES INCORPORATED<br> FBO RANGER PIPELINES INC NQ EXCESS<br> PLAN<br> ATTN PLAN TRUSTEE<br> 1790 YOSEMITE AVE<br> SAN FRANCISCO CA 94124-2622<br>|
| CORE PLUS BOND (R4) | 6.49% | &nbsp;&nbsp;&nbsp;&nbsp; NOMURA HOLDING AMERICA INC<br> ATTN PLAN TRUSTEE<br> FBO NOMURA SUPP RET SAVINGS<br> 309 W 49TH ST<br> NEW YORK NY 10019-9102<br>|
| CORE PLUS BOND (R5) | 84.92% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| CORE PLUS BOND (R5) | 5.26% | &nbsp;&nbsp;&nbsp;&nbsp; NORTHWEST ADMINISTRATORS<br> FBO NQ EXCESS OF NW ADMINISTRATORS<br> ATTN GAYLE BUSHNELL<br> 2323 EASTLAKE AVE E<br> SEATTLE WA 98102-3963<br>|
| DIVERSIFIED INCOME (A) | 15.15% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| DIVERSIFIED INCOME (A) | 11.54% | &nbsp;&nbsp;&nbsp;&nbsp; MLPF&S FOR THE SOLE<br> BENEFIT OF ITS CUSTOMERS<br> ATTN FUND ADMINISTRATION<br> 4800 DEER LAKE DR E FL 3<br> JACKSONVILLE FL 32246-6484<br>|
| DIVERSIFIED INCOME (A) | 11.31% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| DIVERSIFIED INCOME (A) | 11.25% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| DIVERSIFIED INCOME (A) | 6.23% | &nbsp;&nbsp;&nbsp;&nbsp; UBS WM USA<br> 0O0 11011 6100<br> OMNI ACCOUNT M/F<br> SPEC CDY A/C EBOC UBSFSI<br> 1000 HARBOR BLVD<br> WEEHAWKEN NJ 07086-6761<br>|
| DIVERSIFIED INCOME (A) | 5.70% | &nbsp;&nbsp;&nbsp;&nbsp; RAYMOND JAMES<br> OMNIBUS FOR MUTUAL FUNDS<br> HOUSE ACCT FIRM 92500015<br> ATTN: COURTNEY WALLER<br> 880 CARILLON PKWY<br> ST PETERSBURG FL 33716-1102<br>|
| DIVERSIFIED INCOME (A) | 5.00% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY A/C FBO CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 211 MAIN STREET<br> SAN FRANCISCO CA 94105-1901<br>|
| DIVERSIFIED INCOME (C) | 30.94% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| DIVERSIFIED INCOME (C) | 11.05% | &nbsp;&nbsp;&nbsp;&nbsp; RAYMOND JAMES<br> OMNIBUS FOR MUTUAL FUNDS<br> HOUSE ACCT FIRM 92500015<br> ATTN: COURTNEY WALLER<br> 880 CARILLON PKWY<br> ST PETERSBURG FL 33716-1102<br>|
| DIVERSIFIED INCOME (C) | 8.63% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|
| DIVERSIFIED INCOME (C) | 7.85% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| DIVERSIFIED INCOME (C) | 5.79% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> FBO SPECIAL CUSTODY ACCOUNTS<br> ATTN MUTUAL FUNDS<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1901<br>|
| DIVERSIFIED INCOME (C) | 5.31% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| DIVERSIFIED INCOME (C) | 5.16% | &nbsp;&nbsp;&nbsp;&nbsp; AMERICAN ENTERPRISE INVESTMENT SVC<br> FBO #41999970<br> 707 2ND AVE S<br> MINNEAPOLIS MN 55402-2405<br>|
| DIVERSIFIED INCOME (C) | 5.00% | &nbsp;&nbsp;&nbsp;&nbsp; UBS WM USA<br> 0O0 11011 6100<br> OMNI ACCOUNT M/F<br> SPEC CDY A/C EBOC UBSFSI<br> 1000 HARBOR BLVD<br> WEEHAWKEN NJ 07086-6761<br>|
| DIVERSIFIED INCOME (I) | 14.91% | &nbsp;&nbsp;&nbsp;&nbsp; MLPF&S FOR THE SOLE<br> BENEFIT OF ITS CUSTOMERS<br> ATTN FUND ADMINISTRATION<br> 4800 DEER LAKE DR E FL 3<br> JACKSONVILLE FL 32246-6484<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| DIVERSIFIED INCOME (I) | 13.54% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|
| DIVERSIFIED INCOME (I) | 10.05% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| DIVERSIFIED INCOME (I) | 9.53% | &nbsp;&nbsp;&nbsp;&nbsp; UBS WM USA<br> 0O0 11011 6100<br> OMNI ACCOUNT M/F<br> SPEC CDY A/C EBOC UBSFSI<br> 1000 HARBOR BLVD<br> WEEHAWKEN NJ 07086-6761<br>|
| DIVERSIFIED INCOME (I) | 8.97% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY A/C FBO CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 211 MAIN STREET<br> SAN FRANCISCO CA 94105-1901<br>|
| DIVERSIFIED INCOME (I) | 7.90% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| DIVERSIFIED INCOME (I) | 7.79% | &nbsp;&nbsp;&nbsp;&nbsp; RAYMOND JAMES<br> OMNIBUS FOR MUTUAL FUNDS<br> HOUSE ACCT FIRM 92500015<br> ATTN: COURTNEY WALLER<br> 880 CARILLON PKWY<br> ST PETERSBURG FL 33716-1102<br>|
| DIVERSIFIED INCOME (I) | 6.97% | &nbsp;&nbsp;&nbsp;&nbsp; LPL FINANCIAL<br> OMNIBUS CUSTOMER ACCOUNT<br> ATTN MUTUAL FUND TRADING<br> 4707 EXECUTIVE DR<br> SAN DIEGO CA 92121-3091<br>|
| DIVERSIFIED INCOME (I) | 5.49% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| DIVERSIFIED INCOME (R6) | 37.86% | &nbsp;&nbsp;&nbsp;&nbsp; ATTN MUTUAL FUNDS OPERATIONS<br> MAC & CO A/C 798018<br> 500 GRANT STREET ROOM 151-1010<br> PITTSBURGH PA 15219-2502<br>|
| DIVERSIFIED INCOME (R6) | 12.11% | &nbsp;&nbsp;&nbsp;&nbsp; ATTN MUTUAL FUND OPERATIONS<br> MAC & CO A/C 798045<br> 500 GRANT STREET ROOM 151-1010<br> PITTSBURGH PA 15219-2502<br>|
| DIVERSIFIED INCOME (R6) | 9.45% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| DIVERSIFIED INCOME (R6) | 6.64% | &nbsp;&nbsp;&nbsp;&nbsp; ATTN MUTUAL FUND OPERATIONS<br> MAC & CO A/C 798041<br> 500 GRANT STREET ROOM 151-1010<br> PITTSBURGH PA 15219-2502<br>|
| DIVERSIFIED INCOME (R6) | 6.27% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| DIVERSIFIED INTERNATIONAL (A) | 12.98% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| DIVERSIFIED INTERNATIONAL (I) | 60.11% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| DIVERSIFIED INTERNATIONAL (I) | 12.15% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY A/C FBO CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 211 MAIN STREET<br> SAN FRANCISCO CA 94105-1901<br>|
| DIVERSIFIED INTERNATIONAL (I) | 7.79% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| DIVERSIFIED INTERNATIONAL (R1) | 86.12% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| DIVERSIFIED INTERNATIONAL (R1) | 8.57% | &nbsp;&nbsp;&nbsp;&nbsp; RELIANCE TRUST CO TTEE<br> FBO ADP ACCESS LARGE MARKET<br> 401(K) PLAN<br> 201 17TH ST NW STE 1000<br> ATLANTA GA 30363-1195<br>|
| DIVERSIFIED INTERNATIONAL (R3) | 60.02% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| DIVERSIFIED INTERNATIONAL (R4) | 74.51% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| DIVERSIFIED INTERNATIONAL (R4) | 8.61% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO CRST INTL NQ PLAN<br> ATTN SUSAN SAGGIONE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| DIVERSIFIED INTERNATIONAL (R4) | 5.89% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO NQ BENEFIT FOR HCES OF MIECO<br> ATTN SUSAN SAGGIONE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| DIVERSIFIED INTERNATIONAL (R5) | 75.20% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| DIVERSIFIED INTERNATIONAL (R5) | 7.56% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY A/C FBO CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 101 MONTGOMERY ST<br> SAN FRANCISCO CA 94104-4151<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| DIVERSIFIED INTERNATIONAL (R6) | 12.89% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2040 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| DIVERSIFIED INTERNATIONAL (R6) | 12.28% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2030 FUND<br> ATTN MUTUAL FUND ACCOUNTING- H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| DIVERSIFIED INTERNATIONAL (R6) | 9.95% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2050 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| DIVERSIFIED INTERNATIONAL (R6) | 5.06% | &nbsp;&nbsp;&nbsp;&nbsp; SAM BALANCED PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING - H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| EQUITY INCOME (A) | 16.16% | &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;J. P. MORGAN SECURITIES LLC<br> FBO EXCLUSIVE BENEFIT OF OUR CUST<br> 4 CHASE METROTECH CTR<br> BROOKLYN NY 11245-0003<br>|
| EQUITY INCOME (A) | 13.26% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| EQUITY INCOME (A) | 9.27% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY A/C FOR THE<br> BENIFIT OF CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 101 MONTGOMERY ST<br> SAN FRANCISCO CA 94104-4151<br>|
| EQUITY INCOME (A) | 5.13% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| EQUITY INCOME (C) | 23.16% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| EQUITY INCOME (C) | 11.69% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| EQUITY INCOME (C) | 8.04% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| EQUITY INCOME (C) | 6.69% | &nbsp;&nbsp;&nbsp;&nbsp; MLPF&S FOR THE SOLE<br> BENEFIT OF ITS CUSTOMERS<br> ATTN FUND ADMINISTRATION<br> 4800 DEER LAKE DR EAST 3RD FL<br> JACKSONVILLE FL 32246-6484<br>|
| EQUITY INCOME (C) | 6.60% | &nbsp;&nbsp;&nbsp;&nbsp; RAYMOND JAMES<br> OMNIBUS FOR MUTUAL FUNDS<br> HOUSE ACCT FIRM 92500015<br> ATTN: COURTNEY WALLER<br> 880 CARILLON PKWY<br> ST PETERSBURG FL 33716-1102<br>|
| EQUITY INCOME (C) | 6.28% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| EQUITY INCOME (C) | 5.71% | &nbsp;&nbsp;&nbsp;&nbsp; STIFEL NICOLAUS & CO INC<br> EXCLUSIVE BENEFIT OF CUSTOMERS<br> 501 N BROADWAY<br> SAINT LOUIS MO 63102-2188<br>|
| EQUITY INCOME (I) | 27.42% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| EQUITY INCOME (I) | 11.39% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| EQUITY INCOME (I) | 5.21% | &nbsp;&nbsp;&nbsp;&nbsp; SAM BALANCED PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING - H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| EQUITY INCOME (R1) | 90.53% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| EQUITY INCOME (R1) | 9.26% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO CONCORP CONCRETE INC DEFINED<br> BENEFIT PENSION PLAN<br> 2485 ASHCROFT AVE<br> CLOVIS CA 93611-6001<br>|
| EQUITY INCOME (R3) | 52.29% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| EQUITY INCOME (R3) | 12.37% | &nbsp;&nbsp;&nbsp;&nbsp; SAMMONS RETIREMENT SOLUTIONS<br> 8300 MILLS CIVIC PKWY<br> WDM IA 50266-3833<br>|
| EQUITY INCOME (R3) | 6.02% | &nbsp;&nbsp;&nbsp;&nbsp; STATE STREET BANK AND TRUST COMPANY<br> TRUSTEE AND/OR CUSTODIAN<br> FBO ADP ACCESS PRODUCT<br> 1 LINCOLN ST<br> BOSTON MA 02111-2901<br>|
| EQUITY INCOME (R4) | 54.44% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| EQUITY INCOME (R4) | 26.41% | &nbsp;&nbsp;&nbsp;&nbsp; PIMS/PRUDENTIAL RETIREMENT<br> AS NOMINEE FOR THE TTEE/CUST PL 764<br> NYSA-ILA MONEY PURCHASE PENSION<br> 10 EXCHANGE PL STE 1400<br> JERSEY CITY NJ 07302-4931<br>|
| EQUITY INCOME (R5) | 89.80% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| FINISTERRE EMERGING MARKETS <br> TOTAL RETURN BOND (I)<br>| 25.84% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| FINISTERRE EMERGING MARKETS <br> TOTAL RETURN BOND (I)<br>| 13.34% | &nbsp;&nbsp;&nbsp;&nbsp; SAM BALANCED PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING - H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| FINISTERRE EMERGING MARKETS <br> TOTAL RETURN BOND (I)<br>| 12.18% | &nbsp;&nbsp;&nbsp;&nbsp; SAM FLEXIBLE INCOME PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| FINISTERRE EMERGING MARKETS <br> TOTAL RETURN BOND (I)<br>| 9.68% | &nbsp;&nbsp;&nbsp;&nbsp; SAM CONS BALANCED PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| FINISTERRE EMERGING MARKETS <br> TOTAL RETURN BOND (I)<br>| 7.99% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|
| FINISTERRE EMERGING MARKETS <br> TOTAL RETURN BOND (I)<br>| 5.80% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY ACCT<br> FBO CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1901<br>|
| FINISTERRE EMERGING MARKETS <br> TOTAL RETURN BOND (I)<br>| 5.54% | &nbsp;&nbsp;&nbsp;&nbsp; SAM CONS GROWTH PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| GLOBAL EMERGING MARKETS (A) | 19.80% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| GLOBAL EMERGING MARKETS (I) | 85.30% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| GLOBAL EMERGING MARKETS (R1) | 85.53% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| GLOBAL EMERGING MARKETS (R3) | 62.83% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| GLOBAL EMERGING MARKETS (R3) | 5.03% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO SCOTT CONTRACTING CASH<br> BALANCE PLAN<br> 702 OLD PEACHTREE RD NW STE 100<br> SUWANEE GA 30024-4923<br>|
| GLOBAL EMERGING MARKETS (R4) | 75.01% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| GLOBAL EMERGING MARKETS (R4) | 12.37% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO CRST INTL NQ PLAN<br> ATTN SUSAN SAGGIONE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| GLOBAL EMERGING MARKETS (R5) | 79.20% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| GLOBAL EMERGING MARKETS (R6) | 54.72% | &nbsp;&nbsp;&nbsp;&nbsp; BANKERS TRUST COMPANY<br> FBO DEF COMP FOR SELECT INV<br> PROFESSIONALS OF PFG AND ITS<br> ATTN PLAN TRUSTEE<br> 453 7TH ST<br> DES MOINES IA 50309-4110<br>|
| GLOBAL EMERGING MARKETS (R6) | 41.38% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| GLOBAL REAL ESTATE SECURITIES (A) | 15.77% | &nbsp;&nbsp;&nbsp;&nbsp; MLPF&S FOR THE SOLE<br> BENEFIT OF ITS CUSTOMERS<br> ATTN FUND ADMINISTRATION<br> 4800 DEER LAKE DR E FL 3<br> JACKSONVILLE FL 32246-6484<br>|
| GLOBAL REAL ESTATE SECURITIES (A) | 13.74% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY A/C FBO CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 101 MONTGOMERY STREET<br> SAN FRANCISCO CA 94104-4151<br>|
| GLOBAL REAL ESTATE SECURITIES (A) | 13.70% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| GLOBAL REAL ESTATE SECURITIES (A) | 10.73% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|
| GLOBAL REAL ESTATE SECURITIES (A) | 9.30% | &nbsp;&nbsp;&nbsp;&nbsp; RAYMOND JAMES<br> OMNIBUS FOR MUTUAL FUNDS<br> HOUSE ACCT FIRM 92500015<br> ATTN: COURTNEY WALLER<br> 880 CARILLON PKWY<br> ST PETERSBURG FL 33716-1102<br>|
| GLOBAL REAL ESTATE SECURITIES (I) | 20.54% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| GLOBAL REAL ESTATE SECURITIES (I) | 18.64% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| GLOBAL REAL ESTATE SECURITIES (I) | 17.02% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY A/C FOR THE<br> BENIFIT OF CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 101 MONTGOMERY ST<br> SAN FRANCISCO CA 94104-4151<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| GLOBAL REAL ESTATE SECURITIES (I) | 7.84% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|
| GLOBAL REAL ESTATE SECURITIES (I) | 6.35% | &nbsp;&nbsp;&nbsp;&nbsp; RAYMOND JAMES<br> OMNIBUS FOR MUTUAL FUNDS<br> HOUSE ACCT FIRM 92500015<br> ATTN: COURTNEY WALLER<br> 880 CARILLON PKWY<br> ST PETERSBURG FL 33716-1102<br>|
| GLOBAL REAL ESTATE SECURITIES (R3) | 33.33% | &nbsp;&nbsp;&nbsp;&nbsp; SAMMONS RETIREMENT SOLUTIONS<br> 8300 MILLS CIVIC PKWY<br> WDM IA 50266-3833<br>|
| GLOBAL REAL ESTATE SECURITIES (R3) | 33.17% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO BLUE ROCK REFINISHING SOLUTIONS<br> LLC CASH BALANCE PLAN<br> 2974 CLEVELAND AVE N<br> SAINT PAUL MN 55113-1101<br>|
| GLOBAL REAL ESTATE SECURITIES (R3) | 22.23% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| GLOBAL REAL ESTATE SECURITIES (R3) | 6.15% | &nbsp;&nbsp;&nbsp;&nbsp; STATE STREET BANK CUSTODIAN CUST<br> FBO ACCESS ADP 401(K) PLAN<br> 1 LINCOLN STREET<br> BOSTON MA 02111-2901<br>|
| GLOBAL REAL ESTATE SECURITIES (R4) | 68.56% | &nbsp;&nbsp;&nbsp;&nbsp; VOYA INSTITUTIONAL TRUST COMPANY<br> 1 ORANGE WAY<br> WINDSOR CT 06095-4773<br>|
| GLOBAL REAL ESTATE SECURITIES (R4) | 29.38% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| GLOBAL REAL ESTATE SECURITIES (R5) | 82.43% | &nbsp;&nbsp;&nbsp;&nbsp; PIMS/PRUDENTIAL RETIREMENT<br> AS NOMINEE FOR THE TTEE/CUST PL 002<br> CITY OF JERSEY CITY<br> 280 GROVE STREET ROOM 106<br> JERSEY CITY NJ 07302-3610<br>|
| GLOBAL REAL ESTATE SECURITIES (R5) | 12.48% | &nbsp;&nbsp;&nbsp;&nbsp; MID ATLANTIC TRUST COMPANY FBO<br> MATC OMNIBUS DIV REINVEST<br> 1251 WATERFRONT PL STE 525<br> PITTSBURGH PA 15222-4228<br>|
| GLOBAL REAL ESTATE SECURITIES (R6) | 27.52% | &nbsp;&nbsp;&nbsp;&nbsp; UBATCO & CO<br> FBO COLLEGE SAVINGS GROUP<br> PO BOX 82535<br> LINCOLN NE 68501-2535<br>|
| GLOBAL REAL ESTATE SECURITIES (R6) | 9.08% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| GLOBAL REAL ESTATE SECURITIES (R6) | 8.47% | &nbsp;&nbsp;&nbsp;&nbsp; MAC & CO A/C 681885<br> ATTN MUTUAL FUND OPS<br> 500 GRANT STREET ROOM 151-1010<br> PITTSBURGH PA 15219-2502<br>|
| GLOBAL REAL ESTATE SECURITIES (R6) | 7.34% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY NJ 07310-1995<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| GLOBAL REAL ESTATE SECURITIES (R6) | 6.57% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONWIDE TRUST COMPANY FSB<br> C/O IPO PORTFOLIO ACCOUNTING<br> PO BOX 182029<br> COLUMBUS OH 43218-2029<br>|
| GOVERNMENT & HIGH QUALITY BOND <br> (A)<br>| 20.27% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| GOVERNMENT & HIGH QUALITY BOND <br> (A)<br>| 11.63% | &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;J. P. MORGAN SECURITIES LLC<br> FBO EXCLUSIVE BENEFIT OF OUR CUST<br> 4 CHASE METROTECH CTR<br> BROOKLYN NY 11245-0003<br>|
| GOVERNMENT & HIGH QUALITY BOND <br> (I)<br>| 31.77% | &nbsp;&nbsp;&nbsp;&nbsp; SAM FLEXIBLE INCOME PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| GOVERNMENT & HIGH QUALITY BOND <br> (I)<br>| 21.18% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| GOVERNMENT & HIGH QUALITY BOND <br> (I)<br>| 17.50% | &nbsp;&nbsp;&nbsp;&nbsp; SAM BALANCED PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING - H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| GOVERNMENT & HIGH QUALITY BOND <br> (I)<br>| 12.04% | &nbsp;&nbsp;&nbsp;&nbsp; SAM CONS BALANCED PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| GOVERNMENT & HIGH QUALITY BOND <br> (I)<br>| 5.47% | &nbsp;&nbsp;&nbsp;&nbsp; SAM CONS GROWTH PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| GOVERNMENT & HIGH QUALITY BOND <br> (R1)<br>| 74.87% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO KANE HANDEL DEFINED<br> BENEFIT PLAN<br> 3525 DEL MAR HEIGHTS ROAD STE 231<br> SAN DIEGO CA 92130-2199<br>|
| GOVERNMENT & HIGH QUALITY BOND <br> (R1)<br>| 23.65% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| GOVERNMENT & HIGH QUALITY BOND <br> (R3)<br>| 43.30% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| GOVERNMENT & HIGH QUALITY BOND <br> (R3)<br>| 10.08% | &nbsp;&nbsp;&nbsp;&nbsp; ASCENSUS TRUST COMPANY FBO<br> STRUCTURAL ENGINEERING CENTER INC<br> 70069<br> PO BOX 10758<br> FARGO ND 58106-0758<br>|
| GOVERNMENT & HIGH QUALITY BOND <br> (R3)<br>| 6.13% | &nbsp;&nbsp;&nbsp;&nbsp; USIC<br> FBO USIC EXEC BENEFIT PLAN<br> ATTN CARYN HILDRETH<br> 9045 RIVER RD STE 300<br> INDIANAPOLIS IN 46240-6400<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| GOVERNMENT & HIGH QUALITY BOND <br> (R4)<br>| 81.68% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| GOVERNMENT & HIGH QUALITY BOND <br> (R4)<br>| 6.40% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO NQ BENEFIT FOR HCES OF MIECO<br> ATTN SUSAN SAGGIONE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| GOVERNMENT & HIGH QUALITY BOND <br> (R5)<br>| 43.46% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| GOVERNMENT & HIGH QUALITY BOND <br> (R5)<br>| 16.93% | &nbsp;&nbsp;&nbsp;&nbsp; BANKERS TRUST COMPANY<br> FBO II-VI, INC DEFERRED<br> COMPENSATION PLAN<br> ATTN DEBBIE WILLIAMS<br> 453 7TH ST<br> DES MOINES IA 50309-4110<br>|
| GOVERNMENT & HIGH QUALITY BOND <br> (R5)<br>| 15.65% | &nbsp;&nbsp;&nbsp;&nbsp; NORTHWEST ADMINISTRATORS<br> FBO NQ EXCESS OF NW ADMINISTRATORS<br> ATTN GAYLE BUSHNELL<br> 2323 EASTLAKE AVE E<br> SEATTLE WA 98102-3963<br>|
| GOVERNMENT & HIGH QUALITY BOND <br> (R5)<br>| 11.18% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY NJ 07310-1995<br>|
| GOVERNMENT MONEY MARKET (I) | 100.00% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL GLOBAL INVESTORS LLC<br> ATTN SEAN CLINES 801-9A08<br> 801 GRAND AVE<br> DES MOINES IA 50309-8000<br>|
| GOVERNMENT MONEY MARKET (R6) | 12.69% | &nbsp;&nbsp;&nbsp;&nbsp; INCOME FUND<br> FBO PGI<br> ATTN MUTUAL FUND ACCOUNTING H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| GOVERNMENT MONEY MARKET (R6) | 10.65% | &nbsp;&nbsp;&nbsp;&nbsp; BNY MELLON AS AGENT FOR VARIOUS<br> PRINCIPAL FUNDS<br> 500 GRANT ST<br> PITTSBURGH PA 15219-2502<br>|
| GOVERNMENT MONEY MARKET (R6) | 5.13% | &nbsp;&nbsp;&nbsp;&nbsp; EQUITY INCOME FUND<br> FBO PGI<br> ATTN MUTUAL FUND ACCOUNTING H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| HIGH INCOME (I) | 55.15% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL GLOBAL INVESTORS TRUST CO<br> PRINCIPAL LIFETIME HYBRID<br> COLLECTIVE INVESTMENT FUNDS<br> 1300 SW 5TH AVE STE 3300<br> PORTLAND OR 97201-5640<br>|
| HIGH INCOME (I) | 9.20% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| HIGH INCOME (I) | 7.88% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2030 FUND<br> ATTN MUTUAL FUND ACCOUNTING- H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| HIGH YIELD (A) | 14.94% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| HIGH YIELD (A) | 9.52% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| HIGH YIELD (A) | 5.32% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| HIGH YIELD (A) | 5.17% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY A/C FOR THE<br> BENIFIT OF CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 101 MONTGOMERY ST<br> SAN FRANCISCO CA 94104-4151<br>|
| HIGH YIELD (C) | 19.43% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| HIGH YIELD (C) | 19.12% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| HIGH YIELD (C) | 6.89% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| HIGH YIELD (C) | 6.89% | &nbsp;&nbsp;&nbsp;&nbsp; RAYMOND JAMES<br> OMNIBUS FOR MUTUAL FUNDS<br> HOUSE ACCT FIRM 92500015<br> ATTN: COURTNEY WALLER<br> 880 CARILLON PKWY<br> ST PETERSBURG FL 33716-1102<br>|
| HIGH YIELD (C) | 5.84% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> FBO SPECIAL CUSTODY ACCOUNTS<br> ATTN MUTUAL FUNDS<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1901<br>|
| HIGH YIELD (I) | 31.58% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| HIGH YIELD (I) | 14.16% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| HIGH YIELD (I) | 11.19% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| HIGH YIELD (I) | 6.42% | &nbsp;&nbsp;&nbsp;&nbsp; UBS WM USA<br> 0O0 11011 6100<br> OMNI ACCOUNT M/F<br> SPEC CDY A/C EBOC UBSFSI<br> 1000 HARBOR BLVD<br> WEEHAWKEN NJ 07086-6761<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| HIGH YIELD (I) | 5.10% | &nbsp;&nbsp;&nbsp;&nbsp; LPL FINANCIAL<br> OMNIBUS CUSTOMER ACCOUNT<br> ATTN MUTUAL FUND TRADING<br> 4707 EXECUTIVE DR<br> SAN DIEGO CA 92121-3091<br>|
| HIGH YIELD (R6) | 18.50% | &nbsp;&nbsp;&nbsp;&nbsp; SAM BALANCED PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING - H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| HIGH YIELD (R6) | 18.27% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| HIGH YIELD (R6) | 13.83% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO BANK NA<br> PO BOX 1533<br> MINNEAPOLIS MN 55480-1533<br>|
| HIGH YIELD (R6) | 7.83% | &nbsp;&nbsp;&nbsp;&nbsp; SAM CONS BALANCED PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| HIGH YIELD (R6) | 6.53% | &nbsp;&nbsp;&nbsp;&nbsp; SAM FLEXIBLE INCOME PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| HIGH YIELD (R6) | 5.18% | &nbsp;&nbsp;&nbsp;&nbsp; SAM CONS GROWTH PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| INFLATION PROTECTION (I) | 39.03% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL GLOBAL INVESTORS TRUST CO<br> PRINCIPAL LIFETIME HYBRID<br> COLLECTIVE INVESTMENT FUNDS<br> 1300 SW 5TH AVE STE 3300<br> PORTLAND OR 97201-5640<br>|
| INFLATION PROTECTION (I) | 11.89% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| INFLATION PROTECTION (I) | 9.62% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2020 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| INFLATION PROTECTION (I) | 7.72% | &nbsp;&nbsp;&nbsp;&nbsp; SAM FLEXIBLE INCOME PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| INFLATION PROTECTION (R1) | 99.84% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| INFLATION PROTECTION (R3) | 39.83% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| INFLATION PROTECTION (R3) | 21.80% | &nbsp;&nbsp;&nbsp;&nbsp; DSL CONSTRUCTION CORP<br> FBO EXEC NQ EXCESS OF DSL<br> CONSTRUCTION<br> ATTN PLAN TRUSTEE<br> 11300 W OLYMPIC BLVD STE 770<br> LOS ANGELES CA 90064-1644<br>|
| INFLATION PROTECTION (R3) | 14.37% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> ATTN PLAN TRUSTEE<br> FBO PRCD HOLDINGS LLC NQ DEF COMP<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| INFLATION PROTECTION (R3) | 5.57% | &nbsp;&nbsp;&nbsp;&nbsp; GREEN RIVER RENTALS<br> FBO EXEC NQ EXCESS OF GREEN RIVER<br> ATTN PLAN TRUSTEE<br> RENTALS<br> 5720 NASHVILLE ROAD<br> BOWLING GREEN KY 42101-7546<br>|
| INFLATION PROTECTION (R3) | 5.28% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO DUPAGE INTERNAL MEDICINE LLC<br> 228 OXFORD AVE<br> CLARENDON HLS IL 60514-2807<br>|
| INFLATION PROTECTION (R4) | 93.07% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| INFLATION PROTECTION (R5) | 89.82% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| INFLATION PROTECTION (R5) | 6.13% | &nbsp;&nbsp;&nbsp;&nbsp; COMANCHE COUNTY HOSPITAL AUTHORITY<br> FBO COMANCHE COUNTY HOSPITAL<br> AUTHORITY EMPLOYEE EXCESS PLAN<br> ATTN DONNA WADE<br> 3401 W GORE BLVD<br> LAWTON OK 73505-6300<br>|
| INTERNATIONAL I (I) | 71.59% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| INTERNATIONAL I (I) | 12.04% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|
| INTERNATIONAL I (I) | 6.08% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY A/C FOR THE<br> BENIFIT OF CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 101 MONTGOMERY ST<br> SAN FRANCISCO CA 94104-4151<br>|
| INTERNATIONAL I (R1) | 100.00% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| INTERNATIONAL I (R3) | 90.84% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| INTERNATIONAL I (R4) | 92.55% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| INTERNATIONAL I (R4) | 5.90% | &nbsp;&nbsp;&nbsp;&nbsp; INTL UNION AGAINST TB & LUNG DIS<br> FBO INTL UNION AGAINST TB&LD VITAL<br> ATTN PLAN TRUSTEE<br> STRATEGIES 457B<br> 61 BROADWAY STE 1010<br> NEW YORK NY 10006-2738<br>|
| INTERNATIONAL I (R5) | 97.94% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| INTERNATIONAL I (R6) | 78.09% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| INTERNATIONAL I (R6) | 9.18% | &nbsp;&nbsp;&nbsp;&nbsp; C/O BANKERS TRUST<br> 1 FREEDOM VALLEY DR<br> OAKS PA 19456-9989<br>|
| LARGECAP GROWTH I (A) | 13.94% | &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;J. P. MORGAN SECURITIES LLC<br> FBO EXCLUSIVE BENEFIT OF OUR CUST<br> 4 CHASE METROTECH CTR<br> BROOKLYN NY 11245-0003<br>|
| LARGECAP GROWTH I (A) | 8.27% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| LARGECAP GROWTH I (I) | 78.47% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| LARGECAP GROWTH I (I) | 8.58% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| LARGECAP GROWTH I (R1) | 95.34% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| LARGECAP GROWTH I (R3) | 72.22% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| LARGECAP GROWTH I (R4) | 50.62% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| LARGECAP GROWTH I (R4) | 22.37% | &nbsp;&nbsp;&nbsp;&nbsp; EMPOWER TRUST FBO<br> EMPLOYEE BENEFITS CLIENTS 401K<br> 8515 E ORCHARD RD 2T2<br> GREENWOOD VILLAGE CO 80111-5002<br>|
| LARGECAP GROWTH I (R4) | 5.85% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> FBO CHARLES SCHWAB & CO INC<br> ATTN MUTUAL FUNDS<br> 101 MONTGOMERY ST<br> SAN FRANCISCO CA 94104-4151<br>|
| LARGECAP GROWTH I (R5) | 78.45% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| LARGECAP GROWTH I (R5) | 5.90% | &nbsp;&nbsp;&nbsp;&nbsp; RELIANCE TRUST CO TTEE<br> FBO ADP ACCESS LARGE MARKET<br> 401(K) PLAN<br> 201 17TH ST NW STE 1000<br> ATLANTA GA 30363-1195<br>|
| LARGECAP GROWTH I (R6) | 59.63% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| LARGECAP GROWTH I (R6) | 5.95% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| LARGECAP GROWTH I (R6) | 5.23% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2040 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| LARGECAP S&P 500 INDEX (A) | 18.08% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| LARGECAP S&P 500 INDEX (A) | 6.71% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| LARGECAP S&P 500 INDEX (C) | 17.55% | &nbsp;&nbsp;&nbsp;&nbsp; LPL FINANCIAL<br> OMNIBUS CUSTOMER ACCOUNT<br> ATTN MUTUAL FUND TRADING<br> 4707 EXECUTIVE DR<br> SAN DIEGO CA 92121-3091<br>|
| LARGECAP S&P 500 INDEX (C) | 14.38% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| LARGECAP S&P 500 INDEX (C) | 10.46% | &nbsp;&nbsp;&nbsp;&nbsp; STIFEL NICOLAUS & CO INC<br> EXCLUSIVE BENEFIT OF CUSTOMERS<br> 501 N BROADWAY<br> SAINT LOUIS MO 63102-2188<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| LARGECAP S&P 500 INDEX (C) | 10.39% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| LARGECAP S&P 500 INDEX (C) | 5.38% | &nbsp;&nbsp;&nbsp;&nbsp; RAYMOND JAMES<br> OMNIBUS FOR MUTUAL FUNDS<br> HOUSE ACCT FIRM 92500015<br> ATTN: COURTNEY WALLER<br> 880 CARILLON PKWY<br> ST PETERSBURG FL 33716-1100<br>|
| LARGECAP S&P 500 INDEX (I) | 9.93% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| LARGECAP S&P 500 INDEX (I) | 9.12% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2040 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| LARGECAP S&P 500 INDEX (I) | 8.68% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2030 FUND<br> ATTN MUTUAL FUND ACCOUNTING- H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| LARGECAP S&P 500 INDEX (I) | 7.01% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2050 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| LARGECAP S&P 500 INDEX (R1) | 71.53% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| LARGECAP S&P 500 INDEX (R3) | 61.59% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| LARGECAP S&P 500 INDEX (R4) | 47.54% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| LARGECAP S&P 500 INDEX (R4) | 5.44% | &nbsp;&nbsp;&nbsp;&nbsp; STATE STREET BANK AND TRUST COMPANY<br> TRUSTEE AND/OR CUSTODIAN<br> FBO ADP ACCESS PRODUCT<br> 1 LINCOLN ST<br> BOSTON MA 02111-2901<br>|
| LARGECAP S&P 500 INDEX (R4) | 5.18% | &nbsp;&nbsp;&nbsp;&nbsp; NOMURA HOLDING AMERICA INC<br> ATTN PLAN TRUSTEE<br> FBO NOMURA SUPP RET SAVINGS<br> 309 W 49TH ST<br> NEW YORK NY 10019-9102<br>|
| LARGECAP S&P 500 INDEX (R5) | 71.91% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| LARGECAP VALUE III (I) | 13.44% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2040 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| LARGECAP VALUE III (I) | 12.80% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2030 FUND<br> ATTN MUTUAL FUND ACCOUNTING- H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| LARGECAP VALUE III (I) | 11.62% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| LARGECAP VALUE III (I) | 10.34% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2050 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| LARGECAP VALUE III (I) | 7.46% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| LARGECAP VALUE III (R1) | 91.82% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| LARGECAP VALUE III (R1) | 6.91% | &nbsp;&nbsp;&nbsp;&nbsp; RELIANCE TRUST CO TTEE<br> FBO ADP ACCESS LARGE MARKET<br> 401(K) PLAN<br> 201 17TH ST NW STE 1000<br> ATLANTA GA 30363-1195<br>|
| LARGECAP VALUE III (R3) | 80.64% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| LARGECAP VALUE III (R4) | 69.49% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| LARGECAP VALUE III (R4) | 13.31% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO CRST INTL NQ PLAN<br> ATTN SUSAN SAGGIONE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| LARGECAP VALUE III (R4) | 7.02% | &nbsp;&nbsp;&nbsp;&nbsp; NEW LONDON HOSPITAL ASSOC INC<br> FBO NEW LONDON HOSP ASSOC INC 457B<br> ATTN TINA NAIMIE<br> 273 COUNTY RD<br> NEW LONDON NH 03257-7700<br>|
| LARGECAP VALUE III (R5) | 55.56% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| LARGECAP VALUE III (R5) | 15.70% | &nbsp;&nbsp;&nbsp;&nbsp; DELAWARE CHARTER GUAR & TRUST CO<br> FBO PRINCIPAL TRUST COMPANY<br> VEBA TRUST IBEW HEALTH SAVING PLAN<br> SOUTHWEST SCHOOL CORPORATION<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| LARGECAP VALUE III (R5) | 8.65% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO NIPPON LIFE INS CO EXEC NQ<br> ATTN SUSAN SAGGIONE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| LARGECAP VALUE III (R5) | 6.66% | &nbsp;&nbsp;&nbsp;&nbsp; APPALACHIAN REGIONAL HEALTHCARE<br> SYSTEM<br> FBO EXECUTIVE 457B OF ARHS INC<br> ATTN AMY CRABBE<br> PO BOX 2600<br> BOONE NC 28607-2600<br>|
| MIDCAP (A) | 13.22% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| MIDCAP (A) | 5.13% | &nbsp;&nbsp;&nbsp;&nbsp; MLPF&S FOR THE SOLE<br> BENEFIT OF ITS CUSTOMERS<br> ATTN FUND ADMINISTRATION<br> 4800 DEER LAKE DR E FL 3<br> JACKSONVILLE FL 32246-6484<br>|
| MIDCAP (C) | 30.13% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| MIDCAP (C) | 20.10% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> FBO SPECIAL CUSTODY ACCOUNTS<br> ATTN MUTUAL FUNDS<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1901<br>|
| MIDCAP (C) | 8.38% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| MIDCAP (C) | 8.13% | &nbsp;&nbsp;&nbsp;&nbsp; STIFEL NICOLAUS & CO INC<br> EXCLUSIVE BENEFIT OF CUSTOMERS<br> 501 N BROADWAY<br> SAINT LOUIS MO 63102-2188<br>|
| MIDCAP (I) | 15.27% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| MIDCAP (I) | 12.10% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|
| MIDCAP (I) | 10.59% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY A/C FBO CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 211 MAIN STREET<br> SAN FRANCISCO CA 94105-1901<br>|
| MIDCAP (I) | 8.92% | &nbsp;&nbsp;&nbsp;&nbsp; RAYMOND JAMES<br> OMNIBUS FOR MUTUAL FUNDS<br> HOUSE ACCT FIRM 92500015<br> ATTN: COURTNEY WALLER<br> 880 CARILLON PKWY<br> ST PETERSBURG FL 33716-1102<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| MIDCAP (I) | 8.92% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| MIDCAP (I) | 7.07% | &nbsp;&nbsp;&nbsp;&nbsp; MLPF&S FOR THE SOLE<br> BENEFIT OF ITS CUSTOMERS<br> ATTN FUND ADMINISTRATION<br> 4800 DEER LAKE DR E FL 3<br> JACKSONVILLE FL 32246-6484<br>|
| MIDCAP (I) | 5.35% | &nbsp;&nbsp;&nbsp;&nbsp; UBS WM USA<br> 0O0 11011 6100<br> OMNI ACCOUNT M/F<br> SPEC CDY A/C EBOC UBSFSI<br> 1000 HARBOR BLVD<br> WEEHAWKEN NJ 07086-6761<br>|
| MIDCAP (I) | 5.12% | &nbsp;&nbsp;&nbsp;&nbsp; AMERICAN ENTERPRISE INVESTMENT SVC<br> FBO #41999970<br> 707 2ND AVE S<br> MINNEAPOLIS MN 55402-2405<br>|
| MIDCAP (R1) | 95.94% | &nbsp;&nbsp;&nbsp;&nbsp; VOYA INSTITUTIONAL TRUST COMPANY<br> 1 ORANGE WAY<br> WINDSOR CT 06095-4773<br>|
| MIDCAP (R3) | 42.35% | &nbsp;&nbsp;&nbsp;&nbsp; STATE STREET BANK AND TRUST COMPANY<br> TRUSTEE AND/OR CUSTODIAN<br> FBO ADP ACCESS PRODUCT<br> 1 LINCOLN ST<br> BOSTON MA 02111-2901<br>|
| MIDCAP (R3) | 16.19% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP (R4) | 28.27% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY A/C FBO CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 101 MONTGOMERY ST<br> SAN FRANCISCO CA 94104-4151<br>|
| MIDCAP (R4) | 19.29% | &nbsp;&nbsp;&nbsp;&nbsp; LINCOLN RETIREMENT SERVICES CO<br> FBO UT SYSTEM ORP<br> PO BOX 7876<br> FORT WAYNE IN 46801-7876<br>|
| MIDCAP (R4) | 17.02% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP (R4) | 7.75% | &nbsp;&nbsp;&nbsp;&nbsp; LINCOLN RETIREMENT SERVICES CO<br> FBO UT SYSTEM TSA<br> PO BOX 7876<br> FORT WAYNE IN 46801-7876<br>|
| MIDCAP (R4) | 6.52% | &nbsp;&nbsp;&nbsp;&nbsp; JOHN HANCOCK TRUST COMPANY LLC<br> 690 CANTON ST STE 100<br> WESTWOOD MA 02090-2324<br>|
| MIDCAP (R5) | 25.21% | &nbsp;&nbsp;&nbsp;&nbsp; MID ATLANTIC TRUST COMPANY FBO<br> MATC OMNIBUS DIV REINVEST<br> 1251 WATERFRONT PL STE 525<br> PITTSBURGH PA 15222-4228<br>|
| MIDCAP (R5) | 17.44% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY A/C FBO CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 101 MONTGOMERY ST<br> SAN FRANCISCO CA 94104-4151<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| MIDCAP (R5) | 16.79% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP (R5) | 6.60% | &nbsp;&nbsp;&nbsp;&nbsp; TIAA, FSB CUST/TTEE FBO:<br> RETIREMENT PLANS FOR WHICH<br> TIAA ACTS AS RECORDKEEPER<br> ATTN: TRUST OPERATIONS<br> 211 N BROADWAY STE 1000<br> SAINT LOUIS MO 63102-2748<br>|
| MIDCAP (R6) | 37.78% | &nbsp;&nbsp;&nbsp;&nbsp; EDWARD D JONES & CO<br> FOR THE BENEFIT OF CUSTOMERS<br> 12555 MANCHESTER RD<br> SAINT LOUIS MO 63131-3710<br>|
| MIDCAP (R6) | 13.49% | &nbsp;&nbsp;&nbsp;&nbsp; MLPF&S FOR THE SOLE<br> BENEFIT OF ITS CUSTOMERS<br> ATTN FUND ADMINISTRATION<br> 4800 DEER LAKE DR E FL 2<br> JACKSONVILLE FL 32246-6484<br>|
| MIDCAP (R6) | 8.11% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO BANK NA<br> FBO OMNIBUS CASH CASH<br> XXXX0<br> PO BOX 1533<br> MINNEAPOLIS MN 55480-1533<br>|
| MIDCAP (R6) | 5.07% | &nbsp;&nbsp;&nbsp;&nbsp; SAXON & CO<br> FBO 40400904099990<br> PO BOX 94597<br> CLEVELAND OH 44101-4597<br>|
| MIDCAP GROWTH (I) | 25.66% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| MIDCAP GROWTH (I) | 13.90% | &nbsp;&nbsp;&nbsp;&nbsp; LPL FINANCIAL<br> OMNIBUS CUSTOMER ACCOUNT<br> ATTN MUTUAL FUND TRADING<br> 4707 EXECUTIVE DR<br> SAN DIEGO CA 92121-3091<br>|
| MIDCAP GROWTH (I) | 11.55% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP GROWTH (I) | 7.15% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONWIDE TRUST COMPANY FSB<br> C/O IPO PORTFOLIO ACCOUNTING<br> PO BOX 182029<br> COLUMBUS OH 43218-2029<br>|
| MIDCAP GROWTH (R1) | 81.74% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP GROWTH (R1) | 8.42% | &nbsp;&nbsp;&nbsp;&nbsp; MID ATLANTIC TRUST COMPANY FBO<br> BRAINLINK INTERNATIONAL INC 401(K)<br> 1251 WATERFRONT PLACE SUITE 525<br> PITTSBURGH PA 15222-4228<br>|
| MIDCAP GROWTH (R3) | 33.77% | &nbsp;&nbsp;&nbsp;&nbsp; SAMMONS RETIREMENT SOLUTIONS<br> 8300 MILLS CIVIC PKWY<br> WDM IA 50266-3833<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| MIDCAP GROWTH (R3) | 16.50% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP GROWTH (R3) | 8.81% | &nbsp;&nbsp;&nbsp;&nbsp; PIMS/PRUDENTIAL RETIREMENT<br> AS NOMINEE FOR THE TTEE/CUST PL 900<br> DEFINED CONTRIBUTION PENSION<br> 23 MAIN STREET SUITE D1<br> HOLMDEL NJ 07733-2136<br>|
| MIDCAP GROWTH (R3) | 7.54% | &nbsp;&nbsp;&nbsp;&nbsp; PIMS/PRUDENTIAL RETIREMENT<br> AS NOMINEE FOR THE TTEE/CUST PL 900<br> TAX DEFERRED ANNUITY PLAN OF<br> 23 MAIN STREET SUITE D1<br> HOLMDEL NJ 07733-2136<br>|
| MIDCAP GROWTH (R3) | 5.78% | &nbsp;&nbsp;&nbsp;&nbsp; FIIOC<br> FBO<br> DEFOE CORP 401K EMPLOYEE SAVINGS<br> PLAN<br> 100 MAGELLAN WAY (KW1C)<br> COVINGTON KY 41015-1987<br>|
| MIDCAP GROWTH (R4) | 76.55% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP GROWTH (R4) | 9.02% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO FIRST COUNTY BANK NQ DEF COMP<br> AND SERP<br> ATTN PLAN TRUSTEE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| MIDCAP GROWTH (R5) | 61.10% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP GROWTH (R5) | 14.10% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO GRIMMWAY FARMS EXEC DEFERRED<br> ATTN PLAN TRUSTEE<br> COMP<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| MIDCAP GROWTH (R5) | 5.30% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO NQ DB OF AAA ARIZONA<br> ATTN SUSAN SAGGIONE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| MIDCAP GROWTH (R5) | 5.26% | &nbsp;&nbsp;&nbsp;&nbsp; MID ATLANTIC TRUST COMPANY FBO<br> MATC OMNIBUS DIV REINVEST<br> 1251 WATERFRONT PL STE 525<br> PITTSBURGH PA 15222-4228<br>|
| MIDCAP GROWTH III (I) | 37.41% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| MIDCAP GROWTH III (I) | 13.15% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2030 FUND<br> ATTN MUTUAL FUND ACCOUNTING- H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| MIDCAP GROWTH III (I) | 12.60% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2040 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP GROWTH III (I) | 9.78% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2050 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP GROWTH III (R1) | 86.63% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP GROWTH III (R1) | 8.56% | &nbsp;&nbsp;&nbsp;&nbsp; RELIANCE TRUST CO TTEE<br> FBO ADP ACCESS LARGE MARKET<br> 401(K) PLAN<br> 201 17TH ST NW STE 1000<br> ATLANTA GA 30363-1195<br>|
| MIDCAP GROWTH III (R3) | 63.76% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP GROWTH III (R3) | 16.89% | &nbsp;&nbsp;&nbsp;&nbsp; COUNSEL TRUST DBA MATC FBO<br> INTEGRATED LINER TECHNOLOGIES<br> 401 K PROFIT SHARING PLAN & TRUST<br> 1251 WATERFRONT PL STE 525<br> PITTSBURGH PA 15222-4228<br>|
| MIDCAP GROWTH III (R4) | 82.57% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP GROWTH III (R4) | 6.01% | &nbsp;&nbsp;&nbsp;&nbsp; CROSS SALES & ENGINEERING<br> FBO EXEC EXCESS OF CROSS SALES &<br> ENG<br> ATTN JERRY BOHNSACK<br> PO BOX 18508<br> GREENSBORO NC 27419-8508<br>|
| MIDCAP GROWTH III (R4) | 5.81% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO EXEC 457B OF AMERICAN SOCIETY<br> ATTN SUSAN SAGGIONE<br> OF SAFETY ENGINEERS<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| MIDCAP GROWTH III (R5) | 82.33% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP GROWTH III (R5) | 8.97% | &nbsp;&nbsp;&nbsp;&nbsp; CAMPUS USA CREDIT UNION<br> FBO 457F OF CAMPUS CREDIT UNION<br> ATTN JILL HARPER<br> PO BOX 147029<br> GAINESVILLE FL 32614-7029<br>|
| MIDCAP S&P 400 INDEX (I) | 12.21% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| MIDCAP S&P 400 INDEX (I) | 11.31% | &nbsp;&nbsp;&nbsp;&nbsp; LPL FINANCIAL<br> OMNIBUS CUSTOMER ACCOUNT<br> ATTN MUTUAL FUND TRADING<br> 4707 EXECUTIVE DR<br> SAN DIEGO CA 92121-3091<br>|
| MIDCAP S&P 400 INDEX (I) | 8.86% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| MIDCAP S&P 400 INDEX (I) | 7.66% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY A/C FBO CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 211 MAIN STREET<br> SAN FRANCISCO CA 94105-1901<br>|
| MIDCAP S&P 400 INDEX (I) | 7.39% | &nbsp;&nbsp;&nbsp;&nbsp; STATE STREET BANK AND TRUST COMPANY<br> TRUSTEE AND/OR CUSTODIAN<br> FBO ADP ACCESS PRODUCT<br> 1 LINCOLN ST<br> BOSTON MA 02111-2901<br>|
| MIDCAP S&P 400 INDEX (I) | 5.16% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| MIDCAP S&P 400 INDEX (R1) | 52.79% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP S&P 400 INDEX (R1) | 7.22% | &nbsp;&nbsp;&nbsp;&nbsp; ASCENSUS TRUST COMPANY FBO<br> GXM CONSULTING 401K PLAN<br> 213950<br> PO BOX 10758<br> FARGO ND 58106-0758<br>|
| MIDCAP S&P 400 INDEX (R3) | 41.20% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP S&P 400 INDEX (R4) | 39.51% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP S&P 400 INDEX (R4) | 21.17% | &nbsp;&nbsp;&nbsp;&nbsp; VOYA INSTITUTIONAL TRUST COMPANY<br> 1 ORANGE WAY<br> WINDSOR CT 06095-4773<br>|
| MIDCAP S&P 400 INDEX (R5) | 54.95% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP S&P 400 INDEX (R6) | 20.40% | &nbsp;&nbsp;&nbsp;&nbsp; DIVERSIFIED GROWTH ACCOUNT<br> ATTN MUTUAL FUND ACCOUNTING H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP S&P 400 INDEX (R6) | 13.18% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| MIDCAP S&P 400 INDEX (R6) | 8.11% | &nbsp;&nbsp;&nbsp;&nbsp; DIVERSIFIED GROWTH VOLATILITY<br> CONTROL ACCOUNT<br> ATTN MUTUAL FUND ACCOUNTING H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP S&P 400 INDEX (R6) | 6.42% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME HYBRID 2040 FUND<br> ATTN MUTUAL FUND ACCOUNTING H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP S&P 400 INDEX (R6) | 6.30% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME HYBRID 2030 FUND<br> ATTN MUTUAL FUND ACCOUNTING H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP S&P 400 INDEX (R6) | 5.60% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME HYBRID 2035 FUND<br> ATTN MUTUAL FUND ACCOUNTING H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP S&P 400 INDEX (R6) | 5.36% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME HYBRID 2025 FUND<br> ATTN MUTUAL FUND ACCOUNTING H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP VALUE I (A) | 23.61% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| MIDCAP VALUE I (I) | 76.43% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| MIDCAP VALUE I (I) | 7.93% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| MIDCAP VALUE I (R1) | 92.30% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP VALUE I (R3) | 71.61% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP VALUE I (R4) | 66.40% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP VALUE I (R4) | 9.97% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY ACCT<br> FBO CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 101 MONTGOMERY ST<br> SAN FRANCISCO CA 94104-4151<br>|
| MIDCAP VALUE I (R4) | 5.65% | &nbsp;&nbsp;&nbsp;&nbsp; VRSCO<br> FBO AIGFSB CUST TTEE FBO<br> SLIDELL MEMORIAL 457 DEF COMP PLAN<br> 2727-A ALLEN PARKWAY 4-D1<br> HOUSTON TX 77019-2107<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| MIDCAP VALUE I (R5) | 61.64% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP VALUE I (R5) | 5.24% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY ACCT<br> FBO CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 101 MONTGOMERY ST<br> SAN FRANCISCO CA 94104-4151<br>|
| MIDCAP VALUE I (R6) | 53.42% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| MIDCAP VALUE I (R6) | 9.42% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2040 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP VALUE I (R6) | 8.99% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2030 FUND<br> ATTN MUTUAL FUND ACCOUNTING- H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| MIDCAP VALUE I (R6) | 7.31% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2050 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| OVERSEAS (I) | 17.66% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| OVERSEAS (I) | 11.94% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2040 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| OVERSEAS (I) | 11.38% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2030 FUND<br> ATTN MUTUAL FUND ACCOUNTING- H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| OVERSEAS (I) | 10.52% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| OVERSEAS (I) | 9.22% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2050 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| OVERSEAS (R3) | 75.29% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO DUPAGE INTERNAL MEDICINE LLC<br> 228 OXFORD AVE<br> CLARENDON HLS IL 60514-2807<br>|
| OVERSEAS (R3) | 19.37% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| OVERSEAS (R4) | 99.39% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL CAPITAL APPRECIATION (A) | 34.48% | &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;J. P. MORGAN SECURITIES LLC<br> FBO EXCLUSIVE BENEFIT OF OUR CUST<br> 4 CHASE METROTECH CTR<br> BROOKLYN NY 11245-0003<br>|
| PRINCIPAL CAPITAL APPRECIATION (A) | 7.76% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| PRINCIPAL CAPITAL APPRECIATION (C) | 16.93% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| PRINCIPAL CAPITAL APPRECIATION (C) | 8.39% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| PRINCIPAL CAPITAL APPRECIATION (C) | 5.73% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| PRINCIPAL CAPITAL APPRECIATION (I) | 23.58% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL CAPITAL APPRECIATION (I) | 16.11% | &nbsp;&nbsp;&nbsp;&nbsp; SAM BALANCED PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING - H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL CAPITAL APPRECIATION (I) | 14.96% | &nbsp;&nbsp;&nbsp;&nbsp; SAM CONS GROWTH PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL CAPITAL APPRECIATION (I) | 11.95% | &nbsp;&nbsp;&nbsp;&nbsp; SAM STRATEGIC GROWTH PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL CAPITAL APPRECIATION (I) | 7.33% | &nbsp;&nbsp;&nbsp;&nbsp; AMERICAN ENTERPRISE INVESTMENT SVC<br> FBO #41999970<br> 707 2ND AVE S<br> MINNEAPOLIS MN 55402-2405<br>|
| PRINCIPAL CAPITAL APPRECIATION (R1) | 87.52% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL CAPITAL APPRECIATION (R1) | 9.41% | &nbsp;&nbsp;&nbsp;&nbsp; LAKEWOOD RESOURCE & REFERRAL CENTER<br> FBO 457B OF LAKEWOOD RESOURCE &<br> REFERRAL<br> ATTN MIRIAM MILSTEIN<br> 1771 MADISON AVE<br> LAKEWOOD NJ 08701-1242<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| PRINCIPAL CAPITAL APPRECIATION (R3) | 49.80% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL CAPITAL APPRECIATION (R3) | 41.78% | &nbsp;&nbsp;&nbsp;&nbsp; SAMMONS RETIREMENT SOLUTIONS<br> 8300 MILLS CIVIC PKWY<br> WDM IA 50266-3833<br>|
| PRINCIPAL CAPITAL APPRECIATION (R4) | 89.51% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL CAPITAL APPRECIATION (R5) | 86.99% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME STRATEGIC INC (A) | 18.44% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| PRINCIPAL LIFETIME STRATEGIC INC (I) | 89.57% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME STRATEGIC INC (I) | 6.49% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME STRATEGIC INC <br> (R1)<br>| 99.43% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME STRATEGIC INC <br> (R3)<br>| 87.79% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME STRATEGIC INC <br> (R4)<br>| 65.97% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME STRATEGIC INC <br> (R4)<br>| 12.98% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO CRST INTL NQ PLAN<br> ATTN SUSAN SAGGIONE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| PRINCIPAL LIFETIME STRATEGIC INC <br> (R5)<br>| 67.25% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME STRATEGIC INC <br> (R5)<br>| 9.48% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO EXEC 457B OF SANFORD HEALTH<br> ATTN SUSAN SAGGIONE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| PRINCIPAL LIFETIME STRATEGIC INC <br> (R5)<br>| 8.73% | &nbsp;&nbsp;&nbsp;&nbsp; BANKERS TRUST COMPANY<br> FBO EXEC DEF PLAN OF ALION SCIENCE<br> & TECH<br> ATTN DEBBIE WILLIAMS<br> 453 7TH ST<br> DES MOINES IA 50309-4110<br>|
| PRINCIPAL LIFETIME 2010 (A) | 21.83% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| PRINCIPAL LIFETIME 2010 (A) | 5.53% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INSURANCE CO CUST<br> IRA WILLIAM J HENNESSEY<br> 1 FOREST HILLS BLVD<br> RENSSELAER NY 12144-5831<br>|
| PRINCIPAL LIFETIME 2010 (A) | 5.07% | &nbsp;&nbsp;&nbsp;&nbsp; MICHAEL E VER STEEG &<br> WILLIAM R VER STEEG TTEES<br> EUGENE D AND BEVERLY C VER STEEG<br> LEGACY TRUST UA DTD 12/31/2012<br> 1819 250TH ST<br> INWOOD IA 51240-7726<br>|
| PRINCIPAL LIFETIME 2010 (I) | 86.78% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2010 (I) | 9.87% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2010 (R1) | 99.94% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2010 (R3) | 91.26% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2010 (R4) | 57.56% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| PRINCIPAL LIFETIME 2010 (R4) | 29.23% | &nbsp;&nbsp;&nbsp;&nbsp; RANGER PIPELINES INCORPORATED<br> FBO RANGER PIPELINES INC NQ EXCESS<br> PLAN<br> ATTN PLAN TRUSTEE<br> 1790 YOSEMITE AVE<br> SAN FRANCISCO CA 94124-2622<br>|
| PRINCIPAL LIFETIME 2010 (R5) | 83.04% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2010 (R5) | 7.62% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO EXEC 457B OF SANFORD HEALTH<br> ATTN SUSAN SAGGIONE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| PRINCIPAL LIFETIME 2015 (I) | 87.16% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2015 (I) | 11.43% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2015 (R1) | 98.31% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2015 (R3) | 98.33% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2015 (R4) | 97.55% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2015 (R5) | 91.40% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2015 (R5) | 5.57% | &nbsp;&nbsp;&nbsp;&nbsp; MAPS CREDIT UNION<br> ATTN BARBARA CECIL<br> FBO 457B DEF COMP OF MAPS CU<br> 1900 HINES STREET NW PO BOX 12398<br> SALEM OR 97309-0398<br>|
| PRINCIPAL LIFETIME 2020 (A) | 16.74% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| PRINCIPAL LIFETIME 2020 (I) | 86.86% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2020 (I) | 10.36% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2020 (R1) | 96.68% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2020 (R3) | 90.43% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2020 (R4) | 91.86% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2020 (R5) | 84.40% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2020 (R5) | 6.68% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO EXEC 457B OF SANFORD HEALTH<br> ATTN SUSAN SAGGIONE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| PRINCIPAL LIFETIME 2025 (I) | 86.20% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2025 (I) | 12.46% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2025 (R1) | 96.16% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2025 (R3) | 93.31% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| PRINCIPAL LIFETIME 2025 (R4) | 83.71% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2025 (R5) | 91.35% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2030 (A) | 15.55% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| PRINCIPAL LIFETIME 2030 (I) | 88.11% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2030 (I) | 9.10% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2030 (R1) | 93.21% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2030 (R3) | 90.79% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2030 (R4) | 78.83% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2030 (R5) | 85.14% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2030 (R5) | 5.49% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO EXEC 457B OF SANFORD HEALTH<br> ATTN SUSAN SAGGIONE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| PRINCIPAL LIFETIME 2035 (I) | 85.86% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| PRINCIPAL LIFETIME 2035 (I) | 12.16% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2035 (R1) | 99.99% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2035 (R3) | 96.94% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2035 (R4) | 83.94% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2035 (R5) | 91.56% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2040 (A) | 12.76% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| PRINCIPAL LIFETIME 2040 (I) | 87.45% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2040 (I) | 9.82% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2040 (R1) | 92.12% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2040 (R1) | 5.97% | &nbsp;&nbsp;&nbsp;&nbsp; RELIANCE TRUST CO TTEE<br> FBO ADP ACCESS LARGE MARKET<br> 401(K) PLAN<br> 201 17TH ST NW STE 1000<br> ATLANTA GA 30363-1195<br>|
| PRINCIPAL LIFETIME 2040 (R3) | 94.23% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| PRINCIPAL LIFETIME 2040 (R4) | 89.08% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2040 (R5) | 86.31% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2040 (R5) | 8.06% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO EXEC 457B OF SANFORD HEALTH<br> ATTN SUSAN SAGGIONE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| PRINCIPAL LIFETIME 2045 (I) | 82.33% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2045 (I) | 15.83% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2045 (R1) | 98.38% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2045 (R3) | 98.65% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2045 (R4) | 93.27% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2045 (R5) | 95.73% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2050 (A) | 14.41% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| PRINCIPAL LIFETIME 2050 (I) | 85.16% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| PRINCIPAL LIFETIME 2050 (I) | 12.24% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2050 (R1) | 94.18% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2050 (R1) | 5.53% | &nbsp;&nbsp;&nbsp;&nbsp; RELIANCE TRUST CO TTEE<br> FBO ADP ACCESS LARGE MARKET<br> 401(K) PLAN<br> 201 17TH ST NW STE 1000<br> ATLANTA GA 30363-1195<br>|
| PRINCIPAL LIFETIME 2050 (R3) | 97.93% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2050 (R4) | 92.15% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2050 (R5) | 89.39% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2050 (R5) | 5.58% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO EXEC 457B OF SANFORD HEALTH<br> ATTN SUSAN SAGGIONE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| PRINCIPAL LIFETIME 2055 (I) | 82.61% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2055 (I) | 14.68% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2055 (R1) | 96.21% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2055 (R3) | 98.80% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| PRINCIPAL LIFETIME 2055 (R4) | 97.77% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2055 (R5) | 94.00% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2060 (I) | 87.45% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2060 (I) | 9.87% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2060 (R1) | 93.60% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2060 (R1) | 6.39% | &nbsp;&nbsp;&nbsp;&nbsp; RELIANCE TRUST CO TTEE<br> FBO ADP ACCESS LARGE MARKET<br> 401(K) PLAN<br> 201 17TH ST NW STE 1000<br> ATLANTA GA 30363-1195<br>|
| PRINCIPAL LIFETIME 2060 (R3) | 97.88% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2060 (R4) | 95.36% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2060 (R5) | 91.19% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2065 (I) | 89.10% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2065 (I) | 9.05% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| PRINCIPAL LIFETIME 2065 (R1) | 100.00% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2065 (R3) | 93.46% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2065 (R4) | 83.84% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME 2065 (R4) | 13.38% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO ISS FACILITY SERVICES HLDNG INC<br> EX DC PLN<br> ATTN PLAN TRUSTEE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| PRINCIPAL LIFETIME 2065 (R5) | 95.67% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID INCOME <br> (I)<br>| 60.86% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID INCOME <br> (I)<br>| 18.84% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO FBL FINANCIAL GROUP DEF COMP<br> ATTN SUSAN SAGGIONE<br> PLAN<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| PRINCIPAL LIFETIME HYBRID INCOME <br> (I)<br>| 15.93% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| PRINCIPAL LIFETIME HYBRID INCOME <br> (R6)<br>| 82.51% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID INCOME <br> (R6)<br>| 6.55% | &nbsp;&nbsp;&nbsp;&nbsp; BANKERS TRUST COMPANY<br> FBO PRIN SELECT SVNG EXCESS PLAN<br> ATTN MARK HARRISON<br> FOR EES<br> 453 7TH ST PO BOX 897<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2015 (I) | 79.41% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| PRINCIPAL LIFETIME HYBRID 2015 (I) | 11.20% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| PRINCIPAL LIFETIME HYBRID 2015 (I) | 5.49% | &nbsp;&nbsp;&nbsp;&nbsp; MINNESOTA LIFE INSURANCE COMPANY<br> 400 ROBERT ST N STE A<br> SAINT PAUL MN 55101-2099<br>|
| PRINCIPAL LIFETIME HYBRID 2015 (R6) | 86.92% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2020 (I) | 57.94% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2020 (I) | 23.63% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| PRINCIPAL LIFETIME HYBRID 2020 (I) | 8.21% | &nbsp;&nbsp;&nbsp;&nbsp; MINNESOTA LIFE INSURANCE COMPANY<br> 400 ROBERT ST N STE A<br> SAINT PAUL MN 55101-2099<br>|
| PRINCIPAL LIFETIME HYBRID 2020 (R6) | 89.83% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2025 (I) | 60.61% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2025 (I) | 22.98% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| PRINCIPAL LIFETIME HYBRID 2025 (I) | 5.54% | &nbsp;&nbsp;&nbsp;&nbsp; FIIOC<br> FBO<br> BRADY TRANE SERVICE INC 401K PLAN<br> AND TRUST<br> 100 MAGELLAN WAY (KW1C)<br> COVINGTON KY 41015-1987<br>|
| PRINCIPAL LIFETIME HYBRID 2025 (R6) | 87.74% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2030 (I) | 55.90% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| PRINCIPAL LIFETIME HYBRID 2030 (I) | 23.11% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| PRINCIPAL LIFETIME HYBRID 2030 (I) | 9.61% | &nbsp;&nbsp;&nbsp;&nbsp; FIIOC<br> FBO<br> BRADY TRANE SERVICE INC 401K PLAN<br> AND TRUST<br> 100 MAGELLAN WAY (KW1C)<br> COVINGTON KY 41015-1987<br>|
| PRINCIPAL LIFETIME HYBRID 2030 (R6) | 83.08% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2030 (R6) | 7.22% | &nbsp;&nbsp;&nbsp;&nbsp; BANKERS TRUST COMPANY<br> FBO PRIN SELECT SVNG EXCESS PLAN<br> ATTN MARK HARRISON<br> FOR EES<br> 453 7TH ST PO BOX 897<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2030 (R6) | 5.34% | &nbsp;&nbsp;&nbsp;&nbsp; TIAA, FSB CUST/TTEE FBO:<br> RETIREMENT PLANS FOR WHICH<br> TIAA ACTS AS RECORDKEEPER<br> ATTN: TRUST OPERATIONS<br> 211 N BROADWAY STE 1000<br> SAINT LOUIS MO 63102-2748<br>|
| PRINCIPAL LIFETIME HYBRID 2035 (I) | 57.06% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2035 (I) | 23.99% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| PRINCIPAL LIFETIME HYBRID 2035 (I) | 7.65% | &nbsp;&nbsp;&nbsp;&nbsp; FIIOC<br> FBO<br> BRADY TRANE SERVICE INC 401K PLAN<br> AND TRUST<br> 100 MAGELLAN WAY (KW1C)<br> COVINGTON KY 41015-1987<br>|
| PRINCIPAL LIFETIME HYBRID 2035 (R6) | 82.73% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2035 (R6) | 8.22% | &nbsp;&nbsp;&nbsp;&nbsp; TIAA, FSB CUST/TTEE FBO:<br> RETIREMENT PLANS FOR WHICH<br> TIAA ACTS AS RECORDKEEPER<br> ATTN: TRUST OPERATIONS<br> 211 N BROADWAY STE 1000<br> SAINT LOUIS MO 63102-2748<br>|
| PRINCIPAL LIFETIME HYBRID 2040 (I) | 60.68% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| PRINCIPAL LIFETIME HYBRID 2040 (I) | 19.37% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| PRINCIPAL LIFETIME HYBRID 2040 (I) | 7.54% | &nbsp;&nbsp;&nbsp;&nbsp; MINNESOTA LIFE INSURANCE COMPANY<br> 400 ROBERT ST N STE A<br> SAINT PAUL MN 55101-2099<br>|
| PRINCIPAL LIFETIME HYBRID 2040 (I) | 5.76% | &nbsp;&nbsp;&nbsp;&nbsp; FIIOC<br> FBO<br> BRADY TRANE SERVICE INC 401K PLAN<br> AND TRUST<br> 100 MAGELLAN WAY (KW1C)<br> COVINGTON KY 41015-1987<br>|
| PRINCIPAL LIFETIME HYBRID 2040 (R6) | 83.63% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2040 (R6) | 8.64% | &nbsp;&nbsp;&nbsp;&nbsp; TIAA, FSB CUST/TTEE FBO:<br> RETIREMENT PLANS FOR WHICH<br> TIAA ACTS AS RECORDKEEPER<br> ATTN: TRUST OPERATIONS<br> 211 N BROADWAY STE 1000<br> SAINT LOUIS MO 63102-2748<br>|
| PRINCIPAL LIFETIME HYBRID 2045 (I) | 60.79% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2045 (I) | 23.14% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| PRINCIPAL LIFETIME HYBRID 2045 (I) | 8.28% | &nbsp;&nbsp;&nbsp;&nbsp; FIIOC<br> FBO<br> BRADY TRANE SERVICE INC 401K PLAN<br> AND TRUST<br> 100 MAGELLAN WAY (KW1C)<br> COVINGTON KY 41015-1987<br>|
| PRINCIPAL LIFETIME HYBRID 2045 (R6) | 86.92% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2045 (R6) | 8.97% | &nbsp;&nbsp;&nbsp;&nbsp; TIAA, FSB CUST/TTEE FBO:<br> RETIREMENT PLANS FOR WHICH<br> TIAA ACTS AS RECORDKEEPER<br> ATTN: TRUST OPERATIONS<br> 211 N BROADWAY STE 1000<br> SAINT LOUIS MO 63102-2748<br>|
| PRINCIPAL LIFETIME HYBRID 2050 (I) | 61.52% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| PRINCIPAL LIFETIME HYBRID 2050 (I) | 24.23% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| PRINCIPAL LIFETIME HYBRID 2050 (I) | 6.51% | &nbsp;&nbsp;&nbsp;&nbsp; MINNESOTA LIFE INSURANCE COMPANY<br> 400 ROBERT ST N STE A<br> SAINT PAUL MN 55101-2099<br>|
| PRINCIPAL LIFETIME HYBRID 2050 (I) | 5.05% | &nbsp;&nbsp;&nbsp;&nbsp; FIIOC<br> FBO<br> BRADY TRANE SERVICE INC 401K PLAN<br> AND TRUST<br> 100 MAGELLAN WAY (KW1C)<br> COVINGTON KY 41015-1987<br>|
| PRINCIPAL LIFETIME HYBRID 2050 (R6) | 90.92% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2050 (R6) | 5.14% | &nbsp;&nbsp;&nbsp;&nbsp; TIAA, FSB CUST/TTEE FBO:<br> RETIREMENT PLANS FOR WHICH<br> TIAA ACTS AS RECORDKEEPER<br> ATTN: TRUST OPERATIONS<br> 211 N BROADWAY STE 1000<br> SAINT LOUIS MO 63102-2748<br>|
| PRINCIPAL LIFETIME HYBRID 2055 (I) | 60.46% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2055 (I) | 26.61% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| PRINCIPAL LIFETIME HYBRID 2055 (I) | 5.57% | &nbsp;&nbsp;&nbsp;&nbsp; MINNESOTA LIFE INSURANCE COMPANY<br> 400 ROBERT ST N STE A<br> SAINT PAUL MN 55101-2099<br>|
| PRINCIPAL LIFETIME HYBRID 2055 (I) | 5.57% | &nbsp;&nbsp;&nbsp;&nbsp; FIIOC<br> FBO<br> BRADY TRANE SERVICE INC 401K PLAN<br> AND TRUST<br> 100 MAGELLAN WAY (KW1C)<br> COVINGTON KY 41015-1987<br>|
| PRINCIPAL LIFETIME HYBRID 2055 (R6) | 93.15% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2060 (I) | 48.97% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2060 (I) | 28.53% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| PRINCIPAL LIFETIME HYBRID 2060 (I) | 10.68% | &nbsp;&nbsp;&nbsp;&nbsp; MINNESOTA LIFE INSURANCE COMPANY<br> 400 ROBERT ST N STE A<br> SAINT PAUL MN 55101-2099<br>|
| PRINCIPAL LIFETIME HYBRID 2060 (I) | 9.43% | &nbsp;&nbsp;&nbsp;&nbsp; FIIOC<br> FBO<br> BRADY TRANE SERVICE INC 401K PLAN<br> AND TRUST<br> 100 MAGELLAN WAY (KW1C)<br> COVINGTON KY 41015-1987<br>|
| PRINCIPAL LIFETIME HYBRID 2060 (R6) | 86.86% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2065 (I) | 79.18% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| PRINCIPAL LIFETIME HYBRID 2065 (I) | 10.40% | &nbsp;&nbsp;&nbsp;&nbsp; MINNESOTA LIFE INSURANCE COMPANY<br> 400 ROBERT ST N STE A<br> SAINT PAUL MN 55101-2099<br>|
| PRINCIPAL LIFETIME HYBRID 2065 (R6) | 84.47% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| REAL ESTATE SECURITIES (A) | 23.59% | &nbsp;&nbsp;&nbsp;&nbsp; MLPF&S FOR THE SOLE<br> BENEFIT OF ITS CUSTOMERS<br> ATTN FUND ADMINISTRATION<br> 4800 DEER LAKE DR EAST 3RD FL<br> JACKSONVILLE FL 32246-6484<br>|
| REAL ESTATE SECURITIES (A) | 12.68% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| REAL ESTATE SECURITIES (A) | 6.64% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| REAL ESTATE SECURITIES (A) | 5.42% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|
| REAL ESTATE SECURITIES (C) | 27.42% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| REAL ESTATE SECURITIES (C) | 15.32% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| REAL ESTATE SECURITIES (C) | 14.96% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|
| REAL ESTATE SECURITIES (C) | 6.52% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| REAL ESTATE SECURITIES (I) | 30.64% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| REAL ESTATE SECURITIES (I) | 20.15% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| REAL ESTATE SECURITIES (I) | 7.53% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY A/C FOR THE<br> BENIFIT OF CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 101 MONTGOMERY ST<br> SAN FRANCISCO CA 94104-4151<br>|
| REAL ESTATE SECURITIES (I) | 6.05% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|
| REAL ESTATE SECURITIES (I) | 5.33% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| REAL ESTATE SECURITIES (R1) | 63.84% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| REAL ESTATE SECURITIES (R1) | 10.46% | &nbsp;&nbsp;&nbsp;&nbsp; MG TRUST COMPANY CUST<br> FBO LIOKAREAS CONSTRUCTION CO<br> 717 17TH ST STE 1300<br> DENVER CO 80202-3304<br>|
| REAL ESTATE SECURITIES (R1) | 7.71% | &nbsp;&nbsp;&nbsp;&nbsp; STATE STREET BANK AND TRUST COMPANY<br> TRUSTEE AND/OR CUSTODIAN<br> FBO ADP ACCESS PRODUCT<br> 1 LINCOLN ST<br> BOSTON MA 02111-2901<br>|
| REAL ESTATE SECURITIES (R1) | 6.14% | &nbsp;&nbsp;&nbsp;&nbsp; ASCENSUS TRUST COMPANY FBO<br> BROADMOOR GOLF CLUB 401K RETIREME<br> PO BOX 10758<br> FARGO ND 58106-0758<br>|
| REAL ESTATE SECURITIES (R1) | 5.69% | &nbsp;&nbsp;&nbsp;&nbsp; FIIOC<br> FBO CABLE CONNECTION & SUPPLY<br> CO INC PROFIT SHARING PLAN & TRUST<br> 100 MAGELLAN WAY<br> COVINGTON KY 41015-1987<br>|
| REAL ESTATE SECURITIES (R3) | 24.88% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| REAL ESTATE SECURITIES (R3) | 20.82% | &nbsp;&nbsp;&nbsp;&nbsp; STATE STREET BANK AND TRUST COMPANY<br> TRUSTEE AND/OR CUSTODIAN<br> FBO ADP ACCESS PRODUCT<br> 1 LINCOLN ST<br> BOSTON MA 02111-2901<br>|
| REAL ESTATE SECURITIES (R3) | 6.44% | &nbsp;&nbsp;&nbsp;&nbsp; SAMMONS RETIREMENT SOLUTIONS<br> 8300 MILLS CIVIC PKWY<br> WDM IA 50266-3833<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| REAL ESTATE SECURITIES (R3) | 6.07% | &nbsp;&nbsp;&nbsp;&nbsp; TIAA, FSB CUST/TTEE FBO:<br> RETIREMENT PLANS FOR WHICH<br> TIAA ACTS AS RECORDKEEPER<br> ATTN: TRUST OPERATIONS<br> 211 N BROADWAY STE 1000<br> SAINT LOUIS MO 63102-2748<br>|
| REAL ESTATE SECURITIES (R4) | 30.52% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| REAL ESTATE SECURITIES (R4) | 15.51% | &nbsp;&nbsp;&nbsp;&nbsp; EMPOWER TRUST FBO<br> EMPOWER BENEFIT PLANS<br> 8515 E ORCHARD RD 2T2<br> GREENWOOD VILLAGE CO 80111-5002<br>|
| REAL ESTATE SECURITIES (R4) | 10.41% | &nbsp;&nbsp;&nbsp;&nbsp; EMPOWER TRUST FBO<br> EMPLOYEE BENEFITS CLIENTS 401K<br> 8515 E ORCHARD RD 2T2<br> GREENWOOD VILLAGE CO 80111-5002<br>|
| REAL ESTATE SECURITIES (R4) | 6.97% | &nbsp;&nbsp;&nbsp;&nbsp; EMPOWER TRUST FBO<br> EMPOWER BENEFIT PLANS<br> 8515 E ORCHARD RD 2T2<br> GREENWOOD VILLAGE CO 80111-5002<br>|
| REAL ESTATE SECURITIES (R4) | 6.92% | &nbsp;&nbsp;&nbsp;&nbsp; STATE STREET BANK AND TRUST COMPANY<br> TRUSTEE AND/OR CUSTODIAN<br> FBO ADP ACCESS PRODUCT<br> 1 LINCOLN ST<br> BOSTON MA 02111-2901<br>|
| REAL ESTATE SECURITIES (R5) | 38.15% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| REAL ESTATE SECURITIES (R5) | 7.53% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| REAL ESTATE SECURITIES (R5) | 6.77% | &nbsp;&nbsp;&nbsp;&nbsp; EMPOWER TRUST FBO<br> EMPOWER BENEFIT PLANS<br> 8515 E ORCHARD RD 2T2<br> GREENWOOD VILLAGE CO 80111-5002<br>|
| REAL ESTATE SECURITIES (R5) | 5.83% | &nbsp;&nbsp;&nbsp;&nbsp; MATRIX TRUST COMPANY COTRUSTEE FBO<br> SOUTHERN CALIFORNIA SHEET METAL WOR<br> PO BOX 52129<br> PHOENIX AZ 85072-2129<br>|
| REAL ESTATE SECURITIES (R6) | 22.09% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| REAL ESTATE SECURITIES (R6) | 7.70% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY NJ 07310-1995<br>|
| REAL ESTATE SECURITIES (R6) | 7.40% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO BANK NA<br> PO BOX 1533<br> MINNEAPOLIS MN 55480-1533<br>|
| REAL ESTATE SECURITIES (R6) | 6.50% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2030 FUND<br> ATTN MUTUAL FUND ACCOUNTING- H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| REAL ESTATE SECURITIES (R6) | 5.07% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2040 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM BALANCED PORTFOLIO (A) | 17.19% | &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;J. P. MORGAN SECURITIES LLC<br> FBO EXCLUSIVE BENEFIT OF OUR CUST<br> 4 CHASE METROTECH CTR<br> BROOKLYN NY 11245-0003<br>|
| SAM BALANCED PORTFOLIO (A) | 15.87% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SAM BALANCED PORTFOLIO (A) | 5.35% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| SAM BALANCED PORTFOLIO (C) | 22.70% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SAM BALANCED PORTFOLIO (C) | 10.43% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| SAM BALANCED PORTFOLIO (C) | 6.47% | &nbsp;&nbsp;&nbsp;&nbsp; LPL FINANCIAL<br> OMNIBUS CUSTOMER ACCOUNT<br> ATTN MUTUAL FUND TRADING<br> 4707 EXECUTIVE DR<br> SAN DIEGO CA 92121-3091<br>|
| SAM BALANCED PORTFOLIO (I) | 80.74% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| SAM BALANCED PORTFOLIO (I) | 6.89% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM BALANCED PORTFOLIO (R1) | 84.54% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM BALANCED PORTFOLIO (R1) | 7.55% | &nbsp;&nbsp;&nbsp;&nbsp; STIFEL NICOLAUS & CO INC<br> EXCLUSIVE BENEFIT OF CUSTOMERS<br> 501 N BROADWAY<br> SAINT LOUIS MO 63102-2188<br>|
| SAM BALANCED PORTFOLIO (R3) | 64.18% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM BALANCED PORTFOLIO (R3) | 6.42% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> ATTN PLAN TRUSTEE<br> FBO V K KNOWLTON DEF COMP PLAN<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| SAM BALANCED PORTFOLIO (R3) | 6.41% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO SOUTHEASTERN PLUMBING AND<br> HEATING INC CASH BALANCE PLAN<br> 300 W 23RD ST<br> CHARLOTTE NC 28206-3107<br>|
| SAM BALANCED PORTFOLIO (R3) | 5.74% | &nbsp;&nbsp;&nbsp;&nbsp; CBNA AS CUSTODIAN FBO<br> CITY OF OCOEE VEBA HEALTH SAVINGS P<br> 6 RHOADS DR STE 7<br> UTICA NY 13502-6317<br>|
| SAM BALANCED PORTFOLIO (R4) | 56.51% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM BALANCED PORTFOLIO (R4) | 30.92% | &nbsp;&nbsp;&nbsp;&nbsp; MATRIX TRUST CO AS AGENT FBO<br> PRO-SET INC FINANCIAL SECURITY TRUS<br> PO BOX 52129<br> PHOENIX AZ 85072-2129<br>|
| SAM BALANCED PORTFOLIO (R5) | 94.20% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM CONSERVATIVE BALANCED PORT <br> (A)<br>| 18.95% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SAM CONSERVATIVE BALANCED PORT <br> (A)<br>| 7.59% | &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;J. P. MORGAN SECURITIES LLC<br> FBO EXCLUSIVE BENEFIT OF OUR CUST<br> 4 CHASE METROTECH CTR<br> BROOKLYN NY 11245-0003<br>|
| SAM CONSERVATIVE BALANCED PORT <br> (A)<br>| 6.60% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| SAM CONSERVATIVE BALANCED PORT <br> (C)<br>| 20.42% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| SAM CONSERVATIVE BALANCED PORT <br> (C)<br>| 17.92% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SAM CONSERVATIVE BALANCED PORT <br> (C)<br>| 5.07% | &nbsp;&nbsp;&nbsp;&nbsp; LPL FINANCIAL<br> OMNIBUS CUSTOMER ACCOUNT<br> ATTN MUTUAL FUND TRADING<br> 4707 EXECUTIVE DR<br> SAN DIEGO CA 92121-3091<br>|
| SAM CONSERVATIVE BALANCED PORT <br> (I)<br>| 80.49% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| SAM CONSERVATIVE BALANCED PORT <br> (R1)<br>| 56.31% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| SAM CONSERVATIVE BALANCED PORT <br> (R1)<br>| 33.24% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO DEV MEDICAL ASSOCIATES SC CASH<br> BALANCE PENSION PLAN<br> 5600 W ADDISON ST STE 400<br> CHICAGO IL 60634-4400<br>|
| SAM CONSERVATIVE BALANCED PORT <br> (R1)<br>| 6.58% | &nbsp;&nbsp;&nbsp;&nbsp; PAI TRUST COMPANY INC<br> PARAMOUNT CONSTRUCTION GROUP INC 40<br> 1300 ENTERPRISE DRIVE<br> DE PERE WI 54115-4934<br>|
| SAM CONSERVATIVE BALANCED PORT <br> (R3)<br>| 66.57% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM CONSERVATIVE BALANCED PORT <br> (R3)<br>| 8.30% | &nbsp;&nbsp;&nbsp;&nbsp; DANCKER SELLEW & DOUGLAS INC<br> FBO DANCKER SELLEW & DOUGLAS INC<br> SUPP EXEC RET<br> ATTN PLAN TRUSTEE<br> 291 EVANS WAY<br> SOMMERVILLE NJ 08876-3766<br>|
| SAM CONSERVATIVE BALANCED PORT <br> (R3)<br>| 5.11% | &nbsp;&nbsp;&nbsp;&nbsp; CHANNELL COMMERCIAL CORPORATION<br> ATTN PLAN TRUSTEE<br> FBO CHANNELL COMM CORP NQ DEF COMP<br> 26040 YNEX RD<br> TEMECULA CA 92591-6033<br>|
| SAM CONSERVATIVE BALANCED PORT <br> (R4)<br>| 39.25% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM CONSERVATIVE BALANCED PORT <br> (R4)<br>| 32.84% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO B&G AND AFFILIATES EXEC RET PLA<br> N<br> ATTN SUSAN SAGGIONE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| SAM CONSERVATIVE BALANCED PORT <br> (R4)<br>| 16.97% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO BURWELL DC PLAN<br> ATTN PLAN TRUSTEE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| SAM CONSERVATIVE BALANCED PORT <br> (R5)<br>| 72.63% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM CONSERVATIVE BALANCED PORT <br> (R5)<br>| 21.56% | &nbsp;&nbsp;&nbsp;&nbsp; KGP TELECOMMUNICATIONS LLC<br> ATTN PLAN TRUSTEE<br> FBO KGPCO PHANTOM UNITS PLAN<br> 3305 HIGHWAY 60 WEST<br> FAIRBAULT MN 55021-4869<br>|
| SAM CONSERVATIVE GROWTH PORT <br> (A)<br>| 12.80% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SAM CONSERVATIVE GROWTH PORT <br> (A)<br>| 11.33% | &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;J. P. MORGAN SECURITIES LLC<br> FBO EXCLUSIVE BENEFIT OF OUR CUST<br> 4 CHASE METROTECH CTR<br> BROOKLYN NY 11245-0003<br>|
| SAM CONSERVATIVE GROWTH PORT <br> (A)<br>| 5.30% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| SAM CONSERVATIVE GROWTH PORT <br> (C)<br>| 17.16% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SAM CONSERVATIVE GROWTH PORT <br> (C)<br>| 11.06% | &nbsp;&nbsp;&nbsp;&nbsp; RAYMOND JAMES<br> OMNIBUS FOR MUTUAL FUNDS<br> HOUSE ACCT FIRM 92500015<br> ATTN: COURTNEY WALLER<br> 880 CARILLON PKWY<br> ST PETERSBURG FL 33716-1102<br>|
| SAM CONSERVATIVE GROWTH PORT <br> (C)<br>| 6.74% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| SAM CONSERVATIVE GROWTH PORT (I) | 79.37% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| SAM CONSERVATIVE GROWTH PORT (I) | 5.26% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM CONSERVATIVE GROWTH PORT <br> (R1)<br>| 99.99% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM CONSERVATIVE GROWTH PORT <br> (R3)<br>| 73.40% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM CONSERVATIVE GROWTH PORT <br> (R3)<br>| 5.50% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO EXEC NQ OF FOND DU LAC BAND<br> ATTN SUSAN SAGGIONE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| SAM CONSERVATIVE GROWTH PORT <br> (R4)<br>| 62.65% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM CONSERVATIVE GROWTH PORT <br> (R4)<br>| 19.35% | &nbsp;&nbsp;&nbsp;&nbsp; WALSER AUTOMOTIVE GROUP LLC<br> FBO WALSER AUTO GROUP NQ LONG TERM<br> ATTN PLAN TRUSTEE<br> INCENTIVE PLAN<br> 7700 FRANCE AVENUE S SUITE 410N<br> EDINA MN 55435-5869<br>|
| SAM CONSERVATIVE GROWTH PORT <br> (R4)<br>| 9.77% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO BURWELL DC PLAN<br> ATTN PLAN TRUSTEE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| SAM CONSERVATIVE GROWTH PORT <br> (R5)<br>| 93.03% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM FLEXIBLE INCOME PORTFOLIO (A) | 26.49% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SAM FLEXIBLE INCOME PORTFOLIO (A) | 7.96% | &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;J. P. MORGAN SECURITIES LLC<br> FBO EXCLUSIVE BENEFIT OF OUR CUST<br> 4 CHASE METROTECH CTR<br> BROOKLYN NY 11245-0003<br>|
| SAM FLEXIBLE INCOME PORTFOLIO (C) | 30.05% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SAM FLEXIBLE INCOME PORTFOLIO (C) | 6.45% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| SAM FLEXIBLE INCOME PORTFOLIO (I) | 66.66% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| SAM FLEXIBLE INCOME PORTFOLIO (I) | 7.87% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| SAM FLEXIBLE INCOME PORTFOLIO (I) | 6.56% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SAM FLEXIBLE INCOME PORTFOLIO (I) | 5.46% | &nbsp;&nbsp;&nbsp;&nbsp; LPL FINANCIAL<br> OMNIBUS CUSTOMER ACCOUNT<br> ATTN MUTUAL FUND TRADING<br> 4707 EXECUTIVE DR<br> SAN DIEGO CA 92121-3091<br>|
| SAM FLEXIBLE INCOME PORTFOLIO <br> (R1)<br>| 58.87% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO CONCORP CONCRETE INC DEFINED<br> BENEFIT PENSION PLAN<br> 2485 ASHCROFT AVE<br> CLOVIS CA 93611-6001<br>|
| SAM FLEXIBLE INCOME PORTFOLIO <br> (R1)<br>| 22.90% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO DEV MEDICAL ASSOCIATES SC CASH<br> BALANCE PENSION PLAN<br> 5600 W ADDISON ST STE 400<br> CHICAGO IL 60634-4400<br>|
| SAM FLEXIBLE INCOME PORTFOLIO <br> (R1)<br>| 15.34% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| SAM FLEXIBLE INCOME PORTFOLIO <br> (R3)<br>| 64.09% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM FLEXIBLE INCOME PORTFOLIO <br> (R3)<br>| 13.46% | &nbsp;&nbsp;&nbsp;&nbsp; MID ATLANTIC TRUST COMPANY FBO<br> BUFFALO ULTRASOUND INC 401 K<br> PROFIT SHARING PLAN & TRUST<br> 1251 WATERFRONT PLACE SUITE 525<br> PITTSBURGH PA 15222-4228<br>|
| SAM FLEXIBLE INCOME PORTFOLIO <br> (R3)<br>| 11.94% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO RVVS CASH BALANCE PLAN<br> 15900 JORDAN AVE SE<br> PRIOR LAKE MN 55372-2051<br>|
| SAM FLEXIBLE INCOME PORTFOLIO <br> (R4)<br>| 52.08% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO SCHENECTADY PULMONARY &<br> CRITICAL CARE<br> 124 ROSA RD STE 382<br> SCHENECTADY NY 12308-2144<br>|
| SAM FLEXIBLE INCOME PORTFOLIO <br> (R4)<br>| 19.24% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM FLEXIBLE INCOME PORTFOLIO <br> (R4)<br>| 11.66% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO BURWELL DC PLAN<br> ATTN PLAN TRUSTEE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| SAM FLEXIBLE INCOME PORTFOLIO <br> (R4)<br>| 6.95% | &nbsp;&nbsp;&nbsp;&nbsp; BRISTOL BAY NATIVE CORPORATION<br> ATTN PLAN TRUSTEE<br> FBO BBNC NQ DEF COMP PLAN<br> 111 W 16TH AVE<br> ANCHORAGE AK 99501-6299<br>|
| SAM FLEXIBLE INCOME PORTFOLIO <br> (R5)<br>| 93.54% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM STRATEGIC GROWTH PORTFOLIO <br> (A)<br>| 10.39% | &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;J. P. MORGAN SECURITIES LLC<br> FBO EXCLUSIVE BENEFIT OF OUR CUST<br> 4 CHASE METROTECH CTR<br> BROOKLYN NY 11245-0003<br>|
| SAM STRATEGIC GROWTH PORTFOLIO <br> (A)<br>| 10.18% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SAM STRATEGIC GROWTH PORTFOLIO <br> (C)<br>| 15.78% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SAM STRATEGIC GROWTH PORTFOLIO <br> (I)<br>| 79.47% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| SAM STRATEGIC GROWTH PORTFOLIO <br> (I)<br>| 5.68% | &nbsp;&nbsp;&nbsp;&nbsp; FIRST COMMAND FINANCIAL SERVICES<br> INC<br> ATTN PLAN TRUSTEE<br> FBO FIRST COMMAND DEF CAREER<br> 1 FIRSTCOMM PLAZA<br> FORT WORTH TX 76109-4978<br>|
| SAM STRATEGIC GROWTH PORTFOLIO <br> (R1)<br>| 80.24% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM STRATEGIC GROWTH PORTFOLIO <br> (R1)<br>| 19.75% | &nbsp;&nbsp;&nbsp;&nbsp; MG TRUST COMPANY CUST FBO<br> PAULDING EXEMPTED VILLAGE SC 403 B<br> 717 17TH ST STE 1300<br> DENVER CO 80202-3304<br>|
| SAM STRATEGIC GROWTH PORTFOLIO <br> (R3)<br>| 81.25% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM STRATEGIC GROWTH PORTFOLIO <br> (R3)<br>| 5.98% | &nbsp;&nbsp;&nbsp;&nbsp; UBS WM USA<br> 0O0 11011 6100<br> OMNI ACCOUNT M/F<br> SPEC CDY A/C EBOC UBSFSI<br> 1000 HARBOR BLVD<br> WEEHAWKEN NJ 07086-6761<br>|
| SAM STRATEGIC GROWTH PORTFOLIO <br> (R4)<br>| 51.60% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SAM STRATEGIC GROWTH PORTFOLIO <br> (R4)<br>| 28.79% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO BURWELL DC PLAN<br> ATTN PLAN TRUSTEE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| SAM STRATEGIC GROWTH PORTFOLIO <br> (R4)<br>| 10.62% | &nbsp;&nbsp;&nbsp;&nbsp; MATRIX TRUST CO AS AGENT FBO<br> PRO-SET INC FINANCIAL SECURITY TRUS<br> PO BOX 52129<br> PHOENIX AZ 85072-2129<br>|
| SAM STRATEGIC GROWTH PORTFOLIO <br> (R5)<br>| 95.56% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SHORT-TERM INCOME (A) | 30.37% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SHORT-TERM INCOME (A) | 10.16% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| SHORT-TERM INCOME (A) | 8.70% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| SHORT-TERM INCOME (C) | 20.62% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SHORT-TERM INCOME (C) | 17.56% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| SHORT-TERM INCOME (C) | 5.17% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|
| SHORT-TERM INCOME (I) | 11.81% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| SHORT-TERM INCOME (I) | 11.76% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2020 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SHORT-TERM INCOME (I) | 10.81% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY ACCOUNT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 101 MONTGOMERY ST<br> SAN FRANCISCO CA 94104-4151<br>|
| SHORT-TERM INCOME (I) | 7.39% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SHORT-TERM INCOME (I) | 5.91% | &nbsp;&nbsp;&nbsp;&nbsp; MAC & CO A/C 135602<br> MUTUAL FUND OPERATIONS<br> 500 GRANT STREET ROOM 151-1010<br> PITTSBURGH PA 15219-2502<br>|
| SHORT-TERM INCOME (I) | 5.63% | &nbsp;&nbsp;&nbsp;&nbsp; SAM FLEXIBLE INCOME PORTFOLIO PIF<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SHORT-TERM INCOME (R1) | 62.70% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SHORT-TERM INCOME (R1) | 36.14% | &nbsp;&nbsp;&nbsp;&nbsp; EWR, INC<br> FBO EXEC RETIREMENT PLAN OF EWR,<br> INC<br> ATTN JOSEPH WYRICK<br> 6055 PRIMACY PKWY STE 100<br> MEMPHIS TN 38119-5514<br>|
| SHORT-TERM INCOME (R3) | 53.97% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SHORT-TERM INCOME (R3) | 10.04% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO DUPAGE INTERNAL MEDICINE LLC<br> 228 OXFORD AVE<br> CLARENDON HLS IL 60514-2807<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| SHORT-TERM INCOME (R3) | 6.32% | &nbsp;&nbsp;&nbsp;&nbsp; DSL CONSTRUCTION CORP<br> FBO EXEC NQ EXCESS OF DSL<br> CONSTRUCTION<br> ATTN PLAN TRUSTEE<br> 11300 W OLYMPIC BLVD STE 770<br> LOS ANGELES CA 90064-1644<br>|
| SHORT-TERM INCOME (R3) | 5.57% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO SSP AMERICAN DEF COMP PLAN<br> ATTN SUSAN SAGGIONE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| SHORT-TERM INCOME (R4) | 50.26% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SHORT-TERM INCOME (R4) | 23.33% | &nbsp;&nbsp;&nbsp;&nbsp; NOMURA HOLDING AMERICA INC<br> ATTN PLAN TRUSTEE<br> FBO NOMURA SUPP RET SAVINGS<br> 309 W 49TH ST<br> NEW YORK NY 10019-9102<br>|
| SHORT-TERM INCOME (R4) | 8.59% | &nbsp;&nbsp;&nbsp;&nbsp; BRISTOL BAY NATIVE CORPORATION<br> ATTN PLAN TRUSTEE<br> FBO BBNC NQ DEF COMP PLAN<br> 111 W 16TH AVE<br> ANCHORAGE AK 99501-6299<br>|
| SHORT-TERM INCOME (R5) | 40.03% | &nbsp;&nbsp;&nbsp;&nbsp; CHURCHILL MORTGAGE CORPORATION<br> FBO CHURCHILL MORTGAGE CORPORATION<br> INCENTIVE BONUS PLAN<br> ATTN SHEREE BARLETT<br> 761 OLD HICKORY BLVD STE 400<br> BRENTWOOD TN 37027-4519<br>|
| SHORT-TERM INCOME (R5) | 15.33% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SHORT-TERM INCOME (R5) | 9.82% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY NJ 07310-1995<br>|
| SHORT-TERM INCOME (R5) | 9.77% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO GUEST SERVICES EMPLOYEE SAVINGS<br> ATTN SUSAN SAGGIONE<br> PLAN<br> 1013 CENTRE ROAD<br> WILMINGTON DE 19805-1265<br>|
| SHORT-TERM INCOME (R5) | 9.39% | &nbsp;&nbsp;&nbsp;&nbsp; NORTHWEST ADMINISTRATORS<br> ATTN GAYLE BUSHNELL<br> FBO NQ EXCESS OF NW ADMINISTRATORS<br> 2323 EASTLAKE AVE E<br> SEATTLE WA 98102-3963<br>|
| SMALLCAP (A) | 17.35% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SMALLCAP (A) | 6.20% | &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;J. P. MORGAN SECURITIES LLC<br> FBO EXCLUSIVE BENEFIT OF OUR CUST<br> 4 CHASE METROTECH CTR<br> BROOKLYN NY 11245-0003<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| SMALLCAP (C) | 22.12% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| SMALLCAP (C) | 17.84% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SMALLCAP (C) | 5.45% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| SMALLCAP (I) | 25.07% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SMALLCAP (I) | 23.53% | &nbsp;&nbsp;&nbsp;&nbsp; AMERICAN ENTERPRISE INVESTMENT SVC<br> FBO #41999970<br> 707 2ND AVE S<br> MINNEAPOLIS MN 55402-2405<br>|
| SMALLCAP (I) | 8.24% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| SMALLCAP (I) | 6.03% | &nbsp;&nbsp;&nbsp;&nbsp; LPL FINANCIAL<br> OMNIBUS CUSTOMER ACCOUNT<br> ATTN MUTUAL FUND TRADING<br> 4707 EXECUTIVE DR<br> SAN DIEGO CA 92121-3091<br>|
| SMALLCAP (I) | 5.97% | &nbsp;&nbsp;&nbsp;&nbsp; RBC CAPITAL MARKETS LLC<br> MUTUAL FUND OMNIBUS PROCESSING<br> OMNIBUS<br> ATTN MUTUAL FUND OPS MANAGER<br> 250 NICOLLET MALL SUITE 1400<br> MINNEAPOLIS MN 55401-7554<br>|
| SMALLCAP (I) | 5.59% | &nbsp;&nbsp;&nbsp;&nbsp; RAYMOND JAMES<br> OMNIBUS FOR MUTUAL FUNDS<br> HOUSE ACCT FIRM 92500015<br> ATTN: COURTNEY WALLER<br> 880 CARILLON PKWY<br> ST PETERSBURG FL 33716-1102<br>|
| SMALLCAP (I) | 5.48% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| SMALLCAP (I) | 5.37% | &nbsp;&nbsp;&nbsp;&nbsp; UBS WM USA<br> 0O0 11011 6100<br> OMNI ACCOUNT M/F<br> SPEC CDY A/C EBOC UBSFSI<br> 1000 HARBOR BLVD<br> WEEHAWKEN NJ 07086-6761<br>|
| SMALLCAP (R1) | 52.90% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP (R1) | 28.51% | &nbsp;&nbsp;&nbsp;&nbsp; FIIOC<br> FBO VRMC OF NEW YORK 401K PLAN<br> 100 MAGELLAN WAY (KW1C)<br> COVINGTON KY 41015-1987<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| SMALLCAP (R1) | 8.46% | &nbsp;&nbsp;&nbsp;&nbsp; FIIOC<br> FBO<br> ATLANTIC TOYOTA GROUP INC 401K PLAN<br> 100 MAGELLAN WAY (KW1C)<br> COVINGTON KY 41015-1987<br>|
| SMALLCAP (R3) | 26.59% | &nbsp;&nbsp;&nbsp;&nbsp; SAMMONS RETIREMENT SOLUTIONS<br> 8300 MILLS CIVIC PKWY<br> WDM IA 50266-3833<br>|
| SMALLCAP (R3) | 16.80% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP (R3) | 5.54% | &nbsp;&nbsp;&nbsp;&nbsp; STATE STREET BANK AND TRUST COMPANY<br> TRUSTEE AND/OR CUSTODIAN<br> FBO ADP ACCESS PRODUCT<br> 1 LINCOLN ST<br> BOSTON MA 02111-2901<br>|
| SMALLCAP (R4) | 95.21% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY NJ 07310-1995<br>|
| SMALLCAP (R5) | 49.04% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY NJ 07310-1995<br>|
| SMALLCAP (R5) | 20.47% | &nbsp;&nbsp;&nbsp;&nbsp; PIMS/PRUDENTIAL RETIREMENT<br> AS NOMINEE FOR THE TTEE/CUST PL 002<br> CITY OF JERSEY CITY<br> 280 GROVE STREET ROOM 106<br> JERSEY CITY NJ 07302-3610<br>|
| SMALLCAP (R5) | 13.61% | &nbsp;&nbsp;&nbsp;&nbsp; VANGUARD FIDUCIARY TRUST CO CUST<br> FBO 401K CLIENTS 401(K) PLAN<br> PO BOX 2600<br> VALLEY FORGE PA 19482-2600<br>|
| SMALLCAP (R5) | 8.91% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP (R6) | 53.33% | &nbsp;&nbsp;&nbsp;&nbsp; NFS LLC FEBO<br> FIIOC AS AGENT FOR<br> QUALIFIED EMPLOYEE BENEFIT<br> PLANS (401K) FINOPS-IC FUNDS<br> 100 MAGELLAN WAY # KW1C<br> COVINGTON KY 41015-1987<br>|
| SMALLCAP (R6) | 19.61% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP GROWTH I (I) | 33.09% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SMALLCAP GROWTH I (I) | 14.09% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| SMALLCAP GROWTH I (I) | 12.66% | &nbsp;&nbsp;&nbsp;&nbsp; MLPF&S FOR THE SOLE<br> BENEFIT OF ITS CUSTOMERS<br> ATTN FUND ADMINISTRATION<br> 4800 DEER LAKE DR E FL 3<br> JACKSONVILLE FL 32246-6484<br>|
| SMALLCAP GROWTH I (I) | 10.63% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY A/C FOR THE<br> BENIFIT OF CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 101 MONTGOMERY ST<br> SAN FRANCISCO CA 94104-4151<br>|
| SMALLCAP GROWTH I (R1) | 92.16% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP GROWTH I (R3) | 48.03% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP GROWTH I (R3) | 17.49% | &nbsp;&nbsp;&nbsp;&nbsp; PIMS/PRUDENTIAL RETIREMENT<br> AS NOMINEE FOR THE TTEE/CUST PL 767<br> DIGERONIMO COMPANIES RETIREMENT<br> 5720 SCHAAF RD<br> INDEPENDENCE OH 44131<br>|
| SMALLCAP GROWTH I (R4) | 43.98% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP GROWTH I (R4) | 23.11% | &nbsp;&nbsp;&nbsp;&nbsp; JOHN HANCOCK TRUST COMPANY LLC<br> 690 CANTON ST STE 100<br> WESTWOOD MA 02090-2324<br>|
| SMALLCAP GROWTH I (R4) | 11.25% | &nbsp;&nbsp;&nbsp;&nbsp; LINCOLN RETIREMENT SERVICES COMPANY<br> FBO SCHOOL BD OF RICHMOND 403B<br> PO BOX 7876<br> FORT WAYNE IN 46801-7876<br>|
| SMALLCAP GROWTH I (R4) | 5.96% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL TRUST COMPANY<br> FBO CRST INTL NQ PLAN<br> ATTN SUSAN SAGGIONE<br> 1013 CENTRE RD<br> WILMINGTON DE 19805-1265<br>|
| SMALLCAP GROWTH I (R5) | 46.67% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP GROWTH I (R5) | 19.66% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY NJ 07310-1995<br>|
| SMALLCAP GROWTH I (R5) | 10.67% | &nbsp;&nbsp;&nbsp;&nbsp; TIAA, FSB CUST/TTEE FBO:<br> RETIREMENT PLANS FOR WHICH<br> TIAA ACTS AS RECORDKEEPER<br> ATTN: TRUST OPERATIONS<br> 211 N BROADWAY STE 1000<br> SAINT LOUIS MO 63102-2748<br>|
| SMALLCAP GROWTH I (R5) | 5.27% | &nbsp;&nbsp;&nbsp;&nbsp; RELIANCE TRUST COMPANY TRUSTEE<br> FBO RITE SOLUTIONS SAVINGS & INVEST<br> 185 S BROAD ST STE 303<br> PAWCATUCK CT 06379-1997<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| SMALLCAP GROWTH I (R6) | 46.33% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP GROWTH I (R6) | 8.47% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY NJ 07310-1995<br>|
| SMALLCAP S&P 600 INDEX (I) | 15.63% | &nbsp;&nbsp;&nbsp;&nbsp; PERSHING LLC<br> 1 PERSHING PLZ<br> JERSEY CITY NJ 07399-0001<br>|
| SMALLCAP S&P 600 INDEX (I) | 15.00% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP S&P 600 INDEX (I) | 10.45% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SMALLCAP S&P 600 INDEX (I) | 7.05% | &nbsp;&nbsp;&nbsp;&nbsp; LPL FINANCIAL<br> OMNIBUS CUSTOMER ACCOUNT<br> ATTN MUTUAL FUND TRADING<br> 4707 EXECUTIVE DR<br> SAN DIEGO CA 92121-3091<br>|
| SMALLCAP S&P 600 INDEX (I) | 5.67% | &nbsp;&nbsp;&nbsp;&nbsp; STATE STREET BANK AND TRUST COMPANY<br> TRUSTEE AND/OR CUSTODIAN<br> FBO ADP ACCESS PRODUCT<br> 1 LINCOLN ST<br> BOSTON MA 02111-2901<br>|
| SMALLCAP S&P 600 INDEX (R1) | 37.36% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP S&P 600 INDEX (R1) | 5.30% | &nbsp;&nbsp;&nbsp;&nbsp; COUNSEL TRUST DBA MATC FBO<br> HIRSCH INTERNATIONAL CORP 401 K<br> PROFIT SHARING PLAN & TRUST<br> 1251 WATERFRONT PL STE 525<br> PITTSBURGH PA 15222-4228<br>|
| SMALLCAP S&P 600 INDEX (R3) | 33.65% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP S&P 600 INDEX (R3) | 10.71% | &nbsp;&nbsp;&nbsp;&nbsp; STATE STREET BANK AND TRUST COMPANY<br> TRUSTEE AND/OR CUSTODIAN<br> FBO ADP ACCESS PRODUCT<br> 1 LINCOLN ST<br> BOSTON MA 02111-2901<br>|
| SMALLCAP S&P 600 INDEX (R3) | 5.69% | &nbsp;&nbsp;&nbsp;&nbsp; PIMS/PRUDENTIAL RETIREMENT<br> AS NOMINEE FOR THE TTEE/CUST PL 007<br> 403(B)(7) TAX DEFERRED MUTUAL<br> C/O PARADIGM EQUITIES INC<br> 1216 KENDALE BLVD<br> EAST LANSING MI 48823-2008<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| SMALLCAP S&P 600 INDEX (R4) | 52.83% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP S&P 600 INDEX (R4) | 7.43% | &nbsp;&nbsp;&nbsp;&nbsp; CHARLES SCHWAB & CO INC<br> SPECIAL CUSTODY ACCT<br> FBO CUSTOMERS<br> ATTN MUTUAL FUNDS<br> 101 MONTGOMERY ST<br> SAN FRANCISCO CA 94104-4151<br>|
| SMALLCAP S&P 600 INDEX (R4) | 6.10% | &nbsp;&nbsp;&nbsp;&nbsp; STATE STREET BANK AND TRUST COMPANY<br> TRUSTEE AND/OR CUSTODIAN<br> FBO ADP ACCESS PRODUCT<br> 1 LINCOLN ST<br> BOSTON MA 02111-2901<br>|
| SMALLCAP S&P 600 INDEX (R5) | 55.16% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP S&P 600 INDEX (R6) | 27.97% | &nbsp;&nbsp;&nbsp;&nbsp; DIVERSIFIED GROWTH ACCOUNT<br> ATTN MUTUAL FUND ACCOUNTING H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP S&P 600 INDEX (R6) | 17.12% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> ATTN NPIO TRADE DESK<br> OMNIBUS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP S&P 600 INDEX (R6) | 11.12% | &nbsp;&nbsp;&nbsp;&nbsp; DIVERSIFIED GROWTH VOLATILITY<br> CONTROL ACCOUNT<br> ATTN MUTUAL FUND ACCOUNTING H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP S&P 600 INDEX (R6) | 5.48% | &nbsp;&nbsp;&nbsp;&nbsp; DIVERSIFIED BALANCED ACCOUNT<br> ATTN MUTUAL FUND ACCOUNTING H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP VALUE II (I) | 42.32% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| SMALLCAP VALUE II (I) | 16.44% | &nbsp;&nbsp;&nbsp;&nbsp; PIMS/PRUDENTIAL RETIREMENT<br> AS NOMINEE FOR THE TTEE/CUST PL 767<br> BT U.S. RETIREMENT SAVINGS PLAN<br> 8951 CYPRESS WATERS BLVD STE 200<br> DALLAS TX 75019-4763<br>|
| SMALLCAP VALUE II (I) | 9.78% | &nbsp;&nbsp;&nbsp;&nbsp; EMPOWER TRUST FBO<br> EMPLOYEE BENEFITS CLIENTS 401K<br> 8515 E ORCHARD RD 2T2<br> GREENWOOD VILLAGE CO 80111-5002<br>|
| SMALLCAP VALUE II (I) | 7.42% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| SMALLCAP VALUE II (R1) | 89.60% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP VALUE II (R1) | 10.35% | &nbsp;&nbsp;&nbsp;&nbsp; RELIANCE TRUST CO TTEE<br> FBO ADP ACCESS LARGE MARKET<br> 401(K) PLAN<br> 201 17TH ST NW STE 1000<br> ATLANTA GA 30363-1195<br>|
| SMALLCAP VALUE II (R3) | 73.82% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP VALUE II (R3) | 5.41% | &nbsp;&nbsp;&nbsp;&nbsp; RELIANCE TRUST CO CUST<br> FBO ADP ACCESS LARGE MARKET<br> 401(K) PLAN<br> 201 17TH ST NW STE 1000<br> ATLANTA GA 30363-1195<br>|
| SMALLCAP VALUE II (R4) | 75.74% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP VALUE II (R4) | 16.08% | &nbsp;&nbsp;&nbsp;&nbsp; EMPOWER TRUST FBO<br> EMPLOYEE BENEFITS CLIENTS 401K<br> 8515 E ORCHARD RD 2T2<br> GREENWOOD VILLAGE CO 80111-5002<br>|
| SMALLCAP VALUE II (R5) | 97.10% | &nbsp;&nbsp;&nbsp;&nbsp; DCGT AS TTEE AND/OR CUST<br> FBO PLIC VARIOUS RETIREMENT PLANS<br> OMNIBUS<br> ATTN NPIO TRADE DESK<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP VALUE II (R6) | 58.50% | &nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL LIFE INS COMPANY CUST<br> FBO PFG OMNIBUS WRAPPED AND CUSTOM<br> ATTN PLIC PROXY COORDINATOR<br> FUNDS<br> 711 HIGH STREET<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP VALUE II (R6) | 7.34% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2040 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP VALUE II (R6) | 7.00% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2030 FUND<br> ATTN MUTUAL FUND ACCOUNTING- H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| SMALLCAP VALUE II (R6) | 5.73% | &nbsp;&nbsp;&nbsp;&nbsp; LIFETIME 2050 FUND<br> ATTN MUTUAL FUND ACCOUNTING-H221<br> 711 HIGH ST<br> DES MOINES IA 50392-0001<br>|
| TAX-EXEMPT BOND (A) | 15.68% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| TAX-EXEMPT BOND (A) | 15.57% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|

---

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| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| TAX-EXEMPT BOND (A) | 7.63% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|
| TAX-EXEMPT BOND (A) | 7.54% | &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;J. P. MORGAN SECURITIES LLC<br> FBO EXCLUSIVE BENEFIT OF OUR CUST<br> 4 CHASE METROTECH CTR<br> BROOKLYN NY 11245-0003<br>|
| TAX-EXEMPT BOND (A) | 5.34% | &nbsp;&nbsp;&nbsp;&nbsp; MLPF&S FOR THE SOLE<br> BENEFIT OF ITS CUSTOMERS<br> ATTN FUND ADMINISTRATION<br> 4800 DEER LAKE DR E FL 3<br> JACKSONVILLE FL 32246-6484<br>|
| TAX-EXEMPT BOND (C) | 25.58% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| TAX-EXEMPT BOND (C) | 10.38% | &nbsp;&nbsp;&nbsp;&nbsp; LPL FINANCIAL<br> OMNIBUS CUSTOMER ACCOUNT<br> ATTN MUTUAL FUND TRADING<br> 4707 EXECUTIVE DR<br> SAN DIEGO CA 92121-3091<br>|
| TAX-EXEMPT BOND (C) | 9.80% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR THE EXCL BENE OF OUR CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| TAX-EXEMPT BOND (C) | 9.08% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|
| TAX-EXEMPT BOND (C) | 8.53% | &nbsp;&nbsp;&nbsp;&nbsp; UBS WM USA<br> 0O0 11011 6100<br> OMNI ACCOUNT M/F<br> SPEC CDY A/C EBOC UBSFSI<br> 1000 HARBOR BLVD<br> WEEHAWKEN NJ 07086-6761<br>|
| TAX-EXEMPT BOND (C) | 7.69% | &nbsp;&nbsp;&nbsp;&nbsp; AMERICAN ENTERPRISE INVESTMENT SVC<br> FBO #41999970<br> 707 2ND AVE S<br> MINNEAPOLIS MN 55402-2405<br>|
| TAX-EXEMPT BOND (I) | 33.53% | &nbsp;&nbsp;&nbsp;&nbsp; NATIONAL FINANCIAL SERVICES LLC<br> FOR EXCLUSIVE BENEFIT OF OUR<br> CUSTOMERS<br> 499 WASHINGTON BLVD<br> ATTN MUTUAL FUNDS DEPT 4TH FL<br> JERSEY CITY NJ 07310-1995<br>|
| TAX-EXEMPT BOND (I) | 15.94% | &nbsp;&nbsp;&nbsp;&nbsp; WELLS FARGO CLEARING SERVICES LLC<br> SPECIAL CUSTODY ACCT FOR THE<br> EXCLUSIVE BENEFIT OF CUSTOMER<br> 2801 MARKET ST<br> SAINT LOUIS MO 63103-2523<br>|
| TAX-EXEMPT BOND (I) | 11.52% | &nbsp;&nbsp;&nbsp;&nbsp; AMERICAN ENTERPRISE INVESTMENT SVC<br> FBO #41999970<br> 707 2ND AVE S<br> MINNEAPOLIS MN 55402-2405<br>|
| TAX-EXEMPT BOND (I) | 7.69% | &nbsp;&nbsp;&nbsp;&nbsp; LPL FINANCIAL<br> OMNIBUS CUSTOMER ACCOUNT<br> ATTN MUTUAL FUND TRADING<br> 4707 EXECUTIVE DR<br> SAN DIEGO CA 92121-3091<br>|
| TAX-EXEMPT BOND (I) | 6.07% | &nbsp;&nbsp;&nbsp;&nbsp; MORGAN STANLEY SMITH BARNEY LLC<br> FOR THE EXCLUSIVE BENE OF ITS CUST<br> 1 NEW YORK PLZ FL 12<br> NEW YORK NY 10004-1965<br>|

---

------

---

| | | |
|:---|:---|:---|
| **Fund/Class** | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage**<br> **of Ownership**<br>| **Name and Address of Owner** |
| TAX-EXEMPT BOND (I) | 5.00% | &nbsp;&nbsp;&nbsp;&nbsp; UBS WM USA<br> 0O0 11011 6100<br> OMNI ACCOUNT M/F<br> SPEC CDY A/C EBOC UBSFSI<br> 1000 HARBOR BLVD<br> WEEHAWKEN NJ 07086-6761<br>|

---

**Management Ownership** 

As of February 6, 2023, the Board Members and officers of the Funds, as a group, owned less than 1% of the outstanding shares of any class of any of the Funds.

------

**Portfolio Manager Disclosure** 

(as provided by the Investment Advisors)

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 some portfolio managers, this includes beneficial ownership of Fund shares through participation in an employee benefit program that invests in Principal Funds, Inc. For information about potential material conflicts of interest, see Brokerage Allocation and Other Practices - Allocation of Trades.

This section lists information about PGI's portfolio managers first. Next, the section includes information about the sub-advisors' portfolio managers alphabetically by sub-advisor.

Information in this section is as of October 31, 2022, unless otherwise noted.

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**Advisor: Principal Global Investors, LLC (Principal Asset Allocation Portfolio Managers)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** |
|  | &nbsp;&nbsp; **Total**<br> **Number**<br> **of Accounts**<br>| &nbsp;&nbsp; **Total Assets**<br> **in the**<br> **Accounts**<br>| &nbsp;&nbsp; **Number of**<br> **Accounts**<br> **that base the**<br> **Advisory**<br> **Fee on**<br> **Performance**<br>| &nbsp;&nbsp; **Total Assets**<br> **of the**<br> **Accounts**<br> **that base the**<br> **Advisory**<br> **Fee on**<br> **Performance**<br>|
| **Jessica S. Bush:** Diversified Income Fund | **Jessica S. Bush:** Diversified Income Fund | **Jessica S. Bush:** Diversified Income Fund | **Jessica S. Bush:** Diversified Income Fund | **Jessica S. Bush:** Diversified Income Fund |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 4 | $12.2 billion | 0 | $0 |
| Other accounts | 0 | $0 | 0 | $0 |
| **Brody Dass:** SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic <br> Growth Portfolios | **Brody Dass:** SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic <br> Growth Portfolios | **Brody Dass:** SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic <br> Growth Portfolios | **Brody Dass:** SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic <br> Growth Portfolios | **Brody Dass:** SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic <br> Growth Portfolios |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 5 | $1.5 billion | 0 | $0 |
| Other accounts | 0 | $0 | 0 | $0 |
| **James W. Fennessey:** High Income; LargeCap Growth I; LargeCap Value III; MidCap Growth III; MidCap Value I; Overseas; <br> Principal LifeTime Strategic Income, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; <br> Principal LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; SmallCap <br> Growth I; and SmallCap Value II Funds | **James W. Fennessey:** High Income; LargeCap Growth I; LargeCap Value III; MidCap Growth III; MidCap Value I; Overseas; <br> Principal LifeTime Strategic Income, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; <br> Principal LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; SmallCap <br> Growth I; and SmallCap Value II Funds | **James W. Fennessey:** High Income; LargeCap Growth I; LargeCap Value III; MidCap Growth III; MidCap Value I; Overseas; <br> Principal LifeTime Strategic Income, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; <br> Principal LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; SmallCap <br> Growth I; and SmallCap Value II Funds | **James W. Fennessey:** High Income; LargeCap Growth I; LargeCap Value III; MidCap Growth III; MidCap Value I; Overseas; <br> Principal LifeTime Strategic Income, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; <br> Principal LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; SmallCap <br> Growth I; and SmallCap Value II Funds | **James W. Fennessey:** High Income; LargeCap Growth I; LargeCap Value III; MidCap Growth III; MidCap Value I; Overseas; <br> Principal LifeTime Strategic Income, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; <br> Principal LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; SmallCap <br> Growth I; and SmallCap Value II Funds |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 40 | $52.0 billion | 0 | $0 |
| Other accounts | 44 | $4.6 billion | 0 | $0 |
| **Todd A. Jablonski:** SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM <br> Strategic Growth Portfolios | **Todd A. Jablonski:** SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM <br> Strategic Growth Portfolios | **Todd A. Jablonski:** SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM <br> Strategic Growth Portfolios | **Todd A. Jablonski:** SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM <br> Strategic Growth Portfolios | **Todd A. Jablonski:** SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM <br> Strategic Growth Portfolios |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 7 | $1.6 billion | 0 | $0 |
| Other accounts | 21 | $293.7 million | 0 | $0 |
| **Benjamin E. Rotenberg:** Diversified Income Fund | **Benjamin E. Rotenberg:** Diversified Income Fund | **Benjamin E. Rotenberg:** Diversified Income Fund | **Benjamin E. Rotenberg:** Diversified Income Fund | **Benjamin E. Rotenberg:** Diversified Income Fund |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 4 | $12.2 billion | 0 | $0 |
| Other accounts | 0 | $0 | 0 | $0 |
| **Scott Smith:** Principal LifeTime Strategic Income, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and <br> 2070; and Principal LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070 Funds | **Scott Smith:** Principal LifeTime Strategic Income, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and <br> 2070; and Principal LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070 Funds | **Scott Smith:** Principal LifeTime Strategic Income, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and <br> 2070; and Principal LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070 Funds | **Scott Smith:** Principal LifeTime Strategic Income, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and <br> 2070; and Principal LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070 Funds | **Scott Smith:** Principal LifeTime Strategic Income, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and <br> 2070; and Principal LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070 Funds |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 32 | $46.5 billion | 0 | $0 |
| Other accounts | 34 | $4.6 billion | 0 | $0 |
| **Yesim Tokat-Acikel**<sup>(1)</sup>**:** SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM <br> Strategic Growth Portfolios | **Yesim Tokat-Acikel**<sup>(1)</sup>**:** SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM <br> Strategic Growth Portfolios | **Yesim Tokat-Acikel**<sup>(1)</sup>**:** SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM <br> Strategic Growth Portfolios | **Yesim Tokat-Acikel**<sup>(1)</sup>**:** SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM <br> Strategic Growth Portfolios | **Yesim Tokat-Acikel**<sup>(1)</sup>**:** SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM <br> Strategic Growth Portfolios |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 0 | $0 | 0 | $0 |
| Other accounts | 0 | $0 | 0 | $0 |
| **May Tong:** Diversified Income Fund | **May Tong:** Diversified Income Fund | **May Tong:** Diversified Income Fund | **May Tong:** Diversified Income Fund | **May Tong:** Diversified Income Fund |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 4 | $12.2 billion | 0 | $0 |
| Other accounts | 0 | $0 | 0 | $0 |
| **Randy L. Welch:** High Income; LargeCap Growth I; LargeCap Value III; MidCap Growth III; MidCap Value I; Overseas; Principal <br> LifeTime Strategic Income, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; Principal <br> LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; SmallCap Growth I; and <br> SmallCap Value II Funds | **Randy L. Welch:** High Income; LargeCap Growth I; LargeCap Value III; MidCap Growth III; MidCap Value I; Overseas; Principal <br> LifeTime Strategic Income, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; Principal <br> LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; SmallCap Growth I; and <br> SmallCap Value II Funds | **Randy L. Welch:** High Income; LargeCap Growth I; LargeCap Value III; MidCap Growth III; MidCap Value I; Overseas; Principal <br> LifeTime Strategic Income, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; Principal <br> LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; SmallCap Growth I; and <br> SmallCap Value II Funds | **Randy L. Welch:** High Income; LargeCap Growth I; LargeCap Value III; MidCap Growth III; MidCap Value I; Overseas; Principal <br> LifeTime Strategic Income, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; Principal <br> LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; SmallCap Growth I; and <br> SmallCap Value II Funds | **Randy L. Welch:** High Income; LargeCap Growth I; LargeCap Value III; MidCap Growth III; MidCap Value I; Overseas; Principal <br> LifeTime Strategic Income, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; Principal <br> LifeTime Hybrid Income, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055, 2060, 2065, and 2070; SmallCap Growth I; and <br> SmallCap Value II Funds |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 40 | $52.0 billion | 0 | $0 |
| Other accounts | 44 | $4.6 billion | 0 | $0 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

<sup>(1)</sup>

Information as of December 31, 2022

**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 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 scale. 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 the PFG 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** 

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | &nbsp;&nbsp; **PFI Funds Managed**<br> **by Portfolio Manager**<br>| &nbsp;&nbsp; **Dollar Range of**<br> **Securities Owned by**<br> **the Portfolio Manager**<br>|
| Jessica S. Bush | Diversified Income | $100001 - $500000 |
| Brody Dass | SAM Balanced |  |
| Brody Dass | SAM Conservative Balanced |  |
| Brody Dass | SAM Conservative Growth |  |
| Brody Dass | SAM Flexible Income |  |
| Brody Dass | SAM Strategic Growth |  |
| James W. Fennessey | High Income | $1 - $10000 |
| James W. Fennessey | LargeCap Growth I | $100001 - $500000 |
| James W. Fennessey | LargeCap Value III | $10001 - $50000 |
| James W. Fennessey | MidCap Growth III | $1 - $10000 |
| James W. Fennessey | MidCap Value I | $1 - $10000 |
| James W. Fennessey | Overseas |  |
| James W. Fennessey | Principal LifeTime Strategic Income |  |
| James W. Fennessey | Principal LifeTime 2010 |  |
| James W. Fennessey | Principal LifeTime 2015 |  |
| James W. Fennessey | Principal LifeTime 2020 |  |
| James W. Fennessey | Principal LifeTime 2025 |  |
| James W. Fennessey | Principal LifeTime 2030 |  |
| James W. Fennessey | Principal LifeTime 2035 |  |
| James W. Fennessey | Principal LifeTime 2040 | $10001 - $50000 |
| James W. Fennessey | Principal LifeTime 2045 |  |
| James W. Fennessey | Principal LifeTime 2050 |  |
| James W. Fennessey | Principal LifeTime 2055 |  |
| James W. Fennessey | Principal LifeTime 2060 |  |
| James W. Fennessey | Principal LifeTime 2065 |  |

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| | | |
|:---|:---|:---|
| **Portfolio Manager** | &nbsp;&nbsp; **PFI Funds Managed**<br> **by Portfolio Manager**<br>| &nbsp;&nbsp; **Dollar Range of**<br> **Securities Owned by**<br> **the Portfolio Manager**<br>|
| James W. Fennessey | Principal LifeTime 2070 |  |
| James W. Fennessey | Principal LifeTime Hybrid Income |  |
| James W. Fennessey | Principal LifeTime Hybrid 2015 |  |
| James W. Fennessey | Principal LifeTime Hybrid 2020 |  |
| James W. Fennessey | Principal LifeTime Hybrid 2025 |  |
| James W. Fennessey | Principal LifeTime Hybrid 2030 |  |
| James W. Fennessey | Principal LifeTime Hybrid 2035 |  |
| James W. Fennessey | Principal LifeTime Hybrid 2040 | $100001 - $500000 |
| James W. Fennessey | Principal LifeTime Hybrid 2045 |  |
| James W. Fennessey | Principal LifeTime Hybrid 2050 |  |
| James W. Fennessey | Principal LifeTime Hybrid 2055 |  |
| James W. Fennessey | Principal LifeTime Hybrid 2060 |  |
| James W. Fennessey | Principal LifeTime Hybrid 2065 |  |
| James W. Fennessey | Principal LifeTime Hybrid 2070 |  |
| James W. Fennessey | SmallCap Growth I | $100001 - $500000 |
| James W. Fennessey | SmallCap Value II | $100001 - $500000 |
| Todd A. Jablonski | SAM Balanced | over $1,000,000 |
| Todd A. Jablonski | SAM Conservative Balanced | $1 - $10000 |
| Todd A. Jablonski | SAM Conservative Growth | $100001 - $500000 |
| Todd A. Jablonski | SAM Flexible Income | $1 - $10000 |
| Todd A. Jablonski | SAM Strategic Growth | $100001 - $500000 |
| Benjamin E. Rotenberg | Diversified Income | $100001 - $500000 |
| Scott Smith | Principal LifeTime Strategic Income |  |
| Scott Smith | Principal LifeTime 2010 |  |
| Scott Smith | Principal LifeTime 2015 |  |
| Scott Smith | Principal LifeTime 2020 |  |
| Scott Smith | Principal LifeTime 2025 |  |
| Scott Smith | Principal LifeTime 2030 |  |
| Scott Smith | Principal LifeTime 2035 |  |
| Scott Smith | Principal LifeTime 2040 |  |
| Scott Smith | Principal LifeTime 2045 |  |
| Scott Smith | Principal LifeTime 2050 |  |
| Scott Smith | Principal LifeTime 2055 |  |
| Scott Smith | Principal LifeTime 2060 |  |
| Scott Smith | Principal LifeTime 2065 |  |
| Scott Smith | Principal LifeTime 2070 |  |
| Scott Smith | Principal LifeTime Hybrid Income |  |
| Scott Smith | Principal LifeTime Hybrid 2015 |  |
| Scott Smith | Principal LifeTime Hybrid 2020 |  |
| Scott Smith | Principal LifeTime Hybrid 2025 |  |
| Scott Smith | Principal LifeTime Hybrid 2030 |  |
| Scott Smith | Principal LifeTime Hybrid 2035 |  |
| Scott Smith | Principal LifeTime Hybrid 2040 |  |
| Scott Smith | Principal LifeTime Hybrid 2045 |  |
| Scott Smith | Principal LifeTime Hybrid 2050 | $100001 - $500000 |
| Scott Smith | Principal LifeTime Hybrid 2055 |  |
| Scott Smith | Principal LifeTime Hybrid 2060 |  |
| Scott Smith | Principal LifeTime Hybrid 2065 |  |
| Scott Smith | Principal LifeTime Hybrid 2070 |  |
| Yesim Tokat-Acikel<sup>(1)</sup> | SAM Balanced |  |
| Yesim Tokat-Acikel<sup>(1)</sup> | SAM Conservative Balanced |  |

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| | | |
|:---|:---|:---|
| **Portfolio Manager** | &nbsp;&nbsp; **PFI Funds Managed**<br> **by Portfolio Manager**<br>| &nbsp;&nbsp; **Dollar Range of**<br> **Securities Owned by**<br> **the Portfolio Manager**<br>|
| Yesim Tokat-Acikel<sup>(1)</sup> | SAM Conservative Growth |  |
| Yesim Tokat-Acikel<sup>(1)</sup> | SAM Flexible Income |  |
| Yesim Tokat-Acikel<sup>(1)</sup> | SAM Strategic Growth |  |
| May Tong | Diversified Income | $100001 - $500000 |
| Randy L. Welch | High Income | $1 - $10000 |
| Randy L. Welch | LargeCap Growth I | $100001 - $500000 |
| Randy L. Welch | LargeCap Value III | $1 - $10000 |
| Randy L. Welch | MidCap Growth III | $1 - $10000 |
| Randy L. Welch | MidCap Value I | $1 - $10000 |
| Randy L. Welch | Overseas |  |
| Randy L. Welch | Principal LifeTime Strategic Income |  |
| Randy L. Welch | Principal LifeTime 2010 |  |
| Randy L. Welch | Principal LifeTime 2015 |  |
| Randy L. Welch | Principal LifeTime 2020 |  |
| Randy L. Welch | Principal LifeTime 2025 |  |
| Randy L. Welch | Principal LifeTime 2030 |  |
| Randy L. Welch | Principal LifeTime 2035 |  |
| Randy L. Welch | Principal LifeTime 2040 |  |
| Randy L. Welch | Principal LifeTime 2045 |  |
| Randy L. Welch | Principal LifeTime 2050 |  |
| Randy L. Welch | Principal LifeTime 2055 |  |
| Randy L. Welch | Principal LifeTime 2060 |  |
| Randy L. Welch | Principal LifeTime 2065 |  |
| Randy L. Welch | Principal LifeTime 2070 |  |
| Randy L. Welch | Principal LifeTime Hybrid Income |  |
| Randy L. Welch | Principal LifeTime Hybrid 2015 |  |
| Randy L. Welch | Principal LifeTime Hybrid 2020 |  |
| Randy L. Welch | Principal LifeTime Hybrid 2025 | $100001 - $500000 |
| Randy L. Welch | Principal LifeTime Hybrid 2030 | $100001 - $500000 |
| Randy L. Welch | Principal LifeTime Hybrid 2035 |  |
| Randy L. Welch | Principal LifeTime Hybrid 2040 |  |
| Randy L. Welch | Principal LifeTime Hybrid 2045 |  |
| Randy L. Welch | Principal LifeTime Hybrid 2050 |  |
| Randy L. Welch | Principal LifeTime Hybrid 2055 |  |
| Randy L. Welch | Principal LifeTime Hybrid 2060 |  |
| Randy L. Welch | Principal LifeTime Hybrid 2065 |  |
| Randy L. Welch | Principal LifeTime Hybrid 2070 |  |
| Randy L. Welch | SmallCap Growth I | $50001 - $100000 |
| Randy L. Welch | SmallCap Value II | $50001 - $100000 |

---

<sup>(1)</sup>

Information as of December 31, 2022

------

**Advisor: Principal Global Investors, LLC (Principal Edge Portfolio Managers)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** |
|  | &nbsp;&nbsp; **Total**<br> **Number**<br> **of Accounts**<br>| &nbsp;&nbsp; **Total Assets**<br> **in the**<br> **Accounts**<br>| &nbsp;&nbsp; **Number of**<br> **Accounts**<br> **that base**<br> **the Advisory**<br> **Fee on**<br> **Performance**<br>| &nbsp;&nbsp; **Total Assets**<br> **of the**<br> **Accounts**<br> **that base the**<br> **Advisory**<br> **Fee on**<br> **Performance**<br>|
| **Daniel R. Coleman:** Equity Income and Principal Capital Appreciation Funds | **Daniel R. Coleman:** Equity Income and Principal Capital Appreciation Funds | **Daniel R. Coleman:** Equity Income and Principal Capital Appreciation Funds | **Daniel R. Coleman:** Equity Income and Principal Capital Appreciation Funds | **Daniel R. Coleman:** Equity Income and Principal Capital Appreciation Funds |
| Registered investment companies | 5 | $2.0 billion | 0 | $0 |
| Other pooled investment vehicles | 2 | $274.0 million | 0 | $0 |
| Other accounts | 43 | $3.2 billion | 0 | $0 |
| **Theodore Jayne:** Principal Capital Appreciation Fund | **Theodore Jayne:** Principal Capital Appreciation Fund | **Theodore Jayne:** Principal Capital Appreciation Fund | **Theodore Jayne:** Principal Capital Appreciation Fund | **Theodore Jayne:** Principal Capital Appreciation Fund |
| Registered investment companies | 2 | $261.9 million | 0 | $0 |
| Other pooled investment vehicles | 0 | $0 | 0 | $0 |
| Other accounts | 8 | $210.2 million | 0 | $0 |
| **Sarah E. Radecki:** Equity Income Fund | **Sarah E. Radecki:** Equity Income Fund | **Sarah E. Radecki:** Equity Income Fund | **Sarah E. Radecki:** Equity Income Fund | **Sarah E. Radecki:** Equity Income Fund |
| Registered investment companies | 3 | $1.7 billion | 0 | $0 |
| Other pooled investment vehicles | 2 | $274.0 million | 0 | $0 |
| Other accounts | 34 | $2.9 billion | 0 | $0 |
| **Nedret Vidinli:** Equity Income Fund | **Nedret Vidinli:** Equity Income Fund | **Nedret Vidinli:** Equity Income Fund | **Nedret Vidinli:** Equity Income Fund | **Nedret Vidinli:** Equity Income Fund |
| Registered investment companies | 2 | $728.1 million | 0 | $0 |
| Other pooled investment vehicles | 1 | $180.9 million | 0 | $0 |
| Other accounts | 9 | $294.2 million | 0 | $0 |

---

**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 scale. 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 the PFG 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** 

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | &nbsp;&nbsp; **PFI Funds Managed**<br> **by Portfolio Manager**<br>| &nbsp;&nbsp; **Dollar Range of**<br> **Securities Owned by**<br> **the Portfolio Manager**<br>|
| Daniel R. Coleman | Equity Income | over $1,000,000 |

---

------

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | &nbsp;&nbsp; **PFI Funds Managed**<br> **by Portfolio Manager**<br>| &nbsp;&nbsp; **Dollar Range of**<br> **Securities Owned by**<br> **the Portfolio Manager**<br>|
| Daniel R. Coleman | Principal Capital Appreciation | $100001 - $500000 |
| Theodore Jayne | Principal Capital Appreciation | $100001 - $500000 |
| Sarah E. Radecki | Equity Income | over $1,000,000 |
| Nedret Vidinli | Equity Income | $500001 - $1000000 |

---

------

**Advisor: Principal Global Investors, LLC (Principal Equity Portfolio Managers)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** |
|  | &nbsp;&nbsp; **Total**<br> **Number**<br> **of Accounts**<br>| &nbsp;&nbsp; **Total Assets**<br> **in the**<br> **Accounts**<br>| &nbsp;&nbsp; **Number of**<br> **Accounts**<br> **that base**<br> **the Advisory**<br> **Fee on**<br> **Performance**<br>| &nbsp;&nbsp; **Total Assets**<br> **of the**<br> **Accounts**<br> **that base the**<br> **Advisory**<br> **Fee on**<br> **Performance**<br>|
| **Paul H. Blankenhagen:** Diversified International Fund | **Paul H. Blankenhagen:** Diversified International Fund | **Paul H. Blankenhagen:** Diversified International Fund | **Paul H. Blankenhagen:** Diversified International Fund | **Paul H. Blankenhagen:** Diversified International Fund |
| Registered investment companies | 3 | $632.4 million | 0 | $0 |
| Other pooled investment vehicles | 3 | $8.5 billion | 0 | $0 |
| Other accounts | 11 | $1.1 billion | 1 | $256.3 million |
| **Juliet Cohn:** Diversified International Fund | **Juliet Cohn:** Diversified International Fund | **Juliet Cohn:** Diversified International Fund | **Juliet Cohn:** Diversified International Fund | **Juliet Cohn:** Diversified International Fund |
| Registered investment companies | 3 | $632.4 million | 0 | $0 |
| Other pooled investment vehicles | 4 | $8.6 billion | 0 | $0 |
| Other accounts | 11 | $1.1 billion | 1 | $256.3 million |
| **Christopher T. Corbett:** MidCap Growth Fund | **Christopher T. Corbett:** MidCap Growth Fund | **Christopher T. Corbett:** MidCap Growth Fund | **Christopher T. Corbett:** MidCap Growth Fund | **Christopher T. Corbett:** MidCap Growth Fund |
| Registered investment companies | 2 | $270.7 million | 0 | $0 |
| Other pooled investment vehicles | 1 | $377.4 million | 0 | $0 |
| Other accounts | 13 | $274.0 million | 0 | $0 |
| **Jeffrey Kilkenny:** Global Emerging Markets Fund | **Jeffrey Kilkenny:** Global Emerging Markets Fund | **Jeffrey Kilkenny:** Global Emerging Markets Fund | **Jeffrey Kilkenny:** Global Emerging Markets Fund | **Jeffrey Kilkenny:** Global Emerging Markets Fund |
| Registered investment companies | 1 | $61.4 million | 0 | $0 |
| Other pooled investment vehicles | 1 | $174.4 million | 0 | $0 |
| Other accounts | 0 | $0 | 0 | $0 |
| **K. William Nolin:** MidCap Fund | **K. William Nolin:** MidCap Fund | **K. William Nolin:** MidCap Fund | **K. William Nolin:** MidCap Fund | **K. William Nolin:** MidCap Fund |
| Registered investment companies | 5 | $9.9 billion | 0 | $0 |
| Other pooled investment vehicles | 4 | $2.6 billion | 0 | $0 |
| Other accounts | 68 | $11.2 billion | 0 | $0 |
| **Phil Nordhus:** SmallCap Fund | **Phil Nordhus:** SmallCap Fund | **Phil Nordhus:** SmallCap Fund | **Phil Nordhus:** SmallCap Fund | **Phil Nordhus:** SmallCap Fund |
| Registered investment companies | 5 | $222.5 million | 0 | $0 |
| Other pooled investment vehicles | 1 | $689.9 million | 0 | $0 |
| Other accounts | 27 | $2.9 billion | 2 | $473.9 million |
| **Brian W. Pattinson:** SmallCap Fund | **Brian W. Pattinson:** SmallCap Fund | **Brian W. Pattinson:** SmallCap Fund | **Brian W. Pattinson:** SmallCap Fund | **Brian W. Pattinson:** SmallCap Fund |
| Registered investment companies | 7 | $844.0 million | 0 | $0 |
| Other pooled investment vehicles | 3 | $2.1 billion | 0 | $0 |
| Other accounts | 42 | $4.5 billion | 2 | $473.9 million |
| **Tom Rozycki:** MidCap Fund | **Tom Rozycki:** MidCap Fund | **Tom Rozycki:** MidCap Fund | **Tom Rozycki:** MidCap Fund | **Tom Rozycki:** MidCap Fund |
| Registered investment companies | 5 | $9.9 billion | 0 | $0 |
| Other pooled investment vehicles | 4 | $2.6 billion | 0 | $0 |
| Other accounts | 68 | $11.2 billion | 0 | $0 |
| **Jeffrey A. Schwarte:** LargeCap S&P 500 Index, MidCap S&P 400 Index, and SmallCap S&P 600 Index Funds | **Jeffrey A. Schwarte:** LargeCap S&P 500 Index, MidCap S&P 400 Index, and SmallCap S&P 600 Index Funds | **Jeffrey A. Schwarte:** LargeCap S&P 500 Index, MidCap S&P 400 Index, and SmallCap S&P 600 Index Funds | **Jeffrey A. Schwarte:** LargeCap S&P 500 Index, MidCap S&P 400 Index, and SmallCap S&P 600 Index Funds | **Jeffrey A. Schwarte:** LargeCap S&P 500 Index, MidCap S&P 400 Index, and SmallCap S&P 600 Index Funds |
| Registered investment companies | 27 | $9.4 billion | 0 | $0 |
| Other pooled investment vehicles | 3 | $39.7 billion | 0 | $0 |
| Other accounts | 4 | $1.7 billion | 0 | $0 |
| **Marc R. Shapiro:** MidCap Growth Fund | **Marc R. Shapiro:** MidCap Growth Fund | **Marc R. Shapiro:** MidCap Growth Fund | **Marc R. Shapiro:** MidCap Growth Fund | **Marc R. Shapiro:** MidCap Growth Fund |
| Registered investment companies | 2 | $270.7 million | 0 | $0 |
| Other pooled investment vehicles | 1 | $377.4 million | 0 | $0 |
| Other accounts | 10 | $201.9 million | 0 | $0 |
| **Aaron J. Siebel:** LargeCap S&P 500 Index, MidCap S&P 400 Index, and SmallCap S&P 600 Index Funds | **Aaron J. Siebel:** LargeCap S&P 500 Index, MidCap S&P 400 Index, and SmallCap S&P 600 Index Funds | **Aaron J. Siebel:** LargeCap S&P 500 Index, MidCap S&P 400 Index, and SmallCap S&P 600 Index Funds | **Aaron J. Siebel:** LargeCap S&P 500 Index, MidCap S&P 400 Index, and SmallCap S&P 600 Index Funds | **Aaron J. Siebel:** LargeCap S&P 500 Index, MidCap S&P 400 Index, and SmallCap S&P 600 Index Funds |
| Registered investment companies | 26 | $9.3 billion | 0 | $0 |
| Other pooled investment vehicles | 3 | $39.7 billion | 0 | $0 |
| Other accounts | 2 | $1.7 billion | 0 | $0 |

---

------

**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 scale. 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 the PFG 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** 

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | &nbsp;&nbsp; **PFI Funds Managed**<br> **by Portfolio Manager**<br>| &nbsp;&nbsp; **Dollar Range of**<br> **Securities Owned by**<br> **the Portfolio Manager**<br>|
| Paul H. Blankenhagen | Diversified International | over $1,000,000 |
| Juliet Cohn | Diversified International | $100001 - $500000 |
| Christopher T. Corbett | MidCap Growth | $500001 - $1000000 |
| Jeffrey Kilkenny | Global Emerging Markets | $100001 - $500000 |
| K. William Nolin | MidCap | over $1,000,000 |
| Phil Nordhus | SmallCap | over $1,000,000 |
| Brian Pattinson | SmallCap | over $1,000,000 |
| Tom Rozycki | MidCap | over $1,000,000 |
| Jeffrey A. Schwarte | LargeCap S&P 500 Index | $100001 - $500000 |
| Jeffrey A. Schwarte | MidCap S&P 400 Index |  |
| Jeffrey A. Schwarte | SmallCap S&P 600 Index | $10001 - $50000 |
| Marc R. Shapiro | MidCap Growth | $100001 - $500000 |
| Aaron J. Siebel | LargeCap S&P 500 Index |  |
| Aaron J. Siebel | MidCap S&P 400 Index |  |
| Aaron J. Siebel | SmallCap S&P 600 Index |  |

---

------

**Advisor: Principal Global Investors, LLC (Principal Finisterre Portfolio Managers)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** |
|  | &nbsp;&nbsp; **Total**<br> **Number**<br> **of Accounts**<br>| &nbsp;&nbsp; **Total Assets**<br> **in the**<br> **Accounts**<br>| &nbsp;&nbsp; **Number of**<br> **Accounts**<br> **that base**<br> **the Advisory**<br> **Fee on**<br> **Performance**<br>| &nbsp;&nbsp; **Total Assets**<br> **of the**<br> **Accounts**<br> **that base the**<br> **Advisory**<br> **Fee on**<br> **Performance**<br>|
| **Damien Buchet:** Finisterre Emerging Markets Total Return Bond Fund | **Damien Buchet:** Finisterre Emerging Markets Total Return Bond Fund | **Damien Buchet:** Finisterre Emerging Markets Total Return Bond Fund | **Damien Buchet:** Finisterre Emerging Markets Total Return Bond Fund | **Damien Buchet:** Finisterre Emerging Markets Total Return Bond Fund |
| Registered Investment Companies | 4 | $491.8 million | 0 | $0 |
| Other Pooled Investment Vehicles | 5 | $1.5 billion | 0 | $0 |
| Other accounts | 1 | $363.0 million | 0 | $0 |
| **Christopher Watson:** Finisterre Emerging Markets Total Return Bond Fund | **Christopher Watson:** Finisterre Emerging Markets Total Return Bond Fund | **Christopher Watson:** Finisterre Emerging Markets Total Return Bond Fund | **Christopher Watson:** Finisterre Emerging Markets Total Return Bond Fund | **Christopher Watson:** Finisterre Emerging Markets Total Return Bond Fund |
| Registered Investment Companies | 4 | $491.8 million | 0 | $0 |
| Other Pooled Investment Vehicles | 5 | $1.5 billion | 0 | $0 |
| Other accounts | 1 | $363.0 million | 0 | $0 |

---

**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 Funds' 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 scale. Deferred compensation is required to be invested into funds managed by the team via a co-investment program and is 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) and talent retention.

**Ownership of Securities** 

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | &nbsp;&nbsp; **PFI Funds Managed**<br> **by Portfolio Manager**<br>| &nbsp;&nbsp; **Dollar Range of**<br> **Securities Owned by**<br> **the Portfolio Manager**<br>|
| Damien Buchet | Finisterre Emerging Markets Total Return Bond |  |
| Christopher Watson | Finisterre Emerging Markets Total Return Bond |  |

---

------

**Advisor: Principal Global Investors, LLC (Principal Fixed Income Portfolio Managers)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** |
|  | &nbsp;&nbsp; **Total**<br> **Number**<br> **of Accounts**<br>| &nbsp;&nbsp; **Total Assets**<br> **in the**<br> **Accounts**<br>| &nbsp;&nbsp; **Number of**<br> **Accounts**<br> **that base**<br> **the Advisory**<br> **Fee on**<br> **Performance**<br>| &nbsp;&nbsp; **Total Assets**<br> **of the**<br> **Accounts**<br> **that base the**<br> **Advisory**<br> **Fee on**<br> **Performance**<br>|
| **William C. Armstrong:** Core Plus Bond Fund | **William C. Armstrong:** Core Plus Bond Fund | **William C. Armstrong:** Core Plus Bond Fund | **William C. Armstrong:** Core Plus Bond Fund | **William C. Armstrong:** Core Plus Bond Fund |
| Registered investment companies | 4 | $1.2 billion | 0 | $0 |
| Other pooled investment vehicles | 2 | $2.7 billion | 0 | $0 |
| Other accounts | 37 | $2.7 billion | 3 | $1.4 billion |
| **Bryan C. Davis:** Core Plus Bond and Government & High Quality Bond Funds | **Bryan C. Davis:** Core Plus Bond and Government & High Quality Bond Funds | **Bryan C. Davis:** Core Plus Bond and Government & High Quality Bond Funds | **Bryan C. Davis:** Core Plus Bond and Government & High Quality Bond Funds | **Bryan C. Davis:** Core Plus Bond and Government & High Quality Bond Funds |
| Registered investment companies | 7 | $2.4 billion | 0 | $0 |
| Other pooled investment vehicles | 9 | $7.5 billion | 0 | $0 |
| Other accounts | 15 | $5.2 billion | 3 | $1.1 billion |
| **Mark P. Denkinger:** High Yield Fund | **Mark P. Denkinger:** High Yield Fund | **Mark P. Denkinger:** High Yield Fund | **Mark P. Denkinger:** High Yield Fund | **Mark P. Denkinger:** High Yield Fund |
| Registered investment companies | 7 | $411.9 million | 0 | $0 |
| Other pooled investment vehicles | 7 | $560.6 million | 0 | $0 |
| Other accounts | 38 | $2.6 billion | 2 | $78.6 million |
| **John R. Friedl:** Core Fixed Income and Short-Term Income Funds | **John R. Friedl:** Core Fixed Income and Short-Term Income Funds | **John R. Friedl:** Core Fixed Income and Short-Term Income Funds | **John R. Friedl:** Core Fixed Income and Short-Term Income Funds | **John R. Friedl:** Core Fixed Income and Short-Term Income Funds |
| Registered investment companies | 2 | $140.7 million | 0 | $0 |
| Other pooled investment vehicles | 2 | $1.5 billion | 0 | $0 |
| Other accounts | 8 | $69.9 million | 0 | $0 |
| **Zach Gassmann:** Government & High Quality Bond Fund | **Zach Gassmann:** Government & High Quality Bond Fund | **Zach Gassmann:** Government & High Quality Bond Fund | **Zach Gassmann:** Government & High Quality Bond Fund | **Zach Gassmann:** Government & High Quality Bond Fund |
| Registered investment companies | 7 | $414.5 million | 0 | $0 |
| Other pooled investment vehicles | 6 | $1.2 billion | 0 | $0 |
| Other accounts | 18 | $3.7 billion | 5 | $338.8 million |
| **Erika Isley:** Government Money Market and Money Market Funds | **Erika Isley:** Government Money Market and Money Market Funds | **Erika Isley:** Government Money Market and Money Market Funds | **Erika Isley:** Government Money Market and Money Market Funds | **Erika Isley:** Government Money Market and Money Market Funds |
| Registered investment companies | 2 | $4654 | 0 | $0 |
| Other pooled investment vehicles | 1 | $1.4 billion | 0 | $0 |
| Other accounts | 9 | $1.2 billion | 2 | $57.7 million |
| **James Noble:** California Municipal and Tax-Exempt Bond Funds | **James Noble:** California Municipal and Tax-Exempt Bond Funds | **James Noble:** California Municipal and Tax-Exempt Bond Funds | **James Noble:** California Municipal and Tax-Exempt Bond Funds | **James Noble:** California Municipal and Tax-Exempt Bond Funds |
| Registered investment companies | 2 | $134.2 million | 0 | $0 |
| Other pooled investment vehicles | 4 | $73.0 million | 0 | $0 |
| Other accounts | 11 | $577.2 million | 0 | $0 |
| **Scott J. Peterson:** Core Fixed Income and Short-Term Income Funds | **Scott J. Peterson:** Core Fixed Income and Short-Term Income Funds | **Scott J. Peterson:** Core Fixed Income and Short-Term Income Funds | **Scott J. Peterson:** Core Fixed Income and Short-Term Income Funds | **Scott J. Peterson:** Core Fixed Income and Short-Term Income Funds |
| Registered investment companies | 2 | $140.7 million | 0 | $0 |
| Other pooled investment vehicles | 2 | $1.5 billion | 0 | $0 |
| Other accounts | 8 | $69.9 million | 0 | $0 |
| **Josh Rank:** High Yield Fund | **Josh Rank:** High Yield Fund | **Josh Rank:** High Yield Fund | **Josh Rank:** High Yield Fund | **Josh Rank:** High Yield Fund |
| Registered investment companies | 7 | $411.9 million | 0 | $0 |
| Other pooled investment vehicles | 7 | $560.6 million | 0 | $0 |
| Other accounts | 38 | $2.6 billion | 2 | $78.6 million |
| **Tracy Reeg:** Government Money Market and Money Market Funds | **Tracy Reeg:** Government Money Market and Money Market Funds | **Tracy Reeg:** Government Money Market and Money Market Funds | **Tracy Reeg:** Government Money Market and Money Market Funds | **Tracy Reeg:** Government Money Market and Money Market Funds |
| Registered investment companies | 0 | $0 | 0 | 0 |
| Other pooled investment vehicles | 1 | $1.4 billion | 0 | $0 |
| Other accounts | 1 | $253.6 million | 0 | $0 |
| **Darrin E. Smith:** High Yield Fund | **Darrin E. Smith:** High Yield Fund | **Darrin E. Smith:** High Yield Fund | **Darrin E. Smith:** High Yield Fund | **Darrin E. Smith:** High Yield Fund |
| Registered investment companies | 7 | $411.9 million | 0 | $0 |
| Other pooled investment vehicles | 7 | $560.6 million | 0 | $0 |
| Other accounts | 38 | $2.6 billion | 2 | $78.6 million |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** |
|  | &nbsp;&nbsp; **Total**<br> **Number**<br> **of Accounts**<br>| &nbsp;&nbsp; **Total Assets**<br> **in the**<br> **Accounts**<br>| &nbsp;&nbsp; **Number of**<br> **Accounts**<br> **that base**<br> **the Advisory**<br> **Fee on**<br> **Performance**<br>| &nbsp;&nbsp; **Total Assets**<br> **of the**<br> **Accounts**<br> **that base the**<br> **Advisory**<br> **Fee on**<br> **Performance**<br>|
| **James Welch:** California Municipal and Tax-Exempt Bond Funds | **James Welch:** California Municipal and Tax-Exempt Bond Funds | **James Welch:** California Municipal and Tax-Exempt Bond Funds | **James Welch:** California Municipal and Tax-Exempt Bond Funds | **James Welch:** California Municipal and Tax-Exempt Bond Funds |
| Registered investment companies | 2 | $134.2 million | 0 | $0 |
| Other pooled investment vehicles | 4 | $73.0 million | 0 | $0 |
| Other accounts | 11 | $577.2 million | 0 | $0 |

---

**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 scale. 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 the PFG 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** 

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | &nbsp;&nbsp; **PFI Funds Managed**<br> **by Portfolio Manager**<br>| &nbsp;&nbsp; **Dollar Range of**<br> **Securities Owned by**<br> **the Portfolio Manager**<br>|
| William C. Armstrong | Core Plus Bond | over $1,000,000 |
| Bryan C. Davis | Core Plus Bond | $500001 - $1000000 |
| Bryan C. Davis | Government & High Quality Bond | over $1,000,000 |
| Mark P. Denkinger | High Yield | over $1,000,000 |
| John R. Friedl | Core Fixed Income | $100001 - $500000 |
| John R. Friedl | Short-Term Income | $1 - $10000 |
| Zach Gassmann | Government & High Quality Bond | $100001 - $500000 |
| Erika Isley | Government Money Market |  |
| Erika Isley | Money Market |  |
| James Noble | California Municipal | $1 - $10000 |
| James Noble | Tax-Exempt Bond | $100001 - $500000 |
| Scott J. Peterson | Core Fixed Income | $1 - $10000 |
| Scott J. Peterson | Short-Term Income | $500001 - $1000000 |
| Josh Rank | High Yield | $500001 - $1000000 |
| Tracy Reeg | Government Money Market |  |

---

------

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | &nbsp;&nbsp; **PFI Funds Managed**<br> **by Portfolio Manager**<br>| &nbsp;&nbsp; **Dollar Range of**<br> **Securities Owned by**<br> **the Portfolio Manager**<br>|
| Tracy Reeg | Money Market | $1 - $10000 |
| Darrin E. Smith | High Yield | $500001 - $1000000 |
| James Welch | California Municipal | $1 - $10000 |
| James Welch | Tax-Exempt Bond | $100001 - $500000 |

---

------

**Sub-Advisor: BlackRock Financial Management, Inc.** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** |
|  | &nbsp;&nbsp; **Total**<br> **Number**<br> **of Accounts**<br>| &nbsp;&nbsp; **Total Assets**<br> **in the**<br> **Accounts**<br>| &nbsp;&nbsp; **Number of**<br> **Accounts**<br> **that base the**<br> **Advisory**<br> **Fee on**<br> **Performance**<br>| &nbsp;&nbsp; **Total Assets**<br> **of the**<br> **Accounts**<br> **that base the**<br> **Advisory**<br> **Fee on**<br> **Performance**<br>|
| **Akiva Dickstein:** Inflation Protection Fund | **Akiva Dickstein:** Inflation Protection Fund | **Akiva Dickstein:** Inflation Protection Fund | **Akiva Dickstein:** Inflation Protection Fund | **Akiva Dickstein:** Inflation Protection Fund |
| Registered investment companies | 22 | $23.0 billion | 0 | $0 |
| Other pooled investment vehicles | 25 | $7.6 billion | 0 | $0 |
| Other accounts | 224 | $95.3 billion | 5 | $1.6 billion |
| **David Rogal:** Inflation Protection Fund |  |  |  |  |
| Registered investment companies | 19 | $76.5 billion | 0 | $0 |
| Other pooled investment vehicles | 13 | $18.1 billion | 0 | $0 |
| Other accounts | 20 | $11.4 million | 0 | $0 |

---

**Compensation for Sub-Advisor and Sub-Sub-Advisor** 

**Portfolio Manager Compensation Overview** 

BlackRock's financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based discretionary bonus, participation in various benefits programs and one or more of the incentive compensation programs established by BlackRock.

**Base Compensation.** Generally, portfolio managers receive base compensation based on their position with the firm.

**Discretionary Incentive Compensation** 

Discretionary incentive compensation is a function of several components: the performance of BlackRock, Inc., the performance of the portfolio manager's group within BlackRock, the investment performance, including risk-adjusted returns, of the firm's assets under management or supervision by that portfolio manager relative to predetermined benchmarks, and the individual's performance and contribution to the overall performance of these portfolios and BlackRock. In most cases, these benchmarks are the same as the benchmark or benchmarks against which the performance of the Funds or other accounts managed by the portfolio managers are measured. Among other things, BlackRock's Chief Investment Officers make a subjective determination with respect to each portfolio manager's compensation based on the performance of the Funds and other accounts managed by each portfolio manager relative to the various benchmarks. Performance of fixed income funds is measured on a pre-tax and/or after-tax basis over various time periods including 1-, 3- and 5- year periods, as applicable. With respect to these portfolio managers, such benchmarks for the Fund and other accounts are:

---

| | |
|:---|:---|
| **Portfolio Manager** | **Benchmarks** |
| Christopher Allen | &nbsp;&nbsp; Varied Euro-Based Benchmarks and global inflation <br> benchmark.<br>|
| Akiva Dickstein | &nbsp;&nbsp; A combination of market-based indices (e.g. Bloomberg <br> US Aggregate Index, Bloomberg US Universal Index and <br> Bloomberg Intermediate Aggregate Index), certain <br> customized indices and certain fund industry peer groups.<br>|
| David Rogal | &nbsp;&nbsp; A combination of market-based indices (e.g., Bloomberg <br> U.S. Aggregate Bond Index), certain customized indices <br> and certain fund industry peer groups.<br>|

---

**Distribution of Discretionary Incentive Compensation.** Distribution of Discretionary Incentive Compensation. Discretionary incentive compensation is distributed to portfolio managers in a combination of cash, deferred BlackRock, Inc. stock awards, and/or deferred cash awards that notionally track the return of certain BlackRock investment products.

Portfolio managers receive their annual discretionary incentive compensation in the form of cash. Portfolio managers whose total compensation is above a specified threshold also receive deferred BlackRock, Inc. stock awards annually as part of their discretionary incentive compensation. Paying a portion of discretionary incentive compensation in the form of deferred

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BlackRock, Inc. stock puts compensation earned by a portfolio manager for a given year "at risk" based on BlackRock's ability to sustain and improve its performance over future periods. In some cases, additional deferred BlackRock, Inc. stock may be granted to certain key employees as part of a long-term incentive award to aid in retention, align interests with long-term shareholders and motivate performance. Deferred BlackRock, Inc. stock awards are generally granted in the form of BlackRock, Inc. restricted stock units that vest pursuant to the terms of the applicable plan and, once vested, settle in BlackRock, Inc. common stock. The portfolio managers of this Fund have deferred BlackRock, Inc. stock awards.

For certain portfolio managers, a portion of the discretionary incentive compensation is also distributed in the form of deferred cash awards that notionally track the returns of select BlackRock investment products they manage, which provides direct alignment of portfolio manager discretionary incentive compensation with investment product results. Deferred cash awards vest ratably over a number of years and, once vested, settle in the form of cash. Only portfolio managers who manage specified products and whose total compensation is above a specified threshold are eligible to participate in the deferred cash award program.

**Other Compensation Benefits.** In addition to base salary and discretionary incentive compensation, portfolio managers may be eligible to receive or participate in one or more of the following:

*Incentive Savings Plans —* BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a company match equal to 50% of the first 8% of eligible pay contributed to the plan capped at $5,000 per year, and a company retirement contribution equal to 3-5% of eligible compensation up to the Internal Revenue Service limit ($305,000 for 2022). The RSP offers a range of investment options, including registered investment companies and collective investment funds managed by the firm. BlackRock contributions follow the investment direction set by participants for their own contributions or, absent participant investment direction, are invested into a target date fund that corresponds to, or is closest to, the year in which the participant attains age 65. The ESPP allows for investment in BlackRock common stock at a 5% discount on the fair market value of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares of common stock or a dollar value of $25,000 based on its fair market value on the purchase date. Messrs. Dickstein and Rogal are eligible to participate in these plans.

United Kingdom-based portfolio managers are also eligible to participate in broad-based plans offered generally to BlackRock employees, including broad-based retirement, health and other employee benefit plans. For example, BlackRock has created a variety of incentive savings plans in which BlackRock employees are eligible to participate, including the BlackRock Retirement Savings Plan (RSP) and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution to the RSP is between 10% and 15% of eligible pay capped at £160,000 per annum. The RSP offers a range of investment options, including several collective investment funds managed by the firm. BlackRock contributions follow the investment direction set by participants for their own contributions or, in the absence of an investment election being made, are invested into a target date fund that corresponds to, or is closest to, the year in which the participant attains age 65. The ESPP allows for investment in BlackRock common stock at a 5% discount on the fair market value of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares of common stock or a US dollar value of $25,000 based on its fair market value on the purchase date. Mr. Allen is eligible to participate in these plans.

**Portfolio Manager Potential Material Conflicts of Interest** 

BlackRock has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock furnishes investment management and advisory services to numerous clients in addition to the Fund, and BlackRock may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such fees), which may be the same as or different from those made to the Fund. In addition, BlackRock, its affiliates and significant shareholders and any officer, director, shareholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock recommends to the Fund. BlackRock, or any of its affiliates or significant shareholders, or any officer, director, shareholder, employee or any member of their families may take different actions than those recommended to the Fund by BlackRock with respect to the same securities. Moreover, BlackRock may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock's (or its affiliates' or significant shareholders') officers, directors or employees are directors or officers, or companies as to which BlackRock or any of its affiliates or significant shareholders or the officers, directors and employees of any of them has any substantial economic interest or possesses material non-public information. Certain portfolio managers also may manage accounts whose investment strategies may at times be opposed to the strategy

------

utilized for a fund. It should also be noted that Messrs. Dickstein and Rogal may be managing hedge fund and/or long only accounts, or may be part of a team managing hedge fund and/or long only accounts, subject to incentive fees. Messrs. Dickstein and Rogal may therefore be entitled to receive a portion of any incentive fees earned on such accounts.

As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to allocate investments in a fair and equitable manner among client accounts, with no account receiving preferential treatment. To this end, BlackRock has adopted policies that are intended to ensure reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base, as appropriate.

**Ownership of Securities** 

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | &nbsp;&nbsp; **PFI Funds Managed**<br> **by Portfolio Manager**<br>| &nbsp;&nbsp; **Dollar Range of**<br> **Securities Owned by**<br> **the Portfolio Manager**<br>|
| Akiva Dickstein | Inflation Protection | None |
| David Rogal | Inflation Protection | None |

---

**Sub-Sub-Advisor: BlackRock International Limited** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** |
|  | &nbsp;&nbsp; **Total**<br> **Number**<br> **of Accounts**<br>| &nbsp;&nbsp; **Total Assets**<br> **in the**<br> **Accounts**<br>| &nbsp;&nbsp; **Number of**<br> **Accounts**<br> **that base**<br> **the Advisory**<br> **Fee on**<br> **Performance**<br>| &nbsp;&nbsp; **Total Assets**<br> **of the**<br> **Accounts**<br> **that base the**<br> **Advisory**<br> **Fee on**<br> **Performance**<br>|
| **Christopher Allen:** Inflation Protection Fund | **Christopher Allen:** Inflation Protection Fund | **Christopher Allen:** Inflation Protection Fund | **Christopher Allen:** Inflation Protection Fund | **Christopher Allen:** Inflation Protection Fund |
| Registered investment companies | 6 | $5.2 billion | 0 | $0 |
| Other pooled investment vehicles | 14 | $9.8 billion | 0 | $0 |
| Other accounts | 24 | $10.3 billion | 0 | $0 |

---

**Compensation** 

For compensation information, reference the Compensation for Sub-Advisor and Sub-Sub-Advisor section under Sub-Advisor: BlackRock Financial Management, Inc.

**Ownership of Securities** 

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | &nbsp;&nbsp; **PFI Funds Managed**<br> **by Portfolio Manager**<br>| &nbsp;&nbsp; **Dollar Range of**<br> **Securities Owned by**<br> **the Portfolio Manager**<br>|
| Christopher Allen | Inflation Protection | None |

---

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**Sub-Advisor: Origin Asset Management LLP** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** |
|  | &nbsp;&nbsp; **Total**<br> **Number**<br> **of Accounts**<br>| &nbsp;&nbsp; **Total Assets**<br> **in the**<br> **Accounts**<br>| &nbsp;&nbsp; **Number of**<br> **Accounts**<br> **that base**<br> **the Advisory**<br> **Fee on**<br> **Performance**<br>| &nbsp;&nbsp; **Total Assets**<br> **of the**<br> **Accounts**<br> **that base the**<br> **Advisory**<br> **Fee on**<br> **Performance**<br>|
| **Chris Carter:** International Fund I | **Chris Carter:** International Fund I | **Chris Carter:** International Fund I | **Chris Carter:** International Fund I | **Chris Carter:** International Fund I |
| Registered investment companies | 1 | $2.1 billion | 0 | $0 |
| Other pooled investment vehicles | 3 | $98.0 million | 0 | $0 |
| Other accounts | 10 | $1.2 billion | 0 | $0 |
| **Tarlock Randhawa:** International Fund I | **Tarlock Randhawa:** International Fund I | **Tarlock Randhawa:** International Fund I | **Tarlock Randhawa:** International Fund I | **Tarlock Randhawa:** International Fund I |
| Registered investment companies | 1 | $2.1 billion | 0 | $0 |
| Other pooled investment vehicles | 3 | $98.0 million | 0 | $0 |
| Other accounts | 10 | $1.2 billion | 0 | $0 |
| **Nerys Weir:** International Fund I | **Nerys Weir:** International Fund I | **Nerys Weir:** International Fund I | **Nerys Weir:** International Fund I | **Nerys Weir:** International Fund I |
| Registered investment companies | 1 | $2.1 billion | 0 | $0 |
| Other pooled investment vehicles | 3 | $98.0 million | 0 | $0 |
| Other accounts | 10 | $1.2 billion | 0 | $0 |

---

**Compensation** 

Origin Asset Management LLP offers investment professionals a competitive compensation structure that is evaluated relative to other asset management firms to ensure its continued competitiveness and alignment with industry best practices. The objective of the structure is to align team contributions in a manner that is consistent with industry standards and business results. Compensation of Origin's portfolio managers is formed of a competitive fixed salary and a share of a bonus pool, which is a function of the annual profitability of the firm. Select members of the investment team further share in the firm's profits based on their overall partner ownership.

**Ownership of Securities** 

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | &nbsp;&nbsp; **PFI Funds Managed**<br> **by Portfolio Manager**<br>| &nbsp;&nbsp; **Dollar Range of**<br> **Securities Owned by**<br> **the Portfolio Manager**<br>|
| Chris Carter | International I | None |
| Tarlock Randhawa | International I | None |
| Nerys Weir | International I | None |

---

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**Sub-Advisor: Principal Real Estate Investors, LLC** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** |
|  | &nbsp;&nbsp; **Total**<br> **Number**<br> **of Accounts**<br>| &nbsp;&nbsp; **Total Assets**<br> **in the**<br> **Accounts**<br>| &nbsp;&nbsp; **Number of**<br> **Accounts**<br> **that base**<br> **the Advisory**<br> **Fee on**<br> **Performance**<br>| &nbsp;&nbsp; **Total Assets**<br> **of the**<br> **Accounts**<br> **that base the**<br> **Advisory**<br> **Fee on**<br> **Performance**<br>|
| **Keith Bokota:** Real Estate Securities Fund | **Keith Bokota:** Real Estate Securities Fund | **Keith Bokota:** Real Estate Securities Fund | **Keith Bokota:** Real Estate Securities Fund | **Keith Bokota:** Real Estate Securities Fund |
| Registered investment companies | 4 | $630.8 million | 0 | $0 |
| Other pooled investment vehicles | 2 | $981.9 million | 0 | $0 |
| Other accounts | 41 | $3.0 billion | 1 | $97.0 million |
| **Simon Hedger:** Global Real Estate Securities Fund | **Simon Hedger:** Global Real Estate Securities Fund | **Simon Hedger:** Global Real Estate Securities Fund | **Simon Hedger:** Global Real Estate Securities Fund | **Simon Hedger:** Global Real Estate Securities Fund |
| Registered investment companies | 6 | $896.6 million | 0 | $0 |
| Other pooled investment vehicles | 4 | $1.4 billion | 0 | $0 |
| Other accounts | 36 | $5.2 billion | 5 | $447.5 million |
| **Anthony Kenkel:** Global Real Estate Securities and Real Estate Securities Funds | **Anthony Kenkel:** Global Real Estate Securities and Real Estate Securities Funds | **Anthony Kenkel:** Global Real Estate Securities and Real Estate Securities Funds | **Anthony Kenkel:** Global Real Estate Securities and Real Estate Securities Funds | **Anthony Kenkel:** Global Real Estate Securities and Real Estate Securities Funds |
| Registered investment companies | 10 | $1.5 billion | 0 | $0 |
| Other pooled investment vehicles | 5 | $2.3 billion | 0 | $0 |
| Other accounts | 78 | $8.2 billion | 6 | $544.6 million |
| **Kelly D. Rush:** Global Real Estate Securities and Real Estate Securities Funds | **Kelly D. Rush:** Global Real Estate Securities and Real Estate Securities Funds | **Kelly D. Rush:** Global Real Estate Securities and Real Estate Securities Funds | **Kelly D. Rush:** Global Real Estate Securities and Real Estate Securities Funds | **Kelly D. Rush:** Global Real Estate Securities and Real Estate Securities Funds |
| Registered investment companies | 10 | $1.5 billion | 0 | $0 |
| Other pooled investment vehicles | 5 | $2.3 billion | 0 | $0 |
| Other accounts | 79 | $8.3 billion | 6 | $544.6 million |

---

**Compensation** 

Principal Real Estate Investors, LLC 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 scale. Deferred compensation is required to be partially invested in Principal Financial Group ("PFG") restricted stock units. The remaining portion will be awarded in deferred cash. 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, 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** 

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | &nbsp;&nbsp; **PFI Funds Managed**<br> **by Portfolio Manager**<br>| &nbsp;&nbsp; **Dollar Range of**<br> **Securities Owned by**<br> **the Portfolio Manager**<br>|
| Keith Bokota | Real Estate Securities | over $1,000,000 |

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------

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | &nbsp;&nbsp; **PFI Funds Managed**<br> **by Portfolio Manager**<br>| &nbsp;&nbsp; **Dollar Range of**<br> **Securities Owned by**<br> **the Portfolio Manager**<br>|
| Simon Hedger | Global Real Estate Securities | $500001 - $1000000 |
| Anthony Kenkel | Global Real Estate Securities | over $1,000,000 |
| Anthony Kenkel | Real Estate Securities | over $1,000,000 |
| Kelly D. Rush | Global Real Estate Securities | over $1,000,000 |
| Kelly D. Rush | Real Estate Securities | over $1,000,000 |

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**APPENDIX A—DESCRIPTION OF BOND RATINGS** 

<u>Moody's Investors Service, Inc. Rating Definitions:</u> 

Long-Term Obligation Ratings

Ratings assigned on Moody's global long-term obligation rating scales are forward-looking opinions of the relative credit risk of financial obligations issued by non-financial corporates, financial institutions, structured finance vehicles, project finance vehicles, and public sector entities. Long-term ratings are assigned to issuers or obligations with an original maturity of one year or more and reflect both on the likelihood of a default or impairment on contractual financial obligations and the expected financial loss suffered in the event of default or impairment.<sup>1</sup>

<sup>1</sup>

*For certain structured finance, preferred stock and hybrid securities in which payment default events are either not defined or do not match investor's expectations for timely payment, the ratings reflect the likelihood of impairment and the expected financial loss in the event of impairment.* 

---

| | |
|:---|:---|
| Aaa: | Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk. |
| Aa: | Obligations rated Aa are judged to be of high quality and are subject to very low credit risk. |
| A: | Obligations rated A are considered upper-medium grade and are subject to low credit risk. |
| Baa: | &nbsp;&nbsp; Obligations rated Baa are subject to moderate credit risk. They are considered medium-grade and as such may <br> possess certain speculative characteristics.<br>|
| Ba: | Obligations rated Ba are judged to be speculative and are subject to substantial credit risk. |
| B: | Obligations rated B are considered speculative and are subject to high credit risk. |
| Caa: | Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk. |
| Ca: | &nbsp;&nbsp; Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of <br> recovery of principal and interest.<br>|
| C: | &nbsp;&nbsp; Obligations rated C are the lowest rated class of bonds and are typically in default, with little prospect for <br> recovery of principal or interest.<br>|
| **NOTE:** | &nbsp;&nbsp; Moody's appends numerical modifiers, 1, 2, and 3 to each generic rating classification from Aa through Caa. <br> The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category, the modifier 2 <br> indicates a mid-range ranking, and the modifier 3 indicates a ranking in the lower end of that generic rating <br> category. Additionally, a "(hyb)" indicator is appended to all ratings of hybrid securities issued by banks, issuers, <br> financial companies, and securities firms.\*<br>|

---

\*

*By their terms, hybrid securities allow for the omission of scheduled dividends, interest, or principal payments, which can potentially result in impairment if such an omission occurs. Hybrid securities may also be subject to contractually allowable write-downs of principal that could result in impairment. Together the hybrid indicator, the long-term obligation rating assigned to a hybrid security is an expression of the relative credit risk associated with that security.* 

SHORT-TERM NOTES: Short-term ratings are assigned to obligations with an original maturity of thirteen months or less and reflect both on the likelihood of a default or impairment on contractual financial obligations and the expected financial loss suffered in the event of default. Moody's employs the following three designations, all judged to be investment grade, to indicate the relative repayment ability of rated issuers:

Issuers rated Prime-1 (or related supporting institutions) have a superior ability to repay short-term debt obligations.

Issuers rated Prime-2 (or related supporting institutions) have a strong ability to repay short-term debt obligations.

Issuers rated Prime-3 (or related supporting institutions) have an acceptable ability to repay short-term obligations.

Issuers rated Not Prime do not fall within any of the Prime rating categories.

US MUNICIPAL SHORT-TERM DEBT: The Municipal Investment Grade (MIG) scale is used to rate US municipal bonds of up to five years maturity. MIG ratings are divided into three levels - MIG 1 through MIG 3 - while speculative grade short-term obligations are designated SG.

MIG 1 denotes superior credit quality, afforded excellent protection from highly reliable liquidity support, or demonstrated broad-based access to the market for refinancing.

MIG 2 denotes strong credit quality with ample margins of protection, although not as large as in the preceding group.

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MIG 3 notes are of acceptable credit quality. Liquidity and cash-flow protection may be narrow and market access for refinancing is likely to be less well-established.

SG denotes speculative-grade credit quality and may lack sufficient margins of protection.

<u>Description of S&P Global Ratings' Credit Rating Definitions:</u> 

S&P Global's credit rating, both long-term and short-term, is a forward-looking opinion of the creditworthiness of an obligor with respect to a specific obligation. This assessment takes into consideration the creditworthiness of guarantors, insurers, or other forms of credit enhancement on the obligation.

The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment as to market price or suitability for a particular investor.

The ratings are statements of opinion as of the date they are expressed furnished by the issuer or obtained by S&P Global Ratings from other sources S&P Global Ratings considers reliable. S&P Global Ratings does not perform an audit in connection with any rating and may, on occasion, rely on unaudited financial information. The ratings may be changed, suspended, or withdrawn as a result of changes in, or unavailability of, such information, or for other circumstances.

The ratings are based, in varying degrees, on the following considerations:

<sup>•</sup>

Likelihood of payment - capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation;

<sup>•</sup>

Nature of and provisions of the financial obligation;

<sup>•</sup>

Protection afforded by, and relative position of, the financial obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditor's rights.

LONG-TERM CREDIT RATINGS:

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| | |
|:---|:---|
| AAA: | &nbsp;&nbsp; Obligations rated 'AAA' have the highest rating assigned by S&P Global Ratings. The obligor's capacity to <br> meet its financial commitment on the obligation is extremely strong.<br>|
| AA: | &nbsp;&nbsp; Obligations rated 'AA' differ from the highest-rated issues only in small degree. The obligor's capacity to <br> meet its financial commitment on the obligation is very strong.<br>|
| A: | &nbsp;&nbsp; Obligations rated 'A' have a strong capacity to meet financial commitment on the obligation although they <br> are somewhat more susceptible to the adverse effects of changes in circumstances and economic <br> conditions than obligations in higher-rated categories.<br>|
| BBB: | &nbsp;&nbsp; Obligations rated 'BBB' exhibit adequate protection parameters; however, adverse economic conditions or <br> changing circumstances are more likely to lead to a weakened capacity to meet financial commitment on <br> the obligation.<br>|
| BB, B, CCC,<br> CC and C:<br>| &nbsp;&nbsp; Obligations rated 'BB', 'B', 'CCC', 'CC', and 'C' are regarded, on balance, as having significant speculative <br> characteristics. 'BB' indicates the lowest degree of speculation and 'C' the highest degree of speculation. <br> While such obligations will likely have some quality and protective characteristics, these may be <br> outweighed by large uncertainties or major risk exposures to adverse conditions.<br>|
| BB: | &nbsp;&nbsp; Obligations rated 'BB' are less vulnerable to nonpayment than other speculative issues. However it faces <br> major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which <br> could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.<br>|
| B: | &nbsp;&nbsp; Obligations rated 'B' are more vulnerable to nonpayment than 'BB' but the obligor currently has the <br> capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic <br> conditions will likely impair this capacity.<br>|
| CCC: | &nbsp;&nbsp; Obligations rated 'CCC' are currently vulnerable to nonpayment and is dependent upon favorable <br> business, financial, and economic conditions for the obligor to meet its financial commitment on the <br> obligation. If adverse business, financial, or economic conditions occur, the obligor is not likely to have the <br> capacity to meet its financial commitment on the obligation.<br>|
| CC: | &nbsp;&nbsp; Obligations rated 'CC' are currently highly vulnerable to nonpayment. The 'CC' rating is used when a <br> default has not yet occurred but S&P Global Ratings expects default to be a virtual certainty, regardless of <br> anticipated time to default.<br>|
| C: | &nbsp;&nbsp; The rating 'C' is highly vulnerable to nonpayment, the obligation is expected to have lower relative seniority <br> or lower ultimate recovery compared to higher rated obligations.<br>|

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------

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| | |
|:---|:---|
| D: | &nbsp;&nbsp; Obligations rated 'D' are in default, or in breach of an imputed promise. For non-hybrid capital instruments, <br> the 'D' rating category is used when payments on an obligation are not made on the date due, unless S&P <br> Global Ratings believes that such payments will be made within five business days in the absence of a <br> stated grace period or within the earlier of the stated grace period or 30 calendar days. The rating will also <br> be used upon filing for bankruptcy petition or the taking of similar action and where default is a virtual <br> certainty. If an obligation is subject to a distressed exchange offer the rating is lowered to 'D'.<br>|

---

Plus (+) or Minus (-): The ratings from 'AA' to 'CCC' may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.

NR: Indicates that no rating has been requested, that there is insufficient information on which to base a rating or that S&P Global Ratings does not rate a particular type of obligation as a matter of policy.

SHORT-TERM CREDIT RATINGS: Ratings are graded into four categories, ranging from 'A-1' for the highest quality obligations to 'D' for the lowest.

---

| | |
|:---|:---|
| A-1: | &nbsp;&nbsp; This is the highest category. The obligor's capacity to meet its financial commitment on the obligation is strong. <br> Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's <br> capacity to meet its financial commitment on these obligations is extremely strong.<br>|
| A-2: | &nbsp;&nbsp; Issues carrying this designation are somewhat more susceptible to the adverse effects of the changes in <br> circumstances and economic conditions than obligations in higher rating categories. However, the obligor's <br> capacity to meet its financial commitment on the obligation is satisfactory.<br>|
| A-3: | &nbsp;&nbsp; Issues carrying this designation exhibit adequate capacity to meet their financial obligations. However, adverse <br> economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to <br> meet it financial commitment on the obligation.<br>|
| B: | &nbsp;&nbsp; Issues rated 'B' are regarded as vulnerable and have significant speculative characteristics. The obligor has <br> capacity to meet financial commitments; however, it faces major ongoing uncertainties which could lead to <br> obligor's inadequate capacity to meet its financial obligations.<br>|
| C: | &nbsp;&nbsp; This rating is assigned to short-term debt obligations that are currently vulnerable to nonpayment and is <br> dependent upon favorable business, financial, and economic conditions to meet its financial commitment on the <br> obligation.<br>|
| D: | &nbsp;&nbsp; This rating indicates that the issue is either in default or in breach of an imputed promise. For non-hybrid capital <br> instruments, the 'D' rating category is used when payments on an obligation are not made on the date due, <br> unless S&P Global Ratings believes that such payments will be made within five business days in the absence <br> of a stated grace period or within the earlier of the stated grace period or 30 calendar days. The rating will also <br> be used upon filing for bankruptcy petition or the taking of similar action and where default is a virtual certainty. <br> If an obligation is subject to a distressed exchange offer the rating is lowered to 'D'.<br>|

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MUNICIPAL SHORT-TERM NOTE RATINGS: S&P Global Ratings rates U.S. municipal notes with a maturity of less than three years as follows:

---

| | |
|:---|:---|
| SP-1: | &nbsp;&nbsp; A strong capacity to pay principal and interest. Issues that possess a very strong capacity to pay debt service is <br> given a "+" designation.<br>|
| SP-2: | &nbsp;&nbsp; A satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic <br> changes over the terms of the notes.<br>|
| SP-3: | A speculative capacity to pay principal and interest. |

---

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**Appendix B—Price Make Up Sheet** 

---

| | | |
|:---|:---|:---|
| **Class A**<br> **Maximum Offering Price Calculation**<br> **(as of October 31, 2022)** | **Class A**<br> **Maximum Offering Price Calculation**<br> **(as of October 31, 2022)** | **Class A**<br> **Maximum Offering Price Calculation**<br> **(as of October 31, 2022)** |
| NAV | = | Maximum Offering Price |
| (1-Sales Charge Percentage) | = | Maximum Offering Price |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | |
|:---|:---|:---|:---|
| **Fund** | **Fund** | **Fund** | **Fund** |
| California Municipal Fund | $9.27 | = | $9.63 |
| California Municipal Fund | (1-.0375) | = | $9.63 |
| Core Fixed Income Fund | $8.19 | = | $8.38 |
| Core Fixed Income Fund | (1-.0225) | = | $8.38 |
| Core Plus Bond Fund | $8.84 | = | $9.18 |
| Core Plus Bond Fund | (1-.0375) | = | $9.18 |
| Diversified Income Fund<sup>(1)</sup> | $11.58 | = | $12.03 |
| Diversified Income Fund<sup>(1)</sup> | (1-.0375) | = | $12.03 |
| Diversified International Fund | $10.77 | = | $11.40 |
| Diversified International Fund | (1-.0550) | = | $11.40 |
| Equity Income Fund | $35.30 | = | $37.35 |
| Equity Income Fund | (1-.0550) | = | $37.35 |
| Global Emerging Markets Fund<sup>(2)</sup> | $20.06 | = | $21.23 |
| Global Emerging Markets Fund<sup>(2)</sup> | (1-.0550) | = | $21.23 |
| Global Real Estate Securities Fund | $7.69 | = | $8.14 |
| Global Real Estate Securities Fund | (1-.0550) | = | $8.14 |
| Government & High Quality Bond Fund | $8.62 | = | $8.82 |
| Government & High Quality Bond Fund | (1-.0225) | = | $8.82 |
| High Yield Fund | $6.29 | = | $6.54 |
| High Yield Fund | (1-.0375) | = | $6.54 |
| LargeCap Growth Fund I | $14.20 | = | $15.03 |
| LargeCap Growth Fund I | (1-.0550) | = | $15.03 |
| LargeCap S&P 500 Index Fund | $19.91 | = | $20.21 |
| LargeCap S&P 500 Index Fund | (1-.0150) | = | $20.21 |
| MidCap Fund | $30.71 | = | $32.50 |
| MidCap Fund | (1-.0550) | = | $32.50 |
| MidCap Value Fund I | $16.23 | = | $17.17 |
| MidCap Value Fund I | (1-.0550) | = | $17.17 |
| Money Market Fund | $1.00 | = | $1.00 |
| Money Market Fund | (1-.0000) | = | $1.00 |
| Principal Capital Appreciation Fund | $53.59 | = | $56.71 |
| Principal Capital Appreciation Fund | (1-.0550) | = | $56.71 |

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------

---

| | | | |
|:---|:---|:---|:---|
| **Fund** | **Fund** | **Fund** | **Fund** |
| Principal LifeTime 2010 Fund | $11.12 | = | $11.55 |
| Principal LifeTime 2010 Fund | (1-.0375) | = | $11.55 |
| Principal LifeTime 2020 Fund | $12.14 | = | $12.61 |
| Principal LifeTime 2020 Fund | (1-.03750) | = | $12.61 |
| Principal LifeTime 2030 Fund | $13.12 | = | $13.88 |
| Principal LifeTime 2030 Fund | (1-.0550) | = | $13.88 |
| Principal LifeTime 2040 Fund | $13.86 | = | $14.67 |
| Principal LifeTime 2040 Fund | (1-.0550) | = | $14.67 |
| Principal LifeTime 2050 Fund | $14.82 | = | $15.68 |
| Principal LifeTime 2050 Fund | (1-.0550) | = | $15.68 |
| Principal LifeTime Strategic Income Fund | $10.46 | = | $10.87 |
| Principal LifeTime Strategic Income Fund | (1-.0375) | = | $10.87 |
| Real Estate Securities Fund | $25.62 | = | $27.11 |
| Real Estate Securities Fund | (1-.0550) | = | $27.11 |
| SAM Balanced Portfolio | $14.16 | = | $14.98 |
| SAM Balanced Portfolio | (1-.0550) | = | $14.98 |
| SAM Conservative Balanced Portfolio | $10.85 | = | $11.48 |
| SAM Conservative Balanced Portfolio | (1-.0550) | = | $11.48 |
| SAM Conservative Growth Portfolio | $16.64 | = | $17.61 |
| SAM Conservative Growth Portfolio | (1-.0550) | = | $17.61 |
| SAM Flexible Income Portfolio | $10.78 | = | $11.20 |
| SAM Flexible Income Portfolio | (1-.0375) | = | $11.20 |
| SAM Strategic Growth Portfolio | $18.24 | = | $19.30 |
| SAM Strategic Growth Portfolio | (1-.0550) | = | $19.30 |
| Short-Term Income Fund | $11.40 | = | $11.66 |
| Short-Term Income Fund | (1-.0225) | = | $11.66 |
| SmallCap Fund | $22.97 | = | $24.31 |
| SmallCap Fund | (1-.0550) | = | $24.31 |
| Tax-Exempt Bond Fund | $6.31 | = | $6.56 |
| Tax-Exempt Bond Fund | (1-.0375) | = | $6.56 |

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<sup>(1)</sup>

Effective March 1, 2022, Global Diversified Income Fund changed its name to Diversified Income Fund.

<sup>(2)</sup>

Effective January 1, 2022, International Emerging Markets Fund changed its name to Global Emerging Markets Fund.

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**Appendix C—Proxy Voting Policies** 

The proxy voting policies applicable to each Fund appear in the following order:

The proxy voting policy for the Fund Complex is first, followed by PGI's proxy voting policy, and followed by the proxy voting policies for the sub-advisors, alphabetically.

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**Proxy Voting Policies and Procedures for Principal Funds, Inc.** 

**Principal Variable Contracts Funds, Inc.** 

**Principal Exchange-Traded Funds** 

**Principal Diversified Select Real Asset Fund (and other Principal interval funds)**

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

**(March 9, 2015)** 

**Revised June 11, 2019** 

It is each Fund's policy to delegate authority to its advisor or sub-advisor, as appropriate, to vote proxy ballots relating to the Fund's portfolio securities in accordance with the adviser's or sub-adviser's voting policies and procedures.

The adviser or sub-adviser must provide, on a quarterly basis:

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.

The adviser or sub-adviser must provide, no later than July 31 of each year, the following information regarding each proxy 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:

<sup>•</sup>

Identification of the issuer of the security;

<sup>•</sup>

Exchange ticker symbol of the security;

<sup>•</sup>

CUSIP number of the security;

<sup>•</sup>

The date of the shareholder meeting;

<sup>•</sup>

A brief description of the subject of the vote;

<sup>•</sup>

Whether the proposal was put forward by the issuer or a shareholder;

<sup>•</sup>

Whether and how the vote was cast; and

<sup>•</sup>

Whether the vote was cast for or against management of the issuer.

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**Principal Global Investors, LLC** 

**Principal Real Estate Investors, LLC**

**Effective December 1, 2021** 

**PROXY VOTING POLICIES AND PROCEDURES** 

**<u>Introduction</u>** 

Principal Global Investors<sup>1</sup> ("PGI") 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, PGI has a fiduciary duty to act in the best interests of its clients. PGI 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, Principal Global Investors' 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 PGI's clients who have delegated such authority and discretion.

Effective January 1, 2021 Finisterre investment teams adopted the policies and procedures in the Adviser's compliance manual except for the following proxy policies and procedures. Finisterre investment teams will continue to follow previously adopted proxy policies and procedures until amended. Please see attached Appendix to this manual for Finisterre specific proxy policies and procedures.

**<u>Relationship between Investment Strategy, ESG and Proxy Voting</u>** 

PGI has a fiduciary duty to make investment decisions that are in its clients' best interests by maximizing the value of their shares. Proxy voting is an important part of this process through which PGI can support strong corporate governance structures, shareholder rights and transparency. PGI also believes a company's positive environmental, social and governance ("ESG") practices may influence the value of the company, leading to long-term shareholder value. PGI may take these factors into considerations when voting proxies in its effort to seek the best outcome for its clients. PGI believes that the integration of consideration of ESG practices in PGI's investment process helps identify sources of risk that could erode the long-term investment results it seeks on behalf of its clients. From time to time, PGI may work with various ESG-related organizations to engage issuers or advocate for greater levels of disclosure.

**<u>Roles and Responsibilities</u>** 

***Role of the Proxy Voting Committee*** 

PGI's 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 PGI 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 PGI's clients (collectively, "Authorized Persons").

The Proxy Voting Committee shall meet at least four times per year, and as necessary to address special situations.

***Role of Portfolio Management*** 

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, PGI may vote differently on the same matter for different accounts as determined by each investment team.

These policies and procedures apply to Principal Global Investors, LLC, Principal Real Estate Investors, LLC, Principal Global Investors (Hong Kong) Limited and any affiliates which have entered into participating affiliate agreements with the aforementioned managers.

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**Proxy Voting Guidelines** 

The Proxy Voting Committee, on an annual basis, or more frequently as needed, will direct each investment team to review draft proxy voting guidelines recommended by the Proxy Advisory Firm ("Draft Guidelines"). The Proxy Voting Committee will collect the reviews of the Draft Guidelines to determine whether any investment teams have positions on issues that deviate from the Draft Guidelines. Based on this review, PGI will adopt proxy voting guidelines. Where an investment team has a position which deviates from the Draft Guidelines, an alternative set of guidelines for that investment team may be created. Collectively, these guidelines will constitute PGI's current Proxy Voting Guidelines 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 to the Policy sets forth the current Guidelines.

There may be instances where proxy votes will not be in accordance with the Guidelines. Clients may instruct PGI to utilize a different set of guidelines, request specific deviations, or directly assume responsibility for the voting of proxies. In addition, PGI may deviate from the Guidelines on an exception basis if the investment team or PGI 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, PGI will consider the relevant facts and circumstances of a particular vote and then vote in a manner PGI 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, PGI may consider the spirit of the Guidelines and instruct the vote on such issues in a manner that PGI believes would be in the best interests of the client.

**<u>Use of Proxy Advisory Firms</u>** 

PGI 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 PGI has proxy voting responsibility, and provide reports concerning the proxies voted ("Proxy Voting Services"). Although PGI has retained the Proxy Advisory Firm for Proxy Voting Services, PGI remains responsible for proxy voting decisions. PGI has designed the Policy to oversee and evaluate the Proxy Advisory Firm, including with respect to the matters described below, to support the PGI's 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 PGI, 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 PGI's clients, and consistent with the PGI's 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 PGI 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 PGI; (iii) a review of those aspects of the Proxy Advisory Firm's policies, procedures, and methodologies for formulating voting recommendations that PGI consider material to Proxy Voting Services provided to PGI, 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 PGI 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, PGI may also consider the adequacy and quality of the Proxy Advisory Firm's staffing, personnel, and/or technology.

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***Procedures for Voting Proxies*** 

To increase the efficiency of the voting process, PGI utilizes the Proxy Advisory Firm to act as its voting agent for its clients' holdings. Issuers initially send proxy information to the clients' custodians. PGI instructs these custodians to direct proxy related materials to the Proxy Advisory Firm. The Proxy Advisory Firm provides PGI with research related to each resolution.

PGI 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 PGI to vote for such client's account differently than what would occur in applying the Policy and the Guidelines. PGI may also agree to follow a client's individualized proxy voting guidelines or otherwise agree with a client on particular voting considerations.

PGI seeks to vote (or refrain from voting) proxies for its clients in a manner that PGI determines is in the best interests of its clients, which may include both considering both the effect on the value of the client's investments and ESG factors. In some cases, PGI may determine that it is in the best interests of clients to refrain from exercising the clients' proxy voting rights. PGI 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 PGI, 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 Advisor Firm will generally process all proxy votes in accordance with the Guidelines. 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 PGI Compliance to approve and once approved administered by PGI 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 PGI exercises voting authority. In certain cases, a client may have elected to have PGI administer a custom policy which is unique to the Client. If PGI 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 PGI. PGI may consider the spirit of the Guidelines and instruct the vote on such issues in a manner that PGI believes would 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 PGI exercises voting discretion, which shall include instances where issues fall outside the Guidelines.

**<u>Securities Lending</u>** 

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 PGI as part of their contract with PGI if they require PGI to take actions in regard to voting securities that have been lent. If not commemorated in such agreement, PGI 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, PGI maintains one share for each company security out on loan by the client. PGI will vote the remaining share in these circumstances.

In cases where PGI does not receive a solicitation or enough information within a sufficient time (as reasonably determined by PGI) prior to the proxy-voting deadline, PGI or the Proxy Advisory Firm may be unable to vote.

**<u>Regional Variances in Proxy Voting</u>** 

PGI 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 PGI that the anticipated economic benefit outweighs the expected cost of voting. PGI intends to make their determination on whether to vote proxies

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of non-U.S. companies on a case-by-case basis. In doing so, PGI shall evaluate market requirements and impediments, including the difficulties set forth above, for voting proxies of companies in each country. PGI 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 PGI's determinations and procedures.

**<u>Conflicts of Interest</u>** 

PGI 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 PGI encounters a potential conflict to ensure that PGI's voting decisions are based on maximizing shareholder value and are not the product of a conflict.

***Addressing Conflicts of Interest – Exception Process*** 

Prior to voting contrary to the Guidelines, the relevant investment team must complete and submit a report to PGI 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. PGI Compliance will approve or deny the exception in consultation, if deemed necessary, with the Legal.

If PGI Compliance determines that there is no potential material conflict exists, the Guidelines may be overridden. If PGI 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:

<sup>•</sup>

The percentage of outstanding securities of the issuer held on behalf of clients by PGI;

<sup>•</sup>

The nature of the relationship of the issuer with the PGI, its affiliates or its executive officers;

<sup>•</sup>

Whether there has been any attempt to directly or indirectly influence the investment team's decision;

<sup>•</sup>

Whether the direction of the proposed vote would appear to benefit PGI or a related party; and/or

<sup>•</sup>

Whether an objective decision to vote in a certain way will still create a strong appearance of a conflict.

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. PGI 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 PGI 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.

**<u>Availability of Proxy Voting Information and Recordkeeping</u>** 

***Disclosure*** 

On a quarterly basis, PGI publicly discloses on our website https://www.principalglobal.com/eu/about-us/responsible-investing a voting report setting forth the manner in which votes were cast, including details related to (i) votes against management, and (ii) abstentions. For more information, Clients may contact PGI for more information related to how PGI has voted with respect to securities held in the Client's account. On request, PGI will provide clients with a summary of PGI'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. PGI will also include such information described in the preceding two sentences in Part 2A of its Form ADV.

***Recordkeeping*** 

PGI 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 PGI's responses (whether a client's request was oral or in writing); (vi) any documents prepared by PGI 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

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reviewed by PGI 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 PGI; 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.

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**Appendix: Finisterre Proxy Voting Policy and Procedures** 

**I. Statement of Policy** 

Proxy voting is an important right of investors and reasonable care and diligence must be undertaken to ensure that such rights are properly and timely exercised. The Firm generally retains proxy-voting authority with respect to securities purchased for its clients. Under such circumstances, the Firm votes proxies in the best interest of its clients and in accordance with these policies and procedures.

**II. Use of Third-Party Proxy Voting Service** 

The Firm has entered into an agreement with Broadridge Investor Communication Solutions, Inc. (referred to as "**Broadridge**" and the "**Proxy Voting Service**") acting with Glass Lewis & Co, to enable it to fulfill its proxy voting obligations.

Broadridge executes, monitors and records the proxies according to the instructions of the Firm. The Firm relies on the recommendations of Glass Lewis & Co, LLC to provide recommendations as to how any proxy should be voted in the best interests of the Clients. These recommendations are integrated into the voting platform set up by the Proxy Voting Service, and the Firm has instructed the Proxy Voting Service to execute all proxies in accordance with such recommendation unless instructed otherwise by the Firm.

The SEC has expressed its view that although the voting of proxies remains the duty of a registered adviser, an adviser may contract with service providers to perform certain functions with respect to proxy voting so long as the adviser is comfortable that the proxy voting service is independent from the issuer companies on which it completes its proxy research. In assessing whether a proxy voting service is independent (as defined by the SEC), the SEC counsels investment advisers that they should not follow the recommendations of an independent proxy voting service without first determining, among other things, that the proxy voting service (a) has the capacity and competence to analyze proxy issues and (b) is in fact independent and can make recommendations in an impartial manner in the best interests of the adviser's clients.

At a minimum annually, or more frequently as deemed necessary, Compliance will ensure that a review of the independence and impartiality of the Proxy Voting Service is carried out, including obtaining certification or other information from the Proxy Voting Service to enable the Firm to make such an assessment. Compliance will also monitor any new SEC interpretations regarding the voting of proxies and the uses of third-party proxy voting services and revise the Firm's policies and procedures as necessary.

Proxies relating to securities held in client accounts will be sent directly to the Proxy Voting Service. If a proxy is received by anyone in the Firm, they must immediately inform the Compliance and work with Compliance to ensure that it is promptly forwarded to the Proxy Voting Service. In the event that the Proxy Voting Service is unable to complete/provide its research regarding a security on a timely basis or the Firm has made a determination that it is in the best interests of the Firm's clients for the Firm to vote the proxy, the Firm's general proxy-voting procedures are required to be followed, as follows.

Compliance will require that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. the recipient of the proxy will forward a copy to Compliance, who will keep a copy of each proxy received;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. if the recipient is not the Portfolio Manager responsible for voting the proxy on behalf of the Firm, s/he will forward a copy to such Portfolio manager;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. the Portfolio Manager will determine how to vote the proxy promptly in order to allow enough time for the completed proxy to be returned to the issuer prior to the vote taking place; and provide evidence of such to Compliance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Absent material conflicts (see Section V), the Portfolio Manager will determine whether the Firm will follow the Proxy Voting Service's recommendation or vote the proxy directly. The Portfolio Manager will send his/her decision on how the Firm should vote a proxy to the Proxy Voting Service, in a timely and appropriate manner. It is desirable to have the Proxy Voting Service complete the actual voting so there exists one central source for the documentation of the Firm's proxy voting records.

**iii. Voting Guidelines** 

To the extent that the Firm is voting a proxy itself and not utilizing the Proxy Voting Service, the Firm will consider the proxy on a case by case basis and require that the relevant investment professional vote the proxy in a manner consistent with the Firm's duty. Investment professionals of the Firm each have the duty to vote proxies in a way that, in their best judgment, is in the best interest of the Firm's clients.

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**Iv. Disclosure** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Firm will disclose in its Form ADV Part 2 that clients may contact the Chief Compliance Officer via e-mail or telephone in order to obtain information on how the Firm voted such client's proxies, and to request a copy of these policies and procedures. If a client requests this information, the Chief Compliance Officer will prepare a written response to the client that lists, with respect to each voted proxy that the client has inquired about, (1) the name of the issuer; (2) the proposal voted upon and (3) how the Firm voted the client's proxy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. A concise summary of these Proxy Voting Policies and Procedures will be included in the Firm's Form ADV Part 2 and will be updated whenever these policies and procedures are updated. Compliance will arrange for a copy of this summary to be sent to all existing clients.

**V. Potential Conflicts of Interest** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. In the event that the Firm is directly voting a proxy, Compliance will examine conflicts that exist between the interests of the Firm and its clients. This examination will include a review of the relationship of the Firm, its personnel and its affiliates with the issuer of each security and any of the issuer's affiliates to determine if the issuer is a client of the Firm or an affiliate of the Firm or has some other relationship with the Firm, its personnel or a client of the Firm.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. If, as a result of Compliance's examination, a determination is made that a material conflict of interest exists, the Firm will determine whether voting in accordance with the voting guidelines and factors described above is in the best interests of the client. If the proxy involves a matter covered by the voting guidelines and factors described above, the Firm will generally vote the proxy as specified above. Alternatively, the Firm may vote the proxy in accordance with the recommendation of the Proxy Voting Service.

The Firm may disclose the conflict to the affected clients and, except in the case of clients that are subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), give the clients the opportunity to vote their proxies themselves In the case of ERISA clients, if the Investment Management Agreement reserves to the ERISA client the authority to vote proxies when the Firm determines it has a material conflict that affects its best judgment as an ERISA fiduciary, the Firm will give the ERISA client the opportunity to vote the proxies themselves.

Absent the client reserving voting rights, the Firm will either vote the proxies in accordance with the policies outlined in Section III "Voting Guidelines" above or vote the proxies in accordance with the recommendation of the Proxy Voting Service.

**VI. Proxy Recordkeeping** 

Compliance will maintain files relating to the Firm's proxy voting procedures in an easily accessible place. (Under the services contract between the Firm and its Proxy Voting Service, the Proxy Voting Service will maintain the Firm's proxy-voting records). Records will be maintained and preserved for five years from the end of the fiscal year during which the last entry was made on a record, with records for the most recent two years kept in the offices of the Firm. Records of the following will be included in the files:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Copies of these proxy voting policies and procedures, and any amendments thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. A copy of each proxy statement that the Firm receives regarding client securities (the Firm may rely on third parties or EDGAR);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. A record of each vote that the Firm casts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. A copy of any document the Firm created that was material to making a decision how to vote proxies, or that memorializes that decision. (For votes that are inconsistent with the Firm's general proxy voting polices, the reason/rationale for such an inconsistent vote is required to be briefly documented and maintained); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. A copy of each written client request for information on how the Firm voted such client's proxies, and a copy of any written response to any (written or oral) client request for information on how the Firm voted its proxies.

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**AllianceBernstein** 

**Proxy Voting and Governance Policy** 

**March 2022** 

**1. Introduction** 

AllianceBernstein L.P.'s ("AB," "we," "us," "our" and similar terms) mission is to work in our clients' best interests to deliver better investment outcomes through differentiated research insights and innovative portfolio solutions. As a fiduciary and investment adviser, we place the interests of our clients first and treat all our clients fairly and equitably, and we have an obligation to responsibly allocate, manage and oversee their investments to seek sustainable, long-term shareholder value.

AB has authority to vote proxies relating to securities in certain client portfolios and, accordingly, AB's fiduciary obligations extend to AB's exercise of such proxy voting authority for each client AB has agreed to exercise that duty. AB's general policy is to vote proxy proposals, amendments, consents or resolutions relating to client securities, including interests in private investment funds, if any (collectively, "proxies"), in a manner that serves the best interests of each respective client as determined by AB in its discretion, after consideration of the relevant clients' investment strategies, and in accordance with this Proxy Voting and Governance Policy ("**Proxy Voting and Governance Policy"** or **"Policy"**) and the operative agreements governing the relationship with each respective client ("Governing Agreements"). This Policy outlines our principles for proxy voting, includes a wide range of issues that often appear on voting ballots, and applies to all of AB's internally managed assets, globally. It is intended for use by those involved in the proxy voting decision-making process and those responsible for the administration of proxy voting **("members of Responsibility team"**), in order to ensure that this Policy and its procedures are implemented consistently.

To be effective stewards of our client's investments and maximize shareholder value, we need to vote proxies on behalf of our clients responsibly. This Policy forms part of a suite of policies and frameworks beginning with AB's Stewardship Statement that outline our approach to Responsibility, stewardship, engagement, climate change, human rights, global slavery and human trafficking, and controversial investments. Proxy voting is an integral part of this process, enabling us to support strong corporate governance structures, shareholder rights, transparency, and disclosure, and encourage corporate action on material environmental, social and governance ("ESG") and climate issues.

This Policy is overseen by the Proxy Voting and Governance Committee (**"Proxy Voting and Governance Committee"** or **"Committee"**), which provides oversight and includes senior representatives from Equities, Fixed Income, Responsibility, Legal and Operations. It is the responsibility of the Committee to evaluate and maintain proxy voting procedures and guidelines, to evaluate proposals and issues not covered by these guidelines, to consider changes in the Policy, and to review the Policy no less frequently than annually. In addition, the Committee meets at least three times a year and as necessary to address special situations.

**2. RESEARCH UNDERPINS DECISION MAKING** 

As a research-driven firm, we approach our proxy voting responsibilities with the same commitment to rigorous research and engagement that we apply to all our investment activities. The different investment philosophies utilized by our investment teams may occasionally result in different conclusions being drawn regarding certain proposals. In turn, our votes on some proposals may vary by issuer, while maintaining the goal of maximizing the value of the securities in client portfolios.

We sometimes manage accounts where proxy voting is directed by clients or newly acquired subsidiary companies. In these cases, voting decisions may deviate from this Policy. Where we have agreed to vote proxies on behalf of our clients, we have an obligation to vote proxies in a timely manner and we apply the principles in this Policy to our proxy decisions. To the extent there are any inconsistencies between this Policy and a client's Governing Agreements, the Governing Agreements shall supersede this Policy.

**RESEARCH SERVICES** 

We subscribe to the corporate governance and proxy research services of vendors such as Institutional Shareholder Services Inc. ("ISS") and Glass Lewis at different levels. This research includes proxy voting recommendations distributed by ISS and Glass Lewis. All our investment professionals can access these materials via the members of the Responsibility team and/or the Committee.

**ENGAGEMENT** 

In evaluating proxy issues and determining our votes, we welcome and seek perspectives of various parties. Internally, members of Responsibility team may consult the Committee, Chief Investment Officers, Portfolio Managers, and/or Research Analysts across our equities platforms, and Portfolio Managers who manage accounts in which a stock is held. Externally,

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we may engage with companies in advance of their Annual General Meeting, and throughout the year. We believe engagement provides the opportunity to share our philosophy, our corporate governance values, and more importantly, affect positive change that we believe will drive shareholder value. Also, these meetings often are joint efforts between the investment professionals, who are best positioned to comment on company-specific details, and members of Responsibility team, who offer a more holistic view of ESG and climate practices and relevant trends. In addition, we engage with shareholder proposal proponents and other stakeholders to understand different viewpoints and objectives.

**3. PROXY VOTING GUIDELINES** 

Our proxy voting guidelines are both principles-based and rules-based. We adhere to a core set of principles that are described in this Policy. We assess each proxy proposal in light of these principles. Our proxy voting "litmus test" will always be guided by what we view as most likely to maximize long-term shareholder value. We believe that authority and accountability for setting and executing corporate policies, goals and compensation generally should rest with a company's board of directors and senior management. In return, we support strong investor rights that allow shareholders to hold directors and management accountable if they fail to act in the best interests of shareholders.

With this as a backdrop, our proxy voting guidelines pertaining to specific issues are set forth below. We generally vote proposals in accordance with these guidelines but, consistent with our "principles-based" approach to proxy voting, we may deviate from these guidelines if we believe that deviating from our stated Policy is necessary to help maximize long- term shareholder value) or as otherwise warranted by the specific facts and circumstances of an investment. In addition, these guidelines are not intended to address all issues that may appear on all proxy ballots. We will evaluate on a case- by-case basis any proposal not specifically addressed by these guidelines, whether submitted by management or shareholders, always keeping in mind our fiduciary duty to make voting decisions that, by maximizing long-term shareholder value, are in our clients' best interests.

**SHAREHOLDER PROPOSAL ASSESSMENT FRAMEWORK** 

AB's commitment to maximize the long-term value of clients' portfolios drives how we analyze shareholder proposals (each an "SHP"). We believe ESG and climate considerations are important elements that help improve the accuracy of our valuation of companies. We think it is in our clients' best interests to incorporate a more comprehensive set of risks and opportunities, such as ESG and climate issues, from a long-term shareholder value perspective. Rather than opting to automatically support all shareholder proposals that mention an ESG or climate issue, we evaluate whether or not each shareholder proposal promotes genuine improvement in the way a company addresses an ESG or climate issue, thereby enhancing shareholder value for our clients in managing a more comprehensive set of risks and opportunities for the company's business. The evaluation of a proposal that addresses an ESG or climate issue will consider (among other things) the following core factors, as necessary:

+ Materiality of the mentioned ESG or climate issue for the company's business

+ The company's current practice, policy, and framework

+ Prescriptiveness of the proposal – does the shareholder demand unreasonably restrict management from conducting its business?

+ Context of the shareholder proposal – is the proponent tied to any particular interest group(s)? Does the proposal aim to promote the interest of the shareholders or group that they are associated with?

+ How does the proposal add value for the shareholders?

This shareholder proposal framework applies to all proposal items labeled "SHP" throughout the Policy and any shareholder proposals that aren't discussed in the Policy but appear in our voting universe.

**3.1 BOARD AND DIRECTOR PROPOSALS** 

**1. Board Oversight and Director Accountability on Material Environmental and Social Topics Impacting Shareholder Value: Climate Risk Management and Human Rights Oversight CASE-BY-CASE** 

AB believes that board oversight and director accountability are critical elements of corporate governance. Companies demonstrate effective governance through proactive monitoring of material risks and opportunities, including ESG related risks and opportunities. In evaluating investee companies' adaptiveness to evolving climate risks and human rights oversight, AB engages its significant holdings on climate strategy through a firmwide campaign. Based on each company's response, AB will hold respective directors accountable as defined by the committee charter of the company.

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**2. Establish New Board Committees and Elect Board Members with Specific Expertise (SHP) CASE-BY-CASE** 

We believe that establishing committees should be the prerogative of a well-functioning board of directors. However, we may support shareholder proposals to establish additional board committees to address specific shareholder issues, including ESG and climate issues. In some cases, oversight for material ESG issues can be managed effectively by existing committees of the board of directors, depending on the expertise of the directors assigned to such committees. We consider on a case-by-case basis proposals that require the addition of a board member with a specific area of expertise.

**3. Changes in Board Structure and Amending the Articles of Incorporation FOR** 

Companies may propose various provisions with respect to the structure of the board of directors, including changing the manner in which board vacancies are filled, directors are nominated and the number of directors. Such proposals may require amending the charter or by-laws or may otherwise require shareholder approval. When these proposals are not controversial or meant as an anti-takeover device, which is generally the case, we vote in their favor. However, if we believe a proposal is intended as an anti-takeover device and diminishes shareholder rights, we generally vote against.

We may vote against directors for amending by-laws without seeking shareholder approval and/or restricting or diminishing shareholder rights.

**4. Classified Boards AGAINST** 

A classified board typically is divided into three separate classes. Each class holds office for a term of two or three years. Only a portion of the board can be elected or replaced each year. Because this type of proposal has fundamental anti- takeover implications, we generally oppose the adoption of classified boards unless there is a justifiable financial reason or an adequate sunset provision. We may also vote against directors that fail to implement shareholder approved proposals to declassify boards that we previously supported.

**5. Director Liability and Indemnification CASE-BY-CASE** 

Some companies argue that increased indemnification and decreased liability for directors are important to ensure the continued availability of competent directors. However, others argue that the risk of such personal liability minimizes the propensity for corruption and recklessness.

We generally support indemnification provisions that are consistent with the local jurisdiction in which the company has been formed. We vote in favor of proposals adopting indemnification for directors with respect to acts conducted in the normal course of business. We also vote in favor of proposals that expand coverage for directors and officers where, despite an unsuccessful legal defense, we believe the director or officer acted in good faith and in the best interests of the company. We oppose proposals to indemnify directors for gross negligence.

**6. Disclose CEO Succession Plan (SHP) FOR** 

Proposals like these are often suggested by shareholders of companies with long-tenured CEOs and/or high employee turnover rates. Even though some markets might not require the disclosure of a CEO succession plan, we do think it is good business practice and will support these proposals.

**7. Election of Directors FOR** 

The election of directors is an important vote. We expect directors to represent shareholder interests at the company and maximize shareholder value. We generally vote in favor of the management-proposed slate of directors while considering a number of factors, including local market best practice. We believe companies should have a majority of independent directors and independent key committees. However, we will incorporate local market regulation and corporate governance codes into our decision making. We may support requirements that surpass market regulation and corporate governance codes implemented in a local market if we believe heightened requirements may improve corporate governance practices. We will generally regard a director as independent if the director satisfies the criteria for independence either (i) espoused by the primary exchange on which the company's shares are traded, or (ii) set forth in the code we determine to be best practice in the country where the subject company is domiciled. We may also take into account affiliations, related- party transactions, and prior service to the company. We consider the election of directors who are "bundled" on a single slate to be a poor governance practice and vote on a case-by-case basis considering the amount of information available and an assessment of the group's qualifications.

In addition:

We believe that directors have a duty to respond to shareholder actions that have received significant shareholder support. We may vote against directors (or withhold votes for directors if plurality voting applies) who fail to act on key issues. We oppose directors who fail to attend at least 75% of board meetings within a given year without a reasonable excuse.

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We may abstain or vote against (depending on a company's history of disclosure in this regard) directors of issuers where there is insufficient information about the nominees disclosed in the proxy statement.

We may vote against directors for poor compensation, audit, or governance practices, including the lack of a formal key committee.

We may vote against directors for unilateral bylaw amendments that diminish shareholder rights.

We also may consider engaging company management (by phone, in writing and in person), until any issues have been satisfactorily resolved.

**a. Controlled Company Exemption CASE-BY-CASE** 

In certain markets, a different standard for director independence may be applicable for controlled companies, which are companies where more than 50% of the voting power is held by an individual, group or another company, or as otherwise defined by local market standards. We may take these local standards into consideration when determining the appropriate level of independence required for the board and key committees.

Exchanges in certain jurisdictions do not have a controlled company exemption (or something similar). In such a jurisdiction, if a company has a majority shareholder or group of related majority shareholders with a majority economic interest, we generally will not oppose that company's directors simply because the board does not include a majority of independent members, although we may take local standards into consideration when determining the appropriate level of independence required for the board and key committees. We will, however, consider these directors in a negative light if the company has a history of violating the rights of minority shareholders.

**b. Voting for Director Nominees in a Contested Election CASE-BY-CASE** 

Votes in a contested election of directors are evaluated on a case-by-case basis with the goal of maximizing shareholder value.

**8. Board Capacity** 

We believe that incorporating an assessment of each director's capacity into consideration for a director election is essential to promote meaningful board oversight of the management. Director effectiveness aside, a social externality arises when the practice of directors serving on many public company boards becomes widespread, as this limits the opportunities for other board candidates, particularly diverse candidates. AB currently votes against the appointment of directors who occupy, or would occupy following the vote: four (4) or more total public company board seats for non-CEOs, three (3) or more total public company board seats for the sitting CEO of the company in question and two (2) or more total public company board seats for sitting CEOs of companies other than the company under consideration. We may also exercise flexibility on occasions where the "over-boarded" director nominee's presence on the board is critical, based on company specific contexts in absence of any notable accountability concerns.

**9. Board Diversity** 

Diversity is an important element of assessing the board's quality, as it promotes wider range of perspectives to be considered for companies to both strategize and mitigate risks. In line with this view, several European countries legally require a quota of female directors. Other European countries have a comply-or-explain policy. In the US, California requires corporations headquartered in the State of California to have at least one female director on board.

We believe that boards should develop, as part of their refreshment process, a framework for identifying diverse candidates for all open board positions. We believe diversity is broader than gender and should also take into consideration factors such as business experience, ethnicity, tenure, and nationality. As such, we generally vote in favor of proposals that encourage the adoption of a diverse search policy, so-called "Rooney Rules", assuring that each director search includes at least one woman, and in the US, at least one underrepresented person of color, in the slate of nominees. Our views on board diversity translate to the following two voting approaches:

a. Gender Diversity: AB will generally vote against the nominating/governance committee chair, or a relevant incumbent member in case of classified boards, when the board has no female members. In Japan, we will vote against the top management. This approach applies globally.

b. Ethnic and Racial Diversity: AB will escalate the topic of board level ethnic/racial diversity and engage with its significant holdings that lack a minority ethnic/racial representation on the board through 2021. Based on the outcome of such engagements, AB will begin voting against the nominating/governance committee chair or a relevant incumbent member for classified boards of companies that lack minority ethnic/racial representation on their board in 2022.

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**10. Independent Lead Director (SHP) FOR** 

We support shareholder proposals that request a company to amend its by-laws to establish an independent lead director if the position of chairman is non-independent. We view the existence of a strong independent lead director, whose role is robust and includes clearly defined duties and responsibilities, such as the authority to call meetings and approve agendas, as a good example of the sufficient counter-balancing governance. If a company has such an independent lead director in place, we will generally oppose a proposal to require an independent board chairman, barring any additional board leadership concerns.

**11. Limit Term of Directorship (SHP) CASE-BY-CASE** 

These proposals seek to limit the term during which a director may serve on a board to a set number of years.

Accounting for local market practice, we generally consider a number of factors, such as overall level of board independence, director qualifications, tenure, board diversity and board effectiveness in representing our interests as shareholders, in assessing whether limiting directorship terms is in shareholders' best interests. Accordingly, we evaluate these items case-by-case.

**12. Majority Independent1 Directors (SHP) FOR** 

Each company's board of directors has a duty to act in the best interest of the company's shareholders at all times. We believe that these interests are best served by having directors who bring objectivity to the company and are free from potential conflicts of interests. Accordingly, we support proposals seeking a majority of independent directors on the board while taking into consideration local market regulation and corporate governance codes.

**13. Majority of Independent Directors on Key Committees (SHP) FOR** 

In order to ensure that those who evaluate management's performance, recruit directors, and set management's compensation are free from conflicts of interests, we believe that the audit2, nominating/governance, and compensation committees should be composed of a majority of independent directors, considering the local market regulation and corporate governance codes as well as controlled company status.

**14. Majority Votes for Directors (SHP) FOR** 

We believe that good corporate governance requires shareholders to have a meaningful voice in the affairs of the company. This objective is strengthened if directors are elected by a majority of votes cast at an annual meeting rather than by the plurality method commonly used. With plurality voting a director could be elected by a single affirmative vote even if the rest of the votes were withheld.

We further believe that majority voting provisions will lead to greater director accountability. Therefore, we support shareholder proposals that companies amend their by-laws to provide that director nominees be elected by an affirmative vote of a majority of the votes cast, provided the proposal includes a carve-out to provide for plurality voting in contested elections where the number of nominees exceeds the number of directors to be elected.

**15. Removal of Directors Without Cause (SHP) FOR** 

Company by-laws sometimes define cause very narrowly, including only conditions of criminal indictment, final adverse adjudication that fiduciary duties were breached or incapacitation, while also providing shareholders with the right to remove directors only upon "cause".

We believe that the circumstances under which shareholders have the right to remove directors should not be limited to those traditionally defined by companies as "cause". We also believe that shareholders should have the right to conduct a vote to remove directors who fail to perform in a manner consistent with their fiduciary duties or representative of shareholders' best interests. And, while we would prefer shareholder proposals that seek to broaden the definition of "cause" to include situations like these, we generally support proposals that would provide shareholders with the right to remove directors without cause.

**16. Require Independent Board Chairman (SHP) CASE-BY-CASE** 

We believe there can be benefits to an executive chairman and to having the positions of chairman and CEO combined as well as split. When the chair is non-independent, the company must have sufficient counter-balancing governance in place, generally through a strong independent lead director. Also, for companies with smaller market capitalizations, separate chairman and CEO positions may not be practical.

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**3.2 COMPENSATION PROPOSALS** 

**17. Pro Rata Vesting of Equity Compensation Awards-Change in Control (SHP) CASE-BY-CASE** 

We examine proposals on the treatment of equity awards in the event of a change in control on a case-by-case basis. If a change in control is accompanied by termination of employment, often referred to as a double trigger, we generally support accelerated vesting of equity awards. If, however, there is no termination agreement in connection with a change in control, often referred to as a single trigger, we generally prefer pro rata vesting of outstanding equity awards.

**18. Adopt Policies to Prohibit any Death Benefits to Senior Executives (SHP) AGAINST** 

We view these bundled proposals as too restrictive and conclude that blanket restrictions on any and all such benefits, including the payment of life insurance premiums for senior executives, could put a company at a competitive disadvantage.

**19. Advisory Vote to Ratify Directors' Compensation (SHP) FOR** 

Similar to advisory votes on executive compensation, shareholders may request a non-binding advisory vote to approve compensation given to board members. We generally support this item.

**20. Amend Executive Compensation Plan Tied to Performance (Bonus Banking) (SHP) AGAINST** 

These proposals seek to force a company to amend executive compensation plans such that compensation awards tied to performance are deferred for shareholder specified and extended periods of time. As a result, awards may be adjusted downward if performance goals achieved during the vesting period are not sustained during the added deferral period.

We believe that most companies have adequate vesting schedules and clawbacks in place. Under such circumstances, we will oppose these proposals. However, if a company does not have what we believe to be adequate vesting and/or clawback requirements, we decide these proposals on a case-by-case basis.

**21. Approve Remuneration for Directors and Auditors CASE-BY-CASE** 

We will vote on a case-by-case basis where we are asked to approve remuneration for directors or auditors. We will generally oppose performance-based remuneration for non-executive directors as this may compromise independent oversight. In addition, where disclosure relating to the details of such remuneration is inadequate or provided without sufficient time for us to consider our vote, we may abstain or vote against, depending on the adequacy of the company's prior disclosures in this regard and the local market practice.

**22. Approve Retirement Bonuses for Directors (Japan and South Korea) CASE-BY-CASE** 

Retirement bonuses are customary in Japan and South Korea. Companies seek approval to give the board authority to grant retirement bonuses for directors and/or auditors and to leave the exact amount of bonuses to the board's discretion. We will analyze such proposals on a case-by-case basis, considering management's commitment to maximizing long- term shareholder value. However, when the details of the retirement bonus are inadequate or undisclosed, we may abstain or vote against.

1 For purposes of this Policy, generally, we will consider a director independent if the director satisfies the independence definition set forth in the listing standards of the exchange on which the common stock is listed. However, we may deem local independence classification criteria insufficient.

2 Pursuant to the SEC rules, adopted pursuant to the Sarbanes-Oxley Act of 2002, as of October 31, 2004, each U.S. listed issuer must have a fully independent audit committee.

**23. Approve Special Payments to Continuing Directors and Auditors (Japan) CASE-BY-CASE** 

In conjunction with the abolition of a company's retirement allowance system, we will generally support special payment allowances for continuing directors and auditors if there is no evidence of their independence becoming impaired. However, when the details of the special payments are inadequate or undisclosed, we may abstain or vote against.

**24. Disclose Executive and Director Pay (SHP) CASE-BY-CASE** 

The United States Securities and Exchange Commission ("SEC") has adopted rules requiring increased and/or enhanced compensation-related and corporate governance-related disclosure in proxy statements and Forms 10-K. Similar steps have been taken by regulators in foreign jurisdictions. We believe the rules enacted by the SEC and various foreign regulators generally ensure more complete and transparent disclosure. Therefore, while we will consider them on a case-by-case basis (analyzing whether there are any relevant disclosure concerns), we generally vote against shareholder proposals seeking additional disclosure of executive and director compensation, including proposals that seek to specify the

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measurement of performance-based compensation, if the company is subject to SEC rules or similar rules espoused by a regulator in a foreign jurisdiction. Similarly, we generally support proposals seeking additional disclosure of executive and director compensation if the company is not subject to any such rules.

**25. Executive and Employee Compensation Plans, Policies and Reports CASE-BY-CASE** 

Compensation plans usually are complex and are a major corporate expense, so we evaluate them carefully and on a case-by-case basis. In all cases, however, we assess each proposed Compensation Plan within the framework of four guiding principles, each of which ensures a company's Compensation Plan helps to align the long- term interests of management with shareholders:

Valid measures of business performance tied to the firm's strategy and shareholder value creation, which are clearly articulated and incorporate appropriate time periods, should be utilized;

Compensation costs should be managed in the same way as any other expense;

Compensation should reflect management's handling, or failure to handle, any recent social, environmental, governance, ethical or legal issue that had a significant adverse financial or reputational effect on the company and; In granting compensatory awards, management should exhibit a history of integrity and decision-making based on logic and well thought out processes.

We may oppose plans which include, and directors who establish, compensation plan provisions deemed to be poor practice such as automatic acceleration of equity, or single-triggered, in the event of a change in control. Although votes on compensation plans are by nature only broad indications of shareholder views, they do lead to more compensation-related dialogue between management and shareholders and help ensure that management and shareholders meet their common objective: maximizing shareholder value.

In markets where votes on compensation plans are not required for all companies, we will support shareholder proposals asking the board to adopt such a vote on an advisory basis.

Where disclosure relating to the details of Compensation Plans is inadequate or provided without sufficient time for us to consider our vote, we may abstain or vote against, depending on the adequacy of the company's prior disclosures in this regard. Where appropriate, we may raise the issue with the company directly or take other steps.

**26. Limit Executive Pay (SHP) CASE-BY-CASE** 

We believe that management and directors, within reason, should be given latitude in determining the mix and types of awards offered to executive officers. We vote against shareholder proposals seeking to limit executive pay if we deem them too restrictive. Depending on our analysis of the specific circumstances, we are generally against requiring a company to adopt a policy prohibiting tax gross up payments to senior executives.

**27. Mandatory Holding Periods (SHP) AGAINST** 

We generally vote against shareholder proposals asking companies to require a company's executives to hold stock for a specified period of time after acquiring that stock by exercising company-issued stock options (i.e., precluding "cashless" option exercises), unless we believe implementing a mandatory holding period is necessary to help resolve underlying problems at a company that have hurt, and may continue to hurt, shareholder value. We are generally in favor of reasonable stock ownership guidelines for executives.

**28. Performance-Based Stock Option Plans (SHP) CASE-BY-CASE** 

These shareholder proposals require a company to adopt a policy that all or a portion of future stock options granted to executives be performance-based. Performance-based options usually take the form of indexed options (where the option sale price is linked to the company's stock performance versus an industry index), premium priced options (where the strike price is significantly above the market price at the time of the grant) or performance vesting options (where options vest when the company's stock price exceeds a specific target). Proponents argue that performance-based options provide an incentive for executives to outperform the market as a whole and prevent management from being rewarded for average performance. We believe that management, within reason, should be given latitude in determining the mix and types of awards it offers. However, we recognize the benefit of linking a portion of executive compensation to certain types of performance benchmarks. While we will not support proposals that require all options to be performance-based, we will generally support proposals that require a portion of options granted to senior executives be performance-based. However, because performance-based options can also result in unfavorable tax treatment and the company may already have in place an option plan that sufficiently ties executive stock option plans to the company's performance, we will consider such proposals on a case-by-case basis.

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**29. Prohibit Relocation Benefits to Senior Executives (SHP) AGAINST** 

We do not consider such perquisites to be problematic pay practices as long as they are properly disclosed. Therefore, we will vote against shareholder proposals asking to prohibit relocation benefits.

**30. Recovery of Performance-Based Compensation (SHP) FOR** 

We generally support shareholder proposals requiring the board to seek recovery of performance-based compensation awards to senior management and directors in the event of a fraud or other reasons that resulted in the detriment to shareholder value and/or company reputation due to gross ethical lapses. In deciding how to vote, we consider the adequacy of the existing company clawback policy, if any.

**31. Submit Golden Parachutes/Severance Plans to a Shareholder Vote (SHP) FOR** 

Golden Parachutes assure key officers of a company lucrative compensation packages if the company is acquired and/or if the new owners terminate such officers. We recognize that offering generous compensation packages that are triggered by a change in control may help attract qualified officers. However, such compensation packages cannot be so excessive that they are unfair to shareholders or make the company unattractive to potential bidders, thereby serving as a constructive anti-takeover mechanism. Accordingly, we support proposals to submit severance plans (including supplemental retirement plans), to a shareholder vote, and we review proposals to ratify or redeem such plans retrospectively on a case-by-case basis.

**32. Submit Golden Parachutes/Severance Plans to a Shareholder Vote Prior to Their Being Negotiated by Management (SHP) CASE-BY-CASE** 

We believe that in order to attract qualified employees, companies must be free to negotiate compensation packages without shareholder interference. However, shareholders must be given an opportunity to analyze a compensation plan's final, material terms in order to ensure it is within acceptable limits. Accordingly, we evaluate proposals that require submitting severance plans and/or employment contracts for a shareholder vote prior to being negotiated by management on a case-by-case basis.

**33. Submit Survivor Benefit Compensation Plan to Shareholder Vote (SHP) FOR** 

Survivor benefit compensation plans, or "golden coffins", can require a company to make substantial payments or awards to a senior executive's beneficiaries following the death of the senior executive. The compensation can take the form of unearned salary or bonuses, accelerated vesting or the continuation in force of unvested equity grants, perquisites and other payments or awards. This compensation would not include compensation that the senior executive chooses to defer during his or her lifetime.

We recognize that offering generous compensation packages that are triggered by the passing of senior executives may help attract qualified officers. However, such compensation packages cannot be so excessive that they are unfair to shareholders or make the company unattractive to potential bidders, thereby serving as a constructive anti-takeover mechanism.

**3.3** **CAPITAL CHANGES AND ANTI-TAKEOVER PROPOSALS** 

**34. Amend Exclusive Forum Bylaw (SHP) AGAINST** 

We will generally oppose proposals that ask the board to repeal the company's exclusive forum bylaw. Such bylaws require certain legal action against the company to take place in the state of the company's incorporation. The courts within the state of incorporation are considered best suited to interpret that state's laws.

**35. Amend Net Operating Loss ("NOL") Rights Plans FOR** 

NOL Rights Plans are established to protect a company's net operating loss carry forwards and tax credits, which can be used to offset future income. We believe this is a reasonable strategy for a company to employ. Accordingly, we will vote in favor of NOL Rights Plans unless we believe the terms of the NOL Rights Plan may provide for a long-term anti- takeover device.

**36. Authorize Share Repurchase FOR** 

We generally support share repurchase proposals that are part of a well-articulated and well-conceived capital strategy. We assess proposals to give the board unlimited authorization to repurchase shares on a case-by-case basis.

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Furthermore, we would generally support the use of derivative instruments (e.g., put options and call options) as part of a share repurchase plan absent a compelling reason to the contrary. Also, absent a specific concern at the company, we will generally support a repurchase plan that could be continued during a takeover period.

**37. Blank Check Preferred Stock AGAINST** 

Blank check preferred stock proposals authorize the issuance of certain preferred stock at some future point in time and allow the board to establish voting, dividend, conversion, and other rights at the time of issuance. While blank check preferred stock can provide a corporation with the flexibility needed to meet changing financial conditions, it also may be used as the vehicle for implementing a "poison pill" defense or some other entrenchment device.

We are concerned that, once this stock has been authorized, shareholders have no further power to determine how or when it will be allocated. Accordingly, we generally oppose this type of proposal.

**38. Corporate Restructurings, Merger Proposals and Spin-Offs CASE-BY-CASE** 

Proposals requesting shareholder approval of corporate restructurings, merger proposals and spin-offs are determined on a case-by-case basis. In evaluating these proposals and determining our votes, we are singularly focused on meeting our goal of maximizing long-term shareholder value.

**39. Elimination of Preemptive Rights CASE-BY-CASE** 

Preemptive rights allow the shareholders of the company to buy newly issued shares before they are offered to the public in order to maintain their percentage ownership. We believe that, because preemptive rights are an important shareholder right, careful scrutiny must be given to management's attempts to eliminate them. However, because preemptive rights can be prohibitively expensive to widely held companies, the benefit of such rights will be weighed against the economic effect of maintaining them.

**40. Expensing Stock Options (SHP) FOR** 

US generally accepted accounting principles require companies to expense stock options, as do the accounting rules in many other jurisdictions (including those jurisdictions that have adopted IFRS -- international financial reporting standards). If a company is domiciled in a jurisdiction where the accounting rules do not already require the expensing of stock options, we will support shareholder proposals requiring this practice and disclosing information about it.

**41. Fair Price Provisions CASE-BY-CASE** 

A fair price provision in the company's charter or by laws is designed to ensure that each shareholder's securities will be purchased at the same price if the corporation is acquired under a plan not agreed to by the board. In most instances, the provision requires that any tender offer made by a third party must be made to all shareholders at the same price.

Fair pricing provisions attempt to prevent the "two-tiered front-loaded offer" where the acquirer of a company initially offers a premium for a sufficient percentage of shares of the company to gain control and subsequently makes an offer for the remaining shares at a much lower price. The remaining shareholders have no choice but to accept the offer. The two - tiered approach is coercive as it compels a shareholder to sell his or her shares immediately in order to receive the higher price per share. This type of tactic has caused many states to adopt fair price provision statutes to restrict this practice.

We consider fair price provisions on a case-by-case basis. We oppose any provision where there is evidence that management intends to use the provision as an anti-takeover device as well as any provision where the shareholder vote requirement is greater than a majority of disinterested shares (i.e., shares beneficially owned by individuals other than the acquiring party).

**42. Increase Authorized Common Stock CASE-BY-CASE** 

In general we regard increases in authorized common stock as serving a legitimate corporate purpose when used to: implement a stock split, aid in a recapitalization or acquisition, raise needed capital for the firm, or provide for employee savings plans, stock option plans or executive compensation plans. That said, we may oppose a particular proposed increase if we consider the authorization likely to lower the share price (this would happen, for example, if the firm were proposing to use the proceeds to overpay for an acquisition, to invest in a project unlikely to earn the firm's cost of capital, or to compensate employees well above market rates). We oppose increases in authorized common stock where there is evidence that the shares are to be used to implement a "poison pill" or another form of anti-takeover device, or if the issuance of new shares would, in our judgment, excessively dilute the value of the outstanding shares upon issuance. In addition, a satisfactory explanation of a company's intentions—going beyond the standard "general corporate purposes"—

must be disclosed in the proxy statement for proposals requesting an increase of greater than 100% of the shares

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outstanding. We view the use of derivatives, particularly warrants, as legitimate capital-raising instruments and apply these same principles to their use as we do to the authorization of common stock. Under certain circumstances where we believe it is important for shareholders to have an opportunity to maintain their proportional ownership, we may oppose proposals requesting shareholders approve the issuance of additional shares if those shares do not include preemptive rights.

In Hong Kong, it is common for companies to request board authority to issue new shares up to 20% of outstanding share capital. The authority typically lapses after one year. We may vote against plans that do not prohibit issuing shares at a discount, taking into account whether a company has a history of doing so.

**43. Issuance of Equity Without Preemptive Rights FOR** 

We are generally in favor of issuances of equity without preemptive rights of up to 30% of a company's outstanding shares unless there is concern that the issuance will be used in a manner that could hurt shareholder value (e.g., issuing the equity at a discount from the current market price or using the equity to help create a "poison pill" mechanism).

**44. Multi Class Equity Structure AGAINST** 

The one share, one vote principle — stating that voting power should be proportional to an investor's economic ownership — is generally preferred in order to hold the board accountable to shareholders. AB's general expectation of companies with multi class equity structures is to attach safeguards for minority shareholders when appropriate and in a cost-effective manner, which may include measures such as sunset provisions or requiring periodic shareholder reauthorizations. We expect boards to routinely review existing multi-class vote structures and share their current view.

With that backdrop, we acknowledge that multi-class structures may be beneficial for a period of time, allowing management to focus on longer-term value creation which benefits all shareholders. Accordingly, AB recommends companies that had an initial public offering (IPO) in the past two (2) years to institute a time-based sunset to be triggered seven (7) years from the year of the IPO. In 2021, we will engage with companies in our significant holdings universe that fall under this category. We may vote against the relevant board member of companies that remain unresponsive starting 2022 AGM, unless there is a valid case to apply an exemption.

For companies that instituted a multi-class share structure unrelated to an IPO event or had an IPO two (2) or more years ago, sunset should be seven (7) years from the year when the issuer implemented the multi-class structure. If the structure was adopted greater than seven (7) years ago, we will expect the issuer to consider the shortest sunset plan that makes sense based on the issuer's context. In 2021, we will engage with our portfolio companies in scope. We may vote against the respective board member if we don't see any progress starting 2022 AGM, unless there is a valid case to apply an exemption.

**45. Net Long Position Requirement FOR** 

We support proposals that require the ownership level needed to call a special meeting to be based on the net long position of a shareholder or shareholder group. This standard ensures that a significant economic interest accompanies the voting power.

**46. Reincorporation CASE-BY-CASE** 

There are many valid business reasons a corporation may choose to reincorporate in another jurisdiction. We perform a case-by-case review of such proposals, taking into consideration management's stated reasons for the proposed move.

Careful scrutiny also will be given to proposals that seek approval to reincorporate in countries that serve as tax havens. When evaluating such proposals, we consider factors such as the location of the company's business, the statutory protections available in the country to enforce shareholder rights and the tax consequences of the reincorporation to shareholders.

**47. Reincorporation to Another Jurisdiction to Permit Majority Voting or Other Changes in Corporate Governance (SHP) CASE-BY-CASE** 

If a shareholder proposes that a company move to a jurisdiction where majority voting (among other shareholder-friendly conditions) is permitted, we will generally oppose the move notwithstanding the fact that we favor majority voting for directors. Our rationale is that the legal costs, taxes, other expenses, and other factors, such as business disruption, in almost all cases would be material and outweigh the benefit of majority voting. If, however, we should find that these costs are not material and/or do not outweigh the benefit of majority voting, we may vote in favor of this kind of proposal. We will evaluate similarly proposals that would require reincorporation in another state to accomplish other changes in corporate governance.

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**48. Stock Splits FOR** 

Stock splits are intended to increase the liquidity of a company's common stock by lowering the price, thereby making the stock seem more attractive to small investors. We generally vote in favor of stock split proposals.

**49. Submit Company's Shareholder Rights Plan to Shareholder Vote (SHP) FOR** 

Most shareholder rights plans (also known as "poison pills") permit the shareholders of a target company involved in a hostile takeover to acquire shares of the target company, the acquiring company, or both, at a substantial discount once a "triggering event" occurs. A triggering event is usually a hostile tender offer or the acquisition by an outside party of a certain percentage of the target company's stock. Because most plans exclude the hostile bidder from the purchase, the effect in most instances is to dilute the equity interest and the voting rights of the potential acquirer once the plan is triggered. A shareholder rights plan is designed to discourage potential acquirers from acquiring shares to make a bid for the issuer. We believe that measures that impede takeovers or entrench management not only infringe on the rights of shareholders but also may have a detrimental effect on the value of the company.

We support shareholder proposals that seek to require the company to submit a shareholder rights plan to a shareholder vote. We evaluate on a case-by-case basis proposals to implement or eliminate a shareholder rights plan.

**50. Transferrable Stock Options CASE-BY-CASE** 

In cases where a compensation plan includes a transferable stock option program, we will consider the plan on a case-by- case basis.

These programs allow stock options to be transferred to third parties in exchange for cash or stock. In effect, management becomes insulated from the downside risk of holding a stock option, while the ordinary shareholder remains exposed to downside risk. This insulation may unacceptably remove management's exposure to downside risk, which significantly misaligns management and shareholder interests. Accordingly, we generally vote against these programs if the transfer can be executed without shareholder approval, is available to executive officers or non-employee directors, or we consider the available disclosure relating to the mechanics and structure of the program to be insufficient to determine the costs, benefits, and key terms of the program.

**3.4** **AUDITOR PROPOSALS** 

**51. Appointment of Auditors FOR** 

We believe that the company is in the best position to choose its accounting firm, and we generally support management's recommendation.

We recognize that there may be inherent conflicts when a company's independent auditors perform substantial non-audit related services for the company. Therefore, in reviewing a proposed auditor, we will consider the amount of fees paid for non-audit related services performed compared to the total audit fees paid by the company to the auditing firm, and whether there are any other reasons for us to question the independence or performance of the firm's auditor such as, for example, tenure. We generally will deem as excessive the non-audit fees paid by a company to its auditor if those fees account for 50% or more of total fees paid. In the UK market, which utilizes a different calculation, we adhere to a non- audit fee cap of 100% of audit fees. Under these circumstances, we generally vote against the auditor and the directors, in particular the members of the company's audit committee. In addition, we generally vote against authorizing the audit committee to set the remuneration of such auditors. We exclude from this analysis non-audit fees related to IPOs, bankruptcy emergence, and spin-offs and other extraordinary events. We may vote against or abstain due to a lack of disclosure of the name of the auditor while taking into account local market practice.

**52. Approval of Financial Statements FOR** 

In some markets, companies are required to submit their financial statements for shareholder approval. This is generally a routine item and, as such, we will vote for the approval of financial statements unless there are appropriate reasons to vote otherwise. We may vote against if the information is not available in advance of the meeting.

**53. Approval of Internal Statutory Auditors FOR** 

Some markets (e.g., Japan) require the annual election of internal statutory auditors. Internal statutory auditors have a number of duties, including supervising management, ensuring compliance with the articles of association, and reporting to a company's board on certain financial issues. In most cases, the election of internal statutory auditors is a routine

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item, and we will support management's nominee provided that the nominee meets the regulatory requirements for serving as internal statutory auditors. However, we may vote against nominees who are designated independent statutory auditors who serve as executives of a subsidiary or affiliate of the issuer or if there are other reasons to question the independence of the nominees.

**54. Limitation of Liability of External Statutory Auditors (Japan) CASE-BY-CASE** 

In Japan, companies may limit the liability of external statutory auditors in the event of a shareholder lawsuit through any of three mechanisms: (i) submitting the proposed limits to shareholder vote; (ii) setting limits by modifying the company's articles of incorporation; and (iii) setting limits in contracts with outside directors, outside statutory auditors and external audit firms (requires a modification to the company's articles of incorporation). A vote by 3% or more of shareholders can nullify a limit set through the second mechanism. The third mechanism has historically been the most prevalent.

We review proposals to set limits on auditor liability on a case-by-case basis, considering whether such a provision is necessary to secure appointment and whether it helps to maximize long-term shareholder value.

**55. Separating Auditors and Consultants (SHP) CASE-BY-CASE** 

We believe that a company serves its shareholders' interests by avoiding potential conflicts of interest that might interfere with an auditor's independent judgment. SEC rules adopted as a result of the Sarbanes-Oxley Act of 2002 attempted to address these concerns by prohibiting certain services by a company's independent auditors and requiring additional disclosure of other non-audit related services.

We evaluate on a case-by-case basis proposals that go beyond the SEC rules or other local market standards by prohibiting auditors from performing other non-audit services or calling for the board to adopt a policy to ensure auditor independence.

We take into consideration the policies and procedures the company already has in place to ensure auditor independence and non-audit fees as a percentage of total fees paid to the auditor are not excessive.

**3.5** **SHAREHOLDER ACCESS AND VOTING PROPOSALS** 

**56. A Shareholder's Right to Call Special Meetings (SHP) FOR** 

Most state corporation statutes (though not Delaware, where many US issuers are domiciled) allow shareholders to call a special meeting when they want to take action on certain matters that arise between regularly scheduled annual meetings. This right may apply only if a shareholder, or a group of shareholders, owns a specified percentage as defined by the relevant company bylaws.

We recognize the importance of the right of shareholders to remove poorly performing directors, respond to takeover offers and take other actions without having to wait for the next annual meeting. However, we also believe it is important to protect companies and shareholders from nuisance proposals. We further believe that striking a balance between these competing interests will maximize shareholder value. We believe that encouraging active share ownership among shareholders generally is beneficial to shareholders and helps maximize shareholder value. Accordingly, we will generally support a proposal to establish shareholders' right to call a special meeting unless we see a potential abuse of the right based on the company's current share ownership structure.

**57. Adopt Cumulative Voting (SHP) CASE-BY-CASE** 

Cumulative voting is a method of electing directors that enables each shareholder to multiply the number of his or her shares by the number of directors being considered. A shareholder may then cast the total votes for any one director or a selected group of directors. For example, a holder of 10 shares normally casts 10 votes for each of 12 nominees to the board thus giving the shareholder 120 (10 × 12) votes. Under cumulative voting, the shareholder may cast all 120 votes for a single nominee, 60 for two, 40 for three, or any other combination that the shareholder may choose.

We believe that encouraging activism among shareholders generally is beneficial to shareholders and helps maximize shareholder value. Cumulative voting supports the interests of minority shareholders in contested elections by enabling them to concentrate their votes and dramatically increase their chances of electing a dissident director to a board.

Accordingly, we generally will support shareholder proposals to restore or provide for cumulative voting and we generally will oppose management proposals to eliminate cumulative voting. However, we may oppose cumulative voting if a company has in place both proxy access, which allows shareholders to nominate directors to the company's ballot, and majority voting (with a carve-out for plurality voting in situations where there are more nominees than seats), which requires each director to receive the affirmative vote of a majority of votes cast and, we believe, leads to greater director accountability to shareholders.

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Also, we support cumulative voting at controlled companies regardless of any other shareholder protections that may be in place.

**58. Adopt Cumulative Voting in Dual Shareholder Class Structures (SHP) FOR** 

In dual class structures (such as A and B shares) where the shareholders with a majority economic interest have a minority voting interest, we generally vote in favor of cumulative voting for those shareholders.

**59. Early Disclosure of Voting Results (SHP) AGAINST** 

These proposals seek to require a company to disclose votes sooner than is required by the local market. In the US, the SEC requires disclosure in the first periodic report filed after the company's annual meeting which we believe is reasonable. We do not support requests that require disclosure earlier than the time required by the local regulator.

**60. Limiting a Shareholder's Right to Call Special Meetings AGAINST** 

Companies contend that limitations on shareholders' rights to call special meetings are needed to prevent minority shareholders from taking control of the company's agenda. However, such limits also have anti-takeover implications because they prevent a shareholder or a group of shareholders who have acquired a significant stake in the company from forcing management to address urgent issues, such as the potential sale of the company. Because most states prohibit shareholders from abusing this right, we see no justifiable reason for management to eliminate this fundamental shareholder right. Accordingly, we generally will vote against such proposals.

In addition, if the board of directors, without shareholder consent, raises the ownership threshold a shareholder must reach before the shareholder can call a special meeting, we will vote against those directors.

**61. Permit a Shareholder's Right to Act by Written Consent (SHP) CASE-BY-CASE** 

Action by written consent enables a large shareholder or group of shareholders to initiate votes on corporate matters prior to the annual meeting. We believe this is a fundamental shareholder right and, accordingly, will generally support shareholder proposals seeking to restore this right. However, in cases where a company has a majority shareholder or group of related majority shareholders with majority economic interest, we will oppose proposals seeking to restore this right as there is a potential risk of abuse by the majority shareholder or group of majority shareholders. We may also vote against the proposal if the company provides shareholders a right to call special meetings with an ownership threshold of 15% or below in absence of material restrictions, as we believe that shareholder access rights should be considered from a holistic view rather than promoting all possible access rights that may impede one another in contrast to long-term shareholder value.

**62. Proxy Access for Annual Meetings (SHP) (Management) FOR** 

These proposals allow "qualified shareholders" to nominate directors. We generally vote in favor of management and shareholder proposals for proxy access that employ guidelines reflecting the SEC framework for proxy access (adopted by the SEC in 2010, but vacated by the US District of Columbia Circuit Court of Appeals in 2011), which would have allowed a single shareholder, or group of shareholders, who hold at least 3% of the voting power for at least three years continuously to nominate up to 25% of the current board seats, or two directors, for inclusion in the subject company's annual proxy statement alongside management nominees.

We may vote against proposals that use requirements that are stricter than the SEC's framework including implementation restrictions and against individual board members, or entire boards, who exclude from their ballot properly submitted shareholder proxy access proposals or compete against shareholder proxy access proposals with stricter management proposals on the same ballot We will generally vote in favor of proposals that seek to amend an existing right to more closely align with the SEC framework.

We will evaluate on a case-by-case basis proposals with less stringent requirements than the vacated SEC framework.

From time to time we may receive requests to join with other shareholders to support a shareholder action. We may, for example, receive requests to join a voting block for purposes of influencing management. If the third parties requesting our participation are not affiliated with us and have no business relationships with us, we will consider the request on a case-by-case basis. However, where the requesting party has a business relationship with us (e.g., the requesting party is a client or a significant service provider), agreeing to such a request may pose a potential conflict of interest. As a fiduciary we have an obligation to vote proxies in the best interest of our clients (without regard to our own interests in generating and maintaining business with our other clients) and given our desire to avoid even the appearance of a conflict, we will generally decline such a request.

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**63. Reduce Meeting Notification from 21 Days to 14 Days (UK) FOR** 

Companies in the United Kingdom may, with shareholder approval, reduce the notice period for extraordinary general meetings from 21 days to 14 days.

A reduced notice period expedites the process of obtaining shareholder approval of additional financing needs and other important matters. Accordingly, we support these proposals.

**64. Shareholder Proponent Engagement Process (SHP) FOR** 

We believe that proper corporate governance requires that proposals receiving support from a majority of shareholders be considered and implemented by the company. Accordingly, we support establishing an engagement process between shareholders and management to ensure proponents of majority-supported proposals, have an established means of communicating with management.

**65. Supermajority Vote Requirements AGAINST** 

A supermajority vote requirement is a charter or by-law requirement that, when implemented, raises the percentage (higher than the customary simple majority) of shareholder votes needed to approve certain proposals, such as mergers, changes of control, or proposals to amend or repeal a portion of the Articles of Incorporation.

In most instances, we oppose these proposals and support shareholder proposals that seek to reinstate the simple majority vote requirement. However, we may support supermajority vote requirements at controlled companies as a protection to minority shareholders from unilateral action of the controlling shareholder.

**66. Authorize Virtual-Only Shareholder Meetings CASE-BY-CASE** 

COVID-19 has called for a need to authorize companies in holding virtual-only shareholder meetings. While recognizing technology has enabled shareholders to remain connected with the board and management, AB acknowledges that virtual only shareholder meetings have resulted in certain companies abusing their authority by limiting shareholders from raising questions and demanding onerous requirements to be able to read their questions during the meeting. Because such practice varies by company and jurisdiction with different safeguard provisions, we will consider—among other things— a company's disclosure on elements such as those below when voting on management or shareholder proposals for authorizing the company to hold virtual-only shareholder meetings:

+ Explanation for eliminating the in-person meeting;

+ Clear description of which shareholders are qualified to participate in virtual-only shareholder meetings and how attendees can join the meeting;

+ How to submit and ask questions;

+ How the company plans to mimic a real-time in-person question and answer session; and

+ List of questions received from shareholders in their entirety, both prior to and during the meeting, as well as associated responses from the company

**3.6** **ENVIRONMENTAL, SOCIAL AND DISCLOSURE PROPOSALS** 

**67. Animal Welfare (SHP) CASE-BY-CASE** 

These proposals may include reporting requests or policy adoption on items such as pig gestation crates and animal welfare in the supply chain. For proposals requesting companies to adopt a policy, we will carefully consider existing policies and the company's incorporation of national standards and best practices. In addition, we will evaluate the potential enactment of new regulations, as well as any investment risk related to the specific issue.

We generally support shareholder proposals calling for reports and disclosure while taking into account existing policies and procedures of the company and whether the proposed information is of added benefit to shareholders.

**68. Climate Change (SHP) FOR** 

Proposals addressing climate change concerns are plentiful and their scope varies. Climate change increasingly receives investor attention as a potentially critical and material risk to the sustainability of a wide range of business-specific activities. These proposals may include emissions standards or reduction targets, quantitative goals, and impact assessments. We generally support these proposals, while taking into account the materiality of the issue and whether the proposed information is of added benefit to shareholders.

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For proposals requesting companies to adopt a policy, we will carefully consider existing policies and the company's incorporation of national standards and best practices. In addition, we will evaluate the potential enactment of new regulations, as well as any investment risk related to the specific issue.

We generally support shareholder proposals calling for reports and disclosure, while taking into account existing policies and procedures of the company and whether the proposal is of added benefit to shareholders.

**69. Charitable Contributions (SHP) (Management) CASE-BY-CASE** 

Proposals relating to charitable contributions may be sponsored by either management or shareholders. Management proposals may ask to approve the amount for charitable contributions.

We generally support shareholder proposals calling for reports and disclosure while taking into account existing policies and procedures of the company and whether the proposed information is of added benefit to shareholders.

**70. Environmental Proposals (SHP) CASE-BY-CASE** 

These proposals can include reporting and policy adoption requests in a wide variety of areas, including, but not limited to, (nuclear) waste, deforestation, packaging and recycling, renewable energy, toxic material, palm oil and water.

For proposals requesting companies to adopt a policy, we will carefully consider existing policies and the company's incorporation of national standards and best practices. In addition, we will evaluate the potential enactment of new regulations, as well as any investment risk related to the specific issue.

We generally support shareholder proposals calling for reports and disclosure while taking into account existing policies and procedures of the company and whether the proposed information is of added benefit to shareholders.

**71. Genetically Altered or Engineered Food and Pesticides (SHP) CASE-BY-CASE** 

These proposals may include reporting requests on pesticides monitoring/use and Genetically Modified Organism (GMO) as well as GMO labeling.

For proposals requesting companies to adopt a policy, we will carefully consider existing policies and the company's incorporation of national standards and best practices. In addition, we will evaluate the potential enactment of new regulations, as well as any investment risk related to the specific issue.

We generally support shareholder proposals calling for reports and disclosure while taking into account existing policies and procedures of the company and whether the proposed information is of added benefit to shareholders.

**72. Health Proposals (SHP) CASE-BY-CASE** 

These proposals may include reports on pharmaceutical pricing, antibiotic use in the meat supply, and tobacco products. We generally support shareholder proposals calling for reports and disclosure while taking into account the current reporting policies of the company and whether the proposed information is of added benefit to shareholders.

For proposals requesting companies to adopt a policy, we will carefully consider existing policies and the company's incorporation of national standards and best practices. In addition, we will evaluate the potential enactment of new regulations, as well as any investment risk related to the specific issue. We generally support shareholder proposals calling for reports and disclosure while taking into account existing policies and procedures of the company and whether the proposal is of added benefit to shareholders.

**73. Human Rights Policies and Reports (SHP) CASE-BY-CASE** 

These proposals may include reporting requests on human rights risk assessments, humanitarian engagement and mediation policies, working conditions, adopting policies on supply chain worker fees, and expanding existing policies in these areas. We recognize that many companies have complex supply chains which have led to increased awareness of supply chain issues as an investment risk.

For proposals requesting companies to adopt a policy, we will carefully consider existing policies and the company's incorporation of national standards and best practices. In addition, we will evaluate the potential enactment of new regulations, as well as any investment risk related to the specific issue.

For proposals addressing forced labor and supply chain management from the human rights perspective, AB assesses the proposal based on its proprietary framework. The framework considers factors such as oversight of the issue, risk identification process, action plan to mitigate risks, the effectiveness of the action plan, and future improvement.

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We generally support shareholder proposals calling for reports and disclosure while taking into account existing policies and procedures of the company and whether the proposed information is of added benefit to shareholders.

**74. Include Sustainability as a Performance Measure (SHP) CASE-BY-CASE** 

We believe management and directors should be given latitude in determining appropriate performance measurements. While doing so, consideration should be given to how long-term sustainability issues might affect future company performance. Therefore, we will evaluate on a case-by-case basis proposals requesting companies to consider incorporating specific, measurable, practical goals consisting of sustainability principles and environmental impacts as metrics for incentive compensation and how they are linked with our objectives as long-term shareholders.

**75. Lobbying and Political Spending (SHP) FOR** 

We generally vote in favor of proposals requesting increased disclosure of political contributions and lobbying expenses, including those paid to trade organizations and political action committees, whether at the federal, state, or local level.

These proposals may increase transparency.

**76. Other Business AGAINST** 

In certain jurisdictions, these proposals allow management to act on issues that shareholders may raise at the annual meeting. Because it is impossible to know what issues may be raised, we will vote against these proposals.

**77. Reimbursement of Shareholder Expenses (SHP) AGAINST** 

These shareholder proposals would require companies to reimburse the expenses of shareholders who submit proposals that receive a majority of votes cast or the cost of proxy contest expenses. We generally vote against these proposals, unless reimbursement occurs only in cases where management fails to implement a majority passed shareholder proposal, in which case we may vote in favor.

**78. Sustainability Report (SHP) FOR** 

We generally support shareholder proposals calling for reports and disclosure related to sustainability while taking into account existing policies and procedures of the company and whether the proposed information is of added benefit to shareholders.

**79. Workplace: Diversity (SHP) FOR** 

We generally support shareholder proposals calling for reports and disclosure surrounding workplace diversity while taking into account existing policies and procedures of the company and whether the proposed information is of added benefit to shareholders.

We generally support proposals requiring a company to amend its Equal Employment Opportunity policies to prohibit workplace discrimination based on sexual orientation and gender identity.

**80. Workplace: Gender Pay Equity (SHP) FOR** 

A report on pay disparity between genders typically compares the difference between male and female median earnings expressed as a percentage of male earnings and may include, (i) statistics and rationale explanation pertaining to changes in the size of the gap, (ii) recommended actions, and (iii) information on whether greater oversight is needed over certain aspects of the company's compensation policies. In the U.S., we are generally supportive of proposals to require companies to make similar assessments and disclosure related to the pay disparity between different gender and ethnic/racial groups. Shareholder requests to place a limit on a global median ethnic/racial pay gap will be assessed based on the cultural and the legal context of markets to which the company is exposed.

The SEC requires US issuers with fiscal years ending on or after January 1, 2017, to contrast CEO pay with median employee pay. This requirement, however, does not specifically address gender pay equity issues in such pay disparity reports.

Accordingly, we will generally support proposals requiring gender pay metrics, taking into account the specific metrics and scope of the information requested and whether the SEC's requirement renders the proposal unnecessary.

**4.** **CONFLICTS OF INTEREST** 

**4.1** **INTRODUCTION** 

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As a fiduciary, we always must act in our clients' best interests. We strive to avoid even the appearance of a conflict that may compromise the trust our clients have placed in us, and we insist on strict adherence to fiduciary standards and compliance with all applicable federal and state securities laws. We have adopted a comprehensive Code of Business Conduct and Ethics ("Code") to help us meet these obligations. As part of this responsibility and as expressed throughout the Code, we place the interests of our clients first and attempt to avoid any perceived or actual conflicts of interest.

AB recognizes that potentially material conflicts of interest arise when we engage with a company or vote a proxy solicited by an issuer that sponsors a retirement plan we manage (or administer), that distributes AB-sponsored mutual funds, or with which AB or one or more of our employees have another business or personal relationship, and that such conflicts could affect how we vote on the issuer's proxy. Similarly, potentially material conflicts of interest arise when engaging with and deciding how to vote on a proposal sponsored or supported by a shareholder group that is a client. In order to address any perceived or actual conflict of interest, the procedures set forth below in sections 4.2 through 4.8 have been established for use when we encounter a potential conflict to ensure that our engagement activities and voting decisions are in our clients' best interest consistent with our fiduciary duties and seek to maximize shareholder value.

**4.2** **ADHERENCE TO STATED PROXY VOTING POLICIES** 

Votes generally are cast in accordance with this Policy3. In situations where our Policy involves a case-by-case assessment, the following sections provide criteria that will guide our decision. In situations where our Policy on a particular issue involves a case-by-case assessment and the vote cannot be clearly decided by an application of our stated Policy, a member of the Committee or his/her designee will make the voting decision in accordance with the basic principle of our Policy to vote proxies with the intention of maximizing the value of the securities in our client accounts. In these situations, the voting rationale must be documented either on the voting platform of our proxy services vendor, by retaining relevant emails or another appropriate method. Where appropriate, the views of investment professionals are considered. All votes cast contrary to our stated voting Policy on specific issues must be documented. If a proxy vote involves a potential conflict of interest, the voting decision will be determined in accordance with the processes outlined in section 4.5 of the Policy. On an annual basis, the Committee will receive and review a report of all such votes so as to confirm adherence with the Policy.

**4.3** **DISCLOSURE OF CONFLICTS** 

When considering a proxy proposal, members of the Committee or investment professionals involved in the decision- making process must disclose to the Committee any potential conflict (including personal relationships) of which they are aware and any substantive contact that they have had with any interested outside party (including the issuer or shareholder group sponsoring a proposal) regarding the proposal. Any previously unknown conflict will be recorded on the Potential Conflicts List (discussed below). If a member of the Committee has a material conflict of interest, he or she generally must recuse himself or herself from the decision-making process.

**4.4** **POTENTIAL CONFLICTS LIST** 

No less frequently than annually, a list of companies and organizations whose engagement and proxies may pose potential conflicts of interest is compiled by the Legal and Compliance Department (the "Potential Conflicts List"). The Potential Conflicts List generally includes:

+ Publicly traded clients of AB;

+ Publicly traded companies that distribute AB mutual funds;

+ Bernstein private clients who are directors, officers, or 10% shareholders of publicly traded companies;

+ Publicly traded companies that are sell-side clients of our affiliated broker-dealer, SCB & Co.;

+ Companies where an employee of AB or Equitable Holdings, Inc., the parent company of AB, has identified an interest;

+ Publicly traded affiliated companies;

+ Clients who sponsor, publicly support or have material interest in a proposal upon which we will be eligible to vote;

+ Publicly traded companies targeted by the AFL-CIO for engagement and voting; and

+ Any other company subject to a material conflict of which a Committee member becomes aware4.

We determine our votes for all meetings of companies that may present a conflict by applying the processes described in Section 4.5 below. We document all instances when the Conflicts Officer determines our vote.

**4.5** **DETERMINE EXISTENCE OF CONFLICT OF INTEREST** 

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When we encounter a potential conflict of interest, we review our proposed vote using the following analysis to ensure our voting decision is in the best interest of our clients:

+ If our proposed vote is explicitly addressed by and consistent with the Policy, no further review is necessary.

+ If our proposed vote is contrary to the Policy (i.e., requires a case-by-case assessment or is not covered by the Policy), the vote will be presented to the Conflicts Officer. The Conflicts Officer's review will be documented using a Proxy Voting Conflict of Interest Form (a copy of which is attached hereto). The Conflicts Officer will determine whether the proposed vote is reasonable. If the Conflicts Officer cannot determine that the proposed vote is reasonable, the Conflicts Officer may instruct AB to refer the votes back to the client(s) or take other actions as the Conflicts Officer deems appropriate in light of the facts and circumstances of the particular potential conflict. The Conflicts Officer may take or recommend that AB take the following steps:

+ Recuse or "wall-off" certain personnel from the proxy voting process;

+ Confirm whether AB's proposed vote is consistent with the voting recommendations of our proxy research services vendor; or

+ Take other actions as the Conflicts Officer deems appropriate.

3 From time to time a client may request that we vote their proxies consistent with AFL-CIO guidelines or the policy of the National Association of Pension Funds. In those situations, AB reserves the right to depart from those policies if we believe it to be in the client's best interests.

4 The Committee must notify the Legal and Compliance Department promptly of any previously unknown conflict.

**4.6** **REVIEW OF THIRD-PARTY PROXY SERVICE VENDORS** 

AB engages one or more Proxy Service Vendors to provide voting recommendations and voting execution services. From time to time, AB will evaluate each Proxy Service Vendor's services to assess that they are consistent with this Policy and the best interest of our clients. This evaluation may include: (i) a review of pre-populated votes on the Proxy Service

Vendor's electronic voting platform before such votes are cast, and (ii) a review of policies that address the consideration of additional information that becomes available regarding a proposal before the vote is cast. AB will also periodically review whether Proxy Service Vendors have the capacity and competency to adequately analyze proxy issues and provide the necessary services to AB. AB will consider, among other things, the adequacy and quality of the Proxy Service Vendor's staffing, personnel and/or technology, as well as whether the Proxy Service Vendor has adequate disclosures regarding its methodologies in formulating voting recommendations. If applicable, we will also review whether any potential factual errors, incompleteness or methodological weaknesses materially affected the Proxy Service Vendor's services and the effectiveness of the Proxy Service Vendor's procedures for obtaining current and accurate information relevant to matters included in its research.

The Committee also takes reasonable steps to review the Proxy Service Vendor's policies and procedures addressing conflicts of interest and verify that the Proxy Service Vendor(s) to which we have a full- level subscription is, in fact, independent based on all of the relevant facts and circumstances. This includes reviewing each Proxy Service Vendor's conflict management procedures on an annual basis. When reviewing these conflict management procedures, we will consider, among other things, (i) whether the Proxy Service Vendor has adequate policies and procedures to identify, disclose, and address actual and potential conflicts of interest; and (ii) whether the Proxy Service Vendor provides adequate disclosure of actual and potential conflicts of interest with respect to the services provided to AB by the Proxy Service Vendor and (iii) whether the Proxy Service Vendor's policies and procedures utilize technology in delivering conflicts disclosure; and (iv) can offer research in an impartial manner and in the best interests of our clients.

**4.7** **CONFIDENTIAL VOTING** 

It is AB's policy to support confidentiality before the actual vote has been cast. Employees are prohibited from revealing how we intend to vote except to (i) members of the Committee; (ii) Portfolio Managers who hold the security in their managed accounts; (iii) the Research Analyst(s) who cover(s) the security; (iv) clients, upon request, for the securities held in their portfolios; (v) clients who do not hold the security or for whom AB does not have proxy voting authority, but who provide AB with a signed a Non-Disclosure Agreement; or (vi) declare our stance on an ESG related shareholder proposal(s) that is (are) deemed material for the issuer's business for generating long-term value in our clients' best interests. Once the votes have been cast for our mutual fund clients, they are made public in accordance with mutual fund proxy vote disclosures required by the SEC, and we generally post all votes to our public website one business day after the meeting date.

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We may participate in proxy surveys conducted by shareholder groups or consultants so long as such participation does not compromise our confidential voting policy. Specifically, prior to our required SEC disclosures each year, we may respond to surveys asking about our proxy voting policies, but not any specific votes. After our mutual fund proxy vote disclosures required by the SEC each year have been made public and/or votes have been posted to our public website, we may respond to surveys that cover specific votes in addition to our voting policies.

On occasion, clients for whom we do not have proxy voting authority may ask us how AB's Policy would be implemented. A member of the Committee or one or more members of Responsibility team may provide the results of a potential implementation of the AB policy to the client's account subject to an understanding with the client that the implementation shall remain confidential.

Any substantive contact regarding proxy issues from the issuer, the issuer's agent or a shareholder group sponsoring a proposal must be reported to the Committee if such contact was material to a decision to vote contrary to this Policy.

Routine administrative inquiries from proxy solicitors need not be reported.

**4.8** **A NOTE REGARDING AB'S STRUCTURE** 

AB and AllianceBernstein Holding L.P. ("AB Holding") are Delaware limited partnerships. As limited partnerships, neither company is required to produce an annual proxy statement or hold an annual shareholder meeting. In addition, the general partner of AB and AB Holding, AllianceBernstein Corporation is an indirect wholly owned subsidiary of Equitable Holdings, Inc.

As a result, most of the positions we express in this Proxy Voting Policy are inapplicable to our business. For example, although units in AB Holding are publicly traded on the New York Stock Exchange ("NYSE"), the NYSE Listed Company Manual exempts limited partnerships and controlled companies from compliance with various listing requirements, including the requirement that our board have a majority of independent directors.

**5.** **VOTING TRANSPARENCY** 

We publish our voting records on our website one business day after the shareholder meeting date for each issuer company. Many clients have requested that we provide them with periodic reports on how we voted their proxies. Clients may obtain information about how we voted proxies on their behalf by contacting their Advisor.

**6.** **RECORDKEEPING** 

All of the records referenced below 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 (6) 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 (6) or more years. If the local regulation requires that records are kept for more than six (6) or more years, we will comply with the local regulation.9 We maintain the vast majority of these records electronically.

**6.1** **PROXY VOTING AND GOVERNANCE POLICY** 

The Policy shall be maintained in the Legal and Compliance Department and posted on our company intranet and on the AB website.

**6.2** **PROXY STATEMENTS RECEIVED REGARDING CLIENT SECURITIES** 

For US Securities5, AB relies on the SEC to maintain copies of each proxy statement we receive regarding client securities. For Non-US Securities, we rely on ISS, our proxy voting agent, to retain such proxy statements.

**6.3** **RECORDS OF VOTES CAST ON BEHALF OF CLIENTS** 

Records of votes cast by AB are retained electronically by our proxy research service vendor.

**6.4** **RECORDS OF CLIENTS REQUESTS FOR PROXY VOTING INFORMATION** 

Copies of written requests from clients for information on how AB voted their proxies shall be maintained by the Legal and Compliance Department. Responses to written and oral requests for information on how we voted clients' proxies will be kept in the Client Group.

**6.5** **DOCUMENTS PREPARED BY AB THAT ARE MATERIAL TO VOTING DECISIONS** 

The Committee is responsible for maintaining documents prepared by the Committee or any AB employee that were material to a voting decision. Therefore, where an investment professional's opinion is essential to the voting decision, the recommendation from investment professionals must be made in writing to a member of Responsibility team.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**7.** **PROXY VOTING PROCEDURES** 

**7.1** **VOTE ADMINISTRATION** 

In an effort to increase the efficiency of voting proxies, AB currently uses ISS to act as its voting agent for our clients' holdings globally.

Issuers initially send proxy information to the custodians of our client accounts. We instruct these custodian banks to direct proxy related materials to ISS's offices. ISS provides us with research related to each resolution and pre-populates certain ballots based on the guidelines contained in this Policy. Members of Responsibility team assess the proposals via ISS's web platform, ProxyExchange, and submit all votes electronically. ISS then returns the proxy ballot forms to the designated returnee for tabulation. In addition, AB's proxy votes are double-checked in a two-tiered approach. Votes for significant holdings, as defined by our stake, are reviewed real-time by an offshore team to verify that the executed votes are in-line with our Policy. Votes outside of the significant holdings universe are sampled and reviewed on a monthly basis by the members of Responsibility team to ensure their compliance with our Policy.

If necessary, any paper ballots we receive will be voted online using ProxyVote or via mail or fax.

5 US securities are defined as securities of issuers required to make reports pursuant to §12 of the Securities Exchange Act of 1934, as amended. Non-US securities are defined as all other securities.

**7.2** **SHARE BLOCKING AND ABSTAINING FROM VOTING CLIENT SECURITIES** 

Proxy voting in certain countries requires "share blocking." Shareholders wishing to vote their proxies must deposit their shares shortly before the date of the meeting (usually one week) with a designated depositary. During this blocking period, shares that will be voted at the meeting cannot be sold until the meeting has taken place and the shares are returned to the clients' custodian banks. We may determine that the value of exercising the vote is outweighed by the detriment of not being able to sell the shares during this period. In cases where we want to retain the ability to trade shares, we may determine to not vote those shares.

We seek to vote all proxies for securities held in client accounts for which we have proxy voting authority. However, in some markets administrative issues beyond our control may sometimes prevent us from voting such proxies. For example, we may receive meeting notices after the cut-off date for voting or without enough time to fully consider the proxy. Similarly, proxy materials for some issuers may not contain disclosure sufficient to arrive at a voting decision, in which cases we may abstain from voting. Some markets outside the US require periodic renewals of powers of attorney that local agents must have from our clients prior to implementing our voting instructions.

AB will abstain from voting (which generally requires submission of a proxy voting card) or affirmatively decide not to vote if AB determines that abstaining or not voting would be in the applicable client's best interest. In making such a determination, AB will consider various factors, including, but not limited to: (i) the costs associated with exercising the proxy (e.g., translation or travel costs); (ii) any legal restrictions on trading resulting from the exercise of a proxy (e.g., share-blocking jurisdictions); (iii) whether AB's clients have sold the underlying securities since the record date for the proxy; and (iv) whether casting a vote would not reasonably be expected to have a material effect on the value of the client's investment.

**7.3** **LOANED SECURITIES** 

Many of our clients have entered into securities lending arrangements with agent lenders to generate additional revenue. We will not be able to vote securities that are on loan under these types of arrangements. However, under rare circumstances, for voting issues that may have a significant impact on the investment, we may request that clients or custodians recall securities that are on loan if we determine that the benefit of voting outweighs the costs and lost revenue to the client or fund and the administrative burden of retrieving the securities. For the SRI labeled Thematic funds, we recall U.S. securities on loan to vote proxies and have discontinued lending for non-U.S. securities.

If you have questions or desire additional information about this Policy, please contact ProxyTeam@alliancebernstein.com.

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**Exhibit** 

**Proxy Voting Guideline Summary** 

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| | | | | |
|:---|:---|:---|:---|:---|
| **Shareholder**<br> **Proposal**<br>|  | **For** | **Against** | &nbsp;&nbsp; **Case-by-**<br> **Case**<br>|
| **Board and Director Proposals** | **Board and Director Proposals** | **Board and Director Proposals** | **Board and Director Proposals** | **Board and Director Proposals** |
|  | Board Diversity |  |  | + |
| + | Establish New Board Committees and Elect Board Members with Specific Expertise |  |  | + |
|  | Changes in Board Structure and Amending the Articles of Incorporation | + |  |  |
|  | Classified Boards |  | + |  |
|  | Director Liability and Indemnification |  |  | + |
| + | Disclose CEO Succession Plan | + |  |  |
|  | Election of Directors | + |  |  |
|  | Controlled Company Exemption |  |  | + |
|  | Voting for Director Nominees in a Contested Election |  |  | + |
| + | Independent Lead Director | + |  |  |
| + | Limit Term of Directorship |  |  | + |
| + | Majority of Independent Directors | + |  |  |
| + | Majority of Independent Directors on Key Committees | + |  |  |
| + | Majority Votes for Directors | + |  |  |
| + | Removal of Directors Without Cause | + |  |  |
| + | Require Independent Board Chairman |  |  | + |
| + | Require Two Candidates for Each Board Seat |  | + |  |
| **Compensation Proposals** | **Compensation Proposals** | **Compensation Proposals** | **Compensation Proposals** | **Compensation Proposals** |
| + | Elimination of Single Trigger Change-in-Control Agreements | + |  |  |
| + | Pro Rata Vesting of Equity Compensation Awards-Change of Control |  |  | + |
| + | Adopt Policies to Prohibit any Death Benefits to Senior Executives |  | + |  |
| + | Advisory Vote to Ratify Directors' Compensation | + |  |  |
| + | Amend Executive Compensation Plan Tied to Performance (Bonus Banking) |  | + |  |
|  | Approve Remuneration for Directors and Auditors |  |  | + |
|  | Approve Remuneration Reports |  |  | + |
|  | Approve Retirement Bonuses for Directors (Japan and South Korea) |  |  | + |
|  | Approve Special Payments to Continuing Directors and Auditors (Japan) |  |  | + |
| + | Disclose Executive and Director Pay |  |  | + |
| + | Exclude Pension Income from Performance-Based Compensation | + |  |  |
|  | Executive and Employee Compensation Plans |  |  | + |
| + | Limit Dividend Payments to Executives |  | + |  |
| + | Limit Executive Pay |  |  | + |
| + | Mandatory Holding Periods |  | + |  |
| + | Performance-Based Stock Option Plans |  |  | + |
| + | Prohibit Relocation Benefits to Senior Executives |  | + |  |
| + | Recovery of Performance-Based Compensation | + |  |  |
| + | Submit Golden Parachutes/Severance Plans to a Shareholder Vote |  | + |  |
| + | &nbsp;&nbsp; Submit Golden Parachutes/Severance Plans to a Shareholder Vote prior to their being <br> Negotiated by Management<br>|  |  | + |
| + | Submit Survivor Benefit Compensation Plans to a Shareholder Vote | + |  |  |
| **Capital Changes and Anti-Take Over Proposals** | **Capital Changes and Anti-Take Over Proposals** | **Capital Changes and Anti-Take Over Proposals** | **Capital Changes and Anti-Take Over Proposals** | **Capital Changes and Anti-Take Over Proposals** |
| + | Amend Exclusive Forum Bylaw |  | + |  |
|  | Amend Net Operating Loss ("NOL") Rights Plans | + |  |  |
|  | Authorize Share Repurchase | + |  |  |

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| | | | | |
|:---|:---|:---|:---|:---|
| **Shareholder**<br> **Proposal**<br>|  | **For** | **Against** | &nbsp;&nbsp; **Case-by-**<br> **Case**<br>|
|  | Blank Check Preferred Stock |  | + |  |
|  | Corporate Restructurings, Merger Proposals and Spin-Offs |  |  | + |
|  | Elimination of Preemptive Rights |  |  | + |
| + | Expensing Stock Options | + |  |  |
|  | Fair Price Provisions |  |  | + |
|  | Increase Authorized Common Stock |  |  | + |
|  | Issuance of Equity without Preemptive Rights | + |  |  |
|  | Issuance of Stock with Unequal Voting Rights |  |  | + |
|  | Net Long Position Requirement | + |  |  |
|  | Reincorporation |  |  | + |
| + | &nbsp;&nbsp; Reincorporation to Another jurisdiction to Permit Majority Voting or Other Changes in <br> Corporate Governance<br>|  |  | + |
|  | Stock Splits | + |  |  |
| + | Submit Company's Shareholder Rights Plan to a Shareholder Vote | + |  |  |
|  | Transferrable Stock Options |  |  | + |
| **Auditor Proposals** | **Auditor Proposals** | **Auditor Proposals** | **Auditor Proposals** | **Auditor Proposals** |
|  | Appointment of Auditors | + |  |  |
|  | Approval of Financial Statements | + |  |  |
|  | Approval of Internal Statutory Auditors | + |  |  |
| + | Limit Compensation Consultant Services |  | + |  |
|  | Limitation of Liability of External Statutory Auditors (Japan) |  |  | + |
| + | Separating Auditors and Consultants |  |  | + |
| **Shareholder Access & Voting Proposals** | **Shareholder Access & Voting Proposals** | **Shareholder Access & Voting Proposals** | **Shareholder Access & Voting Proposals** | **Shareholder Access & Voting Proposals** |
| + | A Shareholder's Right to Call Special Meetings | + |  |  |
| + | Adopt Cumulative Voting |  |  | + |
| + | Adopt Cumulative Voting in Dual Shareholder Class Structures | + |  |  |
| + | Early Disclosure of Voting Results |  | + |  |
| + | Implement Confidential Voting | + |  |  |
|  | Limiting a Shareholder's Right to Call Special Meetings |  | + |  |
| + | Permit a Shareholder's Right to Act by Written Consent |  |  | + |
| + | Proxy Access for Annual Meetings | + |  |  |
|  | Reduce Meeting Notification from 21 Days to 14 Days (UK) | + |  |  |
| + | Rotation of Locale for Annual Meeting |  | + |  |
| + | Shareholder Proponent Engagement Process | + |  |  |
|  | Supermajority Vote Requirements |  | + |  |
| **Environmental & Social, Disclosure Proposals** | **Environmental & Social, Disclosure Proposals** | **Environmental & Social, Disclosure Proposals** | **Environmental & Social, Disclosure Proposals** | **Environmental & Social, Disclosure Proposals** |
| + | Animal Welfare |  |  | + |
| + | Climate Change |  |  | + |
| + | Carbon Accounting | + |  |  |
| + | Carbon Risk | + |  |  |
| + | Charitable Contributions |  |  | + |
| + | Environmental Proposals |  |  | + |
| + | Genetically Altered or Engineered Food and Pesticides |  |  | + |
| + | Health Proposals |  |  | + |
| + | Pharmaceutical Pricing (US) |  |  | + |
| + | Human Rights Policies and Reports |  |  | + |
| + | Include Sustainability as a Performance Measure (SHP) |  |  | + |
| + | Lobbying and Political Spending | + |  |  |

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| | | | | |
|:---|:---|:---|:---|:---|
| **Shareholder**<br> **Proposal**<br>|  | **For** | **Against** | &nbsp;&nbsp; **Case-by-**<br> **Case**<br>|
| + | Other Business |  | + |  |
| + | Reimbursement of Shareholder Expenses |  | + |  |
| + | Sustainability Report |  |  | + |
| + | Work Place: Diversity | + |  |  |
| + | Work Place: Pay Disparity |  |  | + |

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**Proxy Voting Conflict of Interest Form** 

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| | |
|:---|:---|
| **Name of Security** | **Date of Shareholder Meeting** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Short Description of the conflict (client, mutual fund distributor, etc.):**<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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| | | | |
|:---|:---|:---|:---|
| **1.** | &nbsp;&nbsp;&nbsp; **Is our proposed vote on all issues explicitly addressed by, and consistent with our** <br> **stated proxy voting policy?**<br>| ☐ Yes | ☐ No |
|  | If yes, stop here and sign below as no further review is necessary. |  |  |
| **2.** | **Is our proposed vote on consistent with our client's recommended vote?** | ☐ Yes | ☐ No |
|  | If yes, stop here and sign below as no further review is necessary. |  |  |
| **3.** | **Is our proposed vote consistent with the views of Institutional Shareholder Services?** | ☐ Yes | ☐ No |
|  | If yes, stop here and sign below as no further review is necessary. |  |  |

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Please attach a memo containing the following information and documentation supporting the proxy voting decision:

<sup>•</sup>

A list of the issue(s) where our proposed vote is contrary to our stated policy (director election, cumulative voting, compensation)

<sup>•</sup>

A description of any substantive contact with any interested outside party and a proxy voting and governance committee or an AB investment professional that was material to our voting decision. Please include date, attendees, titles, organization they represent and topics discussed. If there was no such contact, please note as such.

<sup>•</sup>

If the Independent Compliance Officer has NOT determined that the proposed vote is reasonable, please explain and indicate what action has been, or will be taken.

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| | |
|:---|:---|
| **AB Conflicts Officer Approval (if necessary. Email** <br> **approval is acceptable.):**<br>| Prepared by: |
| I hereby confirm that the proxy voting decision <br> referenced on this form is reasonable.<br>|  |
|  | Print Name: |
| AB Conflicts Officer |  |
| Date: | Date: |

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**Please return this completed form and all supporting documentation to the Conflicts Officer in the Legal and Compliance Department and keep a copy for your records.** 

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**Barrow Hanley Proxy Voting Policy 2022** 

**Proxy Voting Policy** 

Barrow Hanley has accepted responsibility to vote proxies for equity securities for its clients who have delegated this responsibility to us, and the Firm's policy is to vote our clients' proxies in the best economic interests of our clients, the beneficial owners of the shares. Barrow Hanley has adopted this Proxy Voting Policy and maintains written procedures for handling research, voting, reporting of proxy votes, and making appropriate disclosures about proxy voting on behalf of our clients.

It is Barrow Hanley's policy to vote all clients' proxies the same based on this Proxy Voting Policy and Barrow Hanley's Proxy Voting Guidelines. If or when additional costs to clients are identified in association with voting the client's proxy, Barrow Hanley will determine whether such costs exceed the expected economic benefit of voting the proxy and may determine that abstaining from voting is the better action for ERISA Plan clients. However, if/when such voting costs are borne by Barrow Hanley and not by the client, all proxies will be voted for all clients. Barrow Hanley's Proxy Voting Guidelines provide a framework for assessing proxy proposals. Disclosure information about the Firm's Proxy Voting is included in Barrow Hanley's Form ADV Part 2.

To assist in the proxy voting process, at its own expense Barrow Hanley retains the services of Glass Lewis & Co. Glass Lewis provides:

<sup>•</sup>

Research on corporate governance, financial statements, business, legal and accounting risks;

<sup>•</sup>

Proxy voting recommendations, including ESG voting guidelines;

<sup>•</sup>

Portfolio accounting and reconciliation of shareholdings for voting purposes;

<sup>•</sup>

Proxy voting execution, record keeping, and reporting services.

**Proxy Oversight Committee, Proxy Coordinators, and Proxy Voting Committee** 

<sup>•</sup>

Barrow Hanley's Proxy Oversight Committee is responsible for implementing and monitoring Barrow Hanley's proxy voting policy, procedures, disclosures, and recordkeeping, including outlining our voting guidelines in our procedures.

<sup>•</sup>

The Proxy Oversight Committee conducts periodic reviews to monitor and ensure that the Firm's policy is observed, implemented properly, and amended or updated, as appropriate.

<sup>•</sup>

The Proxy Oversight Committee is made up of the CCO, the Responsible Investing Committee Lead, the Head of Investment Operations, the ESG Research Coordinator, and an At-Large Portfolio Manager.

<sup>•</sup>

Proxy Coordinators are assigned from the Investment Operations department.

<sup>•</sup>

Proxy Coordinators review and organize the data and recommendations provided by the proxy service.

<sup>•</sup>

Proxy Coordinators are responsible for ensuring that the proxy ballots are routed to the appropriate research analyst based on industry sector coverage.

<sup>•</sup>

Research Analysts review and evaluate proxy proposals and make recommendations to the Proxy Voting Committee to ensure that votes are consistent with the Firm's analysis and are in the best economic interest of the shareholders, our clients.

<sup>•</sup>

Equity Portfolio Managers are members of the Proxy Voting Committee.

<sup>•</sup>

Equity Portfolio Managers vote proxy proposals based on shareholders' economic interests utilizing the Firm's Proxy Voting Guidelines, internal research recommendations, and the research from Glass Lewis. Proxy votes must be approved by the Proxy Voting Committee before submitting to the proxy service provider.

<sup>•</sup>

Proxies for the Diversified Small Cap Value accounts are voted in accordance with the proxy service provider's recommendations for the following reasons:

<sup>•</sup>

Investments are based on a quantitative model. Fundamental research is not performed for the holdings.

<sup>•</sup>

The holding period is too short to justify the time for analysis to vote.

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**Conflicts of Interest** 

Potential conflicts may arise when:

<sup>•</sup>

Clients elect to participate in securities lending arrangements; in such cases, the votes follow the shares, and because Barrow Hanley has no information about clients' shares on loan, the proxies for those shares may not be voted.

<sup>•</sup>

Barrow Hanley invests in equity securities of corporations who are also clients of the Firm; in such cases, Barrow Hanley seeks to mitigate potential conflicts by:

<sup>•</sup>

Making voting decisions for the benefit of the shareholder(s), our clients;

<sup>•</sup>

Uniformly voting every proxy based on Barrow Hanley's internal research and consideration of Glass Lewis' recommendations; and

<sup>•</sup>

Documenting the votes of companies who are also clients of the Firm.

<sup>•</sup>

If a material conflict of interest exists, members from the Proxy Voting and Oversight Committees will determine if the affected clients should have an opportunity to vote their proxies themselves, or whether Barrow Hanley will address the specific voting issue through other objective means, such as voting the proxies in a manner consistent with a predetermined voting policy or accepting the voting recommendation of Glass Lewis.

**Other Policies and Procedures** 

<sup>•</sup>

Barrow Hanley sends a daily electronic transfer of equity positions to the proxy service provider.

<sup>•</sup>

The proxy service provider identifies accounts eligible to vote for each security and posts the proposals and research on its secure, proprietary online system.

<sup>•</sup>

Barrow Hanley sends a proxy report to clients at least annually (or as requested by client), listing the number of shares voted and disclosing how proxies were voted.

<sup>•</sup>

Voting records are retained on the network, which is backed up daily. The proxy service provider retains records for seven years.

<sup>•</sup>

Barrow Hanley's Proxy Voting Guidelines are available upon request by calling: (214) 665-1900, or by e-mailing: clientservices@barrowhanley.com.

<sup>•</sup>

Proxy Coordinators retain the following proxy records for at least seven years:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>○</sup>

These policies and procedures and any amendments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>○</sup>

Proxy statements received regarding our clients' securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>○</sup>

A record of each proxy voted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>○</sup>

Proxy voting reports that are sent to clients annually;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>○</sup>

Any document Barrow Hanley created that was material to making a decision on how to vote proxies, or that memorializes that decision; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>○</sup>

Records of any client's request for proxy voting information.

Clients may elect to participate in securities lending programs through their custodial bank. Typically, Barrow Hanley is not notified of shares on loan, and whether shares are loaned is not considered when our Portfolio Manager's make and implement investment selection. When we determine a proxy voting issue to be of material significance, Barrow Hanley makes a best-efforts attempt to alert clients and their custodial bank to recall shares from loan so that we can vote the proxies. In this context, Barrow Hanley defines material significance to be any proxy issue deemed by our investment team to have significant economic impact or likely cause a market movement. The ultimate decision on whether or not to recall shares is the responsibility of the client.

**Voting Debt and/or Bank Loan Securities** 

Barrow Hanley has the responsibility to vote proxies and related interests for its clients who have delegated this responsibility to the Firm, which may include voting on proposals, amendments, consents, or resolutions solicited by or in respect to the issuers of securities, including Bank Loan debt instruments. Barrow Hanley votes proxies and related interests in the best interest of the securities' owners, its clients.

**Exceptions** 

Limited exceptions may be permitted based on a client's circumstances, such as foreign regulations that create a conflict with U.S. practices, expenses to facilitate voting when the costs outweigh the benefit of voting the proxies, or other circumstances.

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**BlackRock Investment Stewardship** 

**Global Principles** 

**Effective as of January 2022** 

**Introduction to BlackRock** 

BlackRock's purpose is to help more and more people experience financial well-being. We manage assets on behalf of institutional and individual clients, across a full spectrum of investment strategies, asset classes, and regions. Our client base includes pension plans, endowments, foundations, charities, official institutions, insurers, and other financial institutions, as well as individuals around the world. As part of our fiduciary duty to our clients, we have determined that it is generally in the best long-term interest of our clients to promote sound corporate governance as an informed, engaged shareholder. At BlackRock, this is the responsibility of the Investment Stewardship Team.

**Philosophy on investment stewardship** 

Companies are responsible for ensuring they have appropriate governance structures to serve the interests of shareholders and other key stakeholders. We believe that there are certain fundamental rights attached to shareholding. Companies and their boards should be accountable to shareholders and structured with appropriate checks and balances to ensure that they operate in shareholders' best interests to create sustainable value. Shareholders should have the right to vote to elect, remove, and nominate directors, approve the appointment of the auditor, and amend the corporate charter or by-laws. Shareholders should be able to vote on key board decisions that are material to the protection of their investment, including but not limited to, changes to the purpose of the business, dilution levels and pre-emptive rights, and the distribution of income and capital structure. In order to make informed decisions, we believe that shareholders have the right to sufficient and timely information. In addition, shareholder voting rights should be proportionate to their economic ownership—

the principle of "one share, one vote" helps achieve this balance.

Consistent with these shareholder rights, we believe BlackRock has a responsibility to monitor and provide feedback to companies in our role as stewards of our clients' investments. Investment stewardship is how we use our voice as an investor to promote sound corporate governance and business practices to help maximize long-term shareholder value for our clients, the vast majority of whom are investing for long-term goals such as retirement. BlackRock Investment Stewardship ("BIS") does this through engagement with management teams and/or board members on material business issues, including but not limited to environmental, social, and governance ("ESG") matters and, for those clients who have given us authority, through voting proxies in their best long- term economic interests. We also participate in the public dialogue to help shape global norms and industry standards with the goal of supporting a policy framework consistent with our clients' interests as long-term shareholders.

BlackRock looks to companies to provide timely, accurate, and comprehensive disclosure on all material governance and business matters, including ESG-related issues. This transparency allows shareholders to appropriately understand and assess how relevant risks and opportunities are being effectively identified and managed. Where company reporting and disclosure is inadequate or we believe the approach taken may be inconsistent with sustainable, long-term value creation, we will engage with a company and/or vote in a manner that encourages progress.

BlackRock views engagement as an important activity; engagement provides us with the opportunity to improve our understanding of the business and risks and opportunities that are material to the companies in which our clients invest, including those related to ESG. Engagement also informs our voting decisions. As long-term investors on behalf of clients, we seek to have regular and continuing dialogue with executives and board directors to advance sound governance and sustainable business practices, as well as to understand the effectiveness of the company's management and oversight of material issues. Engagement is an important mechanism for providing feedback on company practices and disclosures, particularly where we believe they could be enhanced. Similarly, it provides us an opportunity to hear directly from company boards and management on how they believe their actions are aligned with sustainable, long-term value creation. We primarily engage through direct dialogue, but may use other tools such as written correspondence, to share our perspectives.

We generally vote in support of management and boards that demonstrate an approach consistent with creating sustainable, long-term value. If we have concerns about a company's approach, we may choose to explain our expectations to the company's board and management. Following our engagement, we may signal through our voting that we have outstanding concerns, generally by voting against the re- election of directors we view as having responsibility for an issue. We apply our regional proxy voting guidelines to achieve the outcome we believe is most aligned with our clients' long-term economic interests.

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**Key themes** 

We recognize that accepted standards and norms of corporate governance can differ between markets. However, we believe there are certain fundamental elements of governance practice that are intrinsic globally to a company's ability to create long-term value. This set of global themes are set out in this overarching set of principles (the "Principles"), which are anchored in transparency and accountability. At a minimum, we believe companies should observe the accepted corporate governance standards in their domestic market and ask that, if they do not, they explain how their approach better supports sustainable long-term value creation.

These Principles cover seven key themes:

<sup>•</sup>

Boards and directors

<sup>•</sup>

Auditors and audit-related issues

<sup>•</sup>

Capital structure, mergers, asset sales, and other special transactions

<sup>•</sup>

Compensation and benefits

<sup>•</sup>

Environmental and social issues

<sup>•</sup>

General corporate governance matters and shareholder protections

<sup>•</sup>

Shareholder proposals

<sup>•</sup>

Our regional and market-specific voting guidelines explain how these Principles inform our voting decisions in relation to specific ballot items for shareholder meetings.

**Boards and directors** 

<sup>•</sup>

Our primary focus is on the performance of the board of directors . The performance of the board is critical to the economic success of the company and the protection of shareholders' interests. As part of their responsibilities, board members owe fiduciary duties to shareholders in overseeing the strategic direction and operation of the company. For this reason, BIS sees engaging with and the election of directors as one of our most important and impactful responsibilities.

<sup>•</sup>

We support boards whose approach is consistent with creating sustainable, long-term value. This includes the effective management of strategic, operational, financial, and material ESG factors and the consideration of key stakeholder interests. The board should establish and maintain a framework of robust and effective governance mechanisms to support its oversight of the company's strategic aims. We look to the board to articulate the effectiveness of these mechanisms in overseeing the management of business risks and opportunities and the fulfillment of the company's purpose. Disclosure of material issues that affect the company's long-term strategy and value creation, including material ESG factors, is essential for shareholders to be able to appropriately understand and assess how risks are effectively identified, managed and mitigated.

<sup>•</sup>

Where a company has not adequately disclosed and demonstrated it has fulfilled these responsibilities, we will consider voting against the re-election of directors whom we consider having particular responsibility for the issue. We assess director performance on a case-by-case basis and in light of each company's circumstances, taking into consideration our assessment of their governance, business practices that support sustainable, long-term value creation, and performance. In serving the interests of shareholders, the responsibility of the board of directors includes, but is not limited to, the following:

<sup>•</sup>

Establishing an appropriate corporate governance structure

<sup>•</sup>

Supporting and overseeing management in setting long-term strategic goals and applicable measures of value-creation and milestones that will demonstrate progress, and taking steps to address anticipated or actual obstacles to success

<sup>•</sup>

Providing oversight on the identification and management of material, business operational and sustainability-related risks

<sup>•</sup>

Overseeing the financial resilience of the company, the integrity of financial statements, and the robustness of a company's Enterprise Risk Management<sup>1</sup> framework

<sup>•</sup>

Making decisions on matters that require independent evaluation which may include mergers, acquisitions and dispositions, activist situations or other similar cases

<sup>•</sup>

Establishing appropriate executive compensation structures

<sup>•</sup>

Addressing business issues, including environmental and social risks and opportunities, when they have the potential to materially impact the company's long-term value

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There should be clear definitions of the role of the board, the committees of the board, and senior management. Set out below are ways in which boards and directors can demonstrate a commitment to acting in the best long-term economic interests of all shareholders.

We will seek to engage with the appropriate directors where we have concerns about the performance of the company, board, or individual directors and may signal outstanding concerns in our voting.

<sup>1.</sup>

Enterprise risk management is a process, effected by the entity's board of directors, management, and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within the risk appetite, to provide reasonable assurance regarding the achievement of objectives. (Committee of Sponsoring Organizations of the Treadway Commission (COSO), Enterprise Risk Management — Integrated Framework, September 2004, New York, NY).

**Regular accountability** 

BlackRock believes that directors should stand for re-election on a regular basis, ideally annually. In our experience, annual re-elections allow shareholders to reaffirm their support for board members or hold them accountable for their decisions in a timely manner. When board members are not re-elected annually, we believe it is good practice for boards to have a rotation policy to ensure that, through a board cycle, all directors have had their appointment re-confirmed, with a proportion of directors being put forward for re-election at each annual general meeting.

**Effective board composition** 

Regular director elections also give boards the opportunity to adjust their composition in an orderly way to reflect the evolution of the company's strategy and the market environment. BlackRock believes it is beneficial for new directors to be brought onto the board periodically to refresh the group's thinking and in a manner that supports both continuity and appropriate succession planning. We consider the average overall tenure of the board, where we are seeking a balance between the knowledge and experience of longer-serving members and the fresh perspectives of newer members. We expect companies to keep under regular review the effectiveness of their board (including its size), and assess directors nominated for election or re-election in the context of the composition of the board as a whole. This assessment should consider a number of factors, including the potential need to address gaps in skills, experience, diversity, and independence.

When nominating new directors to the board, we ask that there is sufficient information on the individual candidates so that shareholders can assess the suitability of each individual nominee and the overall board composition. These disclosures should give an understanding of how the collective experience and expertise of the board aligns with the company's long-term strategy and business model.

We are interested in diversity in the board room as a means to promoting diversity of thought and avoiding 'group think'. We ask boards to disclose how diversity is considered in board composition, including demographic characteristics such as gender, race/ethnicity and age; as well as professional characteristics, such as a director's industry experience, specialist areas of expertise and geographic location. We assess a board's diversity in the context of a company's domicile, business model and strategy. Self-identified board demographic diversity can usefully be disclosed in aggregate, consistent with local law. We believe boards should aspire to meaningful diversity of membership, at least consistent with local regulatory requirements and best practices, while recognizing that building a strong, diverse board can take time.

This position is based on our view that diversity of perspective and thought – in the board room, in the management team and throughout the company – leads to better long term economic outcomes for companies. Academic research already reveals correlations between specific dimensions of diversity and effects on decision-making processes and outcomes.<sup>2</sup> In our experience, greater diversity in the board room contributes to more robust discussions and more innovative and resilient decisions. Over time, greater diversity in the board room can also promote greater diversity and resilience in the leadership team, and the workforce more broadly. That diversity can enable companies to develop businesses that more closely reflect and resonate with the customers and communities they serve.

<sup>2</sup>

For example, the role of gender diversity on team cohesion and participative communication is explored by: Post, C., 2015, When is female leadership an advantage? Coordination requirements, team cohesion, and team interaction norms, Journal of Organizational Behavior, 36, 1153-1175. <u>http://dx.doi.org/10.1002/job.2031.</u> 

We expect there to be a sufficient number of independent directors, free from conflicts of interest or undue influence from connected parties, to ensure objectivity in the decision-making of the board and its ability to oversee management. Common impediments to independence may include but are not limited to:

<sup>•</sup>

Current or recent employment at the company or a subsidiary

<sup>•</sup>

Being, or representing, a shareholder with a substantial shareholding in the company

<sup>•</sup>

Interlocking directorships

<sup>•</sup>

Having any other interest, business, or other relationship which could, or could reasonably be perceived to, materially interfere with a director's ability to act in the best interests of the company and its shareholders

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BlackRock believes that boards are most effective at overseeing and advising management when there is a senior independent board leader. This director may chair the board, or, where the chair is also the CEO (or is otherwise not independent), be designated as a lead independent director. The role of this director is to enhance the effectiveness of the independent members of the board through shaping the agenda, ensuring adequate information is provided to the board, and encouraging independent participation in board deliberations. The lead independent director or another appropriate director should be available to shareholders in those situations where an independent director is best placed to explain and contextualize a company's approach.

There are matters for which the board has responsibility that may involve a conflict of interest for executives or for affiliated directors. BlackRock believes that objective oversight of such matters is best achieved when the board forms committees comprised entirely of independent directors. In many markets, these committees of the board specialize in audit, director nominations and compensation matters. An ad hoc committee might also be formed to decide on a special transaction, particularly one involving a related party, or to investigate a significant adverse event.

**Sufficient capacity** 

As the role and expectations of a director are increasingly demanding, directors must be able to commit an appropriate amount of time to board and committee matters. It is important that directors have the capacity to meet all of their responsibilities – including when there are unforeseen events – and therefore, they should not take on an excessive number of roles that would impair their ability to fulfill their duties.

**Auditors and audit-related issues** 

BlackRock recognizes the critical importance of financial statements, which should provide a true and fair picture of a company's financial condition. Accordingly, the assumptions made by management and reviewed by the auditor in preparing the financial statements should be reasonable and justified.

The accuracy of financial statements, inclusive of financial and non-financial information, is of paramount importance to BlackRock. Investors increasingly recognize that a broader range of risks and opportunities have the potential to materially impact financial performance. Over time, we expect increased scrutiny of the assumptions underlying financial reports, particularly those that pertain to the impact of the transition to a low carbon economy on a company's business model and asset mix.

In this context, audit committees, or equivalent, play a vital role in a company's financial reporting system by providing independent oversight of the accounts, material financial and non-financial information, internal control frameworks, and in the absence of a dedicated risk committee, Enterprise Risk Management systems. BlackRock believes that effective audit committee oversight strengthens the quality and reliability of a company's financial statements and provides an important level of reassurance to shareholders.

We hold members of the audit committee or equivalent responsible for overseeing the management of the audit function. Audit committees or equivalent should have clearly articulated charters that set out their responsibilities and have a rotation plan in place that allows for a periodic refreshment of the committee membership to introduce fresh perspectives to audit oversight.

We take particular note of critical accounting matters, cases involving significant financial restatements or ad hoc notifications of material financial weakness. In this respect, audit committees should provide timely disclosure on the remediation of Key and Critical Audit Matters identified either by the external auditor or Internal Audit function.

The integrity of financial statements depends on the auditor being free of any impediments to being an effective check on management. To that end, we believe it is important that auditors are, and are seen to be, independent. Where an audit firm provides services to the company in addition to the audit, the fees earned should be disclosed and explained. Audit committees should have in place a procedure for assessing annually the independence of the auditor and the quality of the external audit process.

Comprehensive disclosure provides investors with a sense of the company's long-term operational risk management practices and, more broadly, the quality of the board's oversight. The audit committee or equivalent, or a dedicated risk committee, should periodically review the company's risk assessment and risk management policies and the significant risks and exposures identified by management, the internal auditors or the independent accountants, and management's steps to address them. In the absence of robust disclosures, we may reasonably conclude that companies are not adequately managing risk.

**Capital structure, mergers, asset sales, and other special transactions** 

The capital structure of a company is critical to shareholders as it impacts the value of their investment and the priority of their interest in the company relative to that of other equity or debt investors. Pre-emptive rights are a key protection for shareholders against the dilution of their interests.

------

Effective voting rights are basic rights of share ownership. We believe strongly in one vote for one share as a guiding principle that supports effective corporate governance. Shareholders, as the residual claimants, have the strongest interest in protecting company value, and voting power should match economic exposure.

In principle, we disagree with the creation of a share class with equivalent economic exposure and preferential, differentiated voting rights. In our view, this structure violates the fundamental corporate governance principle of proportionality, and results in a concentration of power in the hands of a few shareholders, thus disenfranchising other shareholders and amplifying any potential conflicts of interest. However, we recognize that in certain markets, at least for a period of time, companies may have a valid argument for listing dual-classes of shares with differentiated voting rights. We believe that such companies should review these share class structures on a regular basis or as company circumstances change. Additionally, they should seek shareholder approval of their capital structure on a periodic basis via a management proposal at the company's shareholder meeting. The proposal should give unaffiliated shareholders the opportunity to affirm the current structure or establish mechanisms to end or phase out controlling structures at the appropriate time, while minimizing costs to shareholders.

In assessing mergers, asset sales, or other special transactions, BlackRock's primary consideration is the long-term economic interests of our clients as shareholders. Boards proposing a transaction need to clearly explain the economic and strategic rationale behind it. We will review a proposed transaction to determine the degree to which it can enhance long- term shareholder value. We would prefer that proposed transactions have the unanimous support of the board and have been negotiated at arm's length. We may seek reassurance from the board that executives' and/or board members' financial interests in a given transaction have not adversely affected their ability to place shareholders' interests before their own. Where the transaction involves related parties, we would expect the recommendation to support it to come from the independent directors, and ideally, the terms also have been assessed through an independent appraisal process. In addition, it is good practice that it be approved by a separate vote of the non-conflicted parties.

BlackRock believes that shareholders have a right to dispose of company shares in the open market without unnecessary restriction. In our view, corporate mechanisms designed to limit shareholders' ability to sell their shares are contrary to basic property rights. Such mechanisms can serve to protect and entrench interests other than those of the shareholders. We believe that shareholders are broadly capable of making decisions in their own best interests. We expect any so-called 'shareholder rights plans' proposed by a board to be subject to shareholder approval upon introduction and periodically thereafter.

**Compensation and benefits** 

BlackRock expects a company's board of directors to put in place a compensation structure that incentivizes and rewards executives appropriately. There should be a clear link between variable pay and operational and financial performance. Performance metrics should be stretching and aligned with a company's strategy and business model. BIS does not have a position on the use of ESG-related criteria, but believes that where companies choose to include them, they should be as rigorous as other financial or operational targets. Long-term incentive plans should vest over timeframes aligned with the delivery of long-term shareholder value. Compensation committees should guard against contractual arrangements that would entitle executives to material compensation for early termination of their employment. Finally, pension contributions and other deferred compensation arrangements should be reasonable in light of market practice.

We are not supportive of one-off or special bonuses unrelated to company or individual performance. Where discretion has been used by the compensation committee or its equivalent, we expect disclosure relating to how and why the discretion was used, and how the adjusted outcome is aligned with the interests of shareholders. We acknowledge that the use of peer group evaluation by compensation committees can help ensure competitive pay; however, we are concerned when the rationale for increases in total compensation at a company is solely based on peer benchmarking rather than a rigorous measure of outperformance. We encourage companies to clearly explain how compensation outcomes have rewarded outperformance against peer firms.

We believe consideration should be given to building claw back provisions into incentive plans such that executives would be required to forgo rewards when they are not justified by actual performance and/or when compensation was based on faulty financial reporting or deceptive business practices. We also favor recoupment from any senior executive whose behavior caused material financial harm to shareholders, material reputational risk to the company, or resulted in a criminal investigation, even if such actions did not ultimately result in a material restatement of past results.

Non-executive directors should be compensated in a manner that is commensurate with the time and effort expended in fulfilling their professional responsibilities. Additionally, these compensation arrangements should not risk compromising directors' independence or aligning their interests too closely with those of the management, whom they are charged with overseeing.

------

We use third party research, in addition to our own analysis, to evaluate existing and proposed compensation structures. We may vote against members of the compensation committee or equivalent board members for poor compensation practices or structures.

**Environmental and social issues** 

We believe that well-managed companies will deal effectively with material environmental and social ("E&S") factors relevant to their businesses. Governance is the core structure by which boards can oversee the creation of sustainable, long-term value. Appropriate risk oversight of E&S considerations stems from this construct.

Robust disclosure is essential for investors to effectively evaluate companies' strategy and business practices related to material E&S risks and opportunities. Given the increased understanding of material sustainability risks and opportunities, and the need for better information to assess them, BlackRock will advocate for continued improvement in companies' reporting, where necessary, and will express any concerns through our voting where a company's actions or disclosures are inadequate.

BlackRock encourages companies to use the framework developed by the Task Force on Climate-related Financial Disclosures (TCFD) to disclose their approach to ensuring they have a sustainable business model and to supplement that disclosure with industry-specific metrics such as those identified by the Sustainability Accounting Standards Board (SASB).<sup>3</sup> While the TCFD framework was developed to support climate-related risk disclosure, the four pillars of the TCFD Governance, Strategy, Risk Management, and Metrics and Targets are a useful way for companies to disclose how they identify, assess, manage, and oversee a variety of sustainability-related risks and opportunities. SASB's industry-specific guidance (as identified in its materiality map) is beneficial in helping companies identify key performance indicators (KPIs) across various dimensions of sustainability that are considered to be financially material and decision-useful within their industry. We recognize that some companies may report using different standards, which may be required by regulation, or one of a number of private standards. In such cases, we ask that companies highlight the metrics that are industry- or company-specific.

Companies may also adopt or refer to guidance on sustainable and responsible business conduct issued by supranational organizations such as the United Nations or the Organization for Economic Cooperation and Development. Further, industry specific initiatives on managing specific operational risks may be useful. Companies should disclose any global standards adopted, the industry initiatives in which they participate, any peer group benchmarking undertaken, and any assurance processes to help investors understand their approach to sustainable and responsible business practices.

<sup>3</sup>

The <u>International Financial Reporting Standards (IFRS) Foundation</u> announced in November 2021 the formation of a<u>n International</u><u>Sustainability</u> <u>Standards Board (ISSB)</u> to develop a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors' information needs. The IFRS Foundation plans to complete consolidation of the Climate Disclosure Standards Board (CDSB—an initiative of CDP) and the Value Reporting Foundation (VRF—which houses the Integrated Reporting Framework and the SASB Standards) by June 2022.

**Climate risk** 

BlackRock believes that climate change has become a defining factor in companies' long-term prospects. We ask every company to help its investors understand how it may be impacted by climate-related risk and opportunities, and how these factors are considered within their strategy in a manner consistent with the company's business model and sector. Specifically, we ask companies to articulate how their business model is aligned to a scenario in which global warming is limited to well below 2°C, moving towards global net zero emissions by 2050.

In Stewardship, we understand that climate change can be very challenging for many companies, as they seek to drive long-term value by mitigating risks and capturing opportunities. A growing number of companies, financial institutions, as well as governments, have committed to advancing net zero. There is growing consensus that companies can benefit from the more favorable macro-economic environment under an orderly, timely and just transition to net zero.4 Many companies are asking what their role should be in contributing to a just transition – in ensuring a reliable energy supply and protecting the most vulnerable from energy price shocks and economic dislocation. They are also seeking more clarity as to the public policy path that will help align greenhouse gas reduction actions with commitments.

In this context, we ask companies to disclose a business plan for how they intend to deliver long-term financial performance through the transition to global net zero, consistent with their business model and sector. We encourage companies to demonstrate that their plans are resilient under likely decarbonization pathways, and the global aspiration to limit warming to 1.5°C.5 We also encourage companies to disclose how considerations related to having a reliable energy supply and just transition affect their plans.

We look to companies to set short-, medium- and long-term science-based targets, where available for their sector, for greenhouse gas reductions and to demonstrate how their targets are consistent with the long-term economic interests of their shareholders. Companies have an opportunity to use and contribute to the development of alternative energy sources and low-carbon transition technologies that will be essential to reaching net zero. We also recognize that some continued

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investment is required to maintain a reliable, affordable supply of fossil fuels during the transition. We ask companies to disclose how their capital allocation across alternatives, transition technologies, and fossil fuel production is consistent with their strategy and their emissions reduction targets.

<sup>4</sup>

For example, BlackRock's Capital Markets Assumptions anticipate 25 points of cumulative economic gains over a 20-year period in an orderly transition as compared to the alternative. This better macro environment will support better economic growth, financial stability, job growth, productivity, as well as ecosystem stability and health outcomes.

<sup>5</sup>

The global aspiration is reflective of aggregated efforts; companies in developed and emerging markets are not equally equipped to transition their business and reduce emissions at the same rate—those in developed markets with the largest market capitalization are better positioned to adapt their business models at an accelerated pace. Government policy and regional targets may be reflective of these realities.

**Key stakeholder interests** 

We believe that, to advance long-term shareholders' interests, companies should consider the interests of their key stakeholders. It is for each company to determine its key stakeholders based on what is material to its business, but they are likely to include employees, business partners (such as suppliers and distributors), clients and consumers, government, and the communities in which they operate.

Considering the interests of key stakeholders recognizes the collective nature of long-term value creation and the extent to which each company's prospects for growth are tied to its ability to foster strong sustainable relationships with and support from those stakeholders. Companies should articulate how they address adverse impacts that could arise from their business practices and affect critical business relationships with their stakeholders. We expect companies to implement, to the extent appropriate, monitoring processes (often referred to as due diligence) to identify and mitigate potential adverse impacts and grievance mechanisms to remediate any actual adverse material impacts. The maintenance of trust within these relationships can be equated with a company's long-term success.

To ensure transparency and accountability, companies should disclose how they have identified their key stakeholders and considered their interests in business decision-making, demonstrating the applicable governance, strategy, risk management, and metrics and targets. This approach should be overseen by the board, which is well positioned to ensure that the approach taken is informed by and aligns with the company's strategy and purpose.

**General corporate governance matters and shareholder protections** 

BlackRock believes that shareholders have a right to material and timely information on the financial performance and viability of the companies in which they invest. In addition, companies should publish information on the governance structures in place and the rights of shareholders to influence these structures. The reporting and disclosure provided by companies help shareholders assess whether their economic interests have been protected and the quality of the board's oversight of management. We believe shareholders should have the right to vote on key corporate governance matters, including changes to governance mechanisms, to submit proposals to the shareholders' meeting, and to call special meetings of shareholders.

**Corporate Form** 

We believe it is the responsibility of the board to determine the corporate form that is most appropriate given the company's purpose and business model.<sup>6</sup> Companies proposing to change their corporate form to a public benefit corporation or similar entity should put it to a shareholder vote if not already required to do so under applicable law. Supporting documentation from companies or shareholder proponents proposing to alter the corporate form should clearly articulate how the interests of shareholders and different stakeholders would be impacted as well as the accountability and voting mechanisms that would be available to shareholders. As a fiduciary on behalf of clients, we generally support management proposals if our analysis indicates that shareholders' interests are adequately protected. Relevant shareholder proposals are evaluated on a case-by-case basis.

**Shareholder proposals** 

In most markets in which BlackRock invests on behalf of clients, shareholders have the right to submit proposals to be voted on by shareholders at a company's annual or extraordinary meeting, as long as eligibility and procedural requirements are met. The matters that we see put forward by shareholders address a wide range of topics, including governance reforms, capital management, and improvements in the management or disclosure of E&S risks.

BlackRock is subject to certain requirements under antitrust law in the United States that place restrictions and limitations on how BlackRock can interact with the companies in which we invest on behalf of our clients, including our ability to submit shareholder proposals. As noted above, we can vote on proposals put forth by others.

When assessing shareholder proposals, we evaluate each proposal on its merit, with a singular focus on its implications for long-term value creation. We consider the business and economic relevance of the issue raised, as well as its materiality and the urgency with which we believe it should be addressed. We take into consideration the legal effect of the proposal, as shareholder proposals may be advisory or legally binding depending on the jurisdiction. We would not support proposals that we believe would result in over-reaching into the basic business decisions of the issuer.

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Where a proposal is focused on a material business risk that we agree needs to be addressed and the intended outcome is consistent with long-term value creation, we will look to the board and management to demonstrate that the company has met the intent of the request made in the shareholder proposal.

Where our analysis and/or engagement indicate an opportunity for improvement in the company's approach to the issue, we may support shareholder proposals that are reasonable and not unduly constraining on management. Alternatively, or in addition, we may vote against the re-election of one or more directors if, in our assessment, the board has not responded sufficiently or with an appropriate sense of urgency. We may also support a proposal if management is on track, but we believe that voting in favor might accelerate progress.

**BlackRock's oversight of its investment stewardship activities** 

**Oversight** 

We hold ourselves to a very high standard in our investment stewardship activities, including proxy voting. To meet this standard, BIS is comprised of BlackRock employees who do not have other responsibilities other than their roles in BIS. BIS is considered an investment function.

BlackRock maintains three regional advisory committees ("Stewardship Advisory Committees") for(a) the Americas; (b) Europe, the Middle East and Africa ("EMEA"); and (c) Asia-Pacific, generally consisting of senior BlackRock investment professionals and/or senior employees with practical boardroom experience. The regional Stewardship Advisory Committees review and advise on amendments to BIS proxy voting guidelines covering markets within each respective region ("Guidelines"). The advisory committees do not determine voting decisions, which are the responsibility of BIS.

In addition to the regional Stewardship Advisory Committees, the Investment Stewardship Global Oversight Committee ("Global Committee") is a risk-focused committee, comprised of senior representatives from various BlackRock investment teams, a senior legal representative, the Global Head of Investment Stewardship("Global Head"), and other senior executives with relevant experience and team oversight. The Global Oversight Committee does not determine voting decisions, which are the responsibility of BIS.

<sup>6.</sup>

Corporate form refers to the legal structure by which a business is organized.

The Global Head has primary oversight of the activities of BIS, including voting in accordance with the Guidelines, which require the application of professional judgment and consideration of each company's unique circumstances. The Global Committee reviews and approves amendments to these Principles. The Global Committee also reviews and approves amendments to the regional Guidelines, as proposed by the regional Stewardship Advisory Committees.

In addition, the Global Committee receives and reviews periodic reports regarding the votes cast by BIS, as well as updates on material process issues, procedural changes, and other risk oversight considerations. The Global Committee reviews these reports in an oversight capacity as informed by the BIS corporate governance engagement program and the Guidelines.

BIS carries out engagement with companies, monitors and executes proxy votes, and conducts vote operations (including maintaining records of votes cast) in a manner consistent with the relevant Guidelines. BIS also conducts research on corporate governance issues and participates in industry discussions to contribute to and keep abreast of important developments in the corporate governance field. BIS may utilize third parties for certain of the foregoing activities and performs oversight of those third parties. BIS may raise complicated or particularly controversial matters for internal discussion with the relevant investment teams and governance specialists for discussion and guidance prior to making a voting decision.

**Vote execution** 

We carefully consider proxies submitted to funds and other fiduciary account(s) ("Fund" or "Funds") for which we have voting authority. BlackRock votes (or refrains from voting) proxies for each Fund for which we have voting authority based on our evaluation of the best long-term economic interests of our clients as shareholders, in the exercise of our independent business judgment, and without regard to the relationship of the issuer of the proxy (or any shareholder proponent or dissident shareholder) to the Fund, the Fund's affiliates (if any), BlackRock or BlackRock's affiliates, or BlackRock employees (see "Conflicts management policies and procedures", below).

When exercising voting rights, BlackRock will normally vote on specific proxy issues in accordance with the Guidelines for the relevant market. The Guidelines are reviewed annually and are amended consistent with changes in the local market practice, as developments in corporate governance occur, or as otherwise deemed advisable by the applicable Stewardship Advisory Committees. BIS analysts may, in the exercise of their professional judgment, conclude that the Guidelines do not cover the specific matter upon which a proxy vote is required or that an exception to the Guidelines would be in the best long-term economic interests of BlackRock's clients.

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In the uncommon circumstance of there being a vote with respect to fixed income securities or the securities of privately held issuers, the decision generally will be made by a Fund's portfolio managers and/or BIS based on their assessment of the particular transactions or other matters at issue.

In certain markets, proxy voting involves logistical issues which can affect BlackRock's ability to vote such proxies, as well as the desirability of voting such proxies. These issues include, but are not limited to: (i) untimely notice of shareholder meetings; (ii) restrictions on a foreigner's ability to exercise votes; (iii) requirements to vote proxies in person; (iv) "share- blocking" (requirements that investors who exercise their voting rights surrender the right to dispose of their holdings for some specified period in proximity to the shareholder meeting); (v) potential difficulties in translating the proxy; (vi) regulatory constraints; and (vii) requirements to provide local agents with unrestricted powers of attorney to facilitate voting instructions. We are not supportive of impediments to the exercise of voting rights such as share-blocking or overly burdensome administrative requirements.

As a consequence, BlackRock votes proxies in these situations on a "best-efforts" basis. In addition, BIS may determine that it is generally in the best interests of BlackRock's clients not to vote proxies (or not to vote our full allocation) if the costs (including but not limited to opportunity costs associated with share-blocking constraints) associated with exercising a vote are expected to outweigh the benefit the client would derive by voting on the proposal.

Portfolio managers have full discretion to vote the shares in the Funds they manage based on their analysis of the economic impact of a particular ballot item on their investors. Portfolio managers may, from time to time, reach differing views on how best to maximize economic value with respect to a particular investment. Therefore, portfolio managers may, and sometimes do, vote shares in the Funds under their management differently from BIS or from one another. However, because BlackRock's clients are mostly long-term investors with long-term economic goals, ballots are frequently cast in a uniform manner.

**Conflicts management policies and procedures** 

BIS maintains policies and procedures that seek to prevent undue influence on BlackRock's proxy voting activity. Such influence might stem from any relationship between the investee company (or any shareholder proponent or dissident shareholder) and BlackRock, BlackRock's affiliates, a Fund or a Fund's affiliates, or BlackRock employees. The following are examples of sources of perceived or potential conflicts of interest:

<sup>•</sup>

BlackRock clients who may be issuers of securities or proponents of shareholder resolutions

<sup>•</sup>

BlackRock business partners or third parties who may be issuers of securities or proponents of shareholder resolutions

<sup>•</sup>

BlackRock employees who may sit on the boards of public companies held in Funds managed by BlackRock

<sup>•</sup>

Significant BlackRock, Inc. investors who may be issuers of securities held in Funds managed by BlackRock

<sup>•</sup>

Securities of BlackRock, Inc. or BlackRock investment funds held in Funds managed by BlackRock

<sup>•</sup>

BlackRock, Inc. board members who serve as senior executives or directors of public companies held in Funds managed by BlackRock

BlackRock has taken certain steps to mitigate perceived or potential conflicts including, but not limited to, the following:

<sup>•</sup>

Adopted the Guidelines which are designed to advance our clients' interests in the companies in which BlackRock invests on their behalf.

<sup>•</sup>

Established a reporting structure that separates BIS from employees with sales, vendor management, or business partnership roles. In addition, BlackRock seeks to ensure that all engagements with corporate issuers, dissident shareholders or shareholder proponents are managed consistently and without regard to BlackRock's relationship with such parties. Clients or business partners are not given special treatment or differentiated access to BIS. BIS prioritizes engagements based on factors including, but not limited to, our need for additional information to make a voting decision or our view on the likelihood that an engagement could lead to positive outcome(s) over time for the economic value of the company. Within the normal course of business, BIS may engage directly with BlackRock clients, business partners and/or third parties, and/or with employees with sales, vendor management, or business partnership roles, in discussions regarding our approach to stewardship, general corporate governance matters, client reporting needs, and/or to otherwise ensure that proxy-related client service levels are met.

<sup>•</sup>

Determined to engage, in certain instances, an independent fiduciary to vote proxies as a further safeguard to avoid potential conflicts of interest, to satisfy regulatory compliance requirements, or as may be otherwise required by applicable law. In such circumstances, the independent fiduciary provides BlackRock's proxy voting agent with instructions, in accordance with the Guidelines, as to how to vote such proxies, and BlackRock's proxy voting agent votes the proxy in accordance with the independent fiduciary's determination. BlackRock uses an independent fiduciary

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to vote proxies of BlackRock, Inc. and companies affiliated with BlackRock, Inc. BlackRock may also use an independent fiduciary to vote proxies of:

public companies that include BlackRock employees on their boards of directors,

public companies of which a BlackRock, Inc. board member serves as a senior executive or a member of the board of directors,

public companies that are the subject of certain transactions involving BlackRock Funds,

public companies that are joint venture partners with BlackRock, and

public companies when legal or regulatory requirements compel BlackRock to use an independent fiduciary.

In selecting an independent fiduciary, we assess several characteristics, including but not limited to: independence, an ability to analyze proxy issues and vote in the best economic interest of our clients, reputation for reliability and integrity, and operational capacity to accurately deliver the assigned votes in a timely manner. We may engage more than one independent fiduciary, in part to mitigate potential or perceived conflicts of interest at an independent fiduciary. The Global Committee appoints and reviews the performance of the independent fiduciaries, generally on an annual basis.

**Securities lending** 

When so authorized, BlackRock acts as a securities lending agent on behalf of Funds. Securities lending is a well-regulated practice that contributes to capital market efficiency. It also enables funds to generate additional returns for a fund, while allowing fund providers to keep fund expenses lower.

With regard to the relationship between securities lending and proxy voting, BlackRock's approach is informed by our fiduciary responsibility to act in our clients' best interests. In most cases, BlackRock anticipates that the potential long-term value to the Fund of voting shares would be less than the potential revenue the loan may provide the Fund. However, in certain instances, BlackRock may determine, in its independent business judgment as a fiduciary, that the value of voting outweighs the securities lending revenue loss to clients and would therefore recall shares to be voted in those instances.

The decision to recall securities on loan as part of BlackRock's securities lending program in order to vote is based on an evaluation of various factors that include, but are not limited to, assessing potential securities lending revenue alongside the potential long-term value to clients of voting those securities (based on the information available at the time of recall consideration).<sup>7</sup> BIS works with colleagues in the Securities Lending and Risk and Quantitative Analysis teams to evaluate the costs and benefits to clients of recalling shares on loan.

Periodically, BlackRock reviews our process for determining whether to recall securities on loan in order to vote and may modify it as necessary.

**Voting guidelines** 

The issue-specific Guidelines published for each region/country in which we vote are intended to summarize BlackRock's general philosophy and approach to issues that may commonly arise in the proxy voting context in each market where we invest. The Guidelines are not intended to be exhaustive. BIS applies the Guidelines on a case-by-case basis, in the context of the individual circumstances of each company and the specific issue under review. As such, the Guidelines do not indicate how BIS will vote in every instance. Rather, they reflect our view about corporate governance issues generally, and provide insight into how we typically approach issues that commonly arise on corporate ballots.

**Reporting and vote transparency** 

We are committed to transparency in the stewardship work we do on behalf of clients. We inform clients about our engagement and voting policies and activities through direct communication and through disclosure on our website. Each year we publish an annual report that provides a global overview of our investment stewardship engagement and voting activities. Additionally, we make public our market- specific voting guidelines for the benefit of clients and companies with whom we engage. We also publish commentaries to share our perspective on market developments and emerging key themes.

At a more granular level, we publish quarterly our vote record for each company that held a shareholder meeting during the period, showing how we voted on each proposal and explaining any votes against management proposals or on shareholder proposals. For shareholder meetings where a vote might be high profile or of significant interest to clients, we may publish a vote bulletin after the meeting, disclosing and explaining our vote on key proposals. We also publish a quarterly list of all companies with which we engaged and the key topics addressed in the engagement meeting.

In this way, we help inform our clients about the work we do on their behalf in promoting the governance and business models that support long-term sustainable value creation.

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<sup>7</sup>

Recalling securities on loan can be impacted by the timing of record dates. In the United States, for example, the record date of a shareholder meeting typically falls before the proxy statements are released. Accordingly, it is not practicable to evaluate a proxy statement, determine that a vote has a material impact on a fund and recall any shares on loan in advance of the record date for the annual meeting. As a result, managers must weigh independent business judgement as a fiduciary, the benefit to a fund's shareholders of recalling loaned shares in advance of an estimated record date without knowing whether there will be a vote on matters which have a material impact on the fund (thereby forgoing potential securities lending revenue for the fund's shareholders) or leaving shares on loan to potentially earn revenue for the fund (thereby forgoing the opportunity to vote).

This document is provided for information purposes only and is subject to change. Reliance upon this information is at the sole discretion of the reader. Prepared by BlackRock, Inc.©2020 BlackRock, Inc. All rights reserved.

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**Brown Advisory** 

**Proxy Voting Policy** 

**Brown Advisory Proxy Voting Policy on Securities** 

The firm receives proxy ballots on behalf of clients and shall vote such proxies consistent with this Policy, which sets forth the firm's standard approach to voting on common proxy questions.<sup>1</sup> In general, this Policy is designed to ensure that the firm votes proxies in the best interest of clients, so as to promote the long-term economic value of the underlying securities. These votes are informed by both financial and extra-financial data, including material ESG factors.

Clients may, at any time, opt to change their proxy voting authorization. Upon notice that a client has revoked the firm's authority to vote proxies, the firm will have the client account removed from omnibus voting and have the proxy setting updated accordingly. This update at the custodian routes all ballots and annual reports to the legal address on record of the account holder.

To facilitate the proxy voting process, the firm has engaged Institutional Shareholder Services Inc. ("ISS"), an unaffiliated, third-party proxy voting service, to provide proxy research and voting recommendations. In addition, the firm subscribes to ISS's proxy vote management system, which provides a means to receive and vote proxies, as well as services for record-keeping, auditing, reporting and disclosure regarding votes. However, securities held within institutional equity strategies are voted on a case-by-case basis, meaning, we do not rely exclusively on the proxy policy, and complement our proxy provider's research with our own proprietary research to arrive at independent decisions, when needed. The firm will regularly review our relationship with ISS in order to assess its capacity and competency to provide services to the firm and to review certain of its significant policies and procedures, including those governing conflicts of interests, error identification and correction and processes to evaluate additional information received during the proxy process.

On a regular basis, a list of upcoming proxies issued for companies held within the institutional strategies are provided to the institutional portfolio managers. Except in situations identified as presenting material conflicts of interest, the institutional portfolio manager responsible for the institutional strategy that holds the security may make the final voting decision based on a variety of considerations. In circumstances where the securities are not held within an institutional strategy, proxies will be voted according to Brown Advisory's policy, unless the client-specific guidelines provided by Brown Advisory to ISS specify otherwise. Generally, Brown Advisory's proxy voting philosophy is aligned with ISS recommendations.

In keeping with its fiduciary obligations to clients, the firm considers each proxy voting proposal related to holdings in the firm's institutional strategies on its own merits and an independent determination is made based on the relevant facts and circumstances, including both fundamental and ESG factors. Proxy proposals include a wide range of routine and non-routine matters. The firm generally votes with management on routine matters and takes a more case-by-case approach regarding non-routine matters.

Voting preferences of clients may differ based on their values. The firm seeks to provide clients with the opportunity to have proxies voted in line with these values. From time to time, clients may prefer to select alternative voting guidelines that better align with their values. In these cases, the firm will work with ISS to identify an appropriate alternative policy. Where no appropriate alternative policy is available, the firm will endeavor to work with the client to set up appropriate guidelines and procedures to vote case-by-case

**Proxy Voting Principles for Securities Held within our Institutional Strategies** 

<sup>•</sup>

The following principles serve as a foundation of our approach to proxy voting for securities held within our institutional strategies. For these securities, Brown Advisory's equity research team has researched the company and generally is well-informed of any issues material to the company's business model and practices. As such, we believe we are in a position to engage with companies on these issues both through proxy voting and other engagement practices. Proxy voting is a democratic process that offers shareholders the opportunity to have their voice heard and express their sentiment as owners. For this reason, we believe that the rights of shareholders with regard to these resolutions should be protected by regulators to ensure that investors' perspectives can always be heard in a public forum. We seek to participate in industry-wide activities that express support for these rights, such as sign-on letters and other initiatives to communicate views to the SEC, FINRA and other regulatory bodies.

<sup>1</sup> The firm votes proxies on behalf of separate account clients, firm-managed mutual funds, private funds and pooled investment vehicles that hold publicly-traded equity securities and, where applicable, employee benefit plan participants and beneficiaries.

<sup>•</sup>

**Proxy voting is our fiduciary duty.** We hold ourselves responsible for aligning our investment decision-making process and our proxy voting, in order to be consistent about what we seek from companies we hold in our institutional portfolios. We seek investments that are building and protecting long-term shareholder value, and we believe this is reflected in all of our proxy voting decisions. Responsible management of ESG issues is one input to achieving long-term shareholder

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value, and as such, we are likely to support those shareholder proposals that encourage company action on what we believe are material ESG risks or opportunities.

<sup>•</sup>

**Transparency is essential:** Brown Advisory is committed to providing proxy reporting and standardized disclosure of our voting history, as well as publishing N-PX filings for our mutual funds as required by law. Transparency is an important step in helping our clients evaluate whether we uphold our stated principles within our Sustainable and ESG strategies.

<sup>•</sup>

**Bottom-up due diligence should inform voting decisions:** We review each proposal that comes up for vote. Our analysts seek to dive below the surface and fully understand the implications of especially complex and material proposals. The recommendations of our proxy voting partner, ISS, are taken into consideration but do not determine our final decisions.

<sup>•</sup>

**Collaboration with other stakeholders can inform our voting choice and amplify the signal of our vote:** We collaborate on voting research, through dialogue between our analysts and portfolio managers. Where additive and practicable, we also collaborate with external stakeholders including company management, ISS, issue experts, ESG research networks and other stakeholders. We believe this collaboration leads to better-informed decisions, and in certain instances, collaboration can help to send a stronger message to a company about how the investment community views a given issue.

<sup>•</sup>

**Proxy voting can be a part of a larger program to encourage positive changes:** Proxy voting is just one way to communicate with companies on risks and opportunities. To complement our proxy voting process, and sometimes as result of it, our investment team might choose to pursue an extended engagement with a company as it relates to any information found during the due-diligence process for determining the vote.

**Institutional Proxy Voting Process** 

<sup>•</sup>

Proxy voting for our institutional investment strategies is overseen by a Proxy Voting Committee made up of equity research analysts, ESG research analysts, trading operations team members, the Head of Sustainable Investing, our Director of Equity Research and our General Counsel (among others).

<sup>•</sup>

The Committee is responsible for overseeing the proxy voting process. Responsibility for determining how a vote is cast, however, rests with our investment and ESG research teams and, ultimately, with the portfolio managers for each Brown Advisory equity investment strategy. While we use the recommendations of ISS as a baseline for our voting, especially for routine management proposals, we vote each proposal after consideration on a case-by-case basis.

<sup>•</sup>

Our customized Proxy Voting Policy, developed in consultation with ISS, is reviewed each year and aims to reflect our fundamental and ESG thinking, so as to achieve as much alignment between recommendations and execution as possible, while still enabling our case-by-case approach.

<sup>•</sup>

A 30-day outlook of upcoming proposals is circulated to our full equity investment research team each week. Fundamental analysts guide vote recommendations on management proposals, and ESG analysts guide vote recommendations on shareholder proposals, with both groups working together to think through the relevant issues.

<sup>•</sup>

Proposals may require additional due diligence and benefit from collaborative investigation, and this is determined on a case-by-case basis. Where necessary, our analysts will conduct research on each proposal, which may include information contained in public filings, policy recommendations and management conversations. When additional proxy materials become available after a voting determination is made, we will seek to consider such filings when they are made sufficiently in advance and where we believe such information would reasonably be expected to affect our voting determination. To enhance our analysis, we may collaborate with our internal and external networks, the resolution filer and/or associated coalition, ISS analysts about their recommendation, the company itself and relevant industry experts. If our additional due diligence uncovers factual errors, incompleteness or inaccuracies in the analysis or recommendation underpinning our vote, the firm will bring this to the attention of ISS.

<sup>•</sup>

**The majority of voting recommendations are in line with our Proxy Voting Policy,** and in these cases the vote is automatically cast accordingly.

<sup>•</sup>

**When our recommendation diverges from the Policy,** the responsible analyst will contact the portfolio managers who own the name and who have final decision-making power. In most cases, the portfolio managers agree with the analyst's recommendation, in rare cases they may overrule. In either case, the final recommendation is provided to Brown Advisory's operations team, which documents the rationale for the vote and ensures vote execution. All votes cast against policy require approval from the firm's General Counsel.

<sup>•</sup>

In the event that portfolio managers of different strategies disagree on the vote recommendation for a name they all own, a split vote may be conducted. In general, this disagreement is due to portfolio managers having unique views

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on an issue. A split vote divides all of the company's shares held by Brown Advisory and splits the vote in accordance with the strategy's share ownership to reflect the individual preferences of each strategy's portfolio manager(s). Split votes trigger a review from the Proxy Voting Committee, and such votes must be approved by the firm's General Counsel.

**Advisory Client Voting Process** 

<sup>•</sup>

Proxy voting for our Advisory clients is facilitated and monitored by our Proxy Voting Operations team. The team is responsible for arrangements with all custodial partners to have accounts set to electronic omnibus ballot distribution to our proxy voting agency, ISS. When omnibus ballot distribution is not supported, individualized account set up and distribution will be arranged.

<sup>•</sup>

Unless otherwise agreed with a client, Brown Advisory's Proxy Voting Policy is assigned by default to our Advisory client accounts.

<sup>•</sup>

The following exceptions can apply to standard voting for Advisory clients:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Client Directed: A client will always retain her or his authority to request verbally and confirm in writing their request to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Attend a meeting and vote

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Vote in line with account owner request

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Request a take no action or abstention

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

No Voting: A client, during on-boarding, will have the ability to request accounts to be set to have voting ballots mailed directly to the account owner's address.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Holdings in Mutual Funds: All holdings owned by our Advisory client base also held in our mutual fund complexes may be overseen and governed by the voting practices detailed in the Institutional section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Client-specific Guidelines: Whereas we have a standard policy default, we have the capability to provide our Advisory clients with the option to customize their voting preferences. Should a client desire a customized approach, the Brown Advisory client team will work directly with the client, Brown Advisory Operations, and ISS to establish and implement client-specific guidelines.

<sup>•</sup>

The following voting practices are applied to separately managed portfolios:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Brown Advisory institutional strategies held in a separately managed account (SMA): Holdings within Brown Advisory SMAs are overseen and governed by the Proxy Voting Committee and follow all protocols detailed in the Institutional section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Externally managed strategies held in a SMA: Holdings within an externally managed strategy held as a SMA are set up with the delegated and/or appointed manager for voting. In other terms, Brown Advisory yields voting authority to the appointed manager.

<sup>•</sup>

Please note the following voting practices are applied to corporate action events whereby the voting matter has a direct financial impact on the Advisory client account holder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Such corporate action events with a direct financial impact on the Advisory client account holder will default to a case-by-case determination within our voting platform at ISS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Customized reporting and service alerts will be distributed to our Proxy Voting Operations team.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

The Proxy Voting Operations team will identify the account holders and Portfolio Management teams to take action on the event. A request with supporting detail and documentation will be sent to the Portfolio Management team to review and provide the voting recommendation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

When appropriate, our Portfolio Management team may engage the client on specific events, to discuss a proposed action.

**General Positions** 

Below is a summary of Brown Advisory's general positions for voting on common proxy questions when Brown Advisory is authorized to vote shares at its discretion rather than by a client's specific guidelines. Given the dynamic and wide-ranging nature of corporate governance issues that may arise, this summary is not intended to be exhaustive.

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**<u>Management Recommendations</u>** 

Since the quality and depth of management is a primary factor considered when investing in an issuer, the recommendation of the issuer's management on any issue will be given substantial weight. Furthermore, Brown Advisory runs concentrated equity portfolios which we believe generally results in holding high quality companies that have strong and trustworthy management teams. This quality bias results in our portfolio managers generally supporting management proposals. Although proxies with respect to most issues are voted in line with the recommendation of the issuer's management, the firm will not blindly vote in favor of management. The firm will not support proxy proposals or positions that it believes compromise clients' best interests or that the firm determines may be detrimental to the underlying value of client positions.

**<u>Election of Directors.</u>** 

Although proxies will typically be voted for a management-proposed slate of directors, the firm may vote against (or withhold votes for) such directors if there are compelling corporate governance reasons for doing so. Some of these reasons may include where a director: attends less than 75% of board and relevant committee meetings; is the CEO of a company where a serious restatement occurred after the CEO certified the financial statements; served at a time when a poison pill was adopted without shareholder approval within the prior year; is the CFO of the company; has an interlocking directorship; has a perceived conflict of interest (or the director's immediate family member has a perceived conflict of interest); or serves on an excessive number of boards.

The firm seeks to support independent boards of directors comprised of members with diverse backgrounds (including gender and race), a breadth and depth of relevant experience (including sustainability), and a track record of positive, long-term performance. The firm may vote against any boards that do not have the following levels of diversity (i.e. directors who are women or other underrepresented groups):

<sup>•</sup>

For boards consisting of six or fewer directors, the firm may vote against the Nominating Committee Chair where the board does not have one diverse director by 2022, and two diverse directors by 2024.

<sup>•</sup>

For boards consisting of more than six directors, the firm may vote against the Nominating Committee Chair where the board does not have 20% diverse board members by 2022, and 30% diverse directors by 2024.

<sup>•</sup>

In cases where the Nominating Committee Chair is not up for re-election, the firm may vote against other board members including the Chair of the board

Separation of the roles of Chairman and CEO is generally supported, but the firm will not typically vote against a CEO who serves as chairman or director. In the absence of an independent chairman, however, the firm generally supports the appointment of a lead director with authority to conduct sessions outside the presence of the insider chairman.

The firm will typically vote against any inside director seeking appointment to a key committee (audit, compensation, nominating or governance), since the firm believes that the service of independent directors on such committees best protects and enhances the interests of shareholders. Where insufficient information is provided regarding performance metrics, or where pay is not tied to performance (e.g., where management has excessive discretion to alter performance terms or previously defined targets), the firm will typically vote against the chair of the compensation committee.

**<u>Appointment and Rotation of Auditors</u>** 

Management recommendations regarding selection of an auditor shall generally be supported, but the firm will not support the ratification of an auditor when there appears to be a hindrance on auditor independence, intentional accounting irregularity or negligence by the auditor. Some examples include: when an auditing firm has other relationships with the company that may suggest a conflict of interest; when the auditor bears some responsibility for a restatement by the company; when a company has aggressive accounting policies or lack of transparency in financial statements; and when a company changes auditors as a result of disagreement between the company and the auditor regarding accounting principles or disclosure issues. The firm will generally support proposals for voluntary auditor rotation with reasonable frequency and/or rationale.

**<u>Changes in State of Incorporation or Capital Structure</u>** 

Management recommendations about reincorporation are generally supported unless the new jurisdiction in which the issuer is reincorporating has laws that would dilute the rights of shareholders of the issuer. The firm will generally vote against reincorporation where it believes the financial benefits are minimal and there is a decrease in shareholder rights. Shareholder proposals to change the company's place of incorporation generally will only be supported in exceptional circumstances.

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Proposals to increase the number of authorized shares will be evaluated on a case-by-case basis. Because adequate capital stock is important to the operation of a company, the firm will generally support the authorization of additional shares, unless the issuer has not disclosed a detailed plan for use of the shares, or where the number of shares far exceeds those needed to accomplish a detailed plan. Additionally, if the issuance of new shares will limit shareholder rights or could excessively dilute the value of outstanding shares, then such proposals will be supported only if they are in the best interest of the client.

**<u>Corporate Restructurings, Mergers and Acquisitions</u>** 

These proposals should be examined on a case-by-case basis because they are an extension of an investment decision.

**<u>Proposals Affecting Shareholder Rights</u>** 

The firm generally favors proposals that are likely to promote shareholder rights and/or increase shareholder value. Proposals that seek to limit shareholder rights, such as the creation of dual classes of stock, generally will not be supported.

**<u>Anti-takeover Issues</u>** 

Measures that impede takeovers or entrench management will be evaluated on a case-by-case basis, taking into account the rights of shareholders, since the financial interest of shareholders regarding buyout offers is so substantial.

Although the firm generally opposes anti-takeover measures because they tend to diminish shareholder rights and reduce management accountability, the firm generally supports proposals that allow shareholders to vote on whether to implement a "poison pill" plan (shareholder rights plan). In certain circumstances, the firm may support a limited poison pill to accomplish a particular objective, such as the closing of an important merger, or a pill that contains a reasonable 'qualifying offer' provision. The firm generally supports anti-greenmail proposals, which prevent companies from buying back company stock at significant premiums from a large shareholder.

**<u>Shareholder Action</u>** 

The firm generally supports proposals that allow shareholders to call special meetings, with a minimum threshold of shareholders requesting such a meeting. The firm believes that best practice for a minimum threshold of shareholders required to call a special meeting is generally considered to be between 20- 25%, however the firm assesses this on a company-by-company basis. Proposals that allow shareholders to act by written consent are also generally supported, if there is a threshold of the minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote were present and voting. The firm believes that best practice for a minimum threshold of shareholders required to act by written consent is generally considered to be between 20-25%, however the firm assesses this on a company-by-company basis. In order to assess the appropriateness of special meeting and written consent provisions the firm would, for example, consider the make-up of the existing investor base/ownership, to determine whether a small number of investors could easily achieve the required threshold, as well as what other mechanisms or governance provisions already exist for shareholders to access management.

**<u>Proxy Access</u>** 

The firm believes that shareholders should, under reasonable conditions, have the right to nominate directors of a company. The firm believes that it is generally in the best interest of shareholders for companies to provide shareholders with reasonable opportunity to exercise this right, while also ensuring that short-term investors or investors without substantial investment in the company cannot abuse this right. In general, we believe that the appropriate threshold for proxy access should permit up to 20 shareholders that collectively own 3% or more of the company's outstanding shares for 3 or more years to nominate the greater of 2 directors or 20% of the board's directors, however the firm assesses this on a case-by-case basis.

**<u>Executive Compensation.</u>** 

Although management recommendations should be given substantial weight, proposals relating to executive compensation plans, including stock option plans and other equity-based compensation, should be examined on a case-by- case basis to ensure that the long-term interests of management and shareholders are properly aligned. This alignment includes assessing whether compensation is tied to both ESG and financial KPIs. Share count and voting power dilution should be limited.

The firm generally favors the grant of restricted stock units (RSU) to executives, since RSUs are an important component of compensation packages that link executives' compensation with their performance and that of the company. The firm typically opposes caps on executive stock RSUs, since tying an executive's compensation to the performance of the company

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provides incentive to maximize share value. The firm also supports equity grants to directors, which help align the interests of outside directors with those of shareholders, although such awards should not be performance-based, so that directors are not incentivized in the same manner as executives.

Proposals to reprice or exchange RSUs are reviewed on a case-by-case basis, but are generally opposed. The firm generally will support a repricing only in limited circumstances, such as if the stock decline mirrors the market or industry price decline in terms of timing and magnitude and the exchange is not value destructive to shareholders.

Although matters of executive compensation should generally be left to the board's compensation committee, proposals to limit executive compensation will be evaluated on a case-by-case basis.

The firm generally supports shareholder proposals to allow shareholders an advisory vote on compensation. Absent a compelling reason, companies should submit say-on-pay votes to shareholders every year, since such votes promote valuable communication between the board and shareholders regarding compensation. Where there is an issue involving egregious or excessive bonuses, equity awards or severance payments (including golden parachutes), the firm will generally vote against a say-on-pay proposal. The firm may oppose the election of compensation committee members at companies that do not satisfactorily align executive compensation with the interests of shareholders.

**<u>Environmental, Social and Governance Issues</u>** 

Shareholder proposals regarding environmental, social and governance issues, in general, are supported, especially when they would have a clear and direct positive financial effect on shareholder value and would not be burdensome or impose unnecessary or excessive costs on the issuer. The environmental, social and governance proposals we generally support often result in increased reporting and disclosure, which deepens our understanding of the risks and opportunities pertaining to a specific company. Although policy decisions are typically better left to management and the board, in cases where the firm believes a company has not adequately mitigated significant ESG risks, the firm may vote against directors.

Brown Advisory broadly supports proposals that encourage the following considerations that we believe are in the best long-term economic interest of our clients:

***<u>Environment</u>*** 

<sup>•</sup>

Climate change and emissions reporting, goal setting, and action

<sup>•</sup>

Water quality, accessibility, and management

<sup>•</sup>

Responsible and effective waste management

<sup>•</sup>

Energy efficiency and renewable, lower-carbon energy sourcing

***<u>Social</u>*** 

<sup>•</sup>

Social justice

<sup>•</sup>

Human rights and responsible labor management

<sup>•</sup>

Data privacy and AI ethics

***<u>Governance</u>*** 

<sup>•</sup>

Executive compensation measures that are linked to ESG metrics

<sup>•</sup>

Diverse and inclusive board composition

<sup>•</sup>

Transparency with regard to political spending

**<u>International Proxy Proposals</u>** 

For actively recommended issuers domiciled outside the United States, the firm may follow ISS's international proxy voting guidelines, including, in certain circumstances, country-specific guidelines.

**<u>Conflicts of Interest</u>** 

A "conflict of interest" means any circumstance when the firm or one of its affiliates (including officers, directors and employees), or in the case where the firm serves as investment adviser to a Brown Advisory Fund, when the Fund or the principal underwriter, or one or more of their affiliates (including officers, directors and employees), knowingly does a material amount of business with, receives material compensation from, or sits on the board of, a particular issuer or closely affiliated entity and, therefore, may appear to have a conflict of interest between its own interests and the interests of clients or Fund shareholders in how proxies of that issuer are voted. For example, a perceived conflict of interest may exist if an

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employee of the firm serves as a director of an actively recommended issuer, or if the firm is aware that a client serves as an officer or director of an actively recommended issuer. Conflicts of interest will be resolved in a manner the firm believes is in the best interest of the client.

The firm should vote proxies relating to such issuers in accordance with the following procedures:

*<u>Routine Matters and Immaterial Conflicts</u>* The firm may vote proxies for routine matters, and for non-routine matters that are considered immaterial conflicts of interest, consistent with this Policy. A conflict of interest will be considered material to the extent that it is determined that such conflict has the potential to influence the firm's decision-making in voting a proxy. Materiality determinations will be made by the Chief Compliance Officer or designee based upon an assessment of the particular facts and circumstances.

*Material Conflicts and Non-Routine Matters* 

If the firm believes that (a) it has a material conflict and (b) that the issue to be voted upon is non-routine or is not covered by this Policy, then to avoid any potential conflict of interest:

<sup>•</sup>

in the case of a Fund, the firm shall contact the Fund board for a review and determination;

<sup>•</sup>

in the case of all other conflicts or potential conflicts, the firm may "echo vote" such shares, if possible, which means the firm will vote the shares in the same proportion as the vote of all other holders of the issuer's shares; or

<sup>•</sup>

in cases when echo voting is not possible, the firm may defer to ISS recommendations, abstain or vote in a manner the firm, in consultation with the General Counsel, believes to be in the best interest of the client.

<sup>•</sup>

If the aforementioned options would not address or ameliorate the conflict or potential conflict, then the firm may abstain from voting, as described below.

**<u>Abstention</u>** 

In recognition of its fiduciary obligations, the firm generally endeavors to vote the proxies it receives. However, the firm may abstain from voting proxies in certain circumstances. For example, the firm may determine that abstaining from voting is appropriate if voting is not in the best interest of the client. In addition to abstentions due to material conflicts of interest, situations in which we would not vote proxies might include:

<sup>•</sup>

Circumstances where the cost of voting the proxy exceeds the expected benefits to the client

<sup>•</sup>

Circumstances where there are significant impediments to an efficient voting process, including with respect to non-US issuers where the vote requires translations or other burdensome conditions

<sup>•</sup>

Circumstances where the vote would not reasonably be expected to have a material effect on the value of the client's investment.

**<u>Client-Specific Guidelines</u>** 

From time to time, clients may prefer to elect alternative voting guidelines in cases where the guidelines previously outlined in this document do not align with the client's investment or value objectives. The firm seeks to provide clients with the opportunity to have proxies voted in line with their values and objectives. Where a client desires to elect alternative voting guidelines, the firm will work with the client and ISS to identify appropriate alternative voting guidelines. Where no appropriate pre-defined alternative guidelines are available, the firm will endeavor to work with the client to define and set up guidelines to vote proxies on a case-by-case basis. If the firm has not previously implemented the alternative guidelines, members of the firm's proxy voting committee will review the policy to ensure alignment with our fiduciary duty. The firm may recommend a departure from specific aspects of the selected policy's guidelines when it deems such a departure to be in the client's best interest.

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**Causeway Capital Management LLC** 

**Proxy Voting Policies and Procedures** 

**Overview** 

As an investment adviser with fiduciary responsibilities to its clients, Causeway Capital Management LLC ("Causeway") votes the proxies of companies owned by investment vehicles managed and sponsored by Causeway, and institutional and private clients who have granted Causeway such voting authority. Causeway has adopted these Proxy Voting Policies and Procedures to govern how it performs and documents its fiduciary duty regarding the voting of proxies.

Proxies are voted solely in what Causeway believes is the best interests of the client, a fund's shareholders or, where employee benefit assets are involved, plan participants and beneficiaries (collectively "clients"). Causeway's intent is to vote proxies, wherever possible to do so, in a manner consistent with its fiduciary obligations. Practicalities involved in international investing may make it impossible at times, and at other times disadvantageous, to vote proxies in every instance.

The Chief Operating Officer of Causeway supervises the proxy voting process. Proxy voting staff monitor upcoming proxy votes, review proxy research, identify potential conflicts of interest and escalate such issues to the Chief Operating Officer, receive input from portfolio managers, and ultimately submit proxy votes in accordance with these Proxy Voting Policies and Procedures. The Chief Operating Officer and President have final decision-making authority over case-by-case votes. To assist in fulfilling its responsibility for voting proxies, Causeway currently uses Institutional Shareholder Services Inc. ("ISS") for proxy research, which assists the decision-making process, and for proxy voting services, which include organizing and tracking pending proxies, communicating voting decisions to custodian banks, and maintaining records. Causeway will conduct periodic due diligence on ISS and its capacity and competency to provide proxy research and the proxy voting services provided to Causeway.

**Proxy Voting Guidelines** 

Causeway generally votes on specific matters in accordance with the proxy voting guidelines set forth below. However, Causeway reserves the right to vote proxies on behalf of clients on a case-by-case basis if the facts and circumstances so warrant.

Causeway's proxy voting guidelines are designed to cast votes consistent with certain basic principles: (i) increasing shareholder value; (ii) maintaining or increasing shareholder influence over the board of directors and management; (iii) establishing and enhancing strong and independent boards of directors; (iv) maintaining or increasing the rights of shareholders; and (v) aligning the interests of management and employees with those of shareholders with a view toward the reasonableness of executive compensation and shareholder dilution. Causeway's guidelines also recognize that a company's management is charged with day-to-day operations and, therefore, Causeway generally votes on routine business matters in favor of management's proposals or positions.

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Causeway generally votes *for*:

• distributions of income

• appointment of auditors

• director compensation, unless deemed excessive

• boards of directors – Causeway generally votes for management's slate of director nominees. However, it votes against incumbent nominees with poor attendance records, or who have otherwise acted in a manner Causeway believes is not in the best interests of shareholders. Causeway recognizes that, in certain jurisdictions, local law or regulation may influence Board composition.

• financial results/director and auditor reports

• share repurchase plans

• changing corporate names and other similar matters

Causeway generally votes the following matters on a case-by-case basis:

• amendments to articles of association or other governing documents

• changes in board or corporate governance structure

• changes in authorized capital including proposals to issue shares

• compensation – Causeway believes that it is important that a company's equity-based compensation plans, including stock option or restricted stock plans, are aligned with the interests of shareholders, including Causeway's clients, and focus on observable long-term returns. Causeway evaluates compensation plans on a case-by-case basis, with due consideration of potential consequences of a particular compensation plan. Causeway generally opposes packages that it believes provide excessive awards or create excessive shareholder dilution. Causeway generally opposes proposals to reprice options because the underlying stock has fallen in value.

• social and environmental issues – Causeway believes that it is generally management's responsibility to address such issues within the context of increasing long-term shareholder value. To the extent that management's position on a social or environmental issue is inconsistent with increasing long-term shareholder value, Causeway may vote against management or abstain. Causeway may also seek to engage in longer-term dialogue with management on these issues, either separately or in connection with proxy votes on the issue.

• debt issuance requests

• mergers, acquisitions and other corporate reorganizations or restructurings

• changes in state or country of incorporation

• related party transactions

Causeway generally votes *against:* 

• anti-takeover mechanisms – Causeway generally opposes anti-takeover mechanisms including poison pills, unequal voting rights plans, staggered boards, provisions requiring supermajority approval of a merger and other matters that are designed to limit the ability of shareholders to approve merger transactions.

**Conflicts of Interest** 

Causeway's interests may, in certain proxy voting situations, be in conflict with the interests of clients. Causeway may have a conflict if a company that is soliciting a proxy is a client of Causeway or is a major business partner or vendor for Causeway. Causeway may also have a conflict if Causeway personnel have significant business or personal relationships with participants in proxy contests, corporate directors or director candidates.

The Chief Operating Officer determines the issuers with which Causeway may have a significant business relationship. For this purpose, a "significant business relationship" is one that: (1) represents 1.5% or more of Causeway's prior calendar year gross revenues; (2) represents $2,000,000 or more in payments from a sponsored vehicle during the prior calendar year; or (3) may not directly involve revenue to Causeway or payments from its sponsored vehicles, but is otherwise determined by the Chief Operating Officer to be significant to Causeway or its affiliates or sponsored vehicles, such as a primary service provider of a fund or vehicle managed and sponsored by Causeway, or a significant relationship with the company that might create an incentive for Causeway to vote in favor of management.

The Chief Operating Officer will identify issuers with which Causeway's employees who are involved in the proxy voting process may have a significant personal or family relationship. For this purpose, a "significant personal or family relationship" is one that would be reasonably likely to influence how Causeway votes proxies.

Proxy voting staff will seek to identify potential conflicts of interest in the first instance and escalate relevant information to the Chief Operating Officer. The Chief Operating Officer will reasonably investigate information relating to conflicts of interest. For purposes of identifying conflicts under this policy, the Chief Operating Officer will rely on publicly available information about Causeway and its affiliates, information about Causeway and its affiliates that is generally known by

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Causeway's employees, and other information actually known by the Chief Operating Officer. Absent actual knowledge, the Chief Operating Officer is not required to investigate possible conflicts involving Causeway where the information is (i) non-public, (ii) subject to information blocking procedures, or (iii) otherwise not readily available to the Chief Operating Officer.

Proxy voting staff will maintain a list of issuers with which there may be a conflict and will monitor for potential conflicts of interest on an ongoing basis.

Proxy proposals that are "routine," such as uncontested elections of directors or those not subject to a vote withholding campaign, meeting formalities, and approvals of annual reports/financial statements are presumed not to involve material conflicts of interest. For non-routine proposals, the Chief Operating Officer in consultation with Causeway's General Counsel/Chief Compliance Officer decides if they involve a material conflict of interest.

If a proposal is determined to involve a material conflict of interest, Causeway may, but is not required to, obtain instructions from the client on how to vote the proxy or obtain the client's consent for Causeway's vote. If Causeway does not seek the client's instructions or consent, Causeway will vote as follows:

• If a "for" or "against" or "with management" guideline applies to the proposal, Causeway will vote in accordance with that guideline.

• If a "for" or "against" or "with management" guideline does not apply to the proposal, Causeway will follow the recommendation of an independent third party such as ISS. If Causeway seeks to follow the recommendation of a third party, the Chief Operating Officer will assess the third party's capacity and competency to analyze the issue, as well as the third party's ability to identify and address conflicts of interest it may have with respect to the recommendation.

To monitor potential conflicts of interest regarding the research and recommendations of independent third parties, such as ISS, proxy voting staff will review the third party's disclosures of significant relationships. The Chief Operating Officer will review proxy votes involving issuers where a significant relationship has been identified by the proxy research provider.

**Practical Limitations Relating to Proxy Voting** 

While the proxy voting process is well established in the United States and other developed markets with numerous tools and services available to assist an investment manager, voting proxies of non-US companies located in certain jurisdictions may involve a number of problems that may restrict or prevent Causeway's ability to vote such proxies. These problems include, but are not limited to: (i) proxy statements and ballots being written in a language other than English; (ii) untimely and/or inadequate notice of shareholder meetings relative to deadlines required to submit votes; (iii) restrictions on the ability of holders outside the issuer's jurisdiction of organization to exercise votes; (iv) requirements to vote proxies in person; (v) restrictions on the sale of the securities for a period of time prior to the shareholder meeting; and (vi) requirements to provide local agents with powers of attorney (which Causeway will typically rely on clients to maintain) to facilitate Causeway's voting instructions. As a result, Causeway will only use its best efforts to vote clients' non-US proxies and Causeway may decide not to vote a proxy if it determines that it would be impractical or disadvantageous to do so.

In addition, regarding US and non-US companies, Causeway will not vote proxies if it does not receive adequate information from the client's custodian in sufficient time to cast the vote.

For clients with securities lending programs, Causeway may not be able to vote proxies for securities that a client has loaned to a third party. Causeway recognizes that clients manage their own securities lending programs. Causeway may, but is not obligated to, notify a client that Causeway is being prevented from voting a proxy due to the securities being on loan. There can be no assurance that such notice will be received in time for the client, if it so chooses, to recall the security.

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**Eagle Asset Management, Inc.** 

**Proxy Voting Guidelines** 

**September 2021** 

**Table of Contents** 

**Part I: Policy And Procedures** 

Guiding Principles

The Proxy Voting Process

Implementation

Conflicts of Interest

**Part Ii: Eam Proxy Voting Guidelines Summary** 

U.S. Proxy Items

Non-U.S. Proxy Items

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**Part I: Policy And Procedures** 

**Eagle Asset Management, Inc.** 

**(Collectively "EAM")** 

**POLICY AND PROCEDURES ON PROXY VOTING** 

**FOR INVESTMENT ADVISORY CLIENTS** 

**Guiding Principles** 

Proxy voting and the analysis of corporate governance issues in general are important elements of the portfolio management services we provide to our advisory clients who have authorized us to address these matters on their behalf. Our guiding principles in performing proxy voting are to make decisions that favor proposals, which in EAM's view, maximize a company's shareholder value and are not influenced by conflicts of interest. These principles reflect EAM's belief that sound corporate governance will create a framework within which a company can be managed in the interests of its shareholders.

EAM has adopted the policies and procedures set out below regarding the voting of proxies (the "Policy"). EAM periodically reviews this Policy, in conjunction with the parent company Carillon Tower Advises Stewardship committee, to ensure it continues to be consistent with our guiding principles.

**The Proxy Voting Process Public Equity** 

**Investments** 

To implement these guiding principles for investments in publicly traded equities for which we have voting power on any record date, we follow customized proxy voting guidelines that have been developed by EAM portfolio management (the "EAM Guidelines"). The EAM Guidelines embody the positions and factors EAM considers important in casting proxy votes. They address a wide variety of individual topics, including, among other matters, shareholder voting rights, anti-takeover defenses, board structures, the election of directors, executive and director compensation, reorganizations, mergers, issues of corporate social responsibility and various shareholder proposals. Recognizing the complexity and fact-specific nature of many corporate governance issues, the EAM Guidelines identify factors we consider in determining how the vote should be cast. A summary of the EAM Guidelines is enclosed as Part II.

The principles and positions reflected in this Policy are designed to guide us in voting proxies, and not necessarily in making investment decisions. EAM portfolio management teams (each a "Portfolio Management Team") base their determinations of whether to invest in a particular company on a variety of factors, and while corporate governance may be one such factor, it may not be the primary consideration.

**Implementation** 

EAM has retained a third-party proxy voting service (the "Proxy Service") to assist in the implementation of certain proxy voting-related functions, including, without limitation, operational, recordkeeping and reporting services. The Proxy Service transmits votes for each proxy based upon the application of the EAM Guidelines to the particular proxy issues. EAM retains the responsibility for proxy voting decisions.

Clients of EAM may retain their voting rights; delegate the responsibility to EAM or to a third party of their choosing. In certain instances, EAM may still be required to transmit vote proxies for those custodians who do not have a relationship with the Proxy Service.

EAM's Portfolio Management Teams generally cast proxy votes consistently with the EAM Guidelines. On certain proxy votes, each Portfolio Management Team may diverge from the EAM Guidelines based on new information but bearing in mind that the override decisions are not influenced by any conflict of interest. Because of the override process, different Portfolio Management Teams may vote differently for particular votes for the same company.

From time to time, EAM's ability to vote proxies may be affected by regulatory requirements and compliance, legal or logistical considerations. As a result, EAM, from time to time, may determine that it is not practicable or desirable to vote proxies.

**Conflicts of Interest** 

In instances when a Portfolio Management Team is interested in voting in a manner that diverges from the initial Recommendation based on the EAM Guidelines, EAM has implemented processes designed to prevent conflicts of interest from influencing its proxy voting decisions. These processes include information barriers, the use of the EAM Guidelines and the override review described above.

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**Part II: EAM Proxy Voting Guidelines Summary** 

The following is a summary of the material EAM Proxy Voting Guidelines (the "Guidelines"), which form the substantive basis of EAM's Policy and Procedures on Proxy Voting for Investment Advisory Clients (the "Policy"). As described in the main body of the Policy, one or more EAM Portfolio Management Teams may diverge from the Guidelines and a related Recommendation on any particular proxy vote or in connection with any individual investment decision in accordance with the Policy.

**U.S. Proxy Items** 

The EAM proxy voting guidelines will be based on the ISS Benchmark Policy (US), with the following customization:

• E&S shareholder proposals would be Case-By-Case ("REFER").

• Shareholder proposals to Require Independent Board Chair would be Case-By-Case ("REFER").

• Advisory Vote on Executive Compensation ("Say on Pay") should go to Case-By-Case ("REFER") in the event ISS has an "Against" recommendation.

• Restructuring proposals, including M&A activity, bankruptcy, etc. would be Case-By-Case ("REFER")

All Case-By-Case ("REFER") votes would go to chair of Stewardship Committee who would then convene a meeting with portfolio managers involved for discussion and vote.

Unified EAM guidelines as well as any updates to the ISS Benchmark Policy (US) will be reviewed by the Stewardship Committee at least annually.

**Non-U.S Proxy Items** 

For international holdings, ISS country-specific benchmark guidelines will be used.

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**Emerald Advisers, LLC.**

**Emerald Mutual Fund Advisers Trust**

**Emerald Separate Account Management** 

**Proxy Voting Policy** 

The voting policies set forth below apply to all proxies which Emerald Advisers, LLC. and subsidiaries are entitled to vote. It is Emerald's policy to vote all such proxies. Corporate governance through the proxy process is solely concerned with the accountability and responsibility for the assets entrusted to corporations. The role of institutional investors in the governance process is the same as the responsibility due all other aspects of the fund's management. First and foremost, the investor is a fiduciary and secondly, an owner. Fiduciaries and owners are <u>responsible</u> for their investments. These responsibilities include:

1)

selecting proper directors

2)

insuring that these directors have properly supervised management

3)

resolve issues of natural conflict between shareholders and managers

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Compensation

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Corporate Expansion

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Dividend Policy

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Free Cash Flow

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Various Restrictive Corporate Governance Issues, Control Issues, etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. Preserving Integrity

In voting proxies, Emerald will consider those factors which would affect the value of the investment and vote in the manner, which in its view, will best serve the economic interest of its clients. Consistent with this objective, Emerald will exercise its vote in a activist pro-shareholder manner in accordance with the following policies.

**I. Boards of Directors** 

In theory, the board represents shareholders, in practice, all to often Board members are selected by management. Their allegiance is therefore owed to management in order to maintain their very favorable retainers and prestigious position. In some cases, corporations never had a nominating process, let alone criteria for the selection of Board members. Shareholders have begun to focus on the importance of the independence of the Board of Directors and the nominating process for electing these Board members. Independence is an important criterium to adequately protect shareholders' ongoing financial interest and to properly conduct a board member's oversight process. Independence though, is only the first criteria for a Board. Boards need to be responsible fiduciaries in their oversight and decision making on behalf of the owners and corporations. Too many companies are really <u>ownerless</u>. Boards who have failed to perform their duties, or do not act in the best interests of the shareholders should be voted out. A clear message is sent when a no confidence vote is given to a set of directors or to a full Board.

**A. Election of Directors,** a Board of Directors, or any number of Directors. In order to assure Boards are acting solely for the shareholders they represent, the following resolutions will provide a clear message to underperforming companies and Boards who have failed to fulfill duties assigned to them.

<sup>•</sup>

Votes should be cast in favor of shareholder proposals asking that boards be comprised of a majority of outside directors.

<sup>•</sup>

Votes should be cast in favor of shareholder proposals asking that board audit, compensation and nominating committees be comprised exclusively of outside directors.

<sup>•</sup>

Votes should be cast against management proposals to re-elect the board if the board has a majority of inside directors.

<sup>•</sup>

Votes should be withheld for directors who may have an inherent conflict of interest by virtue of receiving consulting fees from a corporation (affiliated outsiders).

<sup>•</sup>

Votes should be withheld, on a case by case basis, for those directors of the compensation committees responsible for particularly egregious compensation plans.

<sup>•</sup>

Votes should be withheld for directors who have failed to attend 75% of board or committee meetings in cases where management does not provide adequate explanation for the absences.

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<sup>•</sup>

Votes should be withheld for incumbent directors of poor performing companies; defining poor performing companies as those companies who have below average stock performance (vs. peer group/Wilshire 5000) and below average return on assets and operating margins.

<sup>•</sup>

Votes should be cast in favor of proposals to create shareholder advisory committees. These committees will represent shareholders' views, review management, and provide oversight of the board and their directors.

**B. Selection of Accountants:** Emerald will generally support a rotation of accountants to provide a truly independent audit. This rotation should generally occur every 4-5 years.

**C. Incentive Stock Plans.** Emerald will generally vote against all excessive compensation and incentive stock plans which are not performance related.

**D. Corporate restructuring plans** or company name changes, will generally be evaluated on a case by case basis.

**E. Annual Meeting Location.** This topic normally is brought forward by minority shareholders, requesting management to hold the annual meeting somewhere other than where management desires.

**Resolution**. Emerald normally votes with management, except in those cases where management seeks a location to avoid their shareholders.

**F. Preemptive Rights.** This is usually a shareholder request enabling shareholders to participate first in any new offering of common stock.

**Resolution**: We do not feel that preemptive rights would add value to shareholders, we would vote against such shareholder proposals.

**G. Mergers and/or Acquisitions.** Each merger and/or acquisition has numerous ramifications for long term shareholder value.

**Resolution**: After in-depth valuation Emerald will vote its shares on a case by case basis.

**II. Corporate Governance Issues** 

These issues include those areas where voting with management may not be in the best interest of the institutional investor. All proposals should be examined on a case by case basis.

**A. Provisions Restricting Shareholder Rights.** These provisions would hamper shareholders ability to vote on certain corporate actions, such as changes in the bylaws, greenmail, poison pills, recapitalization plans, golden parachutes, and on any item that would limit shareholders' right to nominate, elect, or remove directors. These items can change the course of the corporation overnight and shareholders should have the right to vote on these critical issues.

**Resolution**: <u>Vote</u> **<u>Against</u>** <u>management proposals to implement such restrictions and vote</u> **<u>For</u>** <u>shareholder proposals to</u> <u>eliminate them.</u> 

**B. Anti-Shareholder Measures.** These are measures designed to entrench management so as to make it more difficult to effect a change in control of the corporation. They are normally not in the best interests of shareholders since they do not allow for the most productive use of corporate assets.

<u>1. Classification of the Board of Directors:</u> A classified Board is one in which directors are not elected in the same year rather their terms of office are staggered. This eliminates the possibility of removing entrenched management at any one annual election of directors.

**Resolution**: <u>Vote</u> **<u>Against</u>** <u>proposals to classify the Board and support proposals (usually shareholder initiated) to implement</u> <u>annual election of the Board.</u> 

<u>2. Shareholder Rights Plans (Poison Pills):</u> Anti-acquisition proposals of this sort come in a variety of forms. In general, issuers confer contingent benefits of some kind on their common stockholders. The most frequently used benefit is the right to buy shares at discount prices in the event of defined changes in corporate control.

**Resolution**: <u>Vote</u> **<u>Against</u>** <u>proposals to adopt Shareholder Rights Plans, and vote</u> **<u>For</u>** <u>Shareholder proposals eliminating</u> <u>such plans.</u> 

<u>3. Unequal Voting Rights:</u> A takeover defense, also known as superstock, which gives holders disproportionate voting rights. Emerald adheres to the One Share, One Vote philosophy, as all holders of common equity must be treated fairly and equally.

**Resolution**: <u>Vote</u> **<u>Against</u>** <u>proposals creating different classes of stock with unequal voting privileges.</u> 

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<u>4. Supermajority Clauses:</u> These are implemented by management requiring that an overly large amount of shareholders (66-95% of shareholders rather than a simple majority) approve business combinations or mergers, or other measures affecting control. This is another way for management to make changes in control of the company more difficult.

**Resolution**: <u>Vote</u> **<u>Against</u>** <u>management proposals to implement supermajority clauses and support shareholder proposals</u> <u>to eliminate them.</u> 

<u>5. Fair Price Provisions:</u> These provisions allow management to set price requirements that a potential bidder would need to satisfy in order to consummate a merger. The pricing formulas normally used are so high that the provision makes any tender offer prohibitively expensive. Therefore, their existence can foreclose the possibility of tender offers and hence, the opportunity to secure premium prices for holdings.

**Resolution**: <u>Vote</u> **<u>Against</u>** <u>management proposals to implement fair price provisions and vote</u> **<u>For</u>** <u>shareholder proposals</u> <u>to eliminate them</u>.

**Caveat:** Certain fair price provisions are legally complex and require careful analysis and advice before concluding whether or not their adoption would serve stockholder interest.

<u>6. Increases in authorized shares and/or creation of new classes of common and preferred stock:</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Increasing authorized shares.

Emerald will support management if they have a stated purpose for increasing the authorized number of common and preferred stock. Under normal circumstances, this would include stock splits, stock dividends, stock option plans, and for additional financing needs. However, in certain circumstances, it is apparent that management is proposing these increases as an anti-takeover measure. When used in this manner, share increases could inhibit or discourage stock acquisitions by a potential buyer, thereby negatively affecting a fair price valuation for the company.

**Resolution:**<u>On a case by case basis, vote</u> **<u>Against</u>** <u>management if they attempt to increase the amount of shares</u> <u>that they are authorized to issue if their intention is to use the excess shares to discourage a beneficial business</u> <u>combination. One way to determine if management intends to abuse its right to issue shares is if the amount of</u> <u>authorized shares requested is double the present amount of authorized shares.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Creation of new classes of stock.

Managements have proposed authorizing shares of new classes of stock, usually preferreds, which the Board would be able to issue at their discretion. The Board would also be granted the discretion to determine the dividend rate, voting privileges, redemption provisions, conversion rights, etc. without approval of the shareholders. These "blank check" issues are designed specifically to inhibit a takeover, merger, or accountability to its shareholders.

**Resolution:**<u>Emerald would vote AGAINST management in allowing the Board the discretion to issue any type of</u> <u>"blank check" stock without shareholder approval.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Directors and Management Liability and Indemnification.

These proposals are a result of the increasing cost of insuring directors and top management against lawsuits. Generally, managements propose that the liability of directors and management be either eliminated or limited. Shareholders must have some recourse for losses that are caused by negligence on the part of directors and management. Therefore directors and management should be responsible for their fiduciary duty of care towards the company. The Duty of Care is defined as the obligation of directors and management to be diligent in considering a transaction or in taking or refusing to take a corporate action.

**Resolution:**<u>On a case by case basis,</u> <u>Emerald</u> <u>votes</u> **<u>Against</u>** <u>attempts by management to eliminate directors and</u> <u>management liability for their duty of care.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Compensation Plans (Incentive Plans)

Management occasionally will propose to adopt an incentive plan which will become effective in the event of a takeover or merger. These plans are commonly known as "golden parachutes" or "tin parachutes" as they are specifically designed to grossly or unduly benefit a select few in management who would most likely lose their jobs in an acquisition. Shareholders should be allowed to vote on all plans of this type.

**Resolution:**<u>On a case by case basis, vote</u> **<u>Against</u>** <u>attempts by management to adopt proposals that are specifically</u> <u>designed to grossly or unduly benefit members of executive management in the event of an acquisition.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Greenmail

Emerald would not support management in the payment of greenmail.

**Resolution:**<u>Emerald would vote</u> **<u>FOR</u>** <u>any shareholder resolution that would eliminate the possibility of the payment</u> <u>of greenmail.</u> 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. Cumulative Voting

Cumulative voting entitles stockholders to as many votes as equal the number of shares they own multiplied by the number of directors being elected. According to this set of rules, a shareholder can cast all votes towards a single director, or any two or more. This is a proposal usually made by a minority shareholder seeking to elect a director to the Board who sympathizes with a special interest. It also can be used by management that owns a large percentage of the company to ensure that their appointed directors are elected.

**Resolution:**<u>Cumulative voting tends to serve special interests and not those of shareholders, therefore Emerald</u> <u>will vote</u> **<u>Against</u>** <u>any proposals establishing cumulative voting and</u> **<u>For</u>** <u>any proposal to eliminate it.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. Proposals Designed to Discourage Mergers & Acquisitions In Advance

These provisions direct Board members to weigh socioeconomic and legal as well as financial factors when evaluating takeover bids. This catchall apparently means that the perceived interests of customers, suppliers, managers, etc., would have to be considered along with those of the shareholder. These proposals may be worded: "amendments to instruct the Board to consider certain factors when evaluating an acquisition proposal". Directors are elected primarily to promote and protect the shareholder interests. Directors should not allow other considerations to dilute or deviate from those interests.

**Resolution**: <u>Emerald will vote</u> **<u>Against</u>** <u>proposals that would discourage the most productive use of corporate</u> <u>assets in advance.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. Confidential Voting

A company that does not have a ballot provision has the ability to see the proxy votes before the annual meeting. In this way, management is able to know before the final outcome how their proposals are being accepted. If a proposal is not going their way, management has the ability to call shareholders to attempt to convince them to change their votes. Elections should take place in normal democratic process which includes the secret ballot. Elections without the secret ballot can lead to coercion of shareholders, employees, and other corporate partners.

**Resolution**: <u>Vote</u> **<u>For</u>** <u>proposals to establish secret ballot voting.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Disclosure

**Resolution:**<u>Emerald will vote</u> **<u>Against</u>** <u>proposals that would require any kind of unnecessary disclosure of business</u> <u>records. Emerald will vote</u> **<u>For</u>** <u>proposals that require disclosure of records concerning unfair labor practices or</u> <u>records dealing with the public safety</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. Sweeteners

**Resolution:**<u>Emerald will vote</u> **<u>Against</u>** <u>proposals that include what are called "sweeteners" used to entice</u> <u>shareholders to vote for a proposal that includes other items that may not be in the shareholders best interest.</u> <u>For instance, including a stock split in the same proposal as a classified Board, or declaring an extraordinary dividend</u> <u>in the same proposal installing a shareholders rights plan (Poison Pill).</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k. Changing the State of Incorporation

If management sets forth a proposal to change the State of Incorporation, the reason for change is usually to take advantage of another state's liberal corporation laws, especially regarding mergers, takeovers, and anti-shareholder measures. Many companies view the redomestication in another jurisdiction as an opportune time to put new anti-shareholder measures on the books or to purge their charter and bylaws of inconvenient shareholder rights, written consent, cumulative voting, etc.

**Resolution**: <u>On a case by case basis, Emerald will vote</u> **<u>Against</u>** <u>proposals changing the State of Incorporation</u> <u>for the purpose of their anti-shareholder provisions and will support shareholder proposals calling for reincorporation</u> <u>into a jurisdiction more favorable to shareholder democracy.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l. Equal Access to Proxy Statements

Emerald supports stockholders right to equal access to the proxy statement, in the same manner that management has access. Stockholders are the owners of a corporation and should not be bound by timing deadlines and other obstacles that presently shareholders must abide by in sponsoring proposals in a proxy statement. The Board should not have the ability to arbitrarily prevent a shareholder proposal from appearing in the proxy statement.

**Resolution**: <u>Emerald will support any proposal calling for equal access to proxy statements.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m. Abstention Votes

Emerald supports changes in the method of accounting for abstention votes. Abstention votes should not be considered as shares "represented" or "cast" at an annual meeting. Only those shares cast favoring or opposing a proposal should be included in the total votes cast to determine if a majority vote has been achieved. Votes cast abstaining should not be included in total votes cast.

**Resolution**: <u>Emerald will support any proposal to change a company's by-laws or articles of incorporation to reflect</u> <u>the proper accounting for abstention votes.</u> 

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**III. Other Issues** 

On other major issues involving questions of community interest, moral and social concern, fiduciary trust and respect for the law such as:

A. Human Rights

B. Nuclear Issues

C. Defense Issues

D. Social Responsibility

Emerald, in general supports the position of management. Exceptions to this policy Include:

**1.** **South Africa**

Emerald will actively encourage those corporations that have South African interests to adopt and adhere to the Statement of Principles for South Africa, formerly known as the Sullivan Principles, and to take further actions to promote responsible corporate activity.

**2.** **Northern Ireland**

Emerald will actively encourage U.S. companies in Northern Ireland to adopt and adhere to the MacBride Principles, and to take further actions to promote responsible corporate activity.

**IV. Other Potential Conflicts of Interest** 

Emerald may manage a variety of corporate accounts that are publicly traded. Emerald will use Glass-Lewis recommendations to avoid any appearance of a conflict of interest when voting proxies of its clients that are publicly traded companies.

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**Hotchkis & Wiley** 

**Summary Of Proxy Voting Policies & Procedures** 

INTRODUCTION

Our primary responsibility is to act as a fiduciary for our clients when voting proxies. We evaluate and vote each proposed proxy in a manner that encourages sustainable business practices which in turn maximizes long term shareholder value.

As part of our normal due diligence and monitoring of investments, we engage management, board members, or their representatives on material business issues including environmental, social, and governance ("ESG") matters. Each proxy to be voted is an opportunity to give company management and board members formal feedback on these important matters.

This document summarizes our stance on important issues that are commonly found on proxy ballots, though each vote is unique and there will be occasional exceptions to these guidelines. The purpose of our proxy guidelines is to ensure decision making is consistent with our responsibilities as a fiduciary.

GENERAL APPROACH

To the extent we are asked to vote a client's proxy, our investment analysts are given the final authority on how to vote a particular proposal as these analysts' understanding of the company make them the best person to apply our policy to a particular company's proxy ballot. To assist our analysts in their voting, we provide them with a report that compares the company's board of directors' recommendation against H&W's proxy policy guideline recommendation and with third party proxy research (ISS sustainability and climate benchmarks) and third party ESG analysis (MSCI). Any deviation from the H&W policy recommendation requires a written statement from the analyst that summarizes their decision to deviate from policy.

There are instances such as unique client guidelines, regulatory requirements, share blocking, securities lending, or other technical limitations where we are unable to vote a particular proxy. In those instances where we do not have voting responsibility, we will generally forward our recommendation to such person our client designates.

VOTING GUIDELINES

These guidelines are divided into seven categories based on issues that frequently appear on proxy ballots.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Boards and Directors

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Environmental and Social Matters

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Auditors and Related Matters

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Shareholder Rights

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Capital and Restructuring

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Executive and Board Compensation

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Routine and Miscellaneous Matters

**1.** **Boards and Directors** 

<u>Board Independence</u> 

We believe an independent board is crucial to protecting and serving the interests of public shareholders. We will generally withhold from or vote against any insiders when such insider sits on the audit, compensation, or nominating committees; or if independent directors comprise less than 50% of the board. Insiders are non-independent directors who may have inherent conflicts of interest that could prevent them from acting in the best interest of shareholders. Examples of non-independent directors include current and former company executives, persons with personal or professional relationships with the company and or its executives, and shareholders with large ownership positions.

<u>Board Composition</u> 

We believe directors should attend meetings, be focused on the company, be responsive to shareholders, and be accountable for their decisions.

We will generally withhold from or vote against directors who attend less than 75% of meetings held during their tenure without just cause, sit on more than 5 public company boards (for CEOs only 2 outside boards), support measures that limit shareholder rights, or fail to act on shareholder proposals that passed with a majority of votes.

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<u>Board Diversity</u> 

Boards should consider diversity when nominating new candidates, including gender, race, ethnicity, age, and professional experience. We encourage companies to have at least one female and one diverse (e.g., race, ethnicity) director or have a plan to do so.

<u>Board Size</u> 

We do not see a standard number of directors that is ideal for all companies. In general, we do not want to see board sizes changed without shareholder approval as changing board size can be abused in the context of a takeover battle.

<u>Board Tenure</u> 

In general, we will evaluate on a case-by-case basis whether the board is adequately refreshed with new talent and the proposed changes are not designed to reduce board independence.

<u>Classified Boards</u> 

We oppose classified boards because, among other things, it can make change in control more difficult to achieve and limit shareholder rights by reducing board accountability.

<u>Cumulative Voting</u> 

Generally, we oppose cumulative voting because we believe that economic interests and voting interests should be aligned in most circumstances.

<u>Independent Board Chair</u> 

Generally, we favor a separate independent chair that is not filled by an insider. If the CEO is also the board chair, we require 2/3 of the board to be independent, a strong independent director (i.e., has formal input on board agendas and can call/preside over meetings of independent directors), and the CEO cannot serve on the nominating or compensation committees.

<u>Proxy Contests</u> 

Proxy contests are unusual events that require a case-by-case assessment of the unique facts and circumstances of each contested proxy campaign. Our policy is to defer to the judgement of our analysts on what best serves our clients' interests. Our analysts will evaluate the validity of the dissident's concerns, the likelihood that the dissident plan will improve shareholder value, the qualifications of the dissident's candidates, and management's historical record of creating or destroying shareholder value.

<u>Risk Oversight</u> 

Generally, companies should have established processes for managing material threats to their businesses, including ESG risks. We encourage transparency and vote to improve transparency to help facilitate appropriate risk oversight.

**2.** **Environmental and Social Matters** 

We believe the oversight of ESG risks is an important responsibility of the board of directors and is a prerequisite for a well- managed company. Transparent disclosures are necessary to identify and evaluate environmental and social risks and opportunities. A lack of transparency will increase the likelihood that environmental and social risks are not being sufficiently managed/limited/mitigated. In general, we will engage companies with substandard disclosure to encourage them to provide adequate disclosure on E&S risks that typically align with Sustainability Accounting Standards Board (SASB) recommendations.

In general, we support proposals that encourage disclosure of risks provided they are not overly burdensome or disclose sensitive competitive information balanced against the materiality of the risk. We also consider whether the proposal is more effectively addressed through other means, like legislation or regulation.

*Environmental Issues* 

<u>Climate Change and Green House Gas Emissions</u> 

Climate change has become an important factor in companies' long-term sustainability and opportunity. Understanding a company's strategy in managing these risks and opportunities is necessary in evaluating an investment's prospects. We support disclosures related to the risks and/or opportunities a company faces related to climate change, including information on how the company identifies and manages such risks/opportunities.

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<u>Energy Efficiency</u> 

We generally support proposals requesting that a company report on its energy efficiency policies. Exceptions may include a request that is overly burdensome or provides unrealistic deadlines.

<u>Hydraulic Fracturing</u> 

We support proposals requesting greater disclosure of a company's hydraulic fracturing operations. This includes steps the company has taken, or plans to take, regarding mitigating and managing its environmental impact overall and on surrounding communities.

<u>Renewable Energy</u> 

We support requests for reports on renewable energy accomplishments and future plans. Exceptions may include duplicative, irrelevant, or otherwise unreasonable requests.

*Social Issues* 

<u>Equal Opportunity</u> 

We support proposals requesting disclosures of companies' policies and/or future initiatives related to diversity, including current data regarding the diversity of its workforce.

<u>Gender Identity and Sexual Orientation</u> 

We support proposals to revise diversity policies to prohibit discrimination based on sexual orientation and/or gender identity.

<u>Human Rights Proposals</u> 

We support proposals requesting disclosure related to labor and/or human rights policies.

<u>Political Activities</u> 

We support the disclosure of a company's policies and procedures related to political contributions and lobbying activities.

<u>Sexual Harassment</u> 

We vote on a case-by-case basis regarding proposals seeking reports on company actions related to sexual harassment. We evaluate the company's current policies, oversight, and disclosures. We also consider the company's history and any related litigation or regulatory actions related to sexual harassment, and support proposals we believe will prevent such behavior when systemic issues are suspected.

**3.** **Auditors and Related Matters** 

Generally, we will support the board's recommendation of auditors provided that the auditors are independent, non-audit fees are less than the sum of all audit and tax related fees, and there are no indications of fraud or misleading audit opinions.

**4.** **Shareholder Rights** 

We do not support proposals that limit shareholder rights. When a company chronically underperforms minimal expectations due to poor execution, poor strategic decisions, or poor capital allocation, there may arise the need for shareholders to effect change at the board level. Proposals that have the effect of entrenching boards or managements, thwarting the will of the majority of shareholders, or advantaging one class of shareholders at the expense of other shareholders will not be supported.

<u>Amendment to Charter/Articles/Bylaws</u> 

We do not support proposals that give the board exclusive authority to amend the bylaws. We believe amendments to charter/articles/bylaws should be approved by a vote of the majority of shareholders.

<u>One Share, One Vote</u> 

Generally, we do not support proposals to create dual class voting structures that give one set of shareholders super voting rights that are disproportionate from their economic interest in the company. Generally, we will support proposals to eliminate dual class structures.

<u>Poison Pills</u> 

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In general, we do not support anti-takeover measures such as poison pills. Such actions can lead to outcomes that are not in shareholders' bests interests and impede maximum shareholder returns. It can also lead to management entrenchment. We may support poison pills intended to protect NOL assets.

<u>Proxy Access</u> 

Generally, we support proposals that enable shareholders with an ownership level of 3% for a period of three years or more, or an ownership level of 10% and a holding period of one year or more.

<u>Right to Act by Written Consent</u> 

We believe that shareholders should have the right to solicit votes by written consent in certain circumstances. These circumstances generally include but are not limited to situations where more than a narrow group of shareholders support the cause to avoid unnecessary resource waste, the proposal does not exclude minority shareholders to the benefit of a large/majority shareholder, and shareholders receive more than 50% support to set up action by written consent.

<u>Special Meetings</u> 

Generally, we support proposals that enable shareholders to call a special meeting provided shareholders own at least 15% of the outstanding shares.

<u>Virtual Meetings</u> 

We believe shareholders should have the opportunity to participate in the annual and special meetings, as current communications technology such as video conferencing is broadly available to facilitate such interactions. This improves shareholders' ability to hear directly from management and the board of the directors, and to provide feedback as needed.

**5.** **Capital and Restructuring** 

Events such as takeover offers, buyouts, mergers, asset purchases and sales, corporate restructuring, recapitalizations, dilutive equity issuance, or other major corporate events are considered by our analysts on a case-by-case basis. Our policy is to vote for transactions that maximize the long-term risk adjusted return to shareholders considering management's historical record of creating shareholder value, the likelihood of success, and the risk of not supporting the proposal.

<u>Dual Class Shares</u> 

We do not support dual class shares unless the economic and voting interests are equal.

<u>Issuance of Common Stock</u> 

In general, we will consider the issuance of additional shares in light of the stated purpose, the magnitude of the increase, the company's historical shareholder value creation, and historical use of shares. We are less likely to support issuance when discounts or re-pricing of options has been an issue in the past.

**6.** **Executive and Board Compensation** 

We expect the board of directors to design, implement, and monitor pay practices that promote pay-for-performance, alignment of interest with long-term shareholder value creation, retention and attraction of key employees. In general, we will evaluate executive compensation in light of historical value creation, peer group pay practices, and our view on management's stewardship of the company.

We expect the board of directors to maintain an independent and effective compensation committee that has members with the appropriate skills, knowledge, experience, and ability to access third-party advice.

We expect the board of directors to provide shareholders with clear and understandable compensation disclosures that enable shareholders to evaluate the effectiveness and fairness of executive pay packages.

And finally, we expect the board of directors' own compensation to be reasonable and not set at a level that undermines their independence from management.

<u>Golden Parachutes</u> 

Golden parachutes can serve as encouragement to management to consider transactions that benefit shareholders; however, substantial payouts may present a conflict of interest where management is incentivized to support a suboptimal deal. We view cash severance greater than 3x base salary and bonus to be excessive unless approved by a majority of shareholders in a say-on-pay advisory vote.

<u>Incentive Options and Repricing</u> 

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We generally support long-term incentive programs tied to pay-for-performance. In general, we believe 50% or more of top executive pay should be tied to long-term performance goals and that those goals should be tied to shareholder value creation metrics. We do not support plans that reset when management fails to attain goals or require more than 10% of outstanding shares to be issued. In general, we do not support the exchange or repricing of options.

<u>Say-on-Pay</u> 

We believe annual say-on-pay votes are an effective mechanism to provide feedback to the board on executive pay and performance. We support non-binding proposals that are worded in a manner such that the actual implementation of the plan is not restricted. In general, we will vote against plans where there is a serious misalignment of CEO pay and performance or the company maintains problematic pay practices. In general, we will withhold votes from members of the compensation committee if there is no say-on-pay on the ballot, the board fails to respond to a previous say-on-pay proposal that received less than 70% support, the company has implemented problematic pay practices such as repricing options or its pay plans are egregious.

**7.** **Routine and Miscellaneous Matters** 

We generally support routine board proposals such as updating bylaws (provided they are of a housekeeping nature), change of the corporate name or change of the time or location of the annual meeting.

<u>Adjournment of Meeting</u> 

We do not support proposals that give management the authority to adjourn a special meeting absent compelling reasons to support the proposal.

<u>Amend Quorum Requirements</u> 

We do not support proposals to reduce quorum requirements for shareholder meetings without support from a majority of the shares outstanding without compelling justification.

<u>Other Business</u> 

We do not support proposals on matters where we have not been provided sufficient opportunity to review the matters at hand.

ONGOING REVIEW & RESPONSIBILITIES

Investment analysts are responsible for voting proxies following a thorough review of the proposals and guided by our internal proxy policy. The analysts draw from a variety of sources during their proprietary research process, which informs the proxy vote decision. These sources include meetings with senior management and/or board members, other industry experts/contacts, and many other means. To support the proxy voting effort, Hotchkis & Wiley has engaged Institutional Shareholder Services ("ISS") for proxy research and proxy voting administration to help facilitate our process.

Hotchkis & Wiley also has a Proxy Oversight Committee consisting of the Chief Operating Officer, Chief Compliance Officer, and Managing Director of Portfolio Services. This group oversees H&W's proxy voting policies and procedures by providing an administrative framework to facilitate and monitor the exercise of such proxy voting and to fulfill the obligations of reporting and recordkeeping under the federal securities laws. This team is responsible for reviewing the policy annually and solicits feedback from investment team members to help inform any material enhancements.

February 2022

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**Insight Proxy Policy** 

1. INTRODUCTION

Insight seeks to actively exercise its rights and responsibilities in regard to proxy voting on behalf of Clients and is an essential part of maximizing shareholder value, ensuring good governance and delivering investment performance aligned with our Clients' long-term economic interests.

The Insight Proxy Voting Policy ("Policy") sets out the arrangements employed by Insight Investment Management (Global) Limited, Insight Investment Management (Europe) Limited, Insight North America LLC and Insight Investment International Limited (collectively "Insight"), where Insight has been granted by its Clients the authority to vote the proxies of the securities held in Client portfolios.

2. POLICY STATEMENT

Insight is committed to integrating governance and voting all our proxies where it is deemed appropriate and responsible to do so for the relevant asset class. In such cases, Insight's objective is to vote proxies in the best interests of its Clients.

3. SCOPE

This Policy applies to all financial instruments with voting rights where Insight has discretionary voting authority.

4. PROXY VOTING PROCESS

Insight's proxy voting activity adheres to best-practice standards and is a component of Insight's Stewardship and Engagement Policy. In implementing its Voting Policy, Insight will take into account a number of factors used to provide a framework for voting each proxy. These include:

Leadership: Every company should be led by an effective board whose approach is consistent with creating sustainable long-term growth.

• Strategy: Company leadership should define a clear purpose and set long term objectives for delivering value to shareholders.

• Culture: The board should promote a diverse and inclusive culture which strongly aligns to the values of the company. It should seek to monitor culture and ensure that it is regularly engaging with its workforce.

• Engagement with Shareholders: The board and senior management should be transparent and engaged with existing shareholders. The board should have a clear understanding of the views of shareholders. The board should seek to minimize unnecessary dilution of equity and preserve the rights of existing shareholders.

• Sustainability: The board should take account of environmental, social and governance risks and opportunities when setting strategy and in their company monitoring role.

Structure: The board should have clear division of responsibilities.

• The Chair: The chair of the board should demonstrate objective judgment and promote transparency and facilitate constructive debate to promote overall effectiveness.

• The Board: There should be an appropriate balance of executive and non-executive directors. Non-executive directors should be evaluated for independence. No one individual should have unfettered decision-making. There should be a clear division, between the board and the executive leadership of the company.

• Resources: The board should ensure it has sufficient governance policies, influence and resources to function effectively. Non-executive directors should have sufficient time to fulfil their obligations to the company as directors.

Effectiveness: The board should seek to build strong institutional knowledge to ensure long term efficient and sustainable operations.

• Appointment: There should be a formal appointment process, which ensures that the most qualified individuals are selected for the board. This process should be irrespective of bias to ensure appropriate diversity of the board.

• Knowledge: The board should be comprised of those with the knowledge, skills and experience to effectively discharge their duties. The board should have sufficient independence to serve as an effective check on company management and ensure the best outcomes for shareholders.

• Evaluation: The board should be evaluated for effectiveness on a regular basis. Board member's contributions should be considered individually.

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Independence: The board should present a fair and balanced view of the company's position and prospects.

• Integrity: The board should ensure that all reports produced accurately reflect the financial position, prospects and risks relevant to the company. The board should ensure the independence and effectiveness of internal and external audit functions.

• Audit: The board should ensure that clear, uncontentious accounts are produced. These should conform to the relevant best accountancy practices and accurately represent the financial position of the company. Deviations from standard accounting practices should be clearly documented with a corresponding rationale.

• Risk: The board should ensure the company has sound risk management and internal control systems. There should be a regular assessment and communication of the company's emerging and principal risks.

Remuneration: Levels of remuneration should be sufficient to attract, retain and motivate talent of the quality required to run the company successfully.

• Goal Based: The board should base remuneration on goal- based, qualitative, discretionary cash incentives. Remuneration should consider underlying industry and macroeconomic conditions and not be structured in a tax oriented manner.

• Transparent: Remuneration arrangements should be transparent and should avoid complexity.

• Sustainable: Remuneration should not be excessively share based and should be accurately represented and controlled as an operational cost. The remuneration of executives should promote long term focus and respect the interests of existing shareholders.

The relevant factors are used by Insight to develop Voting Guidelines enabling a consistent approach to proxy voting, which are reviewed annually by the Proxy Voting Group ("PVG") – (see section 6). Voting Guidelines are available at the following link: www.insightinvestment.com/ri.

Day to day voting activity is performed by the Chair of the PVG, a senior portfolio manager with no investment discretion. This creates an independent governance structure for voting, helping to mitigate actual and potential conflicts of interest (see section 5).

The Chair of the PVG can seek support from portfolio managers, who have active discretion over the securities, to provide additional input into the voting decision such as company background, however the vote will be cast by the Chair of the PVG. Insight seeks to vote on all holdings with associated voting rights in one of three ways: in support of, against, or in abstention. If the chair is unable to cast a vote, the decision will be cast by the deputy chair. Insight uses a Voting Agent to assist in the analysis and administration of the vote (see section 4.1). For contentious issues the rationale for voting for, against, or abstaining is retained on a case-by-case basis as appropriate and reviewed by the PVG on a regular basis.

4.1 VOTING AGENT

To assist Insight professionals with implementing its proxy voting strategy, Insight retains the services of an independent proxy voting service, namely Minerva ("Voting Agent"). Insight provides detailed Voting Guidelines to the Voting Agent on the operational and reporting capacity of the service. The Voting Agent's responsibilities include, but are not limited to, monitoring company meeting agendas and items to be voted on, reviewing each vote against Insight's specific Voting Guidelines and providing a voting analysis based upon the Voting Guidelines. The Voting Agent also identifies contentious issues that represent a significant monetary or strategic decision. This enables Insight to review situations where the Voting Guidelines require additional consideration or assist in the identification of potential conflicts of interest impacting the proxy vote decision. The Chair of the PVG will decide if the issue is contentious or not, and if conflicts are deemed to exist, these will be escalated to the PVG (see section 5.2).

Voting decisions are communicated by Insight to the Voting Agent and submitted to shareholder meetings through a specific proxy.

On a monthly basis the Voting Agent provides reports on voting activity to Insight. Voting data is available to Clients upon request and is posted annually on Insights website (see section 7). Insight conducts an annual due diligence with the Voting Agent to review the Voting Guidelines and related services.

5. CONFLICTS OF INTEREST

Effective stewardship requires protecting our Clients against any potential conflicts of interest and managing them with appropriate governance. To comply with applicable legal and regulatory requirements, Insight believes managing perceived conflicts is as important as managing actual conflicts.

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In the course of normal business, Insight and its personnel may encounter situations where it faces a conflict of interest or a conflict of interest could be perceived. A conflict of interest occurs whenever the interests of Insight or its personnel could diverge from those of a Client or when Insight or its personnel could have obligations to more than one party whose interests are different to each other or those of Insight's Clients.

In identifying a potential conflict situation, as a minimum, consideration will be made as to whether Insight, or a member of staff, is likely to:

• make a financial gain or avoid a financial loss at the expense of the Client

• material differences in the thoughts of two PM's who own the same security

• benefit if it puts the interest of one Client over the interests of another Client

• gain an interest from a service provided to, or transaction carried out on behalf of a Client which may not be in, or which may be different from, the Client's interest

• obtain a higher than usual benefit from a third party in relation to a service provided to the Client

• receive an inducement in relation to a service provided to the Client, in the form of monies, goods or services other than standard commission or fee for that service or

• have a personal interest that could be seen to conflict with their duties at Insight

• creates a conflict where Insight invests in firms which are Clients or potential Clients of Insight. Insight might give preferential treatment in its research (including external communication of the same) and/or investment management to issuers of publicly traded debt or equities which are also clients or closely related to clients (e.g. sponsors of pension schemes). This includes financial and ESG considerations.

• creates a conflict between investment teams with fixed income holdings in publicly listed firms or material differences in the thoughts of two PM's who own the same security

In situations where there is a conflict of interest or perceived conflict of interest that creates a contentious voting issue, as determined by the chair of the PVG, the issue will be escalated to the PVG. A contentious voting issue is a voting decision which would have a detrimental impact to Clients or Insight's reputation. All conflicts are handled in line with the Insight Conflicts of Interest Policy.

5.2 ESCALATION OF CONTENTIOUS VOTING ISSUE

When a contentious voting issue has been identified, the PVG will review, evaluate and determine whether an actual material conflict of interest exist, and if so, will recommend how to vote the proxy. Depending upon the nature of the material conflict of interest, Insight may elect to take one or more of the following measures:

• removing certain Insight personnel from the proxy voting process

• walling off personnel with knowledge of the material conflict to ensure that such personnel do not influence the relevant proxy vote

• voting in accordance with the applicable Voting Guidelines, if any, if the application of the Voting Guidelines would objectively result in the casting of a proxy vote in a predetermined manner and

• deferring the vote to the Independent Voting Service, if any, which will vote in accordance with its own recommendation, this may include an affiliated entity

The resolution of all contentious voting issues, will be documented in order to demonstrate that Insight acted in the best interests of its Clients. Any voting decision not resolved by the PVG will be escalated to the Insight Chief Investment Officer ("CIO") or delegate.

6. PROXY VOTING GROUP

The PVG is responsible for overseeing the implementation of voting decisions where Insight has voting authority on behalf of Clients.

The PVG meets at least quarterly, or more frequently as required. In ensuring that votes casted are in the best interest of Clients, the PVG will oversee the following proxy voting activities:

• Casting votes on behalf of Client

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

• Voting Policy: Oversee and set the Proxy Voting Policy

• Voting Guidelines: Oversee and set the Voting Guidelines which are reviewed and approved on an annual basis

• Stewardship Code & Engagement Policy: Review for consistency with Proxy Voting Policy and Voting Guidelines

• Conflicts of interest: Manage conflicts when making voting instructions in line with Insight's Conflict of Interest Policy

• Monitoring: Review upcoming votes that cannot be made using Voting Guidelines and make voting decisions

• Voting Agent: Appoint and monitor third-party proxy agencies, including the services they perform for Insight in implementing its voting strategy and

• Reporting: Ensure voting activity aligns with local regulations and standards

The PVG is chaired by a Senior Portfolio Manager (who has no direct investment discretion) and attended by portfolio management personnel, the Head of Responsible Investment Research & Stewardship, Corporate Risk, Compliance, Client Services and Operations personnel. The PVG is accountable to and provides biannual updates to the Investment Management Group ("IMG") and Insight Risk Committee ("IROC").

7. DISCLOSURE AND RECORDING KEEPING

In certain foreign jurisdictions, the voting of proxies can result in additional restrictions that have an economic impact to the security, such as "share-blocking." If Insight votes on the proxy share- blocking may prevent Insight from selling the shares of the security for a period of time. In determining whether to vote proxies subject to such restrictions Insight, in consultation with the PVG, considers whether the vote, either in itself or together with the votes of other shareholders, is expected to affect the value of the security that outweighs the cost of voting. If Insight votes on a proxy and during the "share-blocking period" Insight would like to sell the affected security Insight, in consultation with the PVG, will attempt to recall the shares (as allowable within the market time-frame and practices).

Insight publishes its voting activity in full on its website and annual report. This can be found at www.insightinvestment.com/ri.

8. PROXY VOTING POLICY REVIEW

Insight will review its Proxy Voting arrangements regularly through the PVG. Insight reviews this Policy at least annually or whenever a material change occurs and will notify Clients of any material change that affects our ability to vote in line with the best interests of its Clients.

A material change shall be a significant event that could impact Insight's ability to vote proxies such as a change in voting agent. Notification of changes to the policy will be published at the following link: www.insightinvestment.com/ri.

For clients and prospects of Insight North America LLC: Insight North America LLC is a registered investment adviser under the Investment Advisers Act of 1940 and regulated by the US Securities and Exchange Commission. INA is part of 'Insight' or 'Insight Investment', the corporate brand for certain asset management companies operated by Insight Investment Management Limited including, among others, Insight Investment Management (Global) Limited, Insight Investment International Limited and Insight Investment Management (Europe) Limited (IIMEL).© 2022 Insight Investment. All rights reserved.

15511-03-22

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**Los Angeles Capital** 

**Proxy Policy** 

**Rev. August 23, 2022** 

**Los Angeles Capital Management LLC** 

**<u>**TABLE OF CONTENTS**</u>** 

I. Introduction

II. Proxy Policy Statement

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Proxy Voting Guidelines

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Limitations

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Special Considerations

III. Responsibility and Oversight

IV. Proxy Voting Procedures

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Materiality

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Conflicts of Interest

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Disclosure

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Recordkeeping

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**I. Introduction** 

Los Angeles Capital Management LLC ("Los Angeles Capital" or the "Firm") has adopted and implemented policies and procedures that are reasonably designed to ensure that proxies are voted in the best interest of clients, in accordance with U.S. Securities and Exchange Commission ("SEC") Rule 206(4) - 6 under the Investment Advisers Act of 1940 (the "Advisers Act") and its obligations under the Employee Retirement Income Security Act of 1974 ("ERISA"). Los Angeles Capital provides investment advisory or sub-advisory services to various types of institutional clients. When clients give Los Angeles Capital the authority to vote proxies held in their client accounts such authority is specified in the advisory contract or other governing agreement.

**II. Proxy Policy Statement** 

Los Angeles Capital has retained Glass Lewis & Co., LLC ("Glass Lewis") an unaffiliated third-party, to act as an independent proxy voting agent. Glass Lewis provides proxy analysis, voting recommendations, recordkeeping, and manages other operational matters of the proxy voting process. If at any time a material conflict arises, it would be resolved in the best interest of the client.

When Los Angeles Capital is given proxy voting authority together with a client's voting policy, the Firm oversees compliance with such policy. When the client elects to use the Firm's standard proxy guidelines, the Firm will vote in accordance with the guidelines approved by the Firm's Proxy Committee ("Committee"). The Committee has approved the use of Glass Lewis' U.S. and Global guidelines, as may be modified from time to time (the "Firm's Guidelines").

<u>A. Proxy Voting Guidelines</u> 

On an annual basis, the Committee reviews the Firm's Guidelines. The Committee also selectively reviews a sampling of the voting recommendations and the related proxy materials in determining whether to continue or modify the approved Firm Guidelines.

The Firm ultimately retains the right to cast each vote on a case-by-case basis, taking into consideration the applicable proxy guidelines including any contractual obligations or custom voting policy of the particular portfolio as well as all relevant facts and circumstances including information that might be gathered from sources beyond Glass Lewis. In the event there is a disagreement with the Glass Lewis analysis as to a particular vote, the Committee will determine whether it is appropriate to vote contrary to the Glass Lewis analysis provided that such decision is consistent with the approved guideline. In the rare circumstance that the Committee believes it is in the best interest of a client to vote contrary to an approved guideline, the Committee will seek client consent prior to placing a vote that is contrary to an approved guideline.

Los Angeles Capital recognizes that a client may issue specific directives regarding how particular proxy issues are to be voted for the client's portfolio holdings. The Firm requires that the advisory or sub-advisory contract specify such instructions, including instructions as to how those votes will be managed, particularly where they differ from the Firm's Guidelines.

It is unlikely that serious conflicts of interest will arise in the context of the Firm's proxy voting because the Firm does not engage in other financial businesses such as brokerage, managing or advising public companies, underwriting, or investment banking. Nevertheless, should a conflict of interest arise in connection with proxy voting or Glass Lewis, such conflict will be handled as described below under Section IV B, "Conflicts of Interest." As a matter of policy, the Firm and its employees are required to put the interests of clients ahead of their own.

<u>B. Limitations</u> 

In limited circumstances, the Firm may elect to abstain from voting or may be unable to vote a client's proxy. These circumstances include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Where the Firm concludes that the effect on shareholder's economic interests or the value of the portfolio holding is indeterminable or insignificant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Where the securities related to the vote participate in a **securities lending program** and are out on loan. In many cases, where a client directs the securities lending, Los Angeles Capital may not be aware when the security is out on loan and thus may not be able to recall the security before the record date. Where Los Angeles Capital deems a holding materially significant or is directing the securities lending, the Firm may recall securities, if operationally feasible, so that they can be voted where the Firm determines it has a fiduciary obligation to do so.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Where the related securities are issued in a country that participates in **share blocking** because it is disruptive to the management of the portfolio.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Where multiple global custodian accounts roll up into one **omnibus sub-custodian account**. In the specific markets where this may occur, the account managed by Los Angeles Capital is not registered individually. Therefore, if ballots are voted differently for the underlying accounts, the omnibus vote is considered split and is rejected.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Where in the Firm's judgement the **unjustifiable costs**<sup>1</sup> or disadvantages of voting the proxy would exceed the anticipated benefit of voting (e.g., certain non-U.S. securities).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Where a required **Power of Attorney** is not on file.

<u>C. Special Considerations</u> 

Certain accounts may warrant specialized treatment in voting proxies. Contractual stipulations and individual client direction will dictate how voting will be done in these cases.

*<u>Mutual Funds</u>* 

Where the Firm votes proxies for a mutual fund that it sub-advises, the proxies will be voted in accordance with the Fund's stated guidelines and requirements of securities laws. Proxies of portfolio companies voted may be subject to investment restrictions of the fund and voted in accordance with any resolutions or other instructions approved by authorized persons of the fund.

*<u>ERISA Accounts</u>* 

Responsibilities for voting ERISA accounts include: the duty of loyalty, prudence, compliance with the plan, as well as a duty to avoid prohibited transactions.

*<u>Issuer Supplemental Information</u>* 

Management of issuers, as well as other interested parties, will sometimes release supplemental information (after the proxy statement) that relates to a pending proxy vote. Glass Lewis and the Firm will not always be able to consider that additional information depending on when it is released.

**III. Responsibility and Oversight** 

The Committee was established to provide oversight to the proxy voting process and is responsible for developing, implementing, and updating the Firm's proxy policy, reviewing approving, and/or formulating the Firm's Guidelines, selecting and overseeing the third-party proxy vendor, identifying any conflicts of interest, determining the votes for issues it elects to vote independently from, or that cannot be voted by, Glass Lewis, monitoring legislative and corporate governance developments surrounding proxy issues, and meeting to discuss any material issues regarding the proxy voting process. The Committee meets annually and as necessary to fulfill its obligations.

As part of the Committee's ongoing oversight of its third-party proxy vendor, the Committee considers (i) the adequacy and quality of the proxy vendor's staffing and personnel; (ii) the presence of conflicts and processes to address those conflicts; (iii) the robustness of the proxy vendor's policies and procedures for ensuring that its recommendations are based on current and accurate information; and (iv) any other appropriate considerations as to the nature and quality of the proxy vendor's services. In addition, Compliance conducts periodic reviews of ballots voted by the proxy vendor to ensure they are in line with proxy voting procedures.

In cases where the Committee votes a proxy ballot it may conduct research internally and/or use the resources of an independent research consultant or use information from any of the following sources: legislative materials, studies of corporate governance and other proxy voting issues, reports by issuers' management on pending proxy votes, and/or published analyses of shareholder and management proposals. In all voting circumstances, two votes from voting members of the Committee or one voting member of the Committee and an internal legal counsel are required.

Los Angeles Capital's Operations Department handles the day-to-day administration of the proxy voting process.

**IV. Proxy Voting Procedures** 

Glass Lewis provides for the timely execution of specified proxy votes on the Firm's behalf, which includes complete account set-up, vote execution, reporting, recordkeeping, and compliance with ERISA.

Los Angeles Capital's responsibility for voting proxies is generally determined by the obligations set forth under each client's Investment Management Agreement, Limited Partnership Agreement, Prospectus, or other legal documentation governing the account. Voting ERISA client proxies is a fiduciary act of plan asset management that must be performed by the adviser unless the voting right is retained by a named fiduciary of the plan. If an advisory or sub-advisory contract or similar document states that Los Angeles Capital does not have the authority to vote client proxies, then voting is the responsibility of some other named fiduciary.

<sup>1</sup> The DOL has indicated that such costs include, but are not limited to, expenditures related to developing proxy resolutions, proxy voting services and the analysis of the likely net effect of a particular issue on the economic value of the plan's investment. Fiduciaries must take into consideration whether the exercise of its rights to vote a proxy is expected to have an effect on the economic value of the plan's investment that will outweigh the costs of exercising such rights. With respect to proxies for shares of foreign corporations, a fiduciary, in deciding whether to purchase shares of a foreign corporation, should consider whether any additional difficulty and expense in voting such shares is reflected in their market price.

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While Los Angeles Capital will accept direction from clients on specific proxy issues for their account, the Firm reserves the right to maintain its standard position on all other client accounts for which the Firm has proxy authority.

<u>A. Materiality</u> 

The Committee has designated certain materiality thresholds for situations in which the Committee may vote independently from Glass Lewis or may take separate actions in regard to securities lending limitations. Materiality thresholds are monitored daily and are escalated to the Committee for review.

<u>B. Conflicts of Interest</u> 

Los Angeles Capital attempts to minimize the risks of conflicts and reviews the Conflict of Interest Statement prepared by Glass Lewis on an annual basis.

If Glass Lewis identifies a potential conflict of interest between it and a publicly held company, it will disclose the relationship on the relevant research report. If an unforeseen conflict requires specialized treatment, alternate measures may be taken, up to and including having Glass Lewis refrain from writing a Proxy Paper report on the company. In this scenario Glass Lewis would procure a substitute research report from an alternative qualified provider and the Committee may be required to research and vote the proxy.

If, during this process, the Committee identifies a potential material conflict of interest between Los Angeles Capital or an affiliated person of the Firm and the issuer whose ballot is being voted, the client will be notified. If no directive is issued by the client, the Committee will vote in such a way that, in the Committee's opinion, fairly addresses the conflict in the best interest of the client.

<u>C. Disclosure</u> 

Los Angeles Capital will provide all clients with a copy of the Firm's current proxy policies and procedures upon request. In addition, clients may request, at any time, a copy of the Firm's voting records for their respective account(s) by making a formal request to Los Angeles Capital. Los Angeles Capital will make this information available to a client upon its request within a reasonable time. For further information, please contact a member of Operations at Los Angeles Capital at 310-479-9998 or operations@lacapm.com.

Los Angeles Capital generally will not disclose how it intends to vote on behalf of a client account except as required by applicable law but may disclose such information to a client regarding their portfolio who itself may decide or may be required to make public such information. Los Angeles Capital will not disclose past votes or share amounts voted except (for a valid business purpose as determined in the discretion of the Chief Compliance Officer or Chief Legal Officer, (ii) to the respective client, or (iii) as required by law.

<u>D. Recordkeeping</u> 

*<u>ERISA Accounts</u>* 

Los Angeles Capital's maintains access to proxy voting records (both procedures and actions taken in individual situations) to enable the named fiduciary to determine whether Los Angeles Capital is fulfilling its obligations. Such records may be maintained via Glass Lewis' electronic system. Retention may include: (1) issuer name and meeting; (2) issues voted on and record of the vote; (3) number of shares eligible to be voted on the record date; (4) number of shares voted; and (5) where appropriate, cost-benefit analyses.

*<u>Duration</u>* 

Proxy voting books and records will be maintained in an easily accessible place for at least five years from the end of the fiscal year during which the last entry was made on such records. For the first two years, the records are fully accessible in Los Angeles Capital's office and electronically.

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**Nuveen Asset Management, LLC**

**Proxy Voting Policies and Procedures**

**Effective Date: January 1, 2011, as last amended March 05, 2020** 

**I. General Principles** 

**A.** Nuveen Asset Management, LLC ("NAM") is an investment sub-adviser for certain of the Nuveen Funds (the "Funds") and investment adviser for institutional and other separately managed accounts (collectively, with the Funds, "Accounts"). As such, Accounts may confer upon NAM complete discretion to vote proxies.<sup>1</sup>

**B.** When NAM has proxy voting authority, it is NAM's duty to vote proxies in the best interests of its clients (which may involve affirmatively deciding that voting the proxies may not be in the best interests of certain clients on certain matters). In voting proxies, NAM also seeks to enhance total investment return for its clients.

**C.** If NAM contracts with another investment adviser to act as a sub-adviser for an Account, NAM may delegate proxy voting responsibility to the sub-adviser. Where NAM has delegated proxy voting responsibility, the sub-adviser will be responsible for developing and adhering to its own proxy voting policies, subject to oversight by NAM.

**D.** NAM's Proxy Voting Committee ("PVC") provides oversight of NAM's proxy voting policies and procedures, including (1) providing an administrative framework to facilitate and monitor the exercise of such proxy voting and to fulfill the obligations of reporting and recordkeeping under the federal securities laws; and (2) approving the proxy voting policies and procedures.

**II. Policies** 

The PVC after reviewing and concluding that such policies are reasonably designed to vote proxies in the best interests of clients, has approved and adopted the proxy voting policies ("Policies") of Institutional Shareholder Services, Inc. ("ISS"), a leading national provider of proxy voting administrative and research services.<sup>i</sup> As a result, such Policies set forth NAM's positions on recurring proxy issues and criteria for addressing non-recurring issues. These Policies are reviewed periodically by ISS, and therefore are subject to change. Even though it has adopted the Policies as drafted by ISS, NAM maintains the fiduciary responsibility for all proxy voting decisions.

**III. Procedures** 

**A.** **Supervision of Proxy Voting.** Day-to-day administration of proxy voting may be provided internally or by a third-party service provider, depending on client type, subject to the ultimate oversight of the PVC. The PVC shall supervise the relationships with NAM's proxy voting services, ISS. ISS apprises Nuveen Global Operations ("NGO") of shareholder meeting dates, and casts the actual proxy votes. ISS also provides research on proxy proposals and voting recommendations. ISS serves as NAM's proxy voting record keepers and generate reports on how proxies were voted. NGO periodically reviews communications from ISS to determine whether ISS voted the correct amount of proxies, whether the votes were cast in a timely manner, and whether the vote was in accordance with the Policies or NAM's specific instructions

**B.** **General Avoidance of Conflicts of Interest.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. NAM believe that most conflicts of interest faced by NAM in voting proxies can be avoided by voting in accordance with the Policies. Examples of such conflicts of interest are as follows:<sup>2</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The issuer or proxy proponent (e.g., a special interest group) is TIAA-CREF, the ultimate principal owner of NAM, or any of its affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The issuer is an entity in which an executive officer of NAM or a spouse or domestic partner of any such executive officer is or was (within the past three years of the proxy vote) an executive officer or director.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. The issuer is a registered or unregistered fund or other client for which NAM or another affiliated adviser has a material relationship as investment adviser or sub-adviser (e.g., Nuveen Funds and TIAA Funds) or an institutional separate account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Any other circumstances that NAM is aware of where NAM's duty to serve its clients' interests, typically referred to as its "duty of loyalty," could be materially compromised.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. To further minimize this risk, Compliance will review ISS' conflict avoidance policy at least annually to ensure that it adequately addresses both the actual and perceived conflicts of interest ISS may face.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. In the event that ISS faces a material conflict of interest with respect to a specific vote, the PVC shall direct ISS how to vote. The PVC shall receive voting direction from appropriate investment personnel. Before doing so, the PVC will consult with Legal to confirm that NAM faces no material conflicts of its own with respect to the specific proxy vote.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Where ISS is determined to have a conflict of interest, or NAM determines to override the Policies and is determined to have a conflict, the PVC will recommend to NAM's Compliance Committee or designee a course of action designed to address the conflict. Such actions could include, but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Obtaining instructions from the affected client(s) on how to vote the proxy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Disclosing the conflict to the affected client(s) and seeking their consent to permit NAM to vote the proxy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Voting in proportion to the other shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Recusing the individual with the actual or potential conflict of interest from all discussion or consideration of the matter, if the material conflict is due to such person's actual or potential conflict of interest; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Following the recommendation of a different independent third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. In addition to all of the above-mentioned and other conflicts, the Head of Equity Research, NGO and any member of the PVC must notify NAM's Chief Compliance Officer ("CCO") of any direct, indirect or perceived improper influence exerted by any employee, officer or director of TIAA or its subsidiaries with regard to how NAM should vote proxies. NAM Compliance will investigate any such allegations and will report the findings to the PVC and, if deemed appropriate, to NAM's Compliance Committee. If it is determined that improper influence was attempted, appropriate action shall be taken. Such appropriate action may include disciplinary action, notification of the appropriate senior managers, or notification of the appropriate regulatory authorities. In all cases, NAM will not consider any improper influence in determining how to vote proxies, and will vote in the best interests of clients.

**C.** **Proxy Vote Override.** From time to time, a portfolio manager of an account (a "Portfolio Manager") may initiate action to override the Policies' recommendation for a particular vote. Any such override by a NAM Portfolio Manager (but not a sub-adviser Portfolio Manager) shall be reviewed by NAM's Legal Department for material conflicts. If the Legal Department determines that no material conflicts exist, the approval of one member of the PVC shall authorize the override. If a material conflict exists, the conflict and, ultimately, the override recommendation will be rejected and will revert to the original Policies recommendation or will be addressed pursuant to the procedures described above under "Conflicts of Interest."

In addition, the PVC may determine from time to time that a particular recommendation in the Policies should be overridden based on a determination that the recommendation is inappropriate and not in the best interests of shareholders. Any such determination shall be reflected in the minutes of a meeting of the PVC at which such decision is made.

**D.** **Securities Lending.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. In order to generate incremental revenue, some clients may participate in a securities lending program. If a client has elected to participate in the lending program then it will not have the right to vote the proxies of any securities that are on loan as of the shareholder meeting record date. A client, or a Portfolio Manager, may place restrictions on loaning securities and/or recall a security on loan at any time. Such actions must be affected prior to the record date for a meeting if the purpose for the restriction or recall is to secure the vote.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Portfolio Managers and/or analysts who become aware of upcoming proxy issues relating to any securities in portfolios they manage, or issuers they follow, will consider the desirability of recalling the affected securities that are on loan or restricting the affected securities prior to the record date for the matter. If the proxy issue is determined to be material, and the determination is made prior to the shareholder meeting record date the Portfolio Manager(s) will contact the Securities Lending Agent to recall securities on loan or restrict the loaning of any security held in any portfolio they manage, if they determine that it is in the best interest of shareholders to do so.

**E.** **Proxy Voting Records.** As required by Rule 204-2 of the Investment Advisers Act of 1940, NAM shall make and retain five types of records relating to proxy voting; (1) NAM's Policies; (2) proxy statements received for securities in client accounts; (3) records of proxy votes cast by NAM on behalf of clients accounts; (4) records of written requests from clients about how NAM voted their proxies, and written responses from NAM to either a written or oral request by clients; and (5) any documents prepared by the adviser that were material to making a proxy voting decision or that memorialized the basis for the decision. NAM relies on ISS to make and retain on NAM's behalf certain records pertaining to Rule 204-2.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**F.** **Fund of Funds Provision.** In instances where NAM provides investment advice to a fund of funds that acquires shares of affiliated funds or three percent or more of the outstanding voting securities of an unaffiliated fund, the acquiring fund shall vote the shares in the same proportion as the vote of all other shareholders of the acquired fund. If compliance with this procedure results in a vote of any shares in a manner different than the Policies' recommendation, such vote will not require compliance with the Proxy Vote Override procedures set forth above.

**G.** **Legacy Securities.** To the extent that NAM receives proxies for securities that are transferred into an account's portfolio that were not recommended or selected by it and are sold or expected to be sold promptly in an orderly manner ("legacy securities"), NAM will generally refrain from voting such proxies. In such circumstances, since legacy securities are expected to be sold promptly, voting proxies on such securities would not further NAM's interest in maximizing the value of client investments. NAM may agree to an account's special request to vote a legacy security proxy, and would vote such proxy in accordance with the Policies.

**H.** **Terminated Accounts.** Proxies received after the termination date of an account generally will not be voted. An exception will be made if the record date is for a period in which an account was under NAM's discretionary management or if a separately managed account ("SMA") custodian failed to remove the account's holdings from its aggregated voting list.

**I.** **Non-votes.** NGO shall be responsible for obtaining reasonable assurance from ISS that it voted proxies on NAM's behalf, and that any special instructions from NAM about a given proxy or proxies are submitted to ISS in a timely manner. It should not be considered a breach of this responsibility if NGO or NAM does not receive a proxy from ISS or a custodian with adequate time to analyze and direct to vote or vote a proxy by the required voting deadline.

NAM may determine not to vote proxies associated with the securities of any issuer if as a result of voting such proxies, subsequent purchases or sales of such securities would be blocked. However, NAM may decide, on an individual security basis that it is in the best interests of its clients to vote the proxy associated with such a security, taking into account the loss of liquidity. In addition, NAM may determine not to vote proxies where the voting would in NAM's judgment result in some other financial, legal, regulatory disability or burden to the client (such as imputing control with respect to the issuer) or to NAM or its affiliates.

NAM may determine not to vote securities held by SMAs where voting would require the transfer of the security to another custodian designated by the issuer. Such transfer is generally outside the scope of NAM's authority and may result in significant operational limitations on NAM's ability to conduct transactions relating to the securities during the period of transfer. From time to time, situations may arise (operational or otherwise) that prevent NAM from voting proxies after reasonable attempts have been made.

**J.** **Review and Reports.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The PVC shall maintain a review schedule. The schedule shall include reviews of the Policies and the policies of any Sub-adviser engaged by NAM, the proxy voting record, account maintenance, and other reviews as deemed appropriate by the PVC. The PVC shall review the schedule at least annually.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The PVC will report to NAM's Compliance Committee with respect to all identified conflicts and how they were addressed. These reports will include all accounts, including those that are sub-advised. NAM also shall provide the Funds that it sub-advises with information necessary for preparing Form N-PX.

**K.** **Vote Disclosure to Clients.** NAM's institutional and SMA clients can contact their relationship manager for more information on NAM's Policies and the proxy voting record for their account. The information available includes name of issuer, ticker/CUSIP, shareholder meeting date, description of item and NAM's vote.

**IV. Responsible Parties** 

PVC

NGO

NAM Compliance

Legal Department

<sup>1</sup>

NAM does not vote proxies where a client withholds proxy voting authority, and in certain non-discretionary and model programs NAM votes proxies in accordance with its Policies in effect from time to time. Clients may opt to vote proxies themselves, or to have proxies voted by an independent third party or other named fiduciary or agent, at the client's cost. i ISS has separate polices for Taft Hartley plans and it is NAM's policy to apply the Taft Hartley polices to accounts that are Taft Hartley plans and have requested the application of such policies.

<sup>2</sup>

A conflict of interest shall not be considered material for the purposes of these Policies and Procedures with respect to a specific vote or circumstance if the matter to be voted on relates to a restructuring of the terms of existing securities or the issuance of new securities or a similar matter arising out of the holding of securities, other than common equity, in the context of a bankruptcy or threatened bankruptcy of the issuer.

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**ORIGIN ASSET MANAGEMENT** 

**Procedures and Control Processes** 

**Proxy voting** 

**December 2021** 

Control objective 8: Responsibility for generating proxy voting instructions is clearly established.

Proxy voting instructions are generated and recorded and carried out accurately and in a timely manner.

Whilst Origin has full oversight responsibilities, the generation of proxy voting instructions and ensuring that they are recorded and carried out accurately and in a timely manner has been outsourced to the international governance research and voting specialist Glass Lewis and the Broadridge ProxyEdge voting platform with monitoring and oversight undertaken by Origin.

Glass Lewis is an independent global voting and governance specialist and is currently used by institutional investors representing over $15 trillion in assets. Its team of approximately 200 full time researchers provides contextual, objective governance analysis and proxy voting recommendations on shareholder votes on over 23,000 companies in 100 markets worldwide.

For clients that require us to vote proxies the firm's default policy is to set up standing instructions for all global markets where Origin is invested with Broadridge via their web based online system ProxyEdge to vote in line with the Glass Lewis proxy guidelines. These are available at www.glasslewis.com.

The proxy guidelines specifically address key governance issues such as board composition, remuneration, the appointment of auditors, dividend distributions and Long Term Incentive Plans.

Access to our online ProxyEdge log in is restricted to the members of the operations team.

Having set up standing instructions for all client accounts that require us to vote proxies as detailed above, the operations team also receive regular email notifications from ProxyEdge whenever a shareholder meeting has been announced providing brief details of the company, meeting date and vote instruction deadline.

The operations team on at least a monthly basis log in to ProxyEdge to check and review that all meetings have been voted in accordance with the Glass Lewis recommendations mentioned above.

On a bi-monthly basis, the Operations Team will download a report and circulate this to the Investment Team (cc: Compliance) of all impending votes for the next two months together with recommendations from Glass Lewis. This gives the Investment Team visibility and the option to amend on any proposals.

The Operations Team also has access to the Glass Lewis recommendations and rationale via a link within ProxyEdge. This link opens the Glass Lewis website (a specific log-in and password are required) and directs the user to the reports for the specific company vote which can be downloaded if required. There is also a search function to check recommendations for historic meetings.

A summary of meetings held and shares voted is produced on a quarterly basis as part of our client reporting to both segregated and pooled fund clients by generating and downloading Vote Audit and Vote Summary reports from ProxyEdge for the period.

The downloaded reports in both Excel and PDF formats are saved to the shared drive K:\ Operations \ Proxy Voting \ Reports and then reformatted and edited accordingly in Excel prior to being cut and pasted into the client reports. The edited reports produced by a member of the operations team are subsequently checked and reviewed by a senior member of the operations team.

The collation and production of all monthly and quarterly client reporting is covered in detail under Procedure 4 – Client Reporting.

The firm is in compliance with the Financial Reporting Council's UK Stewardship Code and Shareholders Rights Directive II regarding corporate governance and engagement.

A copy of Origin's latest disclosure response to the UK Stewardship Code and Shareholders Rights Directive II is stored in the shared drive K:\ Policies & Procedures

<u>Compliance Monitoring and Policy Review</u> 

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An investment adviser that retains a third party proxy advisory service provider to provide voting recommendations or voting execution services also should consider additional steps to evaluate whether the investment adviser's voting determinations are consistent with its voting policies and procedures and in the client's best interest before the votes are cast. The operations and investment teams view all "pre-populated" vote recommendation by the third party proxy advisory firm before they are cast via the electronic voting platform.

Compliance will conduct the following reviews:

1)

An annual review of the Firm's internal compliance monitoring procedures and policies with respect to proxy voting.

2)

An annual review of the adequacy of service provided by the third party proxy voting service provider and its compliance with the SEC guidelines and federal law with respect to proxy voting. Compliance will review the Glass Lewis documentation under the Compliance section of their website (https://www.glasslewis.com/due_diligence_resources/). The object is to ensure that Glass Lewis processes and procedures are in line with relevant SEC guidance as well as the SRDII.

3)

A quarterly review of the ongoing communication of voting intentions to the investment team to ensure that these are visible to the investment team. As part of the monthly compliance monitoring plan, compliance currently check that the operations team have shared the voting recommendations from Glass Lewis for upcoming votes with the compliance and investment teams. There is an automatic Proxy Edge email alert containing corporate events alerts and one from Operation with a summary of all upcoming proxy votes.

4)

A quarterly sample test of pre-populated voting intentions focused on votes that are likely to impact the client, such as those for corporate events or contested elections of directors, to ensure the voting rationales and relevant background information supplied by the third party proxy voting service provider is available and of adequate quality.

5)

Ad-hoc reviews of company-specific voting intentions where the Firm considers this appropriate based on the above sample testing.

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**PineBridge Investment LLC** 

**Proxy Voting Policies and Procedures** 

20 December 2021

**I. Introduction** 

Proxy voting is an important right of shareholders, such as PineBridge Clients, for which PineBridge must take reasonable care and diligence to ensure such rights are properly and timely exercised. PineBridge, as a fiduciary for its Clients, must vote proxies in their best interest. We believe considering forward looking improvement in ESG issues is in the economic interest of our Clients. Please refer to the PineBridge Stewardship and Engagement Policy for details on how PineBridge interacts with companies, entities or other market participants on Environmental, Social and Governance (ESG) issues.

**II. Policy Statement** 

**Proxy Procedures** 

As a registered investment adviser that votes (or delegates the voting of) securities held in Client portfolios, PineBridge has implemented proxy voting procedures that are reasonably designed to help ensure that a) PineBridge votes proxies in the best interest of its Clients; b) describes its proxy voting procedures to its Clients, and c) discloses to Clients how they may obtain information on how PineBridge voted their proxies. These procedures are designed to help enable PineBridge to manage material conflicts of interest. While PineBridge must disclose its votes upon request to Clients, no public disclosure is required. (Note that disclosure is required for any mutual funds advised by PineBridge, on Form N-PX.)

**Record-Keeping** 

PineBridge must retain (i) these proxy voting policies and procedures; (ii) proxy statements received regarding Client securities; (iii) records of votes it casts on behalf of Clients; (iv) records of Client requests for proxy voting information, and; (v) any documents prepared by PineBridge that were material to making a decision how to vote, or that memorialized the basis for the decision. PineBridge may rely on proxy statements filed on EDGAR instead of keeping its own copies and rely on proxy statements and records of proxy votes cast by PineBridge that are maintained by contract with a third-party proxy voting service or other third party.

**Proxies of Shares of Non-U.S. Corporations** 

PineBridge has implemented general voting policies with respect to non-U.S. shares owned by Clients. However, although U.S. companies must give shareholders at least 20 days' advance notice to vote proxies, some non-U.S. companies may provide considerably shorter notice or none at all. PineBridge is not required to "rush" voting decisions in order to meet an impractical deadline, and as a result, PineBridge or PineBridge affiliates' regional designees under certain circumstances may not vote certain proxies. In addition, certain non-U.S. regulations impose additional costs to a Portfolio that votes proxies, and PineBridge will take that into consideration when determining whether or not to vote.

In the case of a material conflict between the interests of PineBridge and those of its Clients, PineBridge will take steps to address such conflicts (which may include consulting with counsel) and will attempt to resolve all conflicts in the Client's best interest.

**III. Procedures** 

<sup>•</sup>

Compliance is responsible for ensuring that the PineBridge ADV includes the appropriate language summarizing PineBridge's proxy voting procedures and for updating the summary in the ADV whenever the procedures are updated. Compliance is also responsible for consulting with Legal to ensure that PineBridge's proxy voting policy is kept up to date and in a form appropriate for transmission to Clients.

<sup>•</sup>

If a Client or potential Client requests a copy of the Proxy Voting Policy from Client Relations or Sales, Compliance should be contacted for the most recent version, or it may be obtained from the intranet. Client Relations will send to such Client a copy of the current version of the voting procedures within 7 days and will ensure that Compliance receives a log of each Client's request and the action taken.

<sup>•</sup>

If a Client requests access to the records of how PineBridge voted its proxies, the Client should be assured that this will be provided, and Operations should be consulted. Operations has access to these proxy voting records.

<sup>•</sup>

PineBridge has established a Stewardship Committee (the "Committee"), which is responsible for defining and monitoring PineBridge's proxy voting strategy and process. The Committee is comprised of members of senior management, portfolio management, Compliance, Legal, Product and Operations.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

<sup>•</sup>

The Committee conducts an annual review of the proxy voting guidelines for domestic and non-U.S. Portfolios. Guidelines are reviewed to ensure that the interests of PineBridge's Clients are best served.

<sup>•</sup>

Issues not addressed in the voting guidelines are determined on a case-by-case basis with input from the Committee and portfolio managers.

<sup>•</sup>

PineBridge has engaged a third-party vendor to administer proxy voting on its behalf. The vendor receives, in a majority of cases, proxies directly from the Client's custodian and votes them based on PineBridge' s voting guidelines.

<sup>•</sup>

In circumstances where PineBridge receives proxies directly, these proxies must be sent to the vendor promptly. The vendor then votes them in accordance with PineBridge's voting guidelines. The vendor maintains a listing of all votes cast on behalf of PineBridge Clients.

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**Polen Capital Credit, LLC** 

**Proxy Voting Policies and Procedures** 

**Updated May 3, 2022** 

**Overview** 

In accordance with the fiduciary duties owed to our clients and Rule 206(4)-6 promulgated by the Securities and Exchange Commission (the "SEC") under the Investment Advisers Act of 1940 (the "Advisers Act"), Polen Capital Credit, LLC ("Polen Credit") has adopted and implemented these Proxy Voting Policies and Procedures (the "Policies") that we believe are reasonably designed to ensure that proxies are voted in the best interests of our clients that have delegated proxy voting authority to us.

**Proxy Voting Guidelines and Procedures** 

Given the credit-oriented focus of Polen Credit's investment strategies, Polen Credit primarily manages investments in high yield fixed income, rather than equity securities. As a result, equity investments, in particular in public companies that regularly disseminate proxy voting materials to their shareholders, typically constitute a very small percentage of the total assets managed by Polen Credit. Proxy voting in publicly-traded equities therefore is typically not a material element of Polen Credit's significant investment strategies.

When a client grants Polen Credit proxy voting authority, we will vote such proxies in the best interests and for the benefit of such client in accordance with our fiduciary duty and all applicable laws and regulations. We believe that this approach means voting in accordance with our judgment as to what voting decision is most likely to maximize total return to the client as an investor in the company whose securities are being voted, including, where applicable, returns to the client on positions held in non-voting securities of that issuer or securities of other issuers that may be materially affected by the outcome of the vote. Normally, voting decisions are made by the research analyst (or portfolio manager) responsible at the time of the vote for monitoring the corporate events of the particular issuer of the securities to be voted. Polen Credit believes that it is not appropriate, in most cases, to vote proxies with respect to the securities of such issuers in accordance with fixed, pre-determined guidelines. Accordingly, Polen Credit generally reviews and makes a voting decision on each matter presented in such proxy on an individual, case-by- case basis.

These Policies are intended to support good corporate governance, including those corporate practices that address environmental and social issues, in all cases with the objective of protecting shareholder interests and maximizing shareholder value. Accordingly, to the extent that Polen Credit identifies a material ESG (environmental, social, or governance) issue with respect to a particular company, it factors such information into its decision-making process with respect to proxy voting and exercises discretion that it deems appropriate and in the best interests of its clients in a manner consistent with the firm's Responsible Investment Policy.

Polen Credit utilizes a third party service provider, Institutional Shareholder Services ("ISS") for research and recommendations with respect to certain proxy issues, and for facilitating the processing of Polen Credit's selections for each proxy vote. In voting proxies pursuant to these Policies, Polen Credit may consult ISS's Sustainability Voting Guidelines, but in all instances, we will make an independent decision for each vote on a case-by-case basis. Additional information about ISS and the ISS Sustainability Voting Guidelines is available at http://www.issgovernance.com/policy.

The Polen Credit operations department has designated an internal proxy administrator, who is responsible for coordinating the review and voting of client proxies, including, without limitation, circulating the proxy with respect to the applicable research analyst (or portfolio manager) responsible for the voting the proxy and subsequently submitting any applicable proxy vote on behalf of Polen Credit clients within the ISS platform prior to any applicable deadlines.1

In certain circumstances, Polen Credit may elect to not vote a proxy with respect to securities held in client accounts, including, but not limited to, situations where (a) the securities are no longer held in a client's account; (b) the proxy or related materials are not received in sufficient time to allow Polen Credit to analyze the material or cast an informed vote by the voting deadline; or (c) Polen Credit concludes that the costs of voting a proxy outweigh any potential benefits to its clients. In addition, Polen Credit may seek voting instructions from some or all of the clients holding the securities to be voted, and, as a result, client instructions may cause Polen Credit to vote differently for different clients on the same matter.

<sup>1</sup>

Notwithstanding the foregoing, from time to time, Polen Credit clients may hold private equity positions (typically, in connection with the restructuring of a prior fixed income position). To the extent applicable, these Policies also set forth Polen Credit's approach with respect to any shareholder voting of private equity holdings in such client accounts. However, a member of the investment team (typically, the Associate General Counsel) will assume responsibility for reviewing and processing such votes on behalf of Polen Credit's clients.

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**Material Conflicts of Interest** 

If the research analyst (or portfolio manager) responsible for recommending a proxy vote identifies a material conflict of interest between our interests and the interest of our clients, such individual (and/or the internal proxy administrator) will notify the firm's general counsel & chief compliance officer. If the general counsel & chief compliance officer agrees that a material conflict of interest exists, Polen Credit generally will request a waiver of the conflict of interest or otherwise seek to obtain voting instructions from the affected client(s), or an authorized representative of the client(s) (or, in limited circumstances, an appropriate independent third party). In the event that the client(s), client representative(s), or other third party, as the case may be, do not desire to direct the vote of the proxy matter in question, Polen Credit may, as circumstances warrant, take other steps, such as consulting with its outside legal counsel or an independent third party service, which steps are designed to result in a decision that is demonstrably based on the clients' best interests and not the product of the conflict. If a material conflict cannot be resolved as described above, Polen Credit will not vote the proxy on behalf of such client(s).

**Maintenance of Proxy Voting Records** 

As required by Rule 204-2 under the Advisers Act, Polen Credit maintains records of proxies that it has voted on behalf of its clients. These records include:

&nbsp;&nbsp;&nbsp;&nbsp;• a copy of Polen Credit's internal policies and procedures with respect to proxy voting, as updated from time to time;

&nbsp;&nbsp;&nbsp;&nbsp;• copies of proxy statements received regarding securities held in client accounts, unless the materials are available electronically through the SEC's EDGAR system;

&nbsp;&nbsp;&nbsp;&nbsp;• a record of each vote cast on behalf of our clients;

&nbsp;&nbsp;&nbsp;&nbsp;• each written client request for proxy voting records and Polen Credit's written response to any (written or oral) client request for such records.

Polen Credit will maintain these proxy voting books and records for a period of not less than five years.

**Disclosure** 

Polen Credit will provide each client with either a copy of these Policies or a summary thereof. In addition, upon the request of any client, Polen Credit will provide each client with information with respect to how Polen Credit voted any proxies on behalf of such client.

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**Post Advisory Group** 

**Proxy and Corporate Action Voting Policy** 

**Dated March 2020** 

**Policy** 

When voting proxies or acting on corporate actions for clients, Post will decide based on the best interests of its clients. Post shall act in a prudent and diligent manner and make voting decisions Post believes enhance the value of the assets of client accounts. With respect to ERISA accounts, plan beneficiaries and participants, voting will be in accordance with ERISA and the U.S. Department of Labor ("DOL") guidance thereunder. Unless a client specifically reserves the right to vote its own proxies or to take shareholder action in other corporate actions, Post will vote proxies or act on other actions received in sufficient time prior to their deadlines as part of its discretionary authority over the assets. Corporate actions may include, for example and without limitation, tender offers or exchanges, bankruptcy proceedings, and class actions.

**Background** 

Post Advisory Group, LLC ("Post") acts as discretionary investment adviser for various clients, including clients governed by the Employee Retirement Income Security Act of 1974 ("ERISA") and registered open-ended investment companies ("mutual funds"). While Post primarily manages fixed income securities, it does occasionally hold a limited amount of voting securities or securities for which shareholder action is solicited in a client account.

**Responsibility** 

The Chief Compliance Officer (CCO) is responsible for establishing this policy, ensuring that this policy is consistent with applicable federal securities laws and regulations, updating this policy based on changes to federal securities laws and regulations and providing effective disclosure of this policy as applicable. Additionally, the Compliance Department (Compliance) is responsible for evaluating this policy no less frequently than annually. Compliance is also responsible for restricting securities with pending corporate actions in Charles River.

Post's Operations Department is responsible for voting proxies in a timely manner and consistently across portfolios as well as handling clients' corporate actions.

**Proxy Voting Procedures** 

Operations will consider each proxy issue individually and vote in a manner which Post believes enhances the value of client accounts overall. Where a proxy proposal raises a material conflict of interest between Post's interests and the client's, Post will disclose the conflict to the relevant clients and obtain their consent to the proposed vote prior to voting the securities. When a client does not respond to such a conflict disclosure request or denies the request, Post will abstain from voting the securities held by that client's account.

**Corporate Actions Procedures** 

The following procedures are following in addressing corporate actions:

• Operations will receive notifications of corporate actions from State Street.

• Operations will request and receive instructions from the relevant PM or Analyst covering the security.

• Operations will vote consistent with the instructions in State Street's CApTAIN system and send confirmatory documentation back to the relevant PM or Analyst.

• For mandatory calls, Operations will add the positions to the cash sheet and Compliance will add those securities to a restricted list in Charles River.

• State Street will automatically execute exchanges due to standing instructions from Post.

**Record Retention** 

All records associated with this policy that require retention shall be maintained according to the record retention obligations enumerated in the attached Recordkeeping Policy.

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**BAIRD Equity Asset Management** 

**Baird Equity Am's Proxy Voting Policies and Procedures** 

**Revised Effective November 18, 2020** 

**I. Background** 

Rule 206(4)-6 under the Investment Advisers Act of 1940 (the "Advisers Act") requires that, for an investment adviser to exercise voting authority with respect to client securities, the adviser must:

<sup>•</sup>

adopt and implement written policies and procedures that are reasonably designed to ensure that the adviser votes clients securities in the best interest of clients, which procedures must include how the adviser addresses material conflicts that may arise between the adviser's interests and those of the adviser's clients;

<sup>•</sup>

disclose to clients how they may obtain information from the adviser about how the adviser voted with respect to their securities; and

<sup>•</sup>

describe to clients the adviser's proxy voting policies and procedures and, upon request, furnish a copy of the policies and procedures to the requesting client.

Rule 204-2 of the Advisers Act requires that registered investment advisers maintain records of its proxy voting policies and procedures; proxy statements received; votes cast on behalf of clients; client requests for proxy voting information; and documents prepared by the investment adviser that were material to making a voting decision.

**II. Policy** 

The Baird Equity Asset Management department ("Baird Equity AM") of Robert W. Baird & Co. Incorporated (the "Advisor" or "Baird") exercises voting authority with respect to securities held by advisory clients that have executed advisory agreements with Baird and that have delegated proxy voting authority to Baird. Baird owes these clients duties of care and loyalty. Baird's duty of loyalty requires Baird to vote the proxies in a manner consistent with the best interests of advisory clients. While Baird uses its best efforts to vote proxies, there are instances when voting is not practical or is not, in Baird or the portfolio manager's view, in the best interest of clients.

As a fiduciary, Baird will ascertain whether the independent proxy voting service has the capacity and competency to analyze proxy issues, which may include considering: the adequacy and quality of the independent proxy voting service's staffing and personnel; the robustness of its policies and procedures regarding its ability to (i) ensure that its proxy voting recommendations are based on current and accurate information and (ii) identify and address any conflicts of interest. Further, Baird should ensure that these voting guidelines or recommendation policies are generally appropriate for the clients whose proxies are being voted.

**III. Proxy Voting Committee** 

Baird has established a Proxy Voting Committee (the "Committee") to oversee Baird's proxy voting practices, including oversight of the independent proxy voting service. The Committee has established a Proxy Committee Charter to describe its responsibilities under these policies and procedures. The Committee will review, at least annually, these Proxy Voting Policies and Procedures and its Charter. Further, the Committee will appoint a Sub-Committee for Baird's Asset Management groups to consider proxy voting challenges made by its portfolio managers.

**IV. Proxy Voting Guidelines** 

Baird utilizes an independent provider of proxy voting and corporate governance service to analyze proxy materials and votes and make independent voting recommendations (the "independent proxy voting service"). Baird's independent proxy voting service is currently Institutional Shareholder Services Inc. ("ISS"). The independent proxy voting service provides proxy voting guidelines regarding its position on various matters presented by companies to their shareholders for consideration. Baird will typically vote shares in accordance with the recommendations made by the independent proxy voting service. However, the independent proxy voting service's guidelines are not exhaustive, do not address all potential voting issues, and do not necessarily correspond with the opinions of the portfolio managers.

In the event the portfolio manager believes the independent proxy voting service recommendation is not in the best interest of the client, he/she will bring the issue (a "proxy challenge") to the Sub-Committee by completing a Proxy Vote Challenge Form, which describes, among other things, the issue(s) up for vote and the portfolio manager's rationale for voting against the voting recommendation of the independent proxy voting service. The Sub-Committee will consider what is in the best interest of clients when evaluating the proxy challenge, including an evaluation of the portfolio manager's rationale and any potential conflicts of interest. The decision made by the Sub-Committee on the proxy challenge will apply to all advisory accounts managed by the portfolio manager (or team of portfolio managers) that submitted the Proxy Voting Challenge Form, unless the client has directed Baird to utilize specific voting guidelines (e.g., Taft-Hartley guidelines).

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For those matters for which the independent proxy voting service does not provide a specific voting recommendation, the portfolio manager will be responsible for casting the vote in a manner he/she believes is in the best interest of clients.

**V. Proxy Voting Exceptions** 

There are instances when voting is not practical or is not, in Baird or the portfolio manager's view, in the best interest of clients. Some examples of these types of situations are described below:

<u>Certain Foreign Companies</u>. Voting proxies of companies located in some jurisdictions may involve several issues that can restrict or prevent the ability to vote such proxies or entail additional costs, including, but not limited to: (i) requirements to vote proxies in person; (ii) restrictions on the sale of the securities for a period of time in proximity to the shareholder meeting; (iii) proxy statements and ballots being written in a language other than English; (iv) untimely notice of shareholder meetings; (v) restrictions on a foreigner's ability to exercise votes; and (vi) requirements to provide local agents with a power of attorney to facilitate voting instructions. Baird will use a best efforts basis to vote proxies in these situations after weighing the costs and benefits of voting such proxies.

<u>Securities Lending Program</u>. The voting rights for shares that are out on loan are transferred to the borrower and therefore the lender is not entitled to vote the lent shares at the shareholder meeting. In general, Baird believes the revenue received from the lending program outweighs the ability to vote. Therefore, when a client has entered into a securities lending program, Baird generally will not seek to recall the securities on loan for the purpose of voting the securities; however, Baird reserves the right to recall the shares on loan on a best efforts basis if the portfolio manager becomes aware of a proxy proposal where the proxy vote is materially important to the client's account.

**VI. Conflicts of Interest** 

There may be instances where Baird's interests conflict, or appear to conflict, with advisory client interests. For example, Baird (or a Baird affiliate) may manage a pension plan, administer employee benefit plans, or provide brokerage, underwriting, insurance or banking services to a company whose management is soliciting proxies. Or, for example, Baird (or Baird's senior executive officers) may have business or personal relationships with corporate directors or candidates for directorship. There may be a concern that we would vote in favor of management because of our relationship with the company.

We generally believe a material conflict exists if a portfolio manager (or team of portfolio managers) manages or is pursuing management of accounts that are affiliated with the company soliciting proxies, (ii) is aware of investment banking or other relationships that the Advisor has or is pursuing with the company soliciting proxies (or its senior officers) that may give Baird an incentive to vote as recommended by the company, or (iii) has been asked or directed by persons associated with the Advisor or the company soliciting proxies to vote proxies in a certain manner in order to maintain or develop a relationship between the Advisor and the company. The Sub-Committee may also determine a material conflict of interest exists for other reasons.

Baird's duty is to vote proxies in the best interests of advisory clients. As noted above under the Proxy Voting Guidelines section, Baird will typically vote shares in accordance with the recommendations made by the independent proxy voting service, which generally mitigates conflicts. However, in situations where there is a conflict of interest and the independent proxy voting service does not provide a recommendation or there is a proxy challenge, the Sub-Committee will determine the nature and materiality of the conflict.

<sup>•</sup>

If the conflict is determined to not be material, the Sub-Committee will vote the proxy in a manner the Sub-Committee believes is in the best interests of the client and without consideration of any benefit to the Advisor or its affiliates.

<sup>•</sup>

If the conflict is determined to be material, the Sub-Committee will take one of the following steps to resolve the conflict:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Vote the securities in accordance with the recommendations of an independent third party, such as ISS;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Refer the proxy to the advisory client or to a fiduciary of the advisory client for voting purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Suggest that the advisory client engage another party to determine how the proxy should be voted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. If the matter is not addressed by the independent proxy voting service, vote in accordance with management's recommendation; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Abstain from voting.

**VII. Procedures** 

Baird uses ISS's electronic voting management system ("proxy voting system") to assist with executing proxy votes on behalf of clients. Baird Equity Asset Management's voting instructions for clients are typically pre-populated in the proxy voting system with the ISS voting recommendation shortly after such recommendation is made available by ISS. The vote instruction may be changed in the proxy voting system until the voting cut-off time (e.g., due to a portfolio manager challenge approved by the Committee).

------

The portfolio managers (or portfolio manager team) are responsible for:

<sup>•</sup>

casting the vote in a manner he/she believes is in the best interest of clients;

<sup>•</sup>

being familiar with the proxy voting guidelines of the independent proxy voting services; and

<sup>•</sup>

completing the Proxy Voting Challenge Form and submitting it on a timely basis to the Proxy Voting Sub-Committee when he/she believes the independent proxy voting service recommendation is not in the best interest of the client.

Baird Equity AM Operations is responsible for:

<sup>•</sup>

ensuring a copy of the proxy voting guidelines (and/or changes made to such guidelines) established by the independent proxy voting service are distributed, at least annually, to the portfolio managers (or portfolio management teams);

<sup>•</sup>

distributing periodic reports to the portfolio managers (or portfolio management teams) on upcoming shareholder meetings to assist the portfolio managers in identifying proposals that may not necessarily correspond with the opinions of the portfolio managers (e.g., recommendations against management);

<sup>•</sup>

coordinating with the portfolio manager (or portfolio manager team) the voting recommendation for those matters for which the independent proxy voting service does not provide a specific voting recommendation;

<sup>•</sup>

coordinating, with the assistance of the Compliance Department as needed, any Proxy Voting Sub-Committee meetings;

<sup>•</sup>

ensuring a conflicts check is performed in situations where there is a proxy challenge or the independent proxy voting service does not provide a recommendation or there is a proxy challenge;

<sup>•</sup>

ensuring the results of any Sub-Committee meetings are communicated to the portfolio manager (or portfolio manager teams) and, if the proxy challenge is approved by the Sub- Committee, notifying Baird's Proxy Support team to cast the votes in accordance with the Sub-Committee's instructions;

<sup>•</sup>

confirming, when possible prior to the voting cut-off date, that Baird's Proxy Support team properly recorded into the voting instructions into the proxy voting system (currently, ISS) for any approved proxy challenge or for any matters where the independent proxy voting service did not provide a recommendation; and

<sup>•</sup>

notifying the Proxy Support area of Baird's Operations group when advisory client request for information on how Baird voted proxies on the advisory client's behalf.

The Proxy Support area of Baird's Operations group is responsible for:

<sup>•</sup>

sending to the Baird Equity AM Operations any proposals in which the third party proxy voting services has not provided a recommendation, and

<sup>•</sup>

recording or updating, based on the instructions received, the voting instructions in the proxy voting system for (i) any approved proxy voting challenges and (ii) any matters where the proxy voting service did not provide instructions.

**VII. Disclosure to Clients** 

Baird will disclose to clients how they can obtain information from us on how client portfolio securities were voted. At the same time, we will provide a summary of these proxy voting policies and procedures to clients and, upon request, will provide them with a copy of the same. These disclosures will be made in Baird's Form ADV Part 2A (Brochure).

**IX. Recordkeeping** 

The applicable department or department unit will maintain the following records with respect to proxy voting:

<sup>•</sup>

a copy of the proxy voting policies and procedures is maintained by the Compliance Department;

<sup>•</sup>

a copy of all proxy statements received is maintained through the proxy voting system (currently, ISS), the SEC's EDGAR system or by the Proxy Support team;

<sup>•</sup>

a record of each vote cast on behalf of an advisory client is maintained through the proxy voting system (currently, ISS) or by the Proxy Support team;

<sup>•</sup>

a copy of any document prepared by Baird that was material to making a voting decision or that memorializes the basis for that decision is maintained as part of the records of the Proxy Voting Sub-Committee;

<sup>•</sup>

a copy of each written advisory client request for information on how Baird voted proxies on the advisory client's behalf is maintained by Baird Equity AM Operations; and

<sup>•</sup>

a copy of any written response to any advisory client request (written or oral) for information on how proxies were voted on behalf of the requesting advisory client is maintained by Baird Equity AM Operations.

------

These books and records shall be made and maintained in accordance with the requirements and time periods provided in Rule 204-2 of the Advisers Act.

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**Policy on Proxy Voting** 

**Spectrum Asset Management, Inc.** 

**For Investment Advisory Clients:** 

**General Policy** 

Spectrum, an investment adviser registered with the Securities and Exchange Commission, acts as investment advisor for various types of client accounts (e.g. employee benefit plans, governmental plans, mutual funds, insurance company separate accounts, corporate pension plans, endowments and foundations). While Spectrum receives few proxies for the preferred shares it manages, Spectrum nonetheless will, when delegated the authority by a client, vote these shares per the following policy voting standards and processes:

<u>Standards:</u> 

Spectrum's standards aim to ensure the following in keeping with the best interests of its clients:

<sup>•</sup>

That Spectrum act solely in the interest of its clients in providing for ultimate long-term stockholder value.

<sup>•</sup>

That Spectrum act without undue influence from individuals or groups who may have an economic interest in the outcome of a proxy vote.

<sup>•</sup>

That the custodian bank is aware of our fiduciary duty to vote proxies on behalf of others - Spectrum relies on the best efforts of the custodian bank to deliver all proxies we are entitled to vote.

<sup>•</sup>

That Spectrum will exercise its right to vote all proxies on behalf of its clients (or permit clients to vote their interest, as the case(s) may be).

<sup>•</sup>

That Spectrum will implement a reasonable and sound basis to vote proxies.

<u>Processes:</u> 

*<u>A. Following ISS' Recommendations</u>* 

Spectrum has selected Institutional Shareholder Services (ISS) to assist it with its proxy voting responsibilities. Spectrum follows ISS Standard Proxy Voting guidelines (the "Guidelines"). The Guidelines embody the positions and factors Spectrum generally considers important in casting proxy votes. They address a wide variety of individual topics, including, among other matters, shareholder voting rights, anti-takeover defenses, board structures, the election of directors, executive and director compensation, reorganizations, mergers, and various shareholder proposals. Recognizing the complexity and fact-specific nature of many corporate governance issues, the Guidelines often do not direct a particular voting outcome, but instead identify factors ISS considers in determining how the vote should be cast.

In connection with each proxy vote, ISS prepares a written analysis and recommendation (an "ISS Recommendation") that reflects ISS's application of Guidelines to the particular proxy issues. Where the Guidelines do not direct a particular response and instead list relevant factors, the ISS Recommendation will reflect ISS's own evaluation of the factors. Spectrum may on any particular proxy vote decide to diverge from the Guidelines or an ISS Recommendation. In such cases, our procedures require: (i) the requesting Portfolio Manager to set forth the reasons for their decision; (ii) the approval of the Chief Investment Officer; (iii) notification to the Compliance Department and other appropriate Principal Global Investors personnel; (iv) a determination that the decision is not influenced by any conflict of interest; and (v) the creation of a written record reflecting the process.

Spectrum generally votes proxies in accordance with ISS' recommendations. When Spectrum follows ISS' recommendations, it need not follow the conflict of interest procedures in Section B, below.

From time to time ISS may have a business relationship or affiliation with one or more issuers held in Spectrum client accounts, while also providing voting recommendations on these issuers' securities. Because this practice may present a conflict of interest for ISS, Spectrum's Chief Compliance Officer will require from ISS at least annually additional information, or a certification that ISS has adopted policies and procedures to detect and mitigate such conflicts of interest in issuing voting recommendations. Spectrum may obtain voting recommendations from two proxy voting services as an additional check on the independence of the ISS' voting recommendations.

*<u>B. Disregarding ISS' Recommendations</u>* 

Should Spectrum determine not to follow ISS' recommendation for a particular proxy, Spectrum will use the following procedures for identifying and resolving a material conflict of interest, and will use the Proxy Voting Guidelines (below) in determining how to vote. The Report for Proxy Vote(s) against ISS Recommendation(s), Exhibit A hereto, shall be completed in each such instance.

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Spectrum will classify proxy vote issues into three broad categories: Routine Administrative Items, Special Interest Issues, and Issues Having the Potential for Significant Economic Impact. Once the Senior Portfolio Manager has analyzed and identified each issue as belonging in a particular category, and disclosed the conflict of interests to affected clients and obtained their consents prior to voting, Spectrum will cast the client's vote(s) in accordance with the philosophy and decision guidelines developed for that category. New and unfamiliar issues are constantly appearing in the proxy voting process. As new issues arise, we will make every effort to classify them among the three categories below. If we believe it would be informative to do so, we may revise this document to reflect how we evaluate such issues.

Due to timing delays, logistical hurdles and high costs associated with procuring and voting international proxies, Spectrum has elected to approach international proxy voting on the basis of achieving "best efforts at a reasonable cost."

As a fiduciary, Spectrum owes its clients an undivided duty of loyalty. We strive to avoid even the appearance of a conflict that may compromise the trust our clients have placed in it. This is true with respect to proxy voting and thus Spectrum has adopted the following procedures for addressing potential or actual conflicts of interest.

<u>Identifying a Conflict of Interest.</u> There may be a material conflict of interest when Spectrum votes a proxy solicited by an issuer whose retirement plan or fund we manage or with whom Spectrum, an affiliate, or an officer or director of Spectrum or of an affiliate has any other material business or personal relationship that may affect how we vote the issuer's proxy. To avoid any perceived material conflict of interest, the following procedures have been established for use when Spectrum encounters a potential material conflict to ensure that voting decisions are based on a clients' best interest and are not the product of a material conflict.

<u>Monitoring for Conflicts of Interest.</u> All employees of Spectrum are responsible for monitoring for conflicts of interest and referring any that may be material to the CCO for resolution. At least annually, the CCO will take reasonable steps to evaluate the nature of Spectrum's material business relationships (and those of its affiliates) with any company whose preferred securities are held in client accounts (a "portfolio company") to assess which, if any, could give rise to a conflict of interest. CCO's review will focus on the following three categories:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Business Relationships - The CCO will consider whether Spectrum (or an affiliate) has a substantial business relationship with a portfolio company or a proponent of a proxy proposal relating to the portfolio company (e.g., an employee group), such that failure to vote in favor of management (or the proponent) could harm the adviser's relationship with the company (or proponent). For example, if Spectrum manages money for the portfolio company or an employee group, manages pension assets, leases office space from the company, or provides other material services to the portfolio company, the CCO will review whether such relationships may give rise to a conflict of interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Personal Relationships - The CCO will consider whether any senior executives or portfolio managers (or similar persons at Spectrum's affiliates) have a personal relationship with other proponents of proxy proposals, participants in proxy contests, corporate directors, or candidates for directorships that might give rise to a conflict of interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Familial Relationships - The CCO will consider whether any senior executives or portfolio managers (or similar persons at Spectrum's affiliates) have a familial relationship relating to a portfolio company (e.g., a spouse or other relative who serves as a director of a portfolio company, is a candidate for such a position, or is employed by a portfolio company in a senior position).

In monitoring for conflicts of interest, the CCO will consider all information reasonably available to it about any material business, personal, or familial relationship involving Spectrum (and its affiliates) and a portfolio company, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

A list of clients that are also public companies, which is prepared and updated by the Operations Department and retained in the Compliance Department.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Publicly available information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Information generally known within Spectrum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Information actually known by senior executives or portfolio managers. When considering a proxy proposal, investment professionals involved in the decision-making process must disclose any potential material conflict that they are aware of to the CCO prior to any substantive discussion of a proxy matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Information obtained periodically from those persons whom the CCO reasonably believes could be affected by a conflict arising from a personal or familial relationship (e.g., portfolio managers, senior management).

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The CCO may, at his discretion, assign day-to-day responsibility for monitoring for conflicts to a designated person. With respect to monitoring of affiliates, the CCO in conjunction with PGI's CCO may rely on information barriers between Spectrum and its affiliates in determining the scope of its monitoring of conflicts involving affiliates.

<u>Determining Whether a Conflict of Interest is "Material"</u> - On a regular basis, CCO will monitor conflicts of interest to determine whether any may be "material" and therefore should be referred to PGI for resolution. The SEC has not provided any specific guidance as to what types of conflicts may be "material" for purposes of proxy voting, so therefore it would be appropriate to look to the traditional materiality analysis under the federal securities laws, i.e., that a "material" matter is one that is reasonably likely to be viewed as important by the average shareholder.

Whether a conflict may be material in any case will, of course, depend on the facts and circumstances. However, in considering the materiality of a conflict, Spectrum will use the following two-step approach:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Financial Materiality - The most likely indicator of materiality in most cases will be the dollar amount involved with the relationship in question. For purposes of proxy voting, it will be presumed that a conflict is not material unless it involves at least 5% of Spectrum's annual revenues or a minimum dollar amount of $1,000,000. Different percentages or dollar amounts may be used depending on the nature and degree of the conflict (e.g., a higher number if the conflict arises through an affiliate rather than directly with Spectrum).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Non-Financial Materiality - A non-financial conflict of interest might be material (e.g., conflicts involving personal or familial relationships) and should be evaluated based on the facts and circumstances of each case.

If the CCO has any question as to whether a particular conflict is material, it should presume the conflict to be material and refer it to the PGI's CCO for resolution. As in the case of monitoring conflicts, the CCO may appoint a designated person or subgroup of Spectrum's investment team to determine whether potential conflicts of interest may be material.

<u>Resolving a Material Conflict of Interest</u> - When an employee of Spectrum refers a potential material conflict of interest to the CCO, the CCO will determine whether a material conflict of interest exists based on the facts and circumstances of each particular situation. If the CCO determines that no material conflict of interest exists, no further action is necessary and the CCO will notify management accordingly. If the CCO determines that a material conflict exists, CCO must disclose the conflict to affected clients and obtain consent from each as to the manner in which Spectrum proposes to vote.

Clients may obtain information about how we voted proxies on their behalf by contacting Spectrum's Compliance Department.

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**Proxy Voting Guidelines** 

**CATEGORY I: Routine Administrative Items** 

<u>Philosophy</u>: Spectrum is willing to defer to management on matters of a routine administrative nature. We feel management is best suited to make those decisions which are essential to the ongoing operation of the company and which do not have a major economic impact on the corporation and its shareholders. Examples of issues on which we will normally defer to management's recommendation include:

1. selection of auditors

2. increasing the authorized number of common shares

3. election of unopposed directors

**CATEGORY II: Special Interest Issues** 

<u>Philosophy</u>: While there are many social, political, environmental and other special interest issues that are worthy of public attention, we do not believe the corporate proxy process is the appropriate arena in which to achieve gains in these areas. Our primary responsibility in voting proxies is to provide for the greatest long-term value for Spectrum's clients. We are opposed to proposals which involve an economic cost to the corporation, or which restrict the freedom of management to operate in the best interest of the corporation and its shareholders. However, in general we will abstain from voting on shareholder social, political and environmental proposals because their long-term impact on share value cannot be calculated with any reasonable degree of confidence.

**CATEGORY III: Issues Having the Potential for Significant Economic Impact** 

<u>Philosophy</u>: Spectrum is not willing to defer to management on proposals which have the potential for major economic impact on the corporation and the value of its shares. We believe such issues should be carefully analyzed and decided by the owners of the corporation. Presented below are examples of issues which we believe have the potential for significant economic impact on shareholder value.

1. <u>Classification of Board of Directors</u>. Rather than electing all directors annually, these provisions stagger a board, generally into three annual classes, and call for only one-third to be elected each year. Staggered boards may help to ensure leadership continuity, but they also serve as defensive mechanisms. Classifying the board makes it more difficult to change control of a company through a proxy contest involving election of directors. In general, we vote on a case by case basis on proposals for staggered boards, but generally favor annual elections of all directors.

2. <u>Cumulative Voting of Directors</u>. Most corporations provide that shareholders are entitled to cast one vote for each director for each share owned - the one share, one vote standard. The process of cumulative voting, on the other hand, permits shareholders to distribute the total number of votes they have in any manner they wish when electing directors. Shareholders may possibly elect a minority representative to a corporate board by this process, ensuring representation for all sizes of shareholders. Outside shareholder involvement can encourage management to maximize share value. We generally support cumulative voting of directors.

3. <u>Prevention of Greenmail</u>. These proposals seek to prevent the practice of "greenmail", or targeted share repurchases by management of company stock from individuals or groups seeking control of the company. Since only the hostile party receives payment, usually at a substantial premium over the market value of its shares, the practice discriminates against all other shareholders. By making greenmail payments, management transfers significant sums of corporate cash to one entity, most often for the primary purpose of saving their jobs. Shareholders are left with an asset-depleted and often less competitive company. We think that if a corporation offers to buy back its stock, the offer should be made to all shareholders, not just to a select group or individual. We are opposed to greenmail and will support greenmail prevention proposals.

4. <u>Supermajority Provisions</u>. These corporate charter amendments generally require that a very high percentage of share votes (70-81%) be cast affirmatively to approve a merger, unless the board of directors has approved it in advance. These provisions have the potential to give management veto power over merging with another company, even though a majority of shareholders favor the merger. In most cases we believe requiring supermajority approval of mergers places too much veto power in the hands of management and other minority shareholders, at the expense of the majority shareholders, and we oppose such provisions.

5. <u>Defensive Strategies</u>. These proposals will be analyzed on a case by case basis to determine the effect on shareholder value. Our decision will be based on whether the proposal enhances long-term economic value.

6. <u>Business Combinations or Restructuring</u>. These proposals will be analyzed on a case by case basis to determine the effect on shareholder value. Our decision will be based on whether the proposal enhances long-term economic value.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

7. <u>Executive and Director Compensation</u>. These proposals will be analyzed on a case by case basis to determine the effect on shareholder value. Our decision will be based on whether the proposal enhances long-term economic value.

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**Exhibit A to Proxy Policy** 

**Report for Proxy Vote(s) Against ISS Recommendation(s)** 

This form should be completed in instances in which Spectrum Portfolio Manager(s) decide to vote against ISS recommendations.

---

| |
|:---|
| 1. Security Name I Symbol: |
| 2. Issue up for vote: |
| 3. Summary of ISS recommendation (see attached full ISS recommendation): |
| 4. Reasons for voting against ISS recommendation (supporting documentation may be attached): |
| 5. Determination of potential conflicts (if any): |
| 6. Contacted Compliance Department: Yes / No |
| Name of individual contacted: |
| Date: |
| 7. Contacted other Spectrum portfolio managers who have position in same security: |
| Yes / No |
| Name of individual contacted: |
| Date: |
| 8. Portfolio Manager Signature: |
| Date: |
| Portfolio Manager Name: |
| Portfolio Manager Signature\*: |
| Date: |
| Portfolio Manager Name: |

---

\*Note: All Portfolio Managers who manage portfolios that hold relevant security must sign.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**T. Rowe Price Associates, Inc. and Certain of its Investment Adviser Affiliates** 

**Proxy Voting Policies and Procedures** 

**Responsibility to Vote Proxies** 

T. Rowe Price Associates, Inc. and certain of its investment adviser affiliates <sup>1</sup> (collectively, "T. Rowe Price") have adopted these Proxy Voting Policies and Procedures ("Policies and Procedures") for the purpose of establishing formal policies and procedures for performing and documenting their fiduciary duty with regard to the voting of client proxies. This document is reviewed at least annually and updated as necessary.

T. Rowe Price recognizes and adheres to the principle that one of the privileges of owning stock in a company is the right to vote in the election of the company's directors and on matters affecting certain important aspects of the company's structure and operations that are submitted to shareholder vote. The U.S.-registered investment companies which T. Rowe Price sponsors and serves as investment adviser (the "Price Funds") as well as other investment advisory clients have delegated to T. Rowe Price certain proxy voting powers. As an investment adviser, T. Rowe Price has a fiduciary responsibility to such clients when exercising its voting authority with respect to securities held in their portfolios. T. Rowe Price reserves the right to decline to vote proxies in accordance with client-specific voting guidelines.

**Fiduciary Considerations.** 

It is the policy of T. Rowe Price that decisions with respect to proxy issues will be made in light of the anticipated impact of the issue on the desirability of investing in the portfolio company from the viewpoint of the particular advisory client or Price Fund. Proxies are voted solely in the interests of the client, Price Fund shareholders or, where employee benefit plan assets are involved, in the interests of plan participants and beneficiaries. Our intent has always been to vote proxies, where possible to do so, in a manner consistent with our fiduciary obligations and responsibilities.

One of the primary factors T. Rowe Price considers when determining the desirability of investing in a particular company is the quality and depth of its management. We recognize that a company's management is entrusted with the day-to-day operations of the company, as well as its long-term direction and strategic planning, subject to the oversight of the company's board of directors. Accordingly, our proxy voting guidelines are not intended to substitute our judgment for management's with respect to the company's day-to-day operations. Rather, our proxy voting guidelines are designed to promote accountability of a company's management and board of directors to its shareholders; to align the interests of management with those of shareholders; and to encourage companies to adopt best practices in terms of their corporate governance and disclosure. In addition to our proxy voting guidelines, we rely on a company's public filings, its board recommendations, its track record, country-specific best practices codes, our research providers and – most importantly – our investment professionals' views in making voting decisions. T. Rowe Price investment personnel do not coordinate with investment personnel of its affiliated investment adviser, TRPIM, with respect to proxy voting decisions.

T. Rowe Price seeks to vote all of its clients' proxies. In certain circumstances, T. Rowe Price may determine that refraining from voting a proxy is in a client's best interest, such as when the cost of voting outweighs the expected benefit to the client. For example, the practicalities and costs involved with international investing may make it impossible at times, and at other times disadvantageous, to vote proxies in every instance.

**Administration of Policies and Procedures** 

**Environmental, Social and Governance Committee.** 

T. Rowe Price's Environmental, Social and Governance Committee ("TRPA ESG Committee") is responsible for establishing positions with respect to corporate governance and other proxy issues. Certain delegated members of the TRPA ESG Committee also review questions and respond to inquiries from clients and mutual fund shareholders pertaining to proxy issues. While the TRPA ESG Committee sets voting guidelines and serves as a resource for T. Rowe Price portfolio management, it does not have proxy voting authority for any Price Fund or advisory client. Rather, voting authority and responsibility is held by the Chairperson of the Price Fund's Investment Advisory Committee or the advisory client's portfolio manager. The TRPA ESG Committee is also responsible for the oversight of third-party proxy services firms that T. Rowe Price engages to facilitate the proxy voting process.

<sup>1</sup> This document is not applicable to T. Rowe Price Investment Management, Inc. ("TRPIM"). TRPIM votes proxies independently from the other T. Rowe Price-related investment advisers and has adopted its own proxy voting policy.

------

**Proxy Voting Team.** 

The Proxy Voting team is responsible for administering the proxy voting process as set forth in the Policies and Procedures.

**Governance Team.** 

Our Governance team is responsible for reviewing the proxy agendas for all upcoming meetings and making company-specific recommendations to our global industry analysts and portfolio managers with regard to the voting decisions in their portfolios.

**Responsible Investment Team.** 

Our Responsible Investment team oversees the integration of environmental and social factors into our investment processes across asset classes. In formulating vote recommendations for matters of an environmental or social nature, the Governance team frequently consults with the appropriate sector analyst from the Responsible Investment team.

**How Proxies are Reviewed, Processed and Voted** 

In order to facilitate the proxy voting process, T. Rowe Price has retained Institutional Shareholder Services ("ISS") as an expert in the proxy voting and corporate governance area. ISS specializes in providing a variety of fiduciary-level proxy advisory and voting services. These services include custom vote recommendations, research, vote execution, and reporting. Services provided by ISS do not include automated processing of votes on our behalf using the ISS Benchmark Policy recommendations. Instead, in order to reflect T. Rowe Price's issue-by-issue voting guidelines as approved each year by the TRPA ESG Committee, ISS maintains and implements custom voting policies for the Price Funds and other advisory client accounts.

**Meeting Notification** 

T. Rowe Price utilizes ISS' voting agent services to notify us of upcoming shareholder meetings for portfolio companies held in client accounts and to transmit votes to the various custodian banks of our clients. ISS tracks and reconciles our clients' holdings against incoming proxy ballots. If ballots do not arrive on time, ISS procures them from the appropriate custodian or proxy distribution agent. Meeting and record date information is updated daily and transmitted to T. Rowe Price through ProxyExchange, an ISS application.

**Vote Determination** 

Each day, ISS delivers into T. Rowe Price's customized ProxyExchange environment a comprehensive summary of upcoming meetings, proxy proposals, publications discussing key proxy voting issues, and custom vote recommendations to assist us with proxy research and processing. The final authority and responsibility for proxy voting decisions remains with T. Rowe Price. Decisions with respect to proxy matters are made primarily in light of the anticipated impact of the issue on the desirability of investing in the company from the perspective of our clients.

Portfolio managers execute their responsibility to vote proxies in different ways. Some have decided to vote their proxies generally in line with the guidelines as set by the TRPA ESG Committee. Others review the customized vote recommendations and approve them before the votes are cast. Portfolio managers have access to current reports summarizing all proxy votes in their client accounts. Portfolio managers who vote their proxies inconsistent with T. Rowe Price guidelines are required to document the rationale for their votes. The Proxy Voting team is responsible for maintaining this documentation and assuring that it adequately reflects the basis for any vote which is contrary to our proxy voting guidelines.

**T. Rowe Price Voting Policies** 

Specific proxy voting guidelines have been adopted by the TRPA ESG Committee for all regularly occurring categories of management and shareholder proposals. A detailed set of proxy voting guidelines is available on the T. Rowe Price website, <u>www.troweprice.com/esgpolicy</u>.

**Global Portfolio Companies** 

The TRPA ESG Committee has developed custom international proxy voting guidelines based on ISS' general global policies, regional codes of corporate governance, and our own views as investors in these markets. ISS applies a two-tier approach to determining and applying global.

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**Fixed Income and Passively Managed Strategies** 

Proxy voting for our fixed income and indexed portfolios is administered by the Proxy Voting team using T. Rowe Price's guidelines as set by the TRPA ESG Committee. Indexed strategies generally vote in line with the T. Rowe Price guidelines. Fixed income strategies generally follow the proxy vote determinations on security holdings held by our equity accounts unless the matter is specific to a particular fixed income security such as consents, restructurings, or reorganization proposals.

**Shareblocking** 

Shareblocking is the practice in certain countries of "freezing" shares for trading purposes in order to vote proxies relating to those shares. In markets where shareblocking applies, the custodian or sub-custodian automatically freezes shares prior to a shareholder meeting once a proxy has been voted. T. Rowe Price's policy is generally to refrain from voting shares in shareblocking countries unless the matter has compelling economic consequences that outweigh the loss of liquidity in the blocked shares.

**Securities on Loan** 

The Price Funds and our institutional clients may participate in securities lending programs to generate income for their portfolios. Generally, the voting rights pass with the securities on loan; however, lending agreements give the lender the right to terminate the loan and pull back the loaned shares provided sufficient notice is given to the custodian bank in advance of the applicable deadline. T. Rowe Price's policy is generally not to vote securities on loan unless we determine there is a material voting event that could affect the value of the loaned securities. In this event, we have the discretion to pull back the loaned securities in order to cast a vote at an upcoming shareholder meeting. A monthly monitoring process is in place to review securities on loan and how they may affect proxy voting.

**Monitoring and Resolving Conflicts of Interest** 

The TRPA ESG Committee is also responsible for monitoring and resolving potential material conflicts between the interests of T. Rowe Price and those of its clients with respect to proxy voting. We have adopted safeguards to ensure that our proxy voting is not influenced by interests other than those of our fund shareholders and other investment advisory clients. While membership on the TRPA ESG Committee is diverse, it does not include individuals whose primary duties relate to client relationship management, marketing, or sales. Since T. Rowe Price's voting guidelines are predetermined by the TRPA ESG Committee, application of the guidelines by portfolio managers to vote client proxies should in most instances adequately address any potential conflicts of interest. However, consistent with the terms of the Policies and Procedures, which allow portfolio managers to vote proxies opposite our general voting guidelines, the TRPA ESG Committee regularly reviews all such proxy votes that are inconsistent with the proxy voting guidelines to determine whether the portfolio manager's voting rationale appears reasonable. The TRPA ESG Committee also assesses whether any business or other material relationships between T. Rowe Price and a portfolio company (unrelated to the ownership of the portfolio company's securities) could have influenced an inconsistent vote on that company's proxy. Issues raising potential conflicts of interest are referred to designated members of the TRPA ESG Committee for immediate resolution prior to the time T. Rowe Price casts its vote.

With respect to personal conflicts of interest, T. Rowe Price's Code of Ethics and Conduct requires all employees to avoid placing themselves in a "compromising position" in which their interests may conflict with those of our clients and restrict their ability to engage in certain outside business activities. Portfolio managers or TRPA ESG Committee members with a personal conflict of interest regarding a particular proxy vote must recuse themselves and not participate in the voting decisions with respect to that proxy.

**Specific Conflict of Interest Situations** 

Voting of T. Rowe Price Group, Inc. common stock (sym: TROW) by certain T. Rowe Price Index Funds will be done in all instances in accordance with T. Rowe Price voting guidelines and votes inconsistent with the guidelines will not be permitted. In the event that there is no previously established guideline for a specific voting issue appearing on the T. Rowe Price Group proxy, the Price Funds will abstain on that voting item. In addition, T. Rowe Price has voting authority for proxies of the holdings of certain Price Funds that invest in other Price Funds. In cases where the underlying fund of an investing Price Fund, including a fund-of-funds, holds a proxy vote, T. Rowe Price will mirror vote the fund shares held by the upper-tier fund in the same proportion as the votes cast by the shareholders of the underlying funds (other than the T. Rowe Price Reserve Investment Fund).

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**Limitations on Voting Proxies of Banks** 

T. Rowe Price has obtained relief from the U.S. Federal Reserve Board (the **"FRB Relief"**) which permits, subject to a number of conditions, T. Rowe Price to acquire in the aggregate on behalf of its clients, 10% or more of the total voting stock of a bank, bank holding company, savings and loan holding company or savings association (each a **"Bank"**), not to exceed a 15% aggregate beneficial ownership maximum in such Bank. One such condition affects the manner in which T. Rowe Price will vote its clients' shares of a Bank in excess of 10% of the Bank's total voting stock (**"Excess Shares"**). The FRB Relief requires that T. Rowe Price use its best efforts to vote the Excess Shares in the same proportion as all other shares voted, a practice generally referred to as "mirror voting," or in the event that such efforts to mirror vote are unsuccessful, Excess Shares will not be voted. With respect to a shareholder vote for a Bank of which T. Rowe Price has aggregate beneficial ownership of greater than 10% on behalf of its clients, T. Rowe Price will determine which of its clients' shares are Excess Shares on a pro rata basis across all of its clients' portfolios for which T. Rowe Price has the power to vote proxies. <sup>2</sup>

**Reporting, Record Retention and Oversight** 

The TRPA ESG Committee, and certain personnel under the direction of the TRPA ESG Committee, perform the following oversight and assurance functions, among others, over T. Rowe Price's proxy voting: (1) periodically samples proxy votes to ensure that they were cast in compliance with T. Rowe Price's proxy voting guidelines; (2) reviews, no less frequently than annually, the adequacy of the Policies and Procedures to make sure that they have been implemented effectively, including whether they continue to be reasonably designed to ensure that proxies are voted in the best interests of our clients; (3) performs due diligence on whether a retained proxy advisory firm has the capacity and competency to adequately analyze proxy issues, including the adequacy and quality of the proxy advisory firm's staffing and personnel and its policies; and (4) oversees any retained proxy advisory firms and their procedures regarding their capabilities to (i) produce proxy research that is based on current and accurate information and (ii) identify and address any conflicts of interest and any other considerations that we believe would be appropriate in considering the nature and quality of the services provided by the proxy advisory firm.

T. Rowe Price will furnish Vote Summary Reports, upon request, to its institutional clients that have delegated proxy voting authority. The report specifies the portfolio companies, meeting dates, proxy proposals, and votes which have been cast for the client during the period and the position taken with respect to each issue. Reports normally cover quarterly or annual periods and are provided to such clients upon request.

T. Rowe Price retains proxy solicitation materials, memoranda regarding votes cast in opposition to the position of a company's management, and documentation on shares voted differently. In addition, any document which is material to a proxy voting decision such as the T. Rowe Price proxy voting guidelines, TRPA ESG Committee meeting materials, and other internal research relating to voting decisions are maintained in accordance with applicable requirements.

<sup>2</sup> The FRB Relief and the process for voting of Excess Shares described herein apply to the aggregate beneficial ownership of T. Rowe Price and TRPIM

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**Vaughan Nelson Investment Management** 

**Investment Adviser Policies and Procedures Manual** 

**Revised September 2022** 

**Proxy Voting Policies and Procedures** 

**Introduction** 

Rule 206(4)-6 under the Investment Advisers Act of 1940 addresses an investment adviser's duty with regard to the voting of proxies for clients. Under the rule an adviser must:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)

Adopt and implement written policies and procedures that are reasonably designed to ensure that client securities are voted in the client's best interest and to address procedures to be undertaken in the event a material conflict arises between the firm's interest and that of our clients as to how a particular security or proxy issue is voted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)

Disclose to clients how they may obtain information regarding how the firm voted with respect to the client's securities; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)

Describe the firm's policies and procedures to clients and, upon request, furnish a copy of the policies and procedures to the requesting client.

Vaughan Nelson Investment Management, LP ("Vaughan Nelson") has created a Proxy Voting Policy, Procedures and Guideline which are reasonably designed to ensure proxies are voted in the best interest of our clients, are in compliance with Rule 206(4)-6 and address the areas noted by the U.S. Securities and Exchange Commission ("SEC") in Staff Legal Bulletin 20 as well as guidance issued from time to time by the SEC. Our authority to vote proxies for our clients is established through either the advisory contract (if the contract is silent, implied by the overall delegation of discretionary authority), or our fiduciary responsibility to ERISA clients under Department of Labor regulations.

**A. Proxy Voting Policy** 

Vaughan Nelson Investment Management, LP ("Vaughan Nelson") will vote proxies of the securities held in its clients' portfolios on behalf of each client that has delegated proxy voting authority to Vaughan Nelson as investment adviser. Vaughan Nelson has adopted and implemented Proxy Voting Policies and Procedures ("Policy and Procedures") to ensure that, where it has voting authority, proxy matters are handled in the best interests of clients, in accordance with Vaughan Nelson's fiduciary duty, and all applicable law and regulations. The Policy and Procedures, as implemented by the Vaughan Nelson Proxy Voting Committee (PVC), are intended to support good corporate governance, including those corporate practices that address environmental and social issues ("ESG Matters"), in all cases with the objective of protecting shareholder interests and maximizing shareholder value.

Vaughan Nelson has also created a Proxy Voting Guideline (the "Guideline") reasonably believed to be in the best interest of clients relating to common and recurring issues found within proxy voting material. In drafting this guideline, the firm considered the nature of the firm's business and the types of securities being managed. The firm created the Guideline to help ensure voting consistency on issues common amongst issuers and to help serve as evidence that a vote was not the product of a conflict of interest but rather a vote in accordance with a pre-determined policy.

Vaughan Nelson uses the services of third parties to provide research, analysis, voting recommendations, and to administer the process of voting proxies for those clients for which Vaughan Nelson has voting authority (collectively the "Proxy Voting Services"). Vaughan Nelson will generally follow its express policy with input from the Proxy Voting Service that provides research, analysis and voting recommendations to Vaughan Nelson unless the Proxy Voting Committee determines that the client's best interests are served by voting otherwise.

**B. General Guidelines** 

The following general guidelines will apply when voting proxies on behalf of accounts for which Vaughan Nelson has voting authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.**

**Client's Best Interests.** The Policy and Procedures are designed and implemented in a way that is reasonably expected to ensure that proxy matters are conducted in the best interests of clients. When considering the best interests of clients, Vaughan Nelson has determined that this means the best investment interest of its clients as shareholders of the issuer. In evaluating our clients' best interests, Vaughan Nelson has integrated the consideration of ESG Matters into its investment process. The Procedures are intended to reflect the incorporation and impact of these factors in cases where they are material to the growth and sustainability of an issuer. Vaughan Nelson has established its Policy and Procedures to assist it in making its proxy voting decisions with a view toward

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enhancing the value of its clients' interests in an issuer over the period during which it expects its clients to hold their investments. Vaughan Nelson will vote against proposals that it believes could negatively impact the current or future market value of the issuer's securities during the expected holding period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.**

**Client Proxy Voting Authority.** Rather than delegating proxy voting authority to Vaughan Nelson, a client may retain the authority to vote proxies for securities in its account (or delegate voting authority to another party). Vaughan Nelson will honor this instruction as included within the investment management agreement or separately authorized document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.**

**Stated Proxy Guideline.** In the interest of consistency in voting proxies on behalf of its clients, Vaughan Nelson has adopted a Proxy Guideline that identifies issues where Vaughan Nelson will (a) generally vote in favor of a proposal; (b) generally vote against a proposal; or (c) specifically consider its vote for or against a proposal. However, each vote may be cast differently than the stated guideline, taking into consideration all relevant facts and circumstances at the time of the vote. In cases where the recommendation of the issuer's management and the Proxy Voting Service are the same, the vote will generally be cast as recommended and will not be reviewed on a case-by- case basis by the Proxy Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.**

**Abstentions, Limitations and Other Exceptions.** Vaughan Nelson's general policy is to vote rather than abstain from voting on issues presented. However, in the following circumstances Vaughan Nelson may not vote a client's proxy:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Mutual Funds – where voting may be controlled by restrictions within the fund or the actions of authorized persons

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

International Securities – where the perceived benefit of voting an international proxy does not outweigh the anticipated costs of doing so

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

New Accounts – instances where security holdings assumed will be sold in the near term thereby limiting any benefit to be obtained by a vote of proxy material

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Unsupervised Securities – where the firm does not have a basis on which to offer advice

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Unjustifiable Costs – for example, the firm may abstain from voting a client proxy in a specific instance if, in our good faith determination, the costs involved in voting such proxy cannot be justified (e.g., total client holdings less than 10,000 shares and not held by a mutual fund; costs associated with obtaining translations of relevant proxy materials for non-U.S. securities) in light of the benefits to the client of voting. In accordance with the firm's fiduciary duties, the firm shall, in appropriate cases, weigh the costs and benefits of voting proxy proposals and shall make an informed decision with respect to whether voting a given proxy proposal is prudent. The decision will take into account the effect the vote is expected to have on the value of a client's investment and whether this expected effect would outweigh the cost of voting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Administrative requirements for voting proxies in certain foreign jurisdictions such as providing a power of attorney to the client's local sub-custodian, cannot be fulfilled due to timing of the requirement, or the costs required to fulfill the administrative requirements appear to outweigh the benefits to the client of voting the proxy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Securities Not Held on Meeting Date – securities held on 'record date' but divested prior to the 'meeting date'

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

The client, as of the record date, has loaned the securities to which the proxy relates and Vaughan Nelson has concluded that it is not in the best interest of the client to recall the loan or is unable to recall the loan in order to vote the securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

ERISA accounts – with respect to ERISA clients for whom we have accepted the responsibility for proxy voting, we vote proxies in accordance with our duty of loyalty and prudence, compliance with the plan documents, and the firm's duty to avoid prohibited transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.**

**Oversight.** All issues presented for shareholder vote are subject to the oversight of the Proxy Voting Committee, either directly or by application of this Policy and Guideline. All non-routine issues will generally be considered directly by the Proxy Voting Committee and/or, when necessary, the investment professionals responsible for an account holding the security and will be voted in the best investment interests of the client. All routine "for" and "against" issues will be voted according to the Guideline unless special factors require that they be considered by the PVC and/or the investment professionals responsible for an account holding the security.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.**

**Availability of Procedures.** Vaughan Nelson includes a description of its Proxy Voting Procedures in Part 2A of its Form ADV. Upon request, Vaughan Nelson also provides clients with a copy of its Proxy Voting Procedures.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.**

**Disclosure of Vote.** Vaughan Nelson will, upon request by a client, provide information about how each proxy was voted with respect to the securities in that client's account. Vaughan Nelson's policy is not to disclose a client's proxy voting records to third parties except as required by applicable law and regulations.

**C. Proxy Voting Committee (PVC)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.**

**Proxy Voting Committee Composition.** The Proxy Voting Committee will be composed of a Compliance team member, a Portfolio Manager and other employees of Vaughan Nelson as needed. In the event that any member is unable to participate in a meeting of the Proxy Voting Committee, the member may designate another individual to act on the member's behalf. Each portfolio manager of an account that holds voting securities of an issuer or the analyst covering the issuer or its securities may be an ad hoc member of the Proxy Voting Committee in connection with voting proxies of that issuer. Voting determinations made by the Proxy Voting Committee will be memorialized electronically.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.**

**Duties.** The Proxy Voting Committee's specific responsibilities include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Annually reviewing the Proxy Voting Policies and Procedures to ensure they continue to be reasonably designed to ensure proxy votes are cast in the clients' best interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Annually reviewing, updating and modifying the Guidelines

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

overseeing the vote on proposals according to the predetermined Guideline,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

directing the vote on proposals where there is reason not to vote according to the predetermined Guideline or where proposals require special consideration,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

consulting with the portfolio managers and analysts for the accounts holding the security when necessary or appropriate.

**D. Proxy Voting Service (PVS)** 

Vaughan Nelson intends to use a PVS in a limited capacity to assist the firm with its proxy voting responsibilities and to obtain supplemental research information which will assist the firm in voting some proxy items (i.e., ESG related items, items not addressed in the firm's proxy voting guideline). The PVS will be used primarily to collect proxy ballots for our clients, provide the firm a platform in which to indicate our vote, provide company research as a point of information to assist our firm with voting and assist our firm in generating proxy voting reports.

Given the different business lines of a PVS, there will be instances where the research received from the PVS might be influenced by a conflict of interest resulting from the PVS's affiliations or other relationships/engagements the PVS has with an issuer.

Vaughan Nelson will become informed of these conflicts by:

1)

Periodically obtaining an updated list of the PVS's affiliates and a list of its significant relationships with publicly traded issuers that are clients.

Vaughan Nelson will use these lists along with any available on-line tools made available by the PVS to determine if an upcoming proxy vote may present a conflict of interest for the PVS and take that information into consideration if we intend to use the PVS's research to vote a proxy item that is not addressed in our firm's recurring Proxy Voting Guideline.

2)

Obtaining a copy of the PVS's Code of Ethics and Policies and Procedures (or similar document) to ensure they address the topic of conflicts of interest with their employees and have processes in place to mitigate any issues.

3)

Reviewing for indications of conflict for each proxy to be voted.

Vaughan Nelson will perform a third party service provider review of the PVS on an annual basis to determine whether the PVS: a) has been the subject of any inquiries, subpoenas, investigations or penalties by the SEC or any other regulator; b) has the capacity and competency (i.e. staffing, technology) to adequately analyze matters and provide its services; c) has appropriate disclosure regarding the source of information and methodologies used in formulating recommendations; d) has an effective process for seeking timely input from issuers and clients regarding its voting policies, methodologies, peer group construction, identifying and addressing conflicts of interest; e) has a process to correct material deficiencies in the issuer information or research it has provided

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**E. Conflicts of Interest** 

Vaughan Nelson has established policies and procedures to ensure that proxy votes are voted in its clients' best interests and are not affected by any possible conflicts of interest. When determining the vote on any proposal, the Proxy Committee will not consider any benefit to Vaughan Nelson, any of its affiliates, any of its or their clients or service providers, other than benefits to the owner of the securities to be voted.

Vaughan Nelson envisions only rare situations where a conflict of interest would exist or potentially exist between our firm and our clients given the nature of our business, clients, relationship and the types of securities being managed. Notwithstanding, an actual or potential conflict may be resolved in either of the following manners:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

If the proposal that gives rise to an actual or potential conflict is specifically addressed in the Guideline, the firm may vote the proxy in accordance with the pre-determined Guideline (provided that the pre-determined Guideline involves little or no discretion on the firm's part);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>•</sup>

Otherwise, the firm will follow the recommendations of the PVS as to how the proxy should be voted. However, if the conflict of interest is a result of the PVS' affiliations or other lines of business, then the firm will take that information into consideration if the firm intends to use the PVS's research to vote a proxy item that is not addressed in our firm's recurring Proxy Voting Guideline.

Vaughan Nelson, as an indirect subsidiary of a Bank Holding Company (Natixis), is restricted from voting the shares it has invested in banking entities on behalf of its clients in instances where the aggregate ownership of all the Bank Holding Company's investment management subsidiaries exceed 5% of the outstanding voting shares of a bank. Where the aggregate ownership described exceeds the 5% threshold, the firm will instruct the PVS, an independent third party, to vote the proxies in line with their recommendation.

**F. Recordkeeping**

**G. Proxy Voting Procedures**

The procedures to be performed by a Compliance Individual (CI), the firm's Proxy Administrator (PA) and, as needed, the Proxy Voting Committee (or representative thereof) in the execution of our proxy voting duty to clients will be as follows:

**<u>Client account</u> <u>Setup</u><u>/Reconciliation</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. New clients will receive a copy of the "Description of Proxy Voting Policies and Procedures" as part of information provided in connection with the firm's New Client Checklist. This document details the proposed scope of Vaughan Nelson's proxy voting responsibilities and summarizes the processes used to vote proxies on behalf of a client if the client delegates the proxy voting responsibility to Vaughan Nelson.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. At the time a contract is entered into a determination will be made as to whether the client will retain proxy voting responsibilities. A separate acknowledgement will be obtained where the client elects to retain proxy voting responsibilities, if so desired.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The PA will arrange for client proxy material to be forwarded to the PVS for voting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Vaughan Nelson uploads an automated FTP position file each day (on a settlement date basis) detailing all the securities held on behalf of our clients. The PVS will reconcile the daily file uploaded against their records and inform us if there are any account discrepancies. VN will research the reason for any account discrepancies in a timely manner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The PVS will match the proxy material they receive for the accounts listed in the daily FTP position file and follow up with any custodian that has not forwarded proxies within a reasonable time.

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**<u>Securities Lending</u>** 

In many cases Vaughan Nelson's clients participate in securities lending programs whereby the legal right to vote a proxy is transferred to the borrower as a result of the lending process. From time to time, circumstances may arise where Vaughan Nelson desires to vote shares in an upcoming proxy (i.e. acquisition, contested election, etc.) if it is determined that it is in the client's best interest. In these cases, Vaughan Nelson, if the record date has not passed, will request the client to 'recall' the security in question from loan until the proxy record date in order for the client (and thereby Vaughan Nelson) to be the holder of record in order to cast the proxy vote.

**<u>Voting Process</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The PA will log into the PVS system daily to review the proxy meetings that need to be voted. The PA has developed a desk top procedure help track the upcoming proxy meetings to ensure that all proxies are voted in a timely manner and none are missed.

2. While the PVS system provides a monthly view of upcoming proxy meetings, sometimes the research materials are not immediately available. Through web access and the PVS system, the PA is able to determine for each security its record date, meeting date and whether the PVS has completed proxy research on the security.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Once the PVS research reports are available for a proxy meeting, the meeting is ready to be voted. At such time, the PA will review our internal positions/holdings report detailing the shares held of the security for our clients and compare it for reasonableness to the positions/holdings report provided by the PVS. Sometimes, share discrepancies exist because a client might have shares on loan or because clients have opted to retain the responsibility to vote their own proxies. Although Vaughan Nelson relies mainly on account reconciliations (instead of share reconciliations) to ensure proxies are being voted, the PA will research certain share discrepancies as detailed in the PA's desk top procedures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Download the PVS proxy research for each security and save it to a shared drive to be used by the CI if needed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The PA will provide the CI with a copy of the voting form and provide a description of any conflict of interest for the company flagged by the PVS system.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. The CI will make a determination as to whether a material conflict exists with regard to the proxy or an individual proxy issue. The results of this determination will be documented and initialed on the proxy voting form. The CI will review the proxy issues against the firm's Guideline and cast each vote on the voting form, if able, and sign off on having voted those issues.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)

If all issues were able to be voted within the Guideline the package will be returned to the PA for online voting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)

If issues exist for which a case-by-case review must be made the package is forwarded to the PVC. The PVC will review the information within the package and any other necessary information in order to formulate the vote to be cast. If necessary, the proxy item(s) will be forwarded to the appropriate Portfolio Manager for input. The rationale for any departures from the firm's Guideline will be documented within the package. All votes will be indicated on the voting form and a member of the PVC or the Portfolio Manager will sign off as to having voted those issues. The package will then be returned to the PA for voting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)

As described under "Conflicts of Interests", where a material conflict exists the firm may vote the issue 1) in accordance with the Guideline if the application of such policy to the issue at hand involves little or no discretion on the part of the firm, or

2) as indicated by the independent third-party research firm(if the PVS has no conflict), or 3) If both VN and the PVS have a conflict of interest, then this will be documented and taken into consideration when determining how the vote will be cast in the client's best interest . By voting conflicts in accordance with the indication of an independent third-party, the firm will be able to demonstrate that the vote was not a product of a conflict of interest. An indication that this was the approach taken to vote the issue will be made and signed off on by a member of the PVC. The package will then be returned to the PA for voting.

7. Through the software interface with the PVS the PA will indicate, review and submit our vote on individual securities. The PA is able to re-submit our vote up until the day before the meeting which can accommodate cases where new information may come to light.

8. The PVS will then process the vote with the issuer on behalf of the firm.

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**Victory Capital** 

Compliance Policy Executive Summary

Policy Name: H-12 Proxy Voting Policy

Applicability: Victory Capital Management Inc. ("Victory Capital")

Category: Investments - General

Compliance Owner: Chief Compliance Officer, Victory Capital

Business Owner: Director Responsible Investment, Victory Capital

Effective Date: June 1, 2022

Executive Summary: Policy and procedures governing the voting of client securities

BACKGROUND AND RISKS

Voting rights associated with security ownership are closely related to the discretionary asset management services Victory Capital provides to its clients. Therefore, Victory Capital should be capable of accepting and exercising voting authority on behalf of clients with the same standard of care, skill, prudence, and diligence it is subject to when exercising its investment authority on behalf of clients. Further, in order to exercise voting authority on behalf of clients, Victory Capital must comply with Rule 206(4)-6 (the "proxy rule") which requires Victory Capital to adopt and implement written policies and procedures designed to ensure it votes securities in the best interest of clients including managing material conflicts of interest between Victory Capital and its clients. The proxy rule also requires Victory Capital to disclose to clients a summary of its proxy voting policies and procedures, how they may obtain a copy of these procedures, and information about how Victory Capital voted their securities.

Inability to accept and exercise voting authority on behalf of clients or failure to comply with the proxy rule could result in violations of securities law, breach of fiduciary duty, client harm, or damage to Victory Capital's reputation.

POLICY

Victory Capital will establish policies and procedures and retain resources necessary to ensure it is capable of exercising voting authority on behalf of clients according to the same standard of care with which it exercises investment authority. Because Victory Capital will exercise voting authority, it will comply with the proxy rule and must vote securities in the best interest of clients.

For purposes of this policy, voting in the best interest of clients means using complete and accurate information to vote with the objective of increasing the long-term economic value of client assets. Similar to investment decision making, voting decisions are qualitative in nature and Victory Capital will consider a variety of factors to arrive at vote decisions. Further a voting decision in the same security may be different between clients for the same reasons Victory Capital clients are invested in different securities. For example, client agreements, investment strategies, or specific investment franchise views on ballot proposals may cause the same security to be voted in a different manner across Victory Capital's client base.

Victory Capital will vote all securities over which it has authority, provided the client has voting rights and there is sufficient time and information available to make informed decisions. Victory Capital will take reasonable steps to obtain appropriate and timely information. In situations where voting may impact the ability to trade a security (e.g., shareblocking), Victory Capital will not vote unless it determines that voting is in a client's best interest.

For a copy of the guidelines (as defined below) please visit Victory Capital's website at https://investor.vcm.com/policies. To obtain information on specific proxies voted by Victory Capital, clients may contact their Victory Capital client manager or email an inquiry to client_service_team@vcm.com.

Victory Capital will create, maintain, and retain appropriate records related to voting client securities.

LIST OF REQUIRED CONTROLS

<sup>•</sup>

Proxy Voting Committee (the "committee")

<sup>•</sup>

Client Investment Management Agreements ("IMAs")

<sup>•</sup>

Third-party proxy firm ("proxy firm")

<sup>•</sup>

M-19 Vendor Due Diligence and Oversight ("vendor oversight policy")

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

<sup>•</sup>

Proxy voting guidelines

<sup>•</sup>

Annual committee guideline review

<sup>•</sup>

Form ADV, Part 2A

<sup>•</sup>

M-13 Record Retention and Destruction, Appendix A ("recordkeeping requirements")

CONTROL IMPLENTATION PROCEDURES

<sup>•</sup>

The committee will consist of members with experience related to the functional areas applicable to voting client securities including responsible investing, investment management, operations, and compliance. The committee is responsible for exercising Victory Capital's fiduciary responsibilities related to voting client securities including voting in the best interests of clients and identifying and managing conflicts of interest. The committee will be active, keep a charter, and maintain records that demonstrate adequate execution of its responsibilities.

<sup>•</sup>

When a client enters into an advisory relationship with Victory Capital, proxy voting roles and responsibilities between the client and Victory Capital will be fully disclosed. Responsibilities delegated to Victory Capital will be communicated to the committee and the committee will be responsible for implementing voting requirements in accordance with each IMA.

<sup>•</sup>

In order to support its fiduciary duty related to voting client securities, Victory Capital will retain, and the committee will oversee a third-party proxy advisory firm ("proxy firm") to provide both administrative and advisory services related to voting client securities. Selection and ongoing oversight of the proxy firm will be conducted in accordance with the vendor oversight policy. The Sponsor, as defined in the vendor oversight policy, must be a member of the committee. Currently, Victory Capital retains Institutional Shareholder Services Inc. as its proxy firm.

<sup>•</sup>

The committee will adopt written proxy voting guidelines authored by the proxy firm ("guidelines"). These guidelines can be used as standing instructions on how the proxy firm must vote ballots provided that the committee must:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>○</sup>

Have the ability to customize the guidelines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>○</sup>

Retain the ability to override the guidelines on individual ballot proposals at the client level.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>○</sup>

Review the guidelines at least annually, implement customizations based on this review, and submit a written memo to the compliance committee documenting the results of the annual review that includes the name of the proxy firm, links to the specific guidelines adopted, and a description of customizations made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>○</sup>

Make the memo available to clients upon request.

<sup>•</sup>

The purpose of the guidelines is 1) to benefit from the specialized expertise related to voting securities provided by the proxy firm and to provide an independent source to resolve conflicts of interest identified between Victory Capital and its clients. For the first purpose, the committee will take into account the guidelines but will have ultimate responsibility for voting decisions. The committee will, in its discretion, rely on additional sources such as portfolio manager input to ensure the voting decisions it makes are in the best interest of specific clients. If the guidelines are silent on any pending ballot proposal, the committee will exercise its voting responsibility with due care and document the rationale for the vote decision. For the second purpose, if the committee identifies a conflict of interest between Victory Capital and clients, the committee must vote in accordance with the guidelines unless the rationale for deviating from guidelines has unanimous consent from the committee and is put in writing, including an analysis of how the conflict of interest is eliminated, mitigated, or disclosed.

<sup>•</sup>

The proxy firm will provide technology-based platform that provides operational controls over voting securities that include, at minimum, ballot reconciliation, casting complete ballots in a timely manner and in accordance with adopted written guidelines, ability to adjust or override a vote based on committee input, and reporting. The committee is responsible for ensuring these controls are operating as intended though must, at minimum, develop reporting designed to ensure all eligible client accounts are properly set up and configured on the proxy firm's platform and that the proxy firm is voting securities in accordance with the guidelines and this policy. Such reports should be reviewed by the committee at regular intervals and any exceptions should be referred to the LCR department

<sup>•</sup>

The disclosures required under the proxy rule will be contained in Victory Capital's Form ADV, Part 2A and will be delivered to clients at the time and frequency required by regulation.

<sup>•</sup>

The committee will be familiar with the recordkeeping requirements related to voting client securities and will maintain records and ensure the proxy firm maintains records for the required periods.

------

**Westwood Holdings Group, Inc.** 

**Investment Adviser** 

**Proxy Voting Policies & Procedures** 

**Updated March 31, 2022** 

**Proxy Voting** 

**Policy** 

Westwood, as a matter of policy and as a fiduciary to our clients, has a responsibility for voting proxies for portfolio securities in a manner that is consistent with the best economic interests of the clients. Our Firm maintains written policies and procedures as to the handling, research, voting and reporting of proxy voting and makes appropriate disclosures about our Firm's proxy policies and practices. Our policy and practice includes the responsibility to monitor corporate actions, receive and vote client proxies and disclose any potential conflicts of interest. In addition, our policy and practice is to make information available to clients about the voting of proxies for their portfolio securities and to maintain relevant and required records.

**Firm Specific Policy** 

Westwood has engaged Broadridge for assistance with the proxy voting process for our clients. Broadridge is a leading provider of full-service proxy voting services to the global financial industry. Westwood has also engaged Glass Lewis for assistance with proxy research and analysis. Glass Lewis provides complete analysis and voting recommendations on all proposals and is designed to assist investors in mitigating risk and improving long-term value. In most cases, Westwood agrees with Glass Lewis's recommendations; however, ballots are reviewed bi-monthly by our analysts and we may choose to vote differently than Glass Lewis if we believe it to be in the client's best interest. In addition, Westwood will implement "echo voting" (voting pro rata with all other shareholders) for investment company clients relying on Investment Company Act §12(d)(1)(F) and Rule 12d1-3 in order to allow certain purchases of other investment companies in excess of limits that would otherwise apply.

**Responsibility** 

Westwood's Operations Team has the responsibility for the implementation and monitoring of our proxy voting policy, practices, disclosures and record keeping, including outlining our voting guidelines in our procedures.

**Background** 

Proxy voting is an important right of shareholders, and reasonable care and diligence must be taken to ensure that such rights are properly and timely exercised.

Investment advisers who are registered with the SEC, and who exercise voting authority with respect to client securities, are required by Rule 206(4)-6 of the Advisers Act to (a) adopt and implement written policies and procedures that are reasonably designed to ensure that client securities are voted in the best interests of clients, which must include how an adviser addresses material conflicts that may arise between an adviser's interests and those of its clients, (b) disclose to clients how they may obtain information from the adviser with respect to the voting of proxies for their securities, (c) describe a summary of its proxy voting policies and procedures and, upon request, to furnish a copy to its clients, and (d) to maintain certain records relating to the adviser's proxy voting activities when the adviser does have proxy voting authority.

**Procedure** 

Westwood has adopted the following procedures to implement the Firm's proxy voting policy, in addition to adopting the Glass Lewis Proxy Voting Guidelines (general guidelines and guidelines specific to Taft-Hartley). Westwood conducts reviews to monitor and ensure the Firm's policy is observed, implemented properly and amended or updated, as appropriate:

**Proxy Voting Records** 

With respect to proxy record keeping, the Operations Team maintains complete files for all clients. These files include a listing of all proxy materials sent on behalf of our clients along with individual copies of each response. Client access to these files can be arranged upon request. A voting summary will be furnished upon request.

------

**Voting Procedures** 

a. All employees forward proxy materials received on behalf of clients to Broadridge. Westwood has engaged Broadridge for assistance with the proxy voting process for our clients and Glass Lewis provides voting recommendations;

b. Broadridge has access to holders' records and determines which client accounts hold the security to which the proxy relates;

c. Absent material conflicts, Broadridge, with the vote recommendations from Glass Lewis, determines how Westwood should vote the proxy in accordance with applicable voting guidelines;

d. Westwood's analysts review the Glass Lewis proxy voting recommendations on a bi-monthly basis. The analysts may choose to vote differently than Glass Lewis if they believe it is in the best interest of the client or where a different vote is warranted in light of the respective investment strategy;

e. If Westwood chooses to vote differently than Glass Lewis, then Westwood overwrites the Glass Lewis recommendation on the ProxyEdge platform. If Westwood agrees with the Glass Lewis recommendations, no action is necessary; and,

f. Broadridge completes the proxy in a timely and appropriate manner.

g. For certain investment companies managed by Westwood and approved by the CCO (each a "Westwood 12d1F Fund"), Westwood will implement echo voting for shares of other investment companies (each an "Acquired Fund") held by a Westwood 12d1F Fund. The Data Management Team will override any Glass Lewis proxy voting recommendations with respect to shares of an Acquired Fund held by a Westwood 12d1F Fund, and will instead, vote all such Acquired Fund shares pro rata with all other shareholders of each respective Acquired Fund. The Data Management Team will record any votes made with echo voting as overrides to the Glass Lewis recommendations.

**Disclosure** 

a. Westwood provides required disclosures in Form ADV Part 2A, which summarizes these proxy voting policies and procedures and includes information whereby clients may request information regarding how Westwood voted the client's proxies;

b. Westwood's disclosure summary includes a description of how clients may obtain a copy of the Firm's proxy voting policies and procedures. Westwood's proxy voting practice is disclosed in the Firm's advisory agreements.

**Client Requests for Information** 

a. All client requests for information regarding proxy votes, or regarding policies and procedures that are received by any supervised person should be forwarded to the Operations Team; and

b. In response to any request, the Data Management Team prepares a written response with the information requested, and as applicable, includes the name of the issuer, the proposal voted upon, and how Westwood voted the client's proxy with respect to each proposal about which the client inquired.

**Voting Guidelines** 

a. Westwood has engaged Broadridge and Glass Lewis for assistance with the proxy voting process for our clients. The Glass Lewis Proxy Voting Guidelines (general) and (Taft-Hartley) are attached; and

b. Westwood analysts review the Glass Lewis proxy voting recommendations using the following guidelines:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. In the absence of specific voting guidelines from the client, Westwood votes proxies in the best interests of each client;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Westwood's policy is to vote all proxies from a specific issuer the same way for each client absent qualifying restrictions or other mandates from a client;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Clients are permitted to place reasonable restrictions and mandates on Westwood's voting authority in the same manner that they may place such restrictions on the actual selection of account securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. Westwood generally votes in favor of routine corporate housekeeping proposals such as the election of directors and selection of auditors absent conflicts of interest raised by an auditor's non-audit services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. Westwood generally votes against proposals that cause board members to become entrenched or cause unequal voting rights; and

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi. In reviewing proposals, Westwood further considers the opinion of management, the effect on management, and the effect on shareholder value and the issuer's business practices.

**Conflicts of Interest** 

a. Westwood attempts to identify any conflicts that exist between the interests of the Firm and the client by (i) reviewing the relationship of Westwood with the issuer of each security, and (ii) determining if Westwood or any of its supervised persons has any financial, business or personal relationship with the issuer;

b. If a material conflict of interest exists, Westwood will determine whether it is appropriate to disclose the conflict to the affected clients, to give the clients an opportunity to vote the proxies themselves, or to address the voting issue through other objective means, such as voting in a manner consistent with a predetermined voting policy or receiving an independent third-party voting recommendation; and

c. Westwood will maintain a record of the voting resolution of any conflict of interest.

**Recordkeeping** 

The Operations Team retains the following proxy records in accordance with the SEC's five-year retention requirement:

a. These policies and procedures and any amendments;

b. Each proxy statement that Westwood receives;

c. A record of each vote that Westwood casts;

d. Any document Westwood created that was material to making a decision how to vote proxies, or that memorializes that decision, including periodic reports to the Data Management Team or proxy committee, if applicable;

e. A copy of each written request from a client for information on how Westwood voted such client's proxies and a copy of any written response;

f. Copies of materials used to conduct due diligence on proxy voting service providers; and

g. Records documenting audits and other periodic reviews of proxy voting recommendations.

**Proxy Voting Vendor Oversight** 

Westwood conducts initial and ongoing oversight of proxy voting vendors with participation by the Client Service, Compliance, Operations and Investment teams.

In addition to conducting initial due diligence, Westwood monitors and reviews all third- party proxy services to evaluate any conflicts of interest, consistency of voting with guidelines, fees and disclosures, and technical and operational capabilities, among other things.

At least annually, Westwood audits on a sampling basis the recommendations received from Glass Lewis to assess the consistency of its recommendations with Glass Lewis' published guidelines.

------

**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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Articles of Incorporation

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) a. [<u>Articles of Amendment and Restatement dated 02/14/2019 - Filed as Ex-99(a) on 02/26/2019</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000131/ex99a-articlesofrestatemen.htm) [<u>(Accession No. 0000898745-19-000131)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000131/ex99a-articlesofrestatemen.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. [<u>Articles of Amendment effective 03/01/2022 - Filed as Ex-99(a)(1)b on 02/24/2022 (Accession No.</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322001059/f11080d2.htm) [<u>0001683863-22-001059)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322001059/f11080d2.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) [<u>Articles Supplementary dated 09/23/2022</u> <u>–</u> <u>Filed as Ex-99(a)(2) on 11/17/2022 (Accession No.</u>](https://www.sec.gov/Archives/edgar/data/898745/000089874522000193/ex99a2-articlessupplementa.htm) [<u>0000898745-22-000193)</u>](https://www.sec.gov/Archives/edgar/data/898745/000089874522000193/ex99a2-articlessupplementa.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) By-laws

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) [<u>Amended and Restated By-laws effective 06/09/2020 - Filed as Ex-99(b) on 10/30/2020 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfiarbylaws060920.htm) [<u>0000898745-20-000619)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfiarbylaws060920.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Instruments Defining Rights of Security Holders: None other than those included in response to Items 28(a) and 28(b)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Investment Advisory Agreements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) [<u>Amended and Restated Management Agreement dated 03/01/2023</u>](f24464d2.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) a. [<u>AllianceBernstein Amended & Restated Sub-Advisory Agreement dated 01/01/2020 - Filed as</u>](https://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99-alliancearsubadvagmt0.htm) [<u>Ex-99(d)(2)a on 02/26/2020 (Accession No. 0000898745-20-000125)</u>](https://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99-alliancearsubadvagmt0.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. [<u>Barrow, Hanley, Mewhinney & Strauss, LLC Amended & Restated Sub-Advisory Agreement dated</u>](f24464d3.htm) [<u>01/01/2023</u>](f24464d3.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. (1) [<u>BlackRock Financial Management, Inc. Amended & Restated Sub-Advisory Agreement</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfiblackrockfinancialarsub.htm) [<u>dated 07/01/2020 - Filed as Ex-99(d)(2)c(1) on 10/30/2020 (Accession No. 0000898745-</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfiblackrockfinancialarsub.htm) [<u>20-000619)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfiblackrockfinancialarsub.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) [<u>BlackRock International Limited Sub-Sub-Advisory Agreement dated 04/17/2017 - Filed as</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517000909/blackrockinternationallimi.htm) [<u>Ex-99(d)(2)g(3) on 06/09/2017 (Accession No. 0000898745-17-000909)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517000909/blackrockinternationallimi.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. [<u>Brown Investment Advisory, Inc. Sub-Advisory Agreement dated 01/01/2020 - Filed as</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99-brownarsubadv010120.htm) [<u>Ex-99(d)(2)e on 02/26/2020 (Accession No. 0000898745-20-000125)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99-brownarsubadv010120.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. [<u>Causeway Capital Management LLC Amended & Restated Sub-Advisory Agreement dated</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pficausewaycapitalarsub-ad.htm) [<u>07/01/2020 - Filed as Ex-99(d)(2)e on 10/30/2020 (Accession No. 0000898745-20-000619)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pficausewaycapitalarsub-ad.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. [<u>ClearBridge RARE Infrastructure (North America) Pty Limited Sub-Advisory Agreement dated</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pficlearbridgeraresub-advi.htm) [<u>07/31/2020 - Filed as Ex-99(d)(2)f on 10/30/2020 (Accession No. 0000898745-20-000619)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pficlearbridgeraresub-advi.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. [<u>CoreCommodity Management, LLC Sub-Advisory Agreement dated 05/01/2022 - Filed as</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d4.htm) [<u>Ex-99(d)(2)G on 07/01/2022 (Accession No. 0001683863-22-005229)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d4.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. [<u>DDJ Capital Management, LLC Sub-Advisory Agreement dated 01/31/2022 - Filed as Ex-99(d)(2)h</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322001059/f11080d4.htm) [<u>on 02/24/2022 (Accession No. 0001683863-22-001059)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322001059/f11080d4.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. [<u>Eagle Asset Management, Inc. Amended & Restated Sub-Advisory Agreement dated 01/01/2023</u>](f24464d4.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. [<u>Emerald Advisers, LLC Amended and Restated Sub-Advisory Agreement dated 01/01/2020 - Filed</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99-emeraldarsubadv010120.htm) [<u>as Ex-99(d)(2)k on 02/26/2020 (Accession No. 0000898745-20-000125)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99-emeraldarsubadv010120.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k. (1) [<u>Gotham Asset Management, LLC Sub-Advisory Agreement dated 06/25/2019 - Filed as</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000686/gothamsub-advisoryagmt0625.htm) [<u>Ex-99(d)(2)m on 10/31/2019 (Accession No. 0000898745-19-000686)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000686/gothamsub-advisoryagmt0625.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) [<u>Gotham Asset Management LLC Amendment to Sub-Advisory Agreement dated</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000772/gothamsub-advagmtamdmt1005.htm) [<u>10/05/2020 - Filed as Ex-99(d)(2)k(2) on 12/29/2020 (Accession No. 0000898745-20-</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000772/gothamsub-advagmtamdmt1005.htm) [<u>000772)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000772/gothamsub-advagmtamdmt1005.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l. [<u>Graham Capital Management, L.P. Amended & Restated Sub-Advisory Agreement dated</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfigrahamarsub-advisoryagm.htm) [<u>07/01/2020 - Filed as Ex-99(d)(2)n on 10/30/2020 (Accession No. 0000898745-20-000619)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfigrahamarsub-advisoryagm.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m. [<u>Hotchkis & Wiley Capital Management, LLC Sub-Advisory Agreement dated 06/28/2018 - Filed as</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874518000609/hotchkiswileysubadvagmt062.htm) [<u>Ex-99(d)(2)v on 07/13/2018 (Accession No. 0000898745-18-000609)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874518000609/hotchkiswileysubadvagmt062.htm)

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
|  | n. | &nbsp;&nbsp; [<u>Impax Asset Management Limited Sub-Advisory Agreement dated 10/18/2021 - Filed as</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d4.htm)<br> [<u>Ex-99(d)(2)(n) on 12/28/2021 (Accession No. 0001683863-21-007448)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d4.htm) |
|  | o. | &nbsp;&nbsp; [<u>Insight North America LLC Amended and Restated Sub-Advisory Agreement dated 04/01/2022 -</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d5.htm)<br> [<u>Filed as Ex-99(d)(2)O on 07/01/2022 (Accession No. 0001683863-22-005229)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d5.htm) |
|  | p. | &nbsp;&nbsp; [<u>Loomis, Sayles & Company, L.P. Sub-Advisory Agreement dated 07/01/2020 - Filed as</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfiloomissaylesarsub-advis.htm)<br> [<u>Ex-99(d)(2)q on 10/30/2020 (Accession No. 0000898745-20-000619)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfiloomissaylesarsub-advis.htm) |
|  | q. | &nbsp;&nbsp; [<u>Los Angeles Capital Management and Equity Research, Inc. Amended & Restated Sub-Advisory</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfilacapitalarsub-advisory.htm)<br> [<u>Agreement dated 071/01/2020 - Filed as Ex-99(d)(2)r on 10/30/2020 (Accession No. 0000898745-</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfilacapitalarsub-advisory.htm)<br> [<u>20-000619)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfilacapitalarsub-advisory.htm) |
|  | r. | &nbsp;&nbsp; [<u>Macquarie Capital Investment Management, LLC (Delaware Investments Fund Advisers)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d6.htm)<br> [<u>Amended & Restated Sub-Advisory Agreement dated 04/01/2022 - Filed as Ex-99(d)(2)R(2) on</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d6.htm)<br> [<u>07/01/2022 (Accession No. 0001683863-22-005229)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d6.htm) |
|  | s. | &nbsp;&nbsp; [<u>Newton Investment Management North America, LLC Sub-Advisory Agreement dated 08/31/2021</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d6.htm)<br> [<u>- Filed as Ex-99(d)(2)(t) on 12/28/2021 (Accession No. 0001683863-21-007448)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d6.htm) |
|  | t. | &nbsp;&nbsp; [<u>Nuveen Third Amended and Restated Sub-Advisory Agreement dated 01/13/2022 - Filed as</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322001059/f11080d5.htm)<br> [<u>Ex-99(d)(2)u on 02/24/2022 (Accession No. 0001683863-22-001059)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322001059/f11080d5.htm) |
|  | u. | [<u>Origin Asset Management LLP Amended & Restated Sub-Advisory Agreement dated 01/01/2023</u>](f24464d5.htm) \* |
|  | v. | &nbsp;&nbsp; [<u>Pictet Asset Management SA Amended & Restated Sub-Advisory Agreement dated 10/01/2017 -</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001335/ex-99d2dd1pictetxpfisubxad.htm)<br> [<u>Filed as Ex-99(d)(2)dd(1) on 12/15/2017 (Accession No. 0000898745-17-001335)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001335/ex-99d2dd1pictetxpfisubxad.htm) |
|  | w. | &nbsp;&nbsp; [<u>PineBridge Investments LLC Sub-Advisory Agreement dated 04/07/2022 - Filed as Ex-99(d)(2)X</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d8.htm)<br> [<u>on 07/01/2022 (Accession No. 0001683863-22-005229)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d8.htm) |
|  | x. | &nbsp;&nbsp; [<u>Post Advisory Group, LLC Amended & Restated Sub-Advisory Agreement dated 07/01/2019 -</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000686/postadvisoryarsub-advisory.htm)<br> [<u>Filed as Ex-99(d)(2)y on 10/31/2019 (Accession No. 0000898745-19-000686)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000686/postadvisoryarsub-advisory.htm) |
|  | y. | &nbsp;&nbsp; [<u>Principal Real Estate Investors, LLC Amended & Restated Sub-Advisory Agreement dated</u>](https://www.sec.gov/Archives/edgar/data/898745/000089874522000193/ex99dz-pfiprinreiarsubxadv.htm)<br> [<u>09/22/2022 - Filed as Ex-99(d)(2)Z on 11/17/2022 (Accession No. 0000898745-22-000193)</u>](https://www.sec.gov/Archives/edgar/data/898745/000089874522000193/ex99dz-pfiprinreiarsubxadv.htm) |
|  | z. | [<u>Robert W. Baird & Co. Inc. Amended & Restated Sub-Advisory Agreement dated 01/01/2023</u>](f24464d6.htm) \* |
|  | aa. | &nbsp;&nbsp; [<u>Sound Point Capital Management, LP Sub-Advisory Agreement dated 06/24/2016 - Filed</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516001530/ex99d2nn-soundpointsubxadv.htm)<br> [<u>as Ex-99(d)(2)nn on 09/23/2016 (Accession No. 0000898745-16-001530)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516001530/ex99d2nn-soundpointsubxadv.htm)<br>|
|  |  | &nbsp;&nbsp; [<u>Sound Point Capital Management, LP Assumption Agreement dated 05/01/2017 - Filed as</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001102/soundpoint-assumptionagree.htm)<br> [<u>Ex-99(d)(2)ll(2) on 08/31/2017 (Accession No. 0000898745-17-001102)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001102/soundpoint-assumptionagree.htm)<br>|
|  | bb. | &nbsp;&nbsp; [<u>Spectrum Asset Management, Inc. Amended & Restated Sub-Advisory Agreement dated</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000131/ex99d2hh-spectrumamendrstd.htm)<br> [<u>01/01/2019 - Filed as Ex-99(d)(2)hh on 02/26/2019 (Accession No. 0000898745-19-000131)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000131/ex99d2hh-spectrumamendrstd.htm) |
|  | cc. | &nbsp;&nbsp; [<u>T. Rowe Price Associates, Inc. Amended & Restated Sub-Advisory Agreement dated 07/01/2020 -</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfitrowearsub-advisoryagmt.htm)<br> [<u>Filed as Ex-99(d)(2)dd on 10/30/2020 (Accession No. 0000898745-20-000619)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfitrowearsub-advisoryagmt.htm) |
|  | dd. | &nbsp;&nbsp; [<u>Vaughan Nelson Investment Management, LP Amended & Restated Sub-Advisory Agreement</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfivaughanarsub-advisoryag.htm)<br> [<u>dated 07/01/2020 - Filed as Ex-99(d)(2)ee on 10/30/2020 (Accession No. 0000898745-20-000619)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfivaughanarsub-advisoryag.htm) |
|  | ee. | &nbsp;&nbsp; [<u>Victory Capital Management Inc. Amended & Restated Sub-Advisory Agreement dated</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000131/ex99d2oo-victoryamendrstds.htm)<br> [<u>01/01/2019 - Filed as Ex-99(d)(2)oo on 02/26/2019 (Accession No. 0000898745-19-000131)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000131/ex99d2oo-victoryamendrstds.htm) |
|  | ff. | &nbsp;&nbsp; [<u>Wellington Management Company LLP Amended & Restated Sub-Advisory Agreement</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517000041/ex99d2xx-wellingtonsubadvi.htm)<br> [<u>dated 01/01/2017 - Filed as Ex-99(d)(2)xx on 01/30/2017 (Accession No. 0000898745-17-</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517000041/ex99d2xx-wellingtonsubadvi.htm)<br> [<u>000041)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517000041/ex99d2xx-wellingtonsubadvi.htm)<br>|
|  |  | &nbsp;&nbsp; [<u>Wellington Management Company LLP Assumption Agreement dated 05/01/2017 - Filed</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001102/wellington-assumptionagree.htm)<br> [<u>as Ex-99(d)(2)vv(2) on 08/31/2017 (Accession No. 0000898745-17-001102)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001102/wellington-assumptionagree.htm)<br>|
|  | gg. | &nbsp;&nbsp; [<u>Westchester Capital Management, LLC Sub-Advisory Agreement dated 10/01/2021 - Filed as</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d7.htm)<br> [<u>Ex-99(d)(2)(hh) on 12/28/2021 (Accession No. 0001683863-21-007448)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d7.htm) |
|  | hh. | &nbsp;&nbsp; [<u>Westwood Management Corporation Amended & Restated Sub-Advisory Agreement dated</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfiwestwoodarsub-advisorya.htm)<br> [<u>07/01/2020 - Filed as Ex-99(d)(2)ii on 10/30/2020 (Accession No. 0000898745-20-000619)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfiwestwoodarsub-advisorya.htm) |
| (e) | Underwriting Contracts | Underwriting Contracts |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) [<u>Amended & Restated Distribution Agreement for Class A, Class C, Class J, Class P, Class S, Class T,</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001053/amendedrestateddistributio.htm) [<u>Class R-1, Class R-2, Class R-3, Class R-4, Class R-5, Class R-6 and Institutional Class Shares dated</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001053/amendedrestateddistributio.htm) [<u>06/12/2017 - Filed as Ex-99(e)(1)b on 07/13/2017 (Accession No. 0000898745-17-001053)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001053/amendedrestateddistributio.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) a. [<u>Selling Agreement dated 09/27/2019 for Classes A, C, Institutional, R-1, R-2, R-3, R-4, R-5, and</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000725/ex9e2a-sellingagmtdtd092719.htm) [<u>R-6 Shares - Filed as Ex-99(e)(2)a on 12/17/2019 (Accession No. 0000898745-19-000725)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000725/ex9e2a-sellingagmtdtd092719.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. [<u>Amendment to Selling Agreement for Class S - Filed as Ex-99(e)(2)b on 12/15/2017 (Accession</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001335/ex99e2b-classsamendmenttos.htm) [<u>No. 0000898745-17-001335)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001335/ex99e2b-classsamendmenttos.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Bonus or Profit Sharing Contracts -- Not Applicable

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Custodian Agreements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) a. [<u>Custody Agreement between The Bank of New York Mellon and Principal Funds, Inc. dated</u>](http://www.sec.gov/Archives/edgar/data/898745/000114420412039659/v318039_ex99-g1.htm) [<u>11/11/2011 - Filed as Ex-99(g)(1) on 07/16/2012 (Accession No. 0001144204-12-039659)</u>](http://www.sec.gov/Archives/edgar/data/898745/000114420412039659/v318039_ex99-g1.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. [<u>Custody Agreement Supplement between The Bank of New York Mellon and Principal Funds, Inc.</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99g1b-custodyagmtsuppbny.htm) [<u>dated 04/16/2018 - Filed as Ex-99(g)(1)b on 02/26/2020 (Accession No. 0000898745-20-000125)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99g1b-custodyagmtsuppbny.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. [<u>Custody Agreement Amendment to Schedule II between The Bank of New York Mellon and</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322007909/f23747d3.htm) [<u>Principal Funds, Inc. dated 07/18/2022 - Filed as Ex-99(g)(1)c on 12/21/2022 (Accession No.</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322007909/f23747d3.htm) [<u>0001683863-22-007909)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322007909/f23747d3.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. [<u>Custody Agreement Supplement dated 04/16/2018 Amendment between The Bank of New York</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99g1d-custodyagmtsuppame.htm) [<u>Mellon and Principal Funds, Inc. dated 07/10/2019 - Filed as Ex-99(g)(1)d on 02/26/2020</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99g1d-custodyagmtsuppame.htm) [<u>(Accession No. 0000898745-20-000125)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99g1d-custodyagmtsuppame.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. [<u>Custody Agreement Supplement between The Bank of New York Mellon and Principal Funds, Inc.</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99g1e-custodyagmtsuppbny.htm) [<u>dated 11/07/2019 - Filed as Ex-99(g)(1)e on 02/26/2020 (Accession No. 0000898745-20-000125)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99g1e-custodyagmtsuppbny.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. [<u>Custody Agreement Supplement dated 04/16/2018 Amended and Restated Appendix A between</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99g1f-custodyagmtsuppara.htm) [<u>The Bank of New York Mellon and Principal Funds, Inc. dated 01/07/2020 - Filed as Ex-99(g)(1)f</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99g1f-custodyagmtsuppara.htm) [<u>on 02/26/2020 (Accession No. 0000898745-20-000125)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99g1f-custodyagmtsuppara.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. [<u>Custody Agreement Supplement dated 04/16/2018 Amended and Restated Appendix A between</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d10.htm) [<u>The Bank of New York Mellon and Principal Funds, Inc. dated 05/12/2020 - Filed as Ex-99(g)(1)G</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d10.htm) [<u>on 07/01/2022 (Accession No. 0001683863-22-005229)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d10.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. [<u>Custody Agreement Supplement dated 11/07/2019 Amended and Restated Appendix A between</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d11.htm) [<u>The Bank of New York Mellon and Principal Funds, Inc. dated 09/23/2021 - Filed as Ex-99(g)(1)H</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d11.htm) [<u>on 07/01/2022 (Accession No. 0001683863-22-005229)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d11.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Other Material Contracts

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) [<u>Amended and Restated Transfer Agency Agreement for Class A, Class B, Class C, Class J,</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99h1-amendedandrestatedt.htm) [<u>Class P, Class S, Institutional Class, Class R-6, Class T and Plan Class Shares dated 06/12/2017 -</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99h1-amendedandrestatedt.htm) [<u>Filed as Ex-99(h)(1) on 02/26/2020 (Accession No. 0000898745-20-000125)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000125/ex99h1-amendedandrestatedt.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) [<u>Amended & Restated Shareholder Services Agreement dated 01/12/2007</u> <u>–</u> <u>Filed as Ex-99(h)(2)h</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874507000184/shrhldrsevagr-011207.txt) [<u>on 12/14/2007 (Accession No. 0000898745-07-000184)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874507000184/shrhldrsevagr-011207.txt)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) [<u>Investment Service Agreement dated 10/31/2002</u> <u>–</u> <u>Filed as Ex-99(h)(3)c on 12/30/2002</u>](http://www.sec.gov/Archives/edgar/data/898745/000112687102000036/invsvcagt.txt) [<u>(Accession No. 0001126871-02-000036)</u>](http://www.sec.gov/Archives/edgar/data/898745/000112687102000036/invsvcagt.txt)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) [<u>Amended & Restated Administrative Services Agreement dated 05/01/2010</u> <u>–</u> <u>Filed as</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874510000394/h5a-adminsvcagr0501101.htm) [<u>Ex-99(h)(5)a on 07/29/2010 (Accession No. 0000898745-10-000394)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874510000394/h5a-adminsvcagr0501101.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) [<u>Amended & Restated Service Agreement dated 05/01/2010</u> <u>–</u> <u>Filed as Ex-99(h)(6)a on 07/29/2010</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874510000394/h6a-svcagt050110.htm) [<u>(Accession No. 0000898745-10-000394)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874510000394/h6a-svcagt050110.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) [<u>Amended & Restated Service Sub-Agreement dated 9/30/2005</u> <u>–</u> <u>Filed as Ex-99(h)(7)g on</u>](http://www.sec.gov/Archives/edgar/data/898745/000087078605000263/service-subagrmt.txt) [<u>11/22/2005 (Accession No. 0000870786-05-000263)</u>](http://www.sec.gov/Archives/edgar/data/898745/000087078605000263/service-subagrmt.txt)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) [<u>Principal Funds, Inc.</u> <u>–</u> <u>Contractual Fee Waiver Agreement (12b-1) dated 12/31/2015</u> <u>–</u> <u>Filed as</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516000869/a12b-1contractualfeewaiver.htm) [<u>Ex-99(h)(7) on 01/14/2016 (Accession No. 0000898745-16-000869)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516000869/a12b-1contractualfeewaiver.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) [<u>Principal Funds, Inc. and Principal Variable Contracts Funds, Inc. Interfund Lending Agreement</u>](f24464d7.htm) [<u>dated 12/28/2022</u>](f24464d7.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) [<u>Principal Funds, Inc. - Contractual Fee Limit/Waiver Agreement dated 03/01/2023</u>](f24464d8.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) [<u>Form of Rule 12d1-4 Fund of Funds Investment Agreement - Filed as Ex-99(H)(10) on 02/24/2022</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322001059/f11080d7.htm) [<u>(Accession No. 0001683863-22-001059)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322001059/f11080d7.htm)

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) Powers of Attorney for [<u>Barnes, Damos, Dunbar, Halter, Hirsch, McMillan, Nickels, and</u>](https://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfipowersofattorney-all031.htm) [<u>VanDeWeghe dated 3/18/2020,</u>](https://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfipowersofattorney-all031.htm) for [<u>V. Hymes and P. Lattimer dated 12/15/2020 - Filed as</u>](https://www.sec.gov/Archives/edgar/data/898745/000089874520000745/pfi-poahymesandlattimer.htm) [<u>Ex-99(j)(3) on 12/28/2020 (Accession No. 0000898745-20-000745)</u>](https://www.sec.gov/Archives/edgar/data/898745/000089874520000745/pfi-poahymesandlattimer.htm) and for [<u>K. Dyer and F. Grieb</u>](f24464d9.htm) [<u>both dated 01/26/2023</u>](f24464d9.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) [<u>Legal Opinion</u>](f24464d10.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Other Opinions

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) [<u>Consent of Independent Registered Public Accounting Firm</u>](f24464d11.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Omitted Financial Statements -- Not Applicable

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Initial Capital Agreements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Initial Capital Agreement dated 04/26/1993 – Filed as Ex-99(b)(13) on 04/12/1996 (Accession No. 0000898745-96-000012) This exhibit was originally filed in paper format. Accordingly, a hyperlink has not been provided.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) [<u>Initial Capital Agreements dated 11/17/1997</u> <u>–</u> <u>Filed as Ex-99(l)(2) and Ex-99(l)(3) on 09/22/2000</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874500500024/0000898745-00-500024-0017.txt) [<u>(Accession No. 0000898745-00-500024)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874500500024/0000898745-00-500024-0017.txt)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) [<u>Initial Capital Agreements</u> <u>–</u> <u>Filed as Ex-99(l)(4) through (l)(38) on 12/05/2000 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874500000021/0000898745-00-000021-0012.txt) [<u>0000898745-00-000021)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874500000021/0000898745-00-000021-0012.txt)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) [<u>Initial Capital Agreement dated 12/30/2002</u> <u>–</u> <u>Filed as Ex-99(l)(39) on 12/30/2002 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000112687102000036/initialcapital.txt) [<u>0001126871-02-000036)</u>](http://www.sec.gov/Archives/edgar/data/898745/000112687102000036/initialcapital.txt)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) [<u>Initial Capital Agreements dated 12/29/2003 and 12/30/2003</u> <u>–</u> <u>Filed as Ex-99(l)(40</u>](http://www.sec.gov/Archives/edgar/data/898745/000112704804000033/newfunds-invltr.txt)) and [<u>Ex-99(l)(41) on</u>](http://www.sec.gov/Archives/edgar/data/898745/000112704804000033/prfdj-invltr.txt) [<u>02/26/2004 (Accession No. 0001127048-04-000033)</u>](http://www.sec.gov/Archives/edgar/data/898745/000112704804000033/prfdj-invltr.txt)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) [<u>Initial Capital Agreement dated 06/01/2004</u> <u>–</u> <u>Filed as Ex-99(l)(42) on 07/27/2004 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000087078604000163/invstmnt-ltr.txt) [<u>0000870786-04-000163)</u>](http://www.sec.gov/Archives/edgar/data/898745/000087078604000163/invstmnt-ltr.txt)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) [<u>Initial Capital Agreement dated 11/01/2004</u> <u>–</u> <u>Filed as Ex-99(l)(43) on 12/13/2004 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000087078604000242/advsign-invltr.txt) [<u>0000870786-04-000242)</u>](http://www.sec.gov/Archives/edgar/data/898745/000087078604000242/advsign-invltr.txt)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) [<u>Initial Capital Agreement dated 12/29/2004</u> <u>–</u> <u>Filed as Ex-99(l)(44) on 02/28/2005 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000087078605000065/invltr-1204.txt) [<u>0000870786-05-000065)</u>](http://www.sec.gov/Archives/edgar/data/898745/000087078605000065/invltr-1204.txt)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) [<u>Initial Capital Agreement dated 03/01/2005</u> <u>–</u> <u>Filed as Ex-99(l)(45) on 05/16/2005 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000087078605000194/invltr-prtglobalequity.txt) [<u>0000870786-05-000194)</u>](http://www.sec.gov/Archives/edgar/data/898745/000087078605000194/invltr-prtglobalequity.txt)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) [<u>Initial Capital Agreement dated 06/28/2005</u> <u>–</u> <u>Filed as Ex-99(l)(46) on 11/22/2005 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000087078605000263/initalcap-ltr.txt) [<u>0000870786-05-000263)</u>](http://www.sec.gov/Archives/edgar/data/898745/000087078605000263/initalcap-ltr.txt)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) [<u>Initial Capital Agreement dated 03/01/2006</u> <u>–</u> <u>Filed as Ex-99(l)(47) on 10/20/2006 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874506000160/invtltr-0306.txt) [<u>0000898745-06-000160)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874506000160/invtltr-0306.txt)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) [<u>Initial Capital Agreement dated 01/10/2007</u> <u>–</u> <u>Filed as Ex-99(l)(48) on 02/20/2008 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000095013708002501/c23411bpexv99wxlyx48y.htm) [<u>0000950137-08-002501)</u>](http://www.sec.gov/Archives/edgar/data/898745/000095013708002501/c23411bpexv99wxlyx48y.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) [<u>Initial Capital Agreement dated 10/01/2007 and 02/29/2008</u> <u>–</u> <u>Filed as Ex-99(l)(49)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874508000017/invltr-100107.htm) and [<u>Ex-99(l)(50) on</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874508000017/invltr-022908.htm) [<u>03/28/2008 (Accession No. 0000898745-08-000017)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874508000017/invltr-022908.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14) [<u>Initial Capital Agreement dated 05/01/2008</u> <u>–</u> <u>Filed as Ex-99(l)(51) on 07/17/2008 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000000971308000060/investmentltr.htm) [<u>0000009713-08-000060)</u>](http://www.sec.gov/Archives/edgar/data/898745/000000971308000060/investmentltr.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15) [<u>Initial Capital Agreement dated 09/30/2008</u> <u>–</u> <u>Filed as Ex-99(l)(52) on 12/12/2008 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874508000166/investmentltr.htm) [<u>0000898745-08-000166)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874508000166/investmentltr.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(16) [<u>Initial Capital Agreements dated 12/15/2008</u> <u>–</u> <u>Filed as Ex-99(l)(53) on 12/31/2008 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874508000184/investmentletters.htm) [<u>0000898745-08-000184)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874508000184/investmentletters.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(17) [<u>Initial Capital Agreements dated 03/02/2009 and 09/09/2009</u> <u>–</u> <u>Filed as Ex-99(l)(54</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874510000490/ex99_l54-investmentltr030209.htm)) and [<u>Ex-99(l)(55) on</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874510000490/ex99_l55-investmentltr090909.htm) [<u>10/29/2010 (Accession No. 0000898745-10-000490)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874510000490/ex99_l55-investmentltr090909.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(18) [<u>Initial Capital Agreement dated 12/30/2009</u> <u>–</u> <u>Filed as Ex-99(l)(56) on 10/29/2010 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874510000490/ex99_l56-investmentltr123009.htm) [<u>0000898745-10-000490)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874510000490/ex99_l56-investmentltr123009.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(19) [<u>Initial Capital Agreement dated 03/01/2010</u> <u>–</u> <u>Filed as Ex-99(l)(57) on 10/29/2010 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874510000490/ex99_l57-investmentltr030110.htm) [<u>0000898745-10-000490)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874510000490/ex99_l57-investmentltr030110.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(20) [<u>Initial Capital Agreement dated 03/16/2010</u> <u>–</u> <u>Filed as Ex-99(l)(58) on 10/29/2010 (Accession</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874510000490/ex99_l58investmentltr031610.htm) [<u>No.0000898745-10-000490)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874510000490/ex99_l58investmentltr031610.htm)

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(21) [<u>Initial Capital Agreement dated 07/12/2010</u> <u>–</u> <u>Filed as Ex-99(l)(59) on 10/29/2010 (Accession</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874510000490/ex99_l59-investmentltr071210.htm) [<u>No.0000898745-10-000490)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874510000490/ex99_l59-investmentltr071210.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(22) [<u>Initial Capital Agreement dated 09/27/2010</u> <u>–</u> <u>Filed as Ex-99(l)(60) on 12/30/2010 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874510000522/investmentltr09-272010.htm) [<u>0000898745-10-000522)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874510000522/investmentltr09-272010.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(23) [<u>Initial Capital Agreement dated 12/29/2010</u> <u>–</u> <u>Filed as Ex-99(l)(61) on 02/23/2011 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874511000040/investmentletterdtd122910.htm) [<u>0000898745-11-000040)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874511000040/investmentletterdtd122910.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(24) [<u>Initial Capital Agreement dated 06/06/2011</u> <u>–</u> <u>Filed as Ex-99(l)(62) on 10/12/2011 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874511000711/smid-invltr.htm) [<u>0000898745-11-000711)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874511000711/smid-invltr.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(25) [<u>Initial Capital Agreement dated 10/24/2011</u> <u>–</u> <u>Filed as Ex-99(l)(63) on 12/30/2011 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000114420411072069/v243281_ex99-l63.htm) [<u>0001144204-11-072069)</u>](http://www.sec.gov/Archives/edgar/data/898745/000114420411072069/v243281_ex99-l63.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(26) [<u>Initial Capital Agreement dated 03/01/2012</u> <u>–</u> <u>Filed as Ex-99(l)(64) on 06/13/2012 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000114420412034634/v311389_ex99l-64.htm) [<u>0001144204-12-034634)</u>](http://www.sec.gov/Archives/edgar/data/898745/000114420412034634/v311389_ex99l-64.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(27) [<u>Initial Capital Agreements dated 06/14/2012</u> <u>–</u> <u>Filed as Ex-99(l)(65</u>](http://www.sec.gov/Archives/edgar/data/898745/000114420412039659/v318039_exl-65.htm)) and [<u>Ex-99(l)(66) on 07/16/2012</u>](http://www.sec.gov/Archives/edgar/data/898745/000114420412039659/v318039_exl-66.htm) [<u>(Accession No. 0001144204-12-039659)</u>](http://www.sec.gov/Archives/edgar/data/898745/000114420412039659/v318039_exl-66.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(28) [<u>Initial Capital Agreement dated 12/28/2012</u> <u>–</u> <u>Filed as Ex-99(l)(67) on 02/28/2013 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874513000071/l67-invltr122812.htm) [<u>0000898745-13-000071)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874513000071/l67-invltr122812.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(29) [<u>Initial Capital Agreement dated 03/01/2013</u> <u>–</u> <u>Filed as Ex-99(l)(68) on 05/07/2013 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874513000459/l68-investmentletterx030113.htm) [<u>0000898745-13-000459)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874513000459/l68-investmentletterx030113.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(30) [<u>Initial Capital Agreement dated 03/14/2014 (Capital Securities Fund)</u> <u>–</u> <u>Filed as Ex-99(l)(69) on</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874514000513/ex-l69investmentletter0314.htm) [<u>03/28/2014 (Accession No. 0000898745-14-000513)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874514000513/ex-l69investmentletter0314.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(31) [<u>Initial Capital Agreement dated 09/30/2013 (Blue Chip and Global Opportunities)</u> <u>–</u> <u>Filed as Ex-99(l)(70)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874513000729/l70initialcapagreement.htm) [<u>on 10/31/2013 (Accession No. 0000898745-13-000729)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874513000729/l70initialcapagreement.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(32) [<u>Initial Capital Agreement dated 12/30/2013 (Opportunistic Municipal)</u> <u>–</u> <u>Filed as Ex-99(l)(71) on</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874514000071/l71-invltroppmuni.htm) [<u>02/27/2014 (Accession No. 0000898745-14-000071)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874514000071/l71-invltroppmuni.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(33) [<u>Initial Capital Agreement dated 06/03/2014 (share class additions)</u> <u>–</u> <u>Filed as Ex-99(l)(72) on 06/20/2014</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874514000687/l72pfi-investmentletter060.htm) [<u>(Accession No. 0000898745-14-000687)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874514000687/l72pfi-investmentletter060.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(34) [<u>Initial Capital Agreement dated 06/11/2014 (International Small Company)</u> <u>–</u> <u>Filed as Ex-99(l)(73) on</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874514000687/l73pfi-investmentletter061.htm) [<u>06/20/2014 (Accession No. 0000898745-14-000687)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874514000687/l73pfi-investmentletter061.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(35) [<u>Initial Capital Agreement dated 09/30/2014 (Principal LifeTime Hybrids - Instl)</u> <u>–</u> <u>Filed as Ex-99(l)(75) on</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874514000996/l75-pfixlifetimehybridisha.htm) [<u>10/15/2014 (Accession No. 0000898745-14-000996)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874514000996/l75-pfixlifetimehybridisha.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(36) [<u>Initial Capital Agreement dated 11/25/2014 (Class R-6 - 6 Funds)</u> <u>–</u> <u>Filed as Ex-99(l)(37) on 12/29/2014</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874514001274/l37-pfixinvestmentletter11.htm) [<u>(Accession No. 000898745-14-001274)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874514001274/l37-pfixinvestmentletter11.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(37) [<u>Initial Capital Agreements dated 12/31/2014 (Real Estate Allocation and Real Estate Debt Income Funds,</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000123/pfiinvltrs-123114.htm) [<u>addition of Class R-6 to Diversified Real Asset and Institutional Class to International Small Company</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000123/pfiinvltrs-123114.htm) [<u>Funds)</u> <u>–</u> <u>Filed as Ex-99(l)(38) on 02/26/2015 (Accession No. 0000898745-15-000123)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000123/pfiinvltrs-123114.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(38) [<u>Initial Capital Agreement dated 01/23/2015 (Origin Emerging Markets Fund)</u> <u>–</u> <u>Filed as Ex-99(l)(39) on</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000123/pfiinvltr-012315.htm) [<u>02/26/2015 (Accession No. 0000898745-15-000123)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000123/pfiinvltr-012315.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(39) [<u>Initial Capital Agreement dated 02/27/2015 (Cal Muni - Instl)</u> <u>–</u> <u>Filed as Ex-99(l)(40) on 05/18/2015</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000325/pfi-investmentltrx022715.htm) [<u>(Accession No. 0000898745-15-000325)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000325/pfi-investmentltrx022715.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(40) [<u>Initial Capital Agreement dated 03/10/2015 (Opp Muni - Instl)</u> <u>–</u> <u>Filed as Ex-99(l)(41) on 05/18/2015</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000325/pfi-investmentltrx031015.htm) [<u>(Accession No. 0000898745-15-000325)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000325/pfi-investmentltrx031015.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(41) [<u>Initial Capital Agreement dated 05/18/2015 (Tax-Exempt Bond - Instl)</u> <u>–</u> <u>Filed as Ex-99(l)(42) on</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000404/ex-99l42xpfixinvltrx051815.htm) [<u>06/12/2015 (Accession No. 0000898745-15-000404)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000404/ex-99l42xpfixinvltrx051815.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(42) [<u>Initial Capital Agreement dated 09/28/2015 (Edge MidCap - Instl)</u> <u>–</u> <u>Filed as Ex-99(l)(43) on 10/19/2015</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000750/initialcapagmt092815.htm) [<u>(Accession No. 0000898745-15-000750)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000750/initialcapagmt092815.htm)

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(43) [<u>Initial Capital Agreement dated 08/24/2015 (California Municipal Fund - P, Principal LifeTime Hybrid</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000653/ex-99l44xpfiinitialcapital.htm) [<u>Income - R-6, Principal LifeTime Hybrid 2015 - R-6, Principal LifeTime Hybrid 2020 - R-6, Principal</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000653/ex-99l44xpfiinitialcapital.htm) [<u>LifeTime Hybrid 2025 - R-6, Principal LifeTime Hybrid 2030 - R-6, Principal LifeTime Hybrid 2035 - R-6,</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000653/ex-99l44xpfiinitialcapital.htm) [<u>Principal LifeTime Hybrid 2040 - R-6, Principal LifeTime Hybrid 2045 - R-6, Principal LifeTime Hybrid 2050</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000653/ex-99l44xpfiinitialcapital.htm) [<u>- R-6, Principal LifeTime Hybrid 2055 - R-6, Principal LifeTime Hybrid 2060 - R-6, SAM Balanced - P, SAM</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000653/ex-99l44xpfiinitialcapital.htm) [<u>Conservative Balanced - P, SAM Conservative Growth - P, SAM Flexible Income - P, SAM Strategic Growth</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000653/ex-99l44xpfiinitialcapital.htm) [<u>- P, Tax-Exempt Bond Fund - P)</u> <u>–</u> <u>Filed as Ex-99(l)(44) on 09/18/2015 (Accession No. 0000898745-15-</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000653/ex-99l44xpfiinitialcapital.htm) [<u>000653)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874515000653/ex-99l44xpfiinitialcapital.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(44) [<u>Initial Capital Agreement dated 03/07/2016 (Class R-3 shares, Class R-4 shares, and Class R-5 to the</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516001192/pfi-investmentltrgres030716.htm) [<u>Global Real Estate Securities Fund) - Filed as Ex-99(l)(47) on 03/29/2016 (Accession No. 0000898745-</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516001192/pfi-investmentltrgres030716.htm) [<u>16-001192)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516001192/pfi-investmentltrgres030716.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(45) [<u>Initial Capital Agreement dated 03/29/2016 (Class R-3 shares, Class R-4 shares, and Class R-5 to the</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516001225/ex99l48-initialcapagmt0329.htm) [<u>Blue Chip Fund and Diversified Real Asset Fund; and Class P shares to the Origin Emerging Markets</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516001225/ex99l48-initialcapagmt0329.htm) [<u>Fund) - Filed as Ex-99(l)(48) on 04/08/2016 (Accession No. 0000898745-16-001225)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516001225/ex99l48-initialcapagmt0329.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(46) [<u>Initial Capital Agreement dated 07/11/2016 (Finisterre Unconstrained Emerging Markets Bond Fund</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516001543/pfiinvltr-071116.htm) [<u>Class A, P, and Institutional shares) - Filed as Ex-99(l)(50) on 10/13/2016 (Accession No. 0000898745-16-</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516001543/pfiinvltr-071116.htm) [<u>001543)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516001543/pfiinvltr-071116.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(47) [<u>Initial Capital Agreement dated 11/22/2016 (Class R-6 shares for High Yield, International Emerging</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516001858/ex99l51-initialcapitalagmt.htm) [<u>Markets, International I, MidCap, MidCap S&P 400 Index, Real Estate Securities, SmallCap, and</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516001858/ex99l51-initialcapitalagmt.htm) [<u>SmallCap S&P 600 Index Funds) - Filed as Ex-99(l)(51) on 12/28/2016 (Accession No. 0000898745-16-</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516001858/ex99l51-initialcapitalagmt.htm) [<u>001858)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516001858/ex99l51-initialcapitalagmt.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(48) [<u>Initial Capital Agreement dated 01/03/2017 (Class R-6 shares for Blue Chip, Edge MidCap, International</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517000041/ex99l52-initialcapitalagmt.htm) [<u>Equity Index, International Small Company, Preferred Securities, Real Estate Debt Income, and</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517000041/ex99l52-initialcapitalagmt.htm) [<u>Small-MidCap Dividend Income Funds) - Filed as Ex-99(l)(52) on 01/30/2017 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517000041/ex99l52-initialcapitalagmt.htm) [<u>0000898745-17-000041)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517000041/ex99l52-initialcapitalagmt.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(49) [<u>Initial Capital Agreement dated 06/12/2017 (Class R-6 shares for Global Diversified Income and Global</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001004/ex-99i54xinitialcapagreeme.htm) [<u>Multi-Strategy)</u> <u>–</u> <u>Filed as Ex-99(l)(55) on 06/23/2017 (Accession No. 0000898745-17-001004)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001004/ex-99i54xinitialcapagreeme.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(50) [<u>Initial Capital Agreement dated 09/06/2017 (Principal LifeTime 2065 and Principal LifeTime Hybrid 2065</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001118/ex-99l56xinitialcaptalagrm.htm) [<u>Funds) - Filed as Ex-99(l)(56) on 09/08/2017 (Accession No. 0000898745-17-001118)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001118/ex-99l56xinitialcaptalagrm.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(51) [<u>Initial Capital Agreement dated 09/11/2017 (Class J shares for Blue Chip Fund) - Filed as Ex-99(l)(57) on</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001219/pfiinitialcapitalagmtblchi.htm) [<u>10/06/2017 (Accession No. 0000898745-17-001219)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001219/pfiinitialcapitalagmtblchi.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(52) [<u>Initial Capital Agreement dated 12/20/2017 (Institutional Class shares for Government Money Market</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001402/ex99l57-initialcapitalagmt.htm) [<u>Fund) - Filed as Ex-99(l)(57) on 12/29/2017 (Accession No. 0000898745-17-001402)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001402/ex99l57-initialcapitalagmt.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(53) [<u>Initial Capital Agreement dated 03/01/2018 (Class J shares for all Principal LifeTime Hybrid Funds) - Filed</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874518000319/ex99l58-initialcapitalagmt.htm) [<u>as Ex-99(l)(58) on 04/13/2018 (Accession No. 0000898745-18-000319)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874518000319/ex99l58-initialcapitalagmt.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(54) [<u>Initial Capital Agreement dated 10/09/2018 (Class J shares for Equity Income Fund) - Filed as Ex-99(I)(58)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874518000852/ex-99l59initialcapitalagmt.htm) [<u>on 11/01/2018 (Accession No. 0000898745-18-000852)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874518000852/ex-99l59initialcapitalagmt.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(55) [<u>Initial Capital Agreement dated 12/31/2018 (Class A shares for Edge MidCap Fund) - Filed as Ex-99(l)(59)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000131/ex99l59-initialcapitalagmt.htm) [<u>on 02/26/2019 (Accession No. 0000898745-19-000131)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000131/ex99l59-initialcapitalagmt.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(56) [<u>Initial Capital Agreement dated 03/01/2019 (Class R-6 shares for Diversified International Fund) - Filed as</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000316/ex-99l60xpfixpgiinvestment.htm) [<u>Ex-99(l)(60) on 03/29/2019 (Accession No. 0000898745-19-000316)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000316/ex-99l60xpfixpgiinvestment.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(57) [<u>Initial Capital Agreement dated 03/01/2019 (Class R-3 and R-5 shares for all LifeTime Hybrid Funds) -</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000316/ex-99l61xpfixpgiinvestment.htm) [<u>Filed as Ex-99(l)(61) on 03/29/2019 (Accession No. 0000898745-19-000316)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000316/ex-99l61xpfixpgiinvestment.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(58) [<u>Initial Capital Agreement dated 04/02/2019 (Class A and R-6 shares for MidCap Value I Fund) - Filed as</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000437/pfi-pgiinvestmentletterxmc.htm) [<u>Ex-99(l)(62) on 06/10/2019 (Accession No. 0000898745-19-000437)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000437/pfi-pgiinvestmentletterxmc.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(59) [<u>Initial Capital Agreement dated 06/12/2019 (Institutional Class shares for Small-MidCap Growth Fund) -</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000686/pfi-pfsiinvestmentletterxs.htm) [<u>Filed as Ex-99(l)(63) on 10/31/2019 (Accession No. 0000898745-19-000686)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000686/pfi-pfsiinvestmentletterxs.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(60) [<u>Initial Capital Agreement dated 09/22/2022 (Institutional Class shares for Global Sustainable Listed</u>](https://www.sec.gov/Archives/edgar/data/898745/000089874522000193/ex99l60-investmentltrgloba.htm) [<u>Infrastructure Fund)</u> <u>–</u> <u>Filed as Ex-99(l)(60) on 11/17/2022 (Accession No. 0000898745-22-000193)</u>](https://www.sec.gov/Archives/edgar/data/898745/000089874522000193/ex99l60-investmentltrgloba.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Rule 12b-1 Plan

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) [<u>Class A Amended and Restated Distribution Plan and Agreement dated 04/02/2019 - Filed as Ex-99(M)(1)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000437/pfidistributionplanandagmt.htm) [<u>on 06/10/2019 (Accession No. 0000898745-19-000437)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874519000437/pfidistributionplanandagmt.htm)

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) [<u>Class C Distribution Plan and Agreement dated 01/01/2014 - Filed as Ex-99(m)(2) on 02/25/2016</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516001024/m212b-1classc010114.htm) [<u>(Accession No. 0000898745-16-001024)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874516001024/m212b-1classc010114.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) [<u>Class J Amended & Restated Distribution Plan and Agreement dated 03/01/2023</u>](f24464d12.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) [<u>Class R-1 Amended & Restated Distribution Plan and Agreement dated 03/01/2023</u>](f24464d13.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) [<u>Class R-3 Amended and Restated Distribution Plan and Agreement dated 03/01/2023</u>](f24464d14.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) [<u>Class R-4 Amended & Restated Distribution Plan and Agreement dated 03/01/2023</u>](f24464d15.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Rule 18f-3 Plan

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) [<u>Plan pursuant to Rule 18f-3(d) under the Investment Company Act of 1940 dated 06/12/2017- Filed as</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001102/ex99n1-18fx3dplan061217.htm) [<u>Ex-99(n)(1) on 08/31/2017 (Accession No. 0000898745-17-001102)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874517001102/ex99n1-18fx3dplan061217.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) Reserved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) Code of Ethics

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) [<u>Alliance Bernstein L.P. Code of Ethics dated 01/2022</u>](f24464d16.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) [<u>Barrow Hanley Code of Ethics dated 01/01/2022</u>](f24464d17.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) [<u>BlackRock Code of Ethics dated 12/07/2021</u>](f24464d18.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) [<u>Brown Investment Advisory Incorporated Code of Ethics dated 08/2011</u> <u>–</u> <u>Filed as Ex-99(p)(7) on</u>](http://www.sec.gov/Archives/edgar/data/898745/000114420411072069/v243281_ex99-p7.htm) [<u>12/30/2011 (Accession No. 0001144204-11-072069)</u>](http://www.sec.gov/Archives/edgar/data/898745/000114420411072069/v243281_ex99-p7.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) [<u>Causeway Capital Management LLC Code of Ethics dated 06/2021</u>](f24464d19.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) [<u>ClearBridge RARE Infrastructure (North America) Pty Limited Code of Ethics dated 10/2021</u>](f24464d20.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) [<u>CoreCommodity Management, LLC Code of Ethics dated 10/2021 - Filed as Ex-99(p)(7) on 07/01/2022</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d15.htm) [<u>(Accession No. 0001683863-22-005229)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d15.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) [<u>DDJ Capital Management, LLC Code of Ethics dated 11/14/2019 - Filed as Ex-99(p)(9) on 10/30/2020</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/codeofethics-ddjx111419.htm) [<u>(Accession No. 0000898745-20-000619)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/codeofethics-ddjx111419.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) [<u>Eagle Asset Management, Inc. Code of Ethics dated 12/31/2020 - Filed as Ex-99(p)(9) on 12/28/2021</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d16.htm) [<u>(Accession No. 0001683863-21-007448)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d16.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) [<u>Emerald Advisers Inc. Code of Ethics dated 01/15/2021 - Filed as Ex-99(p)(10) on 12/28/2021 (Accession</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d17.htm) [<u>No. 0001683863-21-007448)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d17.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) [<u>Gotham Asset Management, LLC Code of Ethics dated 01/2022</u>](f24464d21.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) [<u>Graham Capital Management, L.P. Code of Ethics dated 04/2018 - Filed as Ex-99(p)(14) on 10/30/2020</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/codeofethics-grahamxap.htm) [<u>(Accession No. 0000898745-20-000619)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/codeofethics-grahamxap.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) [<u>Hotchkis & Wiley Capital Management, LLC Code of Ethics dated 09/2021 - Filed as Ex-99(p)(13) on</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d19.htm) [<u>12/28/2021 (Accession No. 0001683863-21-007448)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d19.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14) [<u>Impax Asset Management Limited Code of Ethics dated 06/2021 - Filed as Ex-99(p)(14) on 12/28/2021</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d20.htm) [<u>(Accession No. 0001683863-21-007448)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d20.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15) [<u>Insight North America LLC Code of Ethics dated 2020 - Filed as Ex-99(p)(15) on 12/28/2021 (Accession</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d21.htm) [<u>No. 0001683863-21-007448)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d21.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(16) [<u>Loomis, Sayles & Co., L.P. Code of Ethics dated 12/16/2020 - Filed as Ex-99(p)(16) on 12/28/2021</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d22.htm) [<u>(Accession No. 0001683863-21-007448)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d22.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(17) [<u>Los Angeles Capital Management and Equity Research, Inc. Code of Ethics dated 01/04/2021 - Filed as</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d23.htm) [<u>Ex-99(p)(17) on 12/28/2021 (Accession No. 0001683863-21-007448)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d23.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(18) [<u>Macquarie Capital Investment Management, LLC (Delaware Investments Fund Advisers) Code of Ethics</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d24.htm) [<u>dated 09/08/2020 - Filed as Ex-99(p)(18) on 12/28/2021 (Accession No. 0001683863-21-007448)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d24.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(19) [<u>Newton Investment Management North America LLC Code of Ethics dated 2020 - Filed as Ex-99(p)(20)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d25.htm) [<u>on 12/28/2021 (Accession No. 0001683863-21-007448)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d25.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(20) [<u>Nuveen Asset Management LLC (Symphony Asset Management LLC) Code of Ethics dated 01/03/2022</u>](f24464d22.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(21) [<u>Origin Asset Management, LLP Code of Ethics dated 01/2021</u>](f24464d23.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(22) [<u>Pictet Asset Management SA Code of Ethics dated 07/01/2022 - Filed as Ex-99(g)(1)c on 12/21/2022</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322007909/f23747d7.htm) [<u>(Accession No. 0001683863-22-007909)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322007909/f23747d7.htm)

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(23) [<u>PineBridge Investments LLC Code of Ethics dated 10/2021 - Filed as Ex-99(p)(24) on 07/01/2022</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d16.htm) [<u>(Accession No. 0001683863-22-005229)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322005229/f12729d16.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(24) [<u>Post Advisory Group, LLC Code of Ethics dated 11/2020 - Filed as Ex-99(p)(23) on 12/28/2021 (Accession</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d26.htm) [<u>No. 0001683863-21-007448)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d26.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(25) [<u>Code of Ethics of Registrant, Principal Global Investors, LLC and Principal Real Estate Investors, LLC</u>](https://www.sec.gov/Archives/edgar/data/898745/000089874522000193/ex99p26-principalfundspgic.htm) [<u>dated 10/01/2022 - Filed as Ex-99(p)(26) on 11/17/2022 (Accession No. 0000898745-22-000193)</u>](https://www.sec.gov/Archives/edgar/data/898745/000089874522000193/ex99p26-principalfundspgic.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(26) [<u>Robert W. Baird & Co. Inc. Code of Ethics dated 06/01/2020 - Filed as Ex-99(p)(25) on 12/28/2021</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d27.htm) [<u>(Accession No. 0001683863-21-007448)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d27.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(27) [<u>Sound Point Capital Management, LP Code of Ethics dated 09/01/2022 - Filed as Ex-99(g)(1)c on</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322007909/f23747d8.htm) [<u>12/21/2022 (Accession No. 0001683863-22-007909)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386322007909/f23747d8.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(28) [<u>Spectrum Code of Ethics dated 03/06/2020 - Filed as Ex-99(p)(28) on 10/30/2020 (Accession No.</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/codeofethics-spectrumx.htm) [<u>0000898745-20-000619)</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/codeofethics-spectrumx.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(29) [<u>T. Rowe Price Code of Ethics dated 03/07/2022</u>](f24464d24.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(30) [<u>Vaughan Nelson Code of Ethics dated 09/09/2022</u>](f24464d25.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(31) [<u>Victory Capital Management Inc. Code of Ethics dated 01/01/2022</u>](f24464d26.htm) \*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(32) [<u>Wellington Management Code of Ethics dated 08/02/2021 - Filed as Ex-99(p)(33) on 12/28/2021</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d32.htm) [<u>(Accession No. 0001683863-21-007448)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d32.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(33) [<u>Westchester Capital Management, LLC Code of Ethics dated 10/01/2017 - Filed as Ex-99(p)(34) on</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d33.htm) [<u>12/28/2021 (Accession No. 0001683863-21-007448)</u>](https://www.sec.gov/Archives/edgar/data/898745/000168386321007448/f10587d33.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(34) [<u>Westwood Management Corporation Code of Ethics dated 07/2022</u>](f24464d27.htm) \*

\*

Filed herein.

**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**

Under Section 2-418 of the Maryland General Corporation Law, with respect to any proceedings against a present or former director, officer, agent or employee (a "corporate representative") of the Registrant, the Registrant may indemnify the corporate representative against judgments, fines, penalties, and amounts paid in settlement, and against expenses, including attorneys' fees, if such expenses were actually incurred by the corporate representative in connection with the proceeding, unless it is established that:

&nbsp;&nbsp;&nbsp;&nbsp;(i) The act or omission of the corporate representative was material to the matter giving rise to the proceeding; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Was committed in bad faith; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Was the result of active and deliberate dishonesty; or

&nbsp;&nbsp;&nbsp;&nbsp;(ii) The corporate representative actually received an improper personal benefit in money, property, or services; or

&nbsp;&nbsp;&nbsp;&nbsp;(iii) In the case of any criminal proceeding, the corporate representative had reasonable cause to believe that the act or omission was unlawful.

If a proceeding is brought by or on behalf of the Registrant, however, the Registrant may not indemnify a corporate representative who has been adjudged to be liable to the Registrant. Under the Registrant's Articles of Incorporation and Bylaws, directors and officers of Registrant are entitled to indemnification by the Registrant to the fullest extent permitted under Maryland law and the Investment Company Act of 1940. Reference is made to Article VI, Section 7 of the Registrant's Articles of Incorporation, Article 9 of Registrant's Bylaws and Section 2-418 of the Maryland General Corporation Law.

The Registrant has agreed to indemnify, defend and hold the Distributors, their officers and directors, and any person who controls the Distributors within the meaning of Section 15 of the Securities Act of 1933, free and harmless from and against any and all claims, demands, liabilities and expenses (including the cost of investigating or defending such claims, demands or liabilities and any counsel fees incurred in connection therewith) which the Distributors, their officers, directors or any such controlling person may incur under the Securities Act of 1933, or under common law or otherwise, arising out of or based upon any untrue statement of a material fact contained in the Registrant's registration statement or prospectus or arising out of or based upon any alleged omission to state a material fact required to be stated in either thereof or necessary to make the statements in either thereof not misleading, except insofar as such claims, demands, liabilities or expenses arise out of or are based upon any such untrue statement or omission made in conformity with information furnished in writing by the Distributors to the Registrant for use in the Registrant's registration statement or prospectus: provided, however, that this indemnity agreement, to the extent that it might require indemnity of any person who is also

------

an officer or director of the Registrant or who controls the Registrant within the meaning of Section 15 of the Securities Act of 1933, shall not inure to the benefit of such officer, director or controlling person unless a court of competent jurisdiction shall determine, or it shall have been determined by controlling precedent that such result would not be against public policy as expressed in the Securities Act of 1933, and further provided, that in no event shall anything contained herein be so construed as to protect the Distributors against any liability to the Registrant or to its security holders to which the Distributors would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence, in the performance of their duties, or by reason of their reckless disregard of their obligations under this Agreement. The Registrant's agreement to indemnify the Distributors, their officers and directors and any such controlling person as aforesaid is expressly conditioned upon the Registrant being promptly notified of any action brought against the Distributors, their officers or directors, or any such controlling person, such notification to be given by letter or telegram addressed to the Registrant.

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 director has entered into an indemnification agreement with the Fund. In addition, the interested directors each have available indemnifications from Principal Financial Group, Inc., the parent company of his/her employer, the Fund's sponsor.

**Item 31. Business or Other Connections of Investment Advisor**

Principal Global Investors, LLC ("PGI") serves as investment advisor and administrator for Principal Funds, Inc. ("PFI"), Principal Variable Contracts Funds, Inc. ("PVC"), and Principal Diversified Select Real Asset Fund ("PDSRA"). PGI also serves as investment advisor for Principal Exchange-Traded Funds ("PETF"). 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"), the headquarters of which is located at 711 High Street, Des Moines, Iowa. Many of the individuals listed below support Principal 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 directors 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)** |
|  | Robert F. Best | Managing Director and Chief Operating Officer - PGAA |
| \* | Kamal Bhatia | Director and President Principal Funds |
|  | David M. Blake | Director and Senior Executive Director - Fixed Income |
|  | Jill M. Blosser | Assistant Vice President and Chief Accounting Officer |
|  | Randy D. Bolin | Vice President and Associate General Counsel |
|  | Wei-erh Chen | Assistant General Counsel |
|  | Daniel R. Coleman | Chief Investment Officer - Edge Asset Management |
|  | Sudipto De | Derivatives Risk Manager - Registered Funds |
|  | Andrew Dion | Managing Director and Chief Operating Officer - Global Fixed Income |
|  | George Djurasovic | Vice President - Principal Asset Management General Counsel |
|  | Jen Dulski | Counsel |
|  | Debra Svoboda Epp | Assistant General Counsel |
|  | Todd E. Everett | Chief Executive Officer - Principal Real Estate Investors |
|  | Karl Goodman | Counsel |
| \* | Gina L. Graham | Vice President and Treasurer |
| \* | Patrick G. Halter | Chair, Chief Executive Officer and President - Principal Global Investors |
|  | Melinda L. Hanrahan | Managing Director - Global Equities |
|  | Corrine Hatala | Counsel |

---

------

---

| | | |
|:---|:---|:---|
|  | **Name** | **Office with Investment Advisor (PGI)** |
|  | Monica L. Haun | Managing Director - Boutique Operations |
|  | Maggie Hibbs | Counsel |
|  | Timothy A. Hill | Executive Director - U.S. Client Group |
|  | Jill M. Hittner | Director and Executive Director - Chief Financial Officer PGI |
|  | Daniel J. Houston | Director |
|  | Todd A. Jablonski | Chief Investment Officer - Principal<sup>®</sup> Global Asset Allocation |
|  | Jaime M. Kiehn | Managing Director - Product Specialist |
|  | Justin T. Lange | Chief Compliance Officer – Principal Asset Management |
| \* | Laura B. Latham | Counsel |
|  | Mitchell Maahs | Counsel |
|  | Farnaz Maters | Executive Director and Chief Marketing Officer - PGAM |
|  | Kenneth A. McCullum | Director |
|  | Adrienne L. McFarland | Assistant General Counsel and Secretary |
|  | Barbara A. McKenzie | Director and Senior Executive Director - Investments |
|  | Amy M. McNally | Global Head Risk Management – PGI |
|  | Everett S. Miles | Vice President - Capital Markets |
|  | Brian S. Ness | Executive Director and Chief Information Officer, PGAM and PI |
|  | Colin D. Pennycooke | Counsel |
|  | Christopher J. Reddy | Executive Director - Investment and Client Solutions |
| \* | Teri Root | Chief Compliance Officer - Funds |
|  | Kelly D. Rush | Chief Investment Officer - Global RE Securities |
|  | Mustafa Sagun | Chief Investment Officer - PGI Equities |
|  | Charles M. Schneider | Counsel |
| \* | Adam U. Shaikh | Assistant General Counsel |
|  | Ellen W. Shumway | Director and Senior Executive Director - Strategy and Investments |
|  | Deanna D. Strable-Soethout | Director |
| \* | John L. Sullivan | Counsel |
|  | Barbara Wenig | Executive Director - Head of Global Operations and Platforms |
|  | Kenneth Kirk West | Executive Director - International Business and Clients |
| \* | Dan L. Westholm | Assistant Vice President - Treasury |
|  | Janis J. Winterhof | Vice President, Associate General Counsel and Assistant Secretary |
| \* | Clint L. Woods | Vice President, Associate General Counsel and Assistant Secretary |
|  | Brooke Yang | Counsel |

---

**Item 32. Principal Underwriters**

&nbsp;&nbsp;&nbsp;&nbsp;(a) Principal Funds Distributor, Inc. ("PFD") acts as principal underwriter for PFI, PVC and PDSRA. PFD also serves as the principal underwriter for certain variable contracts issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York, through their respective separate accounts.

(b) ---

| | | |
|:---|:---|:---|
| **(1)** | **(2)** | **(3)** |
| **Name and Principal**<br> **Business Address**<br>| &nbsp;&nbsp; **Positions and Offices with**<br> **Principal Underwriter (PFD)**<br>| &nbsp;&nbsp; **Positions and Offices**<br> **with the Fund**<br>|
| Kamal Bhatia<br> Principal Funds Distributor, Inc.<sup>(1)</sup> <br>| Director | &nbsp;&nbsp; President and Chief Executive <br> Officer<br>|
| Jill R. Brown<br> Principal Funds Distributor, Inc.<sup>(2)</sup> <br>| &nbsp;&nbsp; President and Chairman of the <br> Board<br>|  |
| Sean Clines<br> Principal Funds Distributor, Inc.<sup>(2)</sup> <br>| Chief Financial Officer |  |
| Amy C. Friedrich<br> Principal Funds Distributor, Inc.<sup>(2)</sup> <br>| Director |  |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| **(1)** | **(2)** | **(3)** |
| **Name and Principal**<br> **Business Address**<br>| &nbsp;&nbsp; **Positions and Offices with**<br> **Principal Underwriter (PFD)**<br>| &nbsp;&nbsp; **Positions and Offices**<br> **with the Fund**<br>|
| Gina L. Graham<br> Principal Funds Distributor, Inc.<sup>(2)</sup> <br>| Vice President and Treasurer | Treasurer |
| Timothy A. Hill<br> Principal Funds Distributor, Inc.<sup>(2)</sup> <br>| &nbsp;&nbsp; Director, Senior Vice President - <br> Distribution, and National Sales <br> Manager<br>|  |
| Farnaz Maters<br> Principal Funds Distributor, Inc.<sup>(2)</sup> <br>| &nbsp;&nbsp; Senior Vice President and Chief <br> Marketing Officer<br>|  |
| Brian S. Ness<br> Principal Funds Distributor, Inc.<sup>(2)</sup> <br>| &nbsp;&nbsp; Senior Vice President and Chief <br> Information Officer<br>|  |
| Michael Scholten<br> Principal Funds Distributor, Inc.<sup>(2)</sup> <br>| Chief Operations Officer |  |
| Michelle Stockman<br> Principal Funds Distributor, Inc.<sup>(2)</sup> <br>| Chief Compliance Officer |  |
| Dina Sullivan<br> Principal Funds Distributor, Inc.<sup>(2)</sup> <br>| Assistant Vice President |  |
| Jeff Trier<br> Principal Funds Distributor, Inc.<sup>(2)</sup> <br>| AML Compliance Officer |  |
| Dan L. Westholm<br> Principal Funds Distributor, Inc.<sup>(2)</sup> <br>| Assistant Vice President - Treasury | Assistant Treasurer |
| Clint L. Woods<br> Principal Funds Distributor, Inc.<sup>(2)</sup> <br>| &nbsp;&nbsp; Vice President, Associate General <br> Counsel, and Secretary<br>| &nbsp;&nbsp; Counsel, Vice President, and <br> Assistant Secretary<br>|

---

<sup>(1)</sup>

888 7th Avenue, 25th Floor, New York, NY 10019

<sup>(2)</sup>

711 High Street, Des Moines, IA 50392

&nbsp;&nbsp;&nbsp;&nbsp;(c) N/A.

**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 Adviser: 801 Grand Avenue, Des Moines, Iowa 50392.

**Item 34. Management Services**

Not applicable.

**Item 35. Undertakings**

None.

**Exhibit Index:** 

---

| | |
|:---|:---|
| Amended and Restated Management Agreement | Exhibit (d)(1) |
| Sub-Advisory Agreement | Exhibits (d)(2)b, (d)(2)i, (d)(2)u, (d)(2)z |
| Interfund Lending Agreement  | Exhibit (h)(8) |
| Contractual Fee Waiver Agreement | Exhibit (h)(9) |
| Powers of Attorney | Exhibit (h)(11) |
| Legal Opinion | Exhibit (i) |
| Consent of Independent Registered Public Accounting Firm | Exhibit (j)(1) |
| Rule 12b-1 Plan | Exhibits (m)(3), (m)(4), (m)5, (m)(6) |
| Code of Ethics  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibits (p)(1), (p)(2), (p)(3), (p)(5), (p)(6),<br> (p)(11), (p)(20), (p)(21), (p)(29),<br> (p)(30), (p)(31), (p)(34)<br>|

---

------

**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, duly authorized, in the city of Des Moines and State of Iowa, on the 27th day of February, 2023.

---

| |
|:---|
| Principal Funds, Inc.<br> (Registrant)<br>|
| /s/ K. Bhatia<br>K. Bhatia<br> President and Chief Executive Officer<br>|

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| |
|:---|
| Attest: |
| /s/ B. C. Wilson<br>B. C. Wilson<br> Vice President and Secretary<br>|

---

------

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/ K. Bhatia<br>K. Bhatia<br>| &nbsp;&nbsp; President and Chief Executive Officer<br> (Principal Executive Officer)<br>| February 27, 2023 |
| /s/ M. Scholten<br>M. Scholten<br>| &nbsp;&nbsp; Chief Financial Officer<br> (Principal Financial Officer)<br>| February 27, 2023 |
| /s/ M. Hoffmann<br>M. Hoffmann<br>| &nbsp;&nbsp; Vice President and Controller<br> (Controller)<br>| February 27, 2023 |
| (L. T. Barnes)\*<br>L. T. Barnes<br>| Director | February 27, 2023 |
| (C. Damos)\*<br>C. Damos <br>| Director | February 27, 2023 |
| (T. M. Dunbar)\*<br>T. M. Dunbar <br>| Director | February 27, 2023 |
| (K. Dyer)\*<br>K. Dyer <br>| Director | February 27, 2023 |
| (F. Greib)\*<br>F. Grieb <br>| Director | February 27, 2023 |
| (P. G. Halter)\*<br>P. G. Halter<br>| Director | February 27, 2023 |
| (F. S. Hirsch)\*<br>F. S. Hirsch <br>| Director | February 27, 2023 |
| (V. Hymes)\*<br>V. Hymes <br>| Director | February 27, 2023 |
| (P. L. Lattimer)\*<br>P. L. Lattimer<br>| Director | February 27, 2023 |
| (K. McMillan)\*<br>K. McMillan <br>| Director | February 27, 2023 |
| (E. A. Nickels)\*<br>E. A. Nickels <br>| Director | February 27, 2023 |
| (M. M. VanDeWeghe)\*<br>M. M. VanDeWeghe <br>| Director | February 27, 2023 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| /s/ K. Bhatia<br>K. Bhatia<br> President and Chief Executive Officer<br>| February 27, 2023 |

---

\*

Pursuant to Powers of Attorney for [<u>Barnes, Damos, Dunbar, Halter, Hirsch, McMillan, Nickels, and VanDeWeghe dated 03/18/2020</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000619/pfipowersofattorney-all031.htm); [<u>Power of Attorney</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000745/pfi-poahymesandlattimer.htm)[<u>dated 12/15/2020 for V. Hymes and P. Lattimer</u>](http://www.sec.gov/Archives/edgar/data/898745/000089874520000745/pfi-poahymesandlattimer.htm) - Filed as Ex-99(j)(3) on 12/28/2020 (Accession No. 0000898745-20-000745); and [<u>Power of Attorney</u>](f24464d9.htm)[<u>dated 01/26/2023 for K. Dyer and F. Grieb</u>](f24464d9.htm) filed herein.

------

## Ex-99.(D)(1)

**PRINCIPAL FUNDS, INC.**

**AMENDED AND RESTATED MANAGEMENT AGREEMENT**

This AMENDED AND RESTATED MANAGEMENT AGREEMENT (the "Agreement"), to be effective March 1, 2023, is by and between PRINCIPAL FUNDS, INC., a Maryland corporation (the "Fund"), on behalf of each series identified on <u>Schedule 1</u> attached hereto, as may be amended from time to time (each, a "Series"), and PRINCIPAL GLOBAL INVESTORS, LLC, a Delaware limited liability company (the "Manager").

**W I T N E S S E T H:**

WHEREAS, The Fund has furnished the Manager with copies properly certified or authenticated of each of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Articles of Incorporation of the Fund;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Bylaws of the Fund as adopted by the Board of Directors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Resolutions of the Board of Directors of the Fund selecting the Manager as investment adviser for each Series and approving the form of this Agreement with respect to each such Series; and

WHEREAS, The Fund desires to retain the Manager to provide investment management services to each Series on the terms set forth in this Agreement, and the Manager is willing to provide such investment management services to each Series on the terms set forth in this Agreement;

NOW, THEREFORE, in consideration of the premises and mutual agreements herein contained, the Fund hereby appoints the Manager to act as investment adviser and manager of each Series, and the Manager agrees to act, perform or assume the responsibility therefore in the manner and subject to the conditions hereinafter set forth. The Fund will furnish the Manager from time to time with copies, properly certified or authenticated, of all amendments of or supplements to the foregoing, if any.

**1.<u>INVESTMENT ADVISORY SERVICES</u>**

The Manager will regularly perform the following services for each Series:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Provide investment research, advice and supervision;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Provide investment advisory, research and statistical facilities and all clerical services relating to research, statistical and investment work;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Furnish to the Board of Directors of the Fund (or any appropriate committee of such Board), and provide ongoing review, evaluation and revision from time to time as conditions require of, a recommended investment program for the portfolio of each Series of the Fund consistent with each Series' investment objective and policies, including any recommendation for any combination or liquidation of Series;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Where applicable, based upon research, analysis and due diligence, recommend to the Board of Directors of the Fund one or more sub-advisers for a Series of the Fund; regularly monitor and evaluate each sub-adviser's performance and recommend changes to the sub-advisers in situations in which appropriate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Implement such of its recommended investment program for each Series as the Fund shall approve, by placing orders for the purchase and sale of securities, subject always to the provisions of the Fund's Articles of Incorporation and Bylaws and the requirements of the Investment Company Act of 1940, as amended (the "1940 Act"),

and the Fund's Registration Statement, current Prospectus and Statement of Additional Information, as each of the same shall be from time to time in effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Advise and assist the officers of the Fund in taking such steps as are necessary or appropriate to carry out the decisions of its Board of Directors and any appropriate committees of such Board regarding the general conduct of the investment business of each Series; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)Report to the Board of Directors of the Fund at such times and in such detail as the Board may deem appropriate in order to enable it to determine that the investment policies of each Series are being observed.

**2.<u>ACCOUNTING SERVICES</u>**

The Manager will provide all accounting services customarily required by investment companies, in accordance with the requirements of applicable laws, rules and regulations and with the policies and practices of each Series as communicated to the Manager from time to time, including, but not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Maintain fund general ledger and journal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Prepare and record disbursements for direct expenses of each Series;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Prepare daily money transfer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Reconcile all bank and custodian accounts of each Series;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Assist Fund independent auditors as appropriate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Prepare daily projection of available cash balances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)Record trading activity for purposes of determining net asset values and daily dividend;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)Prepare daily portfolio valuation report to value portfolio securities and determine daily accrued income;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Determine the net asset value per share of each Series daily or at such other intervals as the Fund may reasonably request or as may be required by law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)Prepare monthly, quarterly, semi-annual and annual financial statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)Provide financial information for reports to the Securities and Exchange Commission (the "SEC") in compliance with the provisions of the 1940 Act and the Securities Act of 1933, as amended (the "Securities Act"), the Internal Revenue Service and any other regulatory or governmental agencies as required;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)Provide financial, yield, net asset value, and similar information to National Association of Securities Dealers, Inc., and other survey and statistical agencies as instructed from time to time by the Fund;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)Investigate, assist in the selection of and conduct relations with custodians, depositories, accountants, legal counsel, insurers, banks and persons in any other capacity deemed to be necessary or desirable for the operations of each Series; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)Obtain and keep in effect fidelity bonds and directors and officers/errors and omissions insurance policies for the Fund in accordance with the requirements of the 1940 Act and the rules thereunder, as such bonds and policies are approved by the Fund's Board of Directors.

Page 2 of 12

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**3.<u>CORPORATE ADMINISTRATIVE SERVICES</u>**

The Manager will provide the following corporate administrative services for the Fund:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)furnish the services of such of the Manager's officers and employees as may be elected officers or directors of the Fund, subject to their individual consent to serve and to any limitations imposed by law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)furnish office space, and all necessary office facilities and equipment, for the general corporate functions of the Fund (i.e., functions other than (i) underwriting and distribution of the shares of each Series; (ii) custody of the assets of each Series, (iii) transfer and paying agency services; and (iv) corporate and portfolio accounting services);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)furnish the services of executive and clerical personnel necessary to perform the general corporate functions of the Fund;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)design, develop, implement and regularly monitor appropriate compliance processes; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)prepare, or provide oversight and review of the preparation of, registration statements, shareholder reports and other disclosure materials and regulatory filings for each Series.

**4.<u>RESERVED RIGHT TO DELEGATE DUTIES AND SERVICES TO OTHERS</u>**

In each case, to the extent required by applicable law (i) subject to the prior approval of a majority of the Board of Directors of the Fund, including a majority of the Directors who are not interested persons (as defined in the 1940 Act) of the Manager, Principal Life Insurance Company, or the Fund and, (ii) by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the applicable Series, the Manager, in assuming responsibility for the various services as set forth in this Agreement, may (a) enter into agreements with others for the performance of certain duties and services or (b) delegate the performance of some or all of such duties and services to Principal Life Insurance Company, or one or more affiliates thereof; provided, however, that (x) the entry into any such agreements shall not relieve the Manager of its duty to review and monitor the performance of such persons to the extent provided in the agreements with such persons or as determined from time to time by the Board of Directors and (y) the entry into any such agreements in clause (a) or any such delegation in clause (b) shall not relieve the Manager of any of its obligations under this Agreement.

**5.<u>EXPENSES BORNE BY THE MANAGER</u>** The Manager will pay:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)the organizational expenses of the Fund and its Series and share classes, including the Fund's registration under the 1940 Act, and the initial registration of its Capital Stock for sale under the Securities Act with the SEC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Compensation of personnel, officers and directors who are also affiliated with the Manager; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Expenses and compensation associated with furnishing office space, and all necessary office facilities and equipment, and personnel necessary to perform the general corporate functions of the Fund.

**6.<u>COMPENSATION OF THE MANAGER BY FUND</u>**

For all services to be rendered and payments made as provided in Sections 1, 2 and 3 hereof, the Fund will accrue daily and pay the Manager monthly, or at such other intervals

Page 3 of 12

as the Fund and Manager may agree, a fee based on the average of the values placed on the net assets of each Series of the Fund as of the time of determination of the net asset value on each trading day throughout the month in accordance with <u>Schedule 1</u> attached hereto.

Net asset value shall be determined pursuant to applicable provisions of the Articles of Incorporation of the Fund. If pursuant to such provisions the determination of net asset value is suspended, then for the purposes of this Section 6 the value of the net assets of each Series as last determined shall be deemed to be the value of the net assets for each day the suspension continues.

The Manager may, at its option, waive all or part of its compensation for such period of time as it deems necessary or appropriate.

**7.<u>EXPENSES BORNE BY FUND</u>**

The Fund will pay, without reimbursement by the Manager, all expenses attributable to the operation of the Fund or the services described in this Agreement and not specifically identified in this Agreement as being paid by the Manager.

**8.<u>AVOIDANCE OF INCONSISTENT POSITION</u>**

In connection with purchases or sales of portfolio securities for the account of each Series, neither the Manager nor any of the Manager's directors, officers or employees will act as a principal or agent or receive any commission.

**9.<u>LIMITATION OF LIABILITY OF THE MANAGER</u>**

The Manager shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the Manager's part in the performance of its duties or from reckless disregard by it of its obligations and duties under this Agreement.

**10.<u>COPIES OF CORPORATE DOCUMENTS</u>**

The Fund will furnish the Manager promptly with properly certified or authenticated copies of amendments or supplements to its Articles of Incorporation or Bylaws. Also, the Fund will furnish the Manager financial and other corporate information as needed, and otherwise cooperate fully with the Manager in its efforts to carry out its duties and responsibilities under this Agreement.

**11.<u>DURATION AND TERMINATION OF THIS AGREEMENT</u>**

This Agreement shall become effective with respect to a Series as of the corresponding date set forth on <u>Schedule 2</u> to this Agreement, as may be amended from time to time, and, unless otherwise terminated with respect to such Series shall continue in effect thereafter for the initial term set forth on <u>Schedule 2</u> to this Agreement, and thereafter from year to year, provided that in each case the continuance is specifically approved within the period required by the 1940 Act either by the Board of Directors of the Fund or by a vote of a majority of the outstanding voting securities of the Series and, in either event, by vote of a majority of the directors of the Fund who are not interested persons of the Manager, Principal Life Insurance Company, or the Fund cast in accordance with the requirements of the 1940 Act after taking into effect any exemptive order, no-action assurances or other relief, rule or regulation upon which the Fund may rely. This Agreement may, on sixty days written notice, be terminated with respect to a Series at any time without the payment of any penalty, by the Board of Directors of the Fund, by vote of

Page 4 of 12

a majority of the outstanding voting securities of the Series, or by the Manager. This Agreement shall automatically terminate in the event of its assignment. In interpreting the provisions of this Section 11, the definitions contained in Section 2(a) of the 1940 Act (particularly the definitions of "interested person," "assignment," "voting security" and "majority of the outstanding voting securities") shall be applied.

**12.<u>AMENDMENT OF THIS AGREEMENT</u>**

No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought, and no material amendment of this Agreement shall be effective until approved, if required by the 1940 Act or the rules, regulations, interpretations or orders issued thereunder, by vote of the holders of a majority of the outstanding voting securities of the Series to which such amendment relates and by the vote of a majority of the directors who are not interested persons of the Manager, Principal Life Insurance Company or the Fund cast in accordance with the requirements of the 1940 Act after taking into effect any exemptive order, no-action assurances or other relief, rule or regulation upon which the Fund may rely.

**13.<u>ADDITIONAL SERIES</u>**

In the event the Fund establishes one or more Series after the effective date of this Agreement, such Series will become Series under this Agreement upon approval of this Agreement for such Series in the manner required by the 1940 Act and the amendment of <u>Schedules 1</u> and <u>2</u> hereto.

**14.<u>ADDRESS FOR PURPOSE OF NOTICE</u>**

Any notice under this Agreement shall be in writing, addressed and delivered or mailed, postage prepaid, to the other party at such address as such other party may designate for the receipt of such notices. Until further notice to the other party, it is agreed that the address of the Fund and that of the Manager for this purpose shall be the Principal Financial Group, Des Moines, Iowa 50392-0200.

**15.<u>REPRESENTATIONS</u>**

The Fund represents and warrants that the Fund and each Series is and will remain a "qualified eligible person" as defined in U.S. Commodity Futures Trading Commission (CFTC) Regulation 4.7 (17 Code of Federal Regulations Section 4.7) and the Fund consents to Manager treating it and each Series as an exempt account under CFTC Regulation 4.7.

The Fund represents and warrants that each Series is a member of the National Futures Association (NFA) and is registered under the U.S. Commodity Exchange Act (CEA) or that it is not required to be a member of the NFA because (i) it is exempt from registration under the CEA, or (ii) it does not engage in activities that require such registration.

**16.<u>MISCELLANEOUS</u>**

The captions in this Agreement are included for convenience of reference only, and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Each party agrees that electronic signatures of the parties included in this Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic signature means any electronic sound, symbol, or

Page 5 of 12

process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures.

PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS BROCHURE OR ACCOUNT DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION. THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMODITY FUTURES TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS BROCHURE OR ACCOUNT DOCUMENT.

Page 6 of 12

![](gkl9hh2f4724shu3avtm2.jpg)

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized.

**PRINCIPAL FUNDS, INC.**

By: /s/ Clint L. Woods

Clint L. Woods, Vice President, Counsel, and

Assistant Secretary

By: /s/ Adam U. Shaikh

Adam U. Shaikh, Assistant Counsel and Assistant

Secretary

**PRINCIPAL GLOBAL INVESTORS, LLC**

By: /s/ Clint L. Woods

Clint L. Woods, Vice President,

Associate General Counsel, and Assistant

Secretary

By: /s/ Adam U. Shaikh

Adam U. Shaikh, Assistant General Counsel

Page 7 of 12

![](ge5cszddr3y10k3ys7lz1.jpg)

**SCHEDULE 1**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Management Fee as a Percentage** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Management Fee as a Percentage** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Management Fee as a Percentage** |  |
| &nbsp;&nbsp;**Series** |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**of Average Daily Net Assets** |  |
| &nbsp;&nbsp;**Series** | **First $3B** | **Next $4B** | **Next $4B** | **Next $4B** | **Over $15B** |
| &nbsp;&nbsp;SAM Balanced Portfolio\* | 0.35% | 0.30% | 0.25% | 0.20% | 0.18% |
| &nbsp;&nbsp;SAM Conservative Balanced Portfolio\* | 0.35% | 0.30% | 0.25% | 0.20% | 0.18% |
| &nbsp;&nbsp;SAM Conservative Growth Portfolio\* | 0.35% | 0.30% | 0.25% | 0.20% | 0.18% |
| &nbsp;&nbsp;SAM Flexible Income Portfolio\* | 0.35% | 0.30% | 0.25% | 0.20% | 0.18% |
| &nbsp;&nbsp;SAM Strategic Growth Portfolio\* | 0.35% | 0.30% | 0.25% | 0.20% | 0.18% |

---

\*Breakpoints based on aggregate SAM Portfolio net assets.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  |  | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** |  |
|  |  |  | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** |  |
| |  | | |  | **Next** | |
| <br>&nbsp;&nbsp;**Series** |  | &nbsp;&nbsp;&nbsp;&nbsp;**First**<br>&nbsp;&nbsp;**$500M** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Next**<br>&nbsp;&nbsp;&nbsp;&nbsp;**$500M** | &nbsp;&nbsp;&nbsp;&nbsp;**$500M** | &nbsp;&nbsp;&nbsp;&nbsp;**$500M** | &nbsp;&nbsp;**Over**<br>**$1.5B** |
| &nbsp;&nbsp;California Municipal Fund |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.40% | &nbsp;&nbsp;&nbsp;&nbsp;0.38% |  | 0.36% | 0.35% |
| &nbsp;&nbsp;Edge MidCap Fund |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.65% | &nbsp;&nbsp;&nbsp;&nbsp;0.63% |  | 0.61% | 0.60% |
| &nbsp;&nbsp;Finisterre Emerging Markets Total Return Bond Fund | &nbsp;&nbsp;Finisterre Emerging Markets Total Return Bond Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.75% | &nbsp;&nbsp;&nbsp;&nbsp;0.74% |  | 0.73% | 0.72% |
| &nbsp;&nbsp;Global Sustainable Listed Infrastructure Fund |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.75% | &nbsp;&nbsp;&nbsp;&nbsp;0.73% |  | 0.71% | 0.70% |
| &nbsp;&nbsp;Government & High Quality Bond Fund |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.49% | &nbsp;&nbsp;&nbsp;&nbsp;0.47% |  | 0.45% | 0.44% |
| &nbsp;&nbsp;International Small Company Fund |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.00% | &nbsp;&nbsp;&nbsp;&nbsp;0.98% |  | 0.96% | 0.95% |
| &nbsp;&nbsp;MidCap Growth Fund |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.65% | &nbsp;&nbsp;&nbsp;&nbsp;0.63% |  | 0.61% | 0.60% |
| &nbsp;&nbsp;MidCap Growth Fund III |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.82% | &nbsp;&nbsp;&nbsp;&nbsp;0.80% |  | 0.78% | 0.77% |
| &nbsp;&nbsp;Opportunistic Municipal Fund |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.44% | &nbsp;&nbsp;&nbsp;&nbsp;0.42% |  | 0.40% | 0.39% |
| &nbsp;&nbsp;SmallCap Fund |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.75% | &nbsp;&nbsp;&nbsp;&nbsp;0.73% |  | 0.71% | 0.70% |
| &nbsp;&nbsp;Small-MidCap Growth Fund |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.70% | &nbsp;&nbsp;&nbsp;&nbsp;0.68% |  | 0.66% | 0.65% |
| &nbsp;&nbsp;Tax-Exempt Bond Fund |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.40% | &nbsp;&nbsp;&nbsp;&nbsp;0.38% |  | 0.36% | 0.35% |
|  |  | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** |  |
|  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**of Average Daily Net Assets** |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;**First** | &nbsp;&nbsp;&nbsp;&nbsp;**Next** | &nbsp;&nbsp;**Next** | &nbsp;&nbsp;**Next** | &nbsp;&nbsp;&nbsp;&nbsp;**Next** | &nbsp;&nbsp;&nbsp;&nbsp;**Over** |
| &nbsp;&nbsp;**Series** | &nbsp;&nbsp;&nbsp;**$500M** | &nbsp;&nbsp;&nbsp;**$500M** | **$500M** | **$500M** | &nbsp;&nbsp;&nbsp;&nbsp;**$1B** | &nbsp;&nbsp;&nbsp;&nbsp;**$3B** |
| &nbsp;&nbsp;Core Plus Bond Fund | &nbsp;&nbsp;0.49% | 0.47% | 0.45% | 0.44% | 0.42% | 0.39% |
| &nbsp;&nbsp;Diversified Income Fund | &nbsp;&nbsp;0.69% | 0.67% | 0.65% | 0.64% | 0.63% | 0.62% |
| &nbsp;&nbsp;Diversified Real Asset Fund | &nbsp;&nbsp;0.80% | 0.78% | 0.76% | 0.75% | 0.74% | 0.73% |
| &nbsp;&nbsp;Global Emerging Markets Fund | &nbsp;&nbsp;0.99% | 0.97% | 0.95% | 0.94% | 0.93% | 0.92% |
| &nbsp;&nbsp;Global Multi-Strategy Fund | &nbsp;&nbsp;1.44% | 1.42% | 1.40% | 1.39% | 1.38% | 1.37% |
| &nbsp;&nbsp;Global Real Estate Securities Fund | &nbsp;&nbsp;0.90% | 0.88% | 0.86% | 0.85% | 0.84% | 0.83% |
| &nbsp;&nbsp;High Income Fund | &nbsp;&nbsp;0.65% | 0.63% | 0.61% | 0.60% | 0.59% | 0.58% |
| &nbsp;&nbsp;Inflation Protection Fund | &nbsp;&nbsp;0.40% | 0.38% | 0.36% | 0.35% | 0.34% | 0.33% |
| &nbsp;&nbsp;International Fund I | &nbsp;&nbsp;0.65% | 0.63% | 0.61% | 0.60% | 0.59% | 0.58% |
| &nbsp;&nbsp;LargeCap Value Fund III | &nbsp;&nbsp;0.80% | 0.78% | 0.76% | 0.75% | 0.73% | 0.70% |
| &nbsp;&nbsp;MidCap Value Fund I | &nbsp;&nbsp;0.68% | 0.66% | 0.64% | 0.63% | 0.62% | 0.61% |
| &nbsp;&nbsp;Money Market Fund | &nbsp;&nbsp;0.40% | 0.39% | 0.38% | 0.37% | 0.36% | 0.35% |
| &nbsp;&nbsp;Origin Emerging Markets Fund | &nbsp;&nbsp;0.99% | 0.97% | 0.95% | 0.94% | 0.93% | 0.92% |
| &nbsp;&nbsp;Overseas Fund | &nbsp;&nbsp;0.93% | 0.91% | 0.89% | 0.88% | 0.87% | 0.86% |
| &nbsp;&nbsp;SmallCap Growth Fund I | &nbsp;&nbsp;0.88% | 0.86% | 0.84% | 0.83% | 0.82% | 0.81% |
| &nbsp;&nbsp;Small-MidCap Dividend Income Fund | &nbsp;&nbsp;0.79% | 0.77% | 0.75% | 0.74% | 0.73% | 0.72% |
| &nbsp;&nbsp;SmallCap Value Fund II | &nbsp;&nbsp;0.95% | 0.93% | 0.91% | 0.90% | 0.89% | 0.88% |

---

Page 8 of 12

![](g91a02l5r1ris8ife8gh4.jpg)

---

| | | | | | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** |  |  |  |  |  |
| &nbsp;&nbsp;**Series** |  |  |  |  |  | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;**Series** |  |  |  | **First $500M** | **First $500M** | **First $500M** | **First $500M** |  | **Next $500M** | **Next $500M** | **Next $500M** | **Next $500M** | **Over $1B** | **Over $1B** | **Over $1B** | **Over $1B** |  |  |  |  |
| &nbsp;&nbsp;Principal Capital Appreciation Fund | &nbsp;&nbsp;Principal Capital Appreciation Fund | &nbsp;&nbsp;Principal Capital Appreciation Fund | &nbsp;&nbsp;Principal Capital Appreciation Fund |  | 0.625% | 0.625% | 0.625% |  |  | 0.500% | 0.500% |  | &nbsp;&nbsp;&nbsp;&nbsp;0.375% | &nbsp;&nbsp;&nbsp;&nbsp;0.375% | &nbsp;&nbsp;&nbsp;&nbsp;0.375% |  |  |  |  |  |
|  |  |  |  |  |  | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** |  |  |  |  |
| &nbsp;&nbsp;**Series** |  |  |  |  |  |  | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** |  |  |  |  |  |
| &nbsp;&nbsp;**Series** |  |  | **First $1B** | **First $1B** | &nbsp;&nbsp;**Next $3B** | &nbsp;&nbsp;**Next $3B** | &nbsp;&nbsp;**Next $3B** | &nbsp;&nbsp;**Next $3B** | &nbsp;&nbsp;**Next $3B** |  | **Next $3B** | **Next $3B** | **Next $3B** | **Next $3B** | **Next $3B** | **Next $3B** |  | **Over $10B** | **Over $10B** |  |
| &nbsp;&nbsp;Core Fixed Income Fund | &nbsp;&nbsp;Core Fixed Income Fund | &nbsp;&nbsp;Core Fixed Income Fund | 0.39% | 0.39% | 0.38% | 0.38% | 0.38% | 0.38% |  |  | &nbsp;&nbsp;0.37% | &nbsp;&nbsp;0.37% | 0.36% | 0.36% | 0.36% |  |  | 0.34% |  |  |
|  |  |  |  |  | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** |  |  |  |  |  |
| &nbsp;&nbsp;**Series** |  |  |  |  |  | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;**Series** |  |  |  |  | **First $250M** | **First $250M** | **First $250M** | **First $250M** | **First $250M** |  |  | **Over $250M** | **Over $250M** | **Over $250M** | **Over $250M** |  |  |  |  |  |
| &nbsp;&nbsp;High Yield Fund | &nbsp;&nbsp;High Yield Fund |  |  |  | 0.625% | 0.625% | 0.625% | 0.625% |  |  |  |  | 0.500% |  |  |  |  |  |  |  |
|  |  |  |  |  | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** |  |  |  |  |  |
| &nbsp;&nbsp;**Series** |  |  |  |  |  | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;**Series** |  |  |  |  | **First $3B** | **First $3B** | **First $3B** |  |  | **Next $3B** | **Next $3B** |  | &nbsp;&nbsp;**Over $6B** | &nbsp;&nbsp;**Over $6B** | &nbsp;&nbsp;**Over $6B** |  |  |  |  |  |
| &nbsp;&nbsp;LargeCap S&P 500 Index Fund | &nbsp;&nbsp;LargeCap S&P 500 Index Fund | &nbsp;&nbsp;LargeCap S&P 500 Index Fund | &nbsp;&nbsp;LargeCap S&P 500 Index Fund |  | 0.15% | 0.15% |  |  |  |  | 0.13% |  | &nbsp;&nbsp;&nbsp;&nbsp;0.10% | &nbsp;&nbsp;&nbsp;&nbsp;0.10% | &nbsp;&nbsp;&nbsp;&nbsp;0.10% |  |  |  |  |  |
|  |  |  |  |  | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** |  |  |  |  |  |
| &nbsp;&nbsp;**Series** |  |  |  |  |  | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;**Series** |  |  |  |  | **First $2B** | **First $2B** | **First $2B** |  |  | **Next $2B** | **Next $2B** |  | &nbsp;&nbsp;**Over $4B** | &nbsp;&nbsp;**Over $4B** | &nbsp;&nbsp;**Over $4B** |  |  |  |  |  |
| &nbsp;&nbsp;Short-Term Income Fund | &nbsp;&nbsp;Short-Term Income Fund | &nbsp;&nbsp;Short-Term Income Fund |  |  | 0.38% | 0.38% |  |  |  |  | 0.36% |  | &nbsp;&nbsp;&nbsp;&nbsp;0.33% | &nbsp;&nbsp;&nbsp;&nbsp;0.33% | &nbsp;&nbsp;&nbsp;&nbsp;0.33% |  |  |  |  |  |
|  |  |  |  | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** |  |  |  |  |  |  |  |
|  |  |  |  |  | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** |  |  |  |  |  |  |  |
|  | &nbsp;&nbsp;**First** | &nbsp;&nbsp;&nbsp;**Next** | **Next** | **Next** | **Next** | **Next** |  | **Next** | **Next** | **Next** | **Next** |  | **Next** |  | **Next** | **Next** |  | &nbsp;&nbsp;**Next** |  | **Over** |
| &nbsp;&nbsp;**Series** | **$500M** | **$500M** | &nbsp;&nbsp;**$500M** | **$500M** | **$1B** | **$1B** |  | **$9.5B** | **$9.5B** | **$9.5B** | &nbsp;&nbsp;**$2.5B** | &nbsp;&nbsp;**$2.5B** | &nbsp;&nbsp;**$3B** |  | &nbsp;&nbsp;**$4B** | &nbsp;&nbsp;**$4B** |  | **$3B** |  | **$25B** |
| &nbsp;&nbsp;MidCap | 0.65% | 0.63% | 0.61% | 0.60% | 0.59% | 0.59% |  | 0.58% | 0.58% | 0.58% | 0.57% | 0.57% | 0.56% |  | 0.55% | 0.55% |  | 0.53% |  | 0.51% |
| &nbsp;&nbsp;Fund | 0.65% | 0.63% | 0.61% | 0.60% | 0.59% | 0.59% |  | 0.58% | 0.58% | 0.58% | 0.57% | 0.57% | 0.56% |  | 0.55% | 0.55% |  | 0.53% |  | 0.51% |
| &nbsp;&nbsp;Fund |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** |  |  |  |  |
|  |  |  |  |  |  |  |  |  | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** |  |  |  |  |
| &nbsp;&nbsp;**Series** |  |  |  | &nbsp;&nbsp;**First** | &nbsp;&nbsp;**Next** | &nbsp;&nbsp;**Next** | &nbsp;&nbsp;**Next** |  |  | **Next** | **Next** | **Next** | **Next** | **Next** | **Next** | **Next** |  | **Next** |  | **Over** |
| &nbsp;&nbsp;**Series** |  |  |  | **$500M** | **$500M** | **$500M** | **$500M** |  | &nbsp;&nbsp;**$500M** | &nbsp;&nbsp;**$500M** | &nbsp;&nbsp;**$500M** | **$500M** | **$500M** |  | **$1B** | **$1B** |  | **$7B** |  | **$10B** |
| &nbsp;&nbsp;Blue Chip Fund | &nbsp;&nbsp;Blue Chip Fund |  |  | 0.65% | 0.63% | 0.63% | 0.63% |  |  | 0.61% | 0.61% | 0.60% | 0.60% | 0.59% | 0.59% | 0.59% | 0.58% | 0.58% | 0.57% | 0.57% |
| &nbsp;&nbsp;Diversified International Fund | &nbsp;&nbsp;Diversified International Fund | &nbsp;&nbsp;Diversified International Fund |  | 0.80% | 0.78% | 0.78% | 0.78% |  |  | 0.76% | 0.76% | 0.75% | 0.75% | 0.73% | 0.73% | 0.73% | 0.70% | 0.70% | 0.69% | 0.69% |
|  |  |  |  |  |  |  |  | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** |  |  |  |  |
|  |  |  |  |  |  |  |  |  | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** |  |  |  |  |
|  |  |  |  | &nbsp;&nbsp;**First** | &nbsp;&nbsp;**Next** | &nbsp;&nbsp;**Next** | &nbsp;&nbsp;**Next** |  |  | **Next** | **Next** | **Next** | **Next** | **Next** | **Next** | **Next** |  | **Next** |  | **Over** |
| &nbsp;&nbsp;**Series** |  |  |  | **$250M** | **$250M** | **$250M** | **$250M** |  |  | **$6.5B** | **$6.5B** | &nbsp;&nbsp;**$3B** | &nbsp;&nbsp;**$3B** |  | **$2B** | **$2B** |  | **$3B** |  | **$15B** |
| &nbsp;&nbsp;Equity Income Fund | &nbsp;&nbsp;Equity Income Fund |  |  | 0.60% | 0.55% | 0.55% | 0.55% |  | 0.50% | 0.50% | 0.50% | 0.49% | 0.49% | 0.48% | 0.48% | 0.48% | 0.46% | 0.46% | 0.44% | 0.44% |
|  |  |  |  |  | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** |  |  |  |  |  |
|  |  |  |  |  |  | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** |  |  |  |  |  |
|  |  | &nbsp;&nbsp;&nbsp;&nbsp;**First** | &nbsp;&nbsp;&nbsp;&nbsp;**Next** | **Next** | **Next** |  | **Next** | **Next** | **Next** |  | &nbsp;&nbsp;**Next** |  | **Next** |  |  | **Next** |  | &nbsp;&nbsp;&nbsp;&nbsp;**Next** |  | &nbsp;&nbsp;&nbsp;&nbsp;**Over** |
| &nbsp;&nbsp;**Series** |  | &nbsp;&nbsp;**$500M** | &nbsp;&nbsp;&nbsp;**$500M** | **$500M** | **$500M** |  | **$500M** | **$500M** | **$500M** |  | &nbsp;&nbsp;**$1B** |  | **$2B** |  |  | &nbsp;&nbsp;**$2B** |  | &nbsp;&nbsp;&nbsp;&nbsp;**$3B** |  | &nbsp;&nbsp;&nbsp;&nbsp;**$10B** |
| &nbsp;&nbsp;Real Estate |  | 0.85% | &nbsp;&nbsp;&nbsp;0.83% | 0.81% | 0.81% |  | 0.80% | 0.80% | 0.80% |  | 0.79% | 0.79% | 0.78% | 0.78% |  | 0.77% | 0.77% | 0.76% | 0.76% | 0.75% |
| &nbsp;&nbsp;Securities Fund | &nbsp;&nbsp;Securities Fund | 0.85% | &nbsp;&nbsp;&nbsp;0.83% | 0.81% | 0.81% |  | 0.80% | 0.80% | 0.80% |  | 0.79% | 0.79% | 0.78% | 0.78% |  | 0.77% | 0.77% | 0.76% | 0.76% | 0.75% |
| &nbsp;&nbsp;Securities Fund | &nbsp;&nbsp;Securities Fund |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Spectrum |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Preferred and | &nbsp;&nbsp;Preferred and | 0.75% | &nbsp;&nbsp;&nbsp;0.73% | 0.71% | 0.71% |  | 0.70% | 0.70% | 0.70% |  | 0.69% | 0.69% | 0.68% | 0.68% |  | 0.67% | 0.67% | 0.66% | 0.66% | 0.65% |
| &nbsp;&nbsp;Capital Securities | &nbsp;&nbsp;Capital Securities | 0.75% | &nbsp;&nbsp;&nbsp;0.73% | 0.71% | 0.71% |  | 0.70% | 0.70% | 0.70% |  | 0.69% | 0.69% | 0.68% | 0.68% |  | 0.67% | 0.67% | 0.66% | 0.66% | 0.65% |
| &nbsp;&nbsp;Capital Securities | &nbsp;&nbsp;Capital Securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Income Fund | &nbsp;&nbsp;Income Fund |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

---

Page 9 of 12

![](goo18048evb2auktcvcqd.jpg)

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** |  |  |
|  |  |  | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** | &nbsp;&nbsp;**of Average Daily Net Assets** |  |  |
| <br>&nbsp;&nbsp;**Series** | &nbsp;&nbsp;**First**<br>**$500M** | &nbsp;&nbsp;&nbsp;&nbsp;**Next**<br>&nbsp;&nbsp;**$500M** | &nbsp;&nbsp;&nbsp;&nbsp;**Next**<br>&nbsp;&nbsp;**$500M** | &nbsp;&nbsp;&nbsp;&nbsp;**Next**<br>&nbsp;&nbsp;**$500M** | &nbsp;&nbsp;&nbsp;**Next**<br>&nbsp;&nbsp;&nbsp;&nbsp;**$1B** | &nbsp;&nbsp;**Next**<br>&nbsp;&nbsp;**$9B** | &nbsp;&nbsp;&nbsp;&nbsp;**Over**<br>&nbsp;&nbsp;&nbsp;&nbsp;**$12B** |
| &nbsp;&nbsp;LargeCap Growth Fund I | 0.66% | &nbsp;&nbsp;0.64% | 0.62% | 0.61% | 0.60% | 0.59% | 0.58% |
| &nbsp;&nbsp;**Series** |  | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** | **Management Fee as a Percentage** |  |
| &nbsp;&nbsp;**Series** |  |  | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** | **of Average Daily Net Assets** |  |
| &nbsp;&nbsp;Bond Market Index Fund |  |  |  | 0.14% |  |  |  |
| &nbsp;&nbsp;Capital Securities Fund |  |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Government Money Market Fund |  |  |  | 0.15% |  |  |  |
| &nbsp;&nbsp;International Equity Index Fund |  |  |  | 0.25% |  |  |  |
| &nbsp;&nbsp;MidCap S&P 400 Index Fund |  |  |  | 0.15% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime 2010 Fund |  |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime 2015 Fund |  |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime 2020 Fund |  |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime 2025 Fund |  |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime 2030 Fund |  |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime 2035 Fund |  |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime 2040 Fund |  |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime 2045 Fund |  |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime 2050 Fund |  |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime 2055 Fund |  |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime 2060 Fund |  |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime 2065 Fund |  |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime 2070 Fund |  |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime Strategic Income Fund | &nbsp;&nbsp;Principal LifeTime Strategic Income Fund |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime Hybrid Income Fund | &nbsp;&nbsp;Principal LifeTime Hybrid Income Fund |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2015 Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2015 Fund |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2020 Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2020 Fund |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2025 Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2025 Fund |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2030 Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2030 Fund |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2035 Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2035 Fund |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2040 Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2040 Fund |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2045 Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2045 Fund |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2050 Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2050 Fund |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2055 Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2055 Fund |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2060 Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2060 Fund |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2065 Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2065 Fund |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2070 Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2070 Fund |  |  | 0.00% |  |  |  |
| &nbsp;&nbsp;SmallCap S&P 600 Index Fund |  |  |  | 0.15% |  |  |  |

---

Page 10 of 12

![](g7lpcg9r2nkjr3uck01zx.jpg)

**SCHEDULE 2**

Effective Date and Initial Term of Management Agreement for each Series

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Series** | &nbsp;&nbsp;**Effective Date** | &nbsp;&nbsp;&nbsp;&nbsp;**Initial Term** |
| &nbsp;&nbsp;Blue Chip Fund | 06/14/2012 | One Year |
| &nbsp;&nbsp;Bond Market Index Fund | 12/30/2009 | One Year |
| &nbsp;&nbsp;California Municipal Fund | 01/12/2007 | One Year |
| &nbsp;&nbsp;Capital Securities Fund | 03/14/2014 | One Year |
| &nbsp;&nbsp;Core Fixed Income Fund | 01/12/2007 | One Year |
| &nbsp;&nbsp;Core Plus Bond Fund | 12/06/2000 | One Year |
| &nbsp;&nbsp;Diversified Income Fund | 12/15/2008 | One Year |
| &nbsp;&nbsp;Diversified International Fund | 12/06/2000 | One Year |
| &nbsp;&nbsp;Diversified Real Asset Fund | 03/16/2010 | One Year |
| &nbsp;&nbsp;Edge MidCap Fund | 09/30/2015 | One Year |
| &nbsp;&nbsp;Equity Income Fund | 01/12/2007 | One Year |
| &nbsp;&nbsp;Finisterre Emerging Markets Total Return Bond Fund | 07/11/2016 | One Year |
| &nbsp;&nbsp;Global Emerging Markets Fund | 12/06/2000 | One Year |
| &nbsp;&nbsp;Global Multi-Strategy Fund | 10/24/2011 | One Year |
| &nbsp;&nbsp;Global Real Estate Securities Fund | 10/01/2007 | One Year |
| &nbsp;&nbsp;Global Sustainable Listed Infrastructure Fund | 09/22/2022 | Two Years |
| &nbsp;&nbsp;Government & High Quality Bond Fund | 01/12/2007 | One Year |
| &nbsp;&nbsp;Government Money Market Fund | 12/20/2017 | One Year |
| &nbsp;&nbsp;High Income Fund | 12/29/2004 | One Year |
| &nbsp;&nbsp;High Yield Fund | 01/12/2007 | One Year |
| &nbsp;&nbsp;Inflation Protection Fund | 12/29/2004 | One Year |
| &nbsp;&nbsp;International Equity Index Fund | 12/30/2009 | One Year |
| &nbsp;&nbsp;International Fund I | 12/29/2003 | One Year |
| &nbsp;&nbsp;International Small Company Fund | 06/11/2014 | One Year |
| &nbsp;&nbsp;LargeCap Growth Fund I | 12/06/2000 | One Year |
| &nbsp;&nbsp;LargeCap S&P 500 Index Fund | 12/06/2000 | One Year |
| &nbsp;&nbsp;LargeCap Value Fund III | 12/06/2000 | One Year |
| &nbsp;&nbsp;MidCap Fund | 12/06/2000 | One Year |
| &nbsp;&nbsp;MidCap Growth Fund | 12/06/2000 | One Year |
| &nbsp;&nbsp;MidCap Growth Fund III | 12/06/2000 | One Year |
| &nbsp;&nbsp;MidCap S&P 400 Index Fund | 12/06/2000 | One Year |
| &nbsp;&nbsp;MidCap Value Fund I | 12/29/2003 | One Year |
| &nbsp;&nbsp;Money Market Fund | 12/06/2000 | One Year |
| &nbsp;&nbsp;Opportunistic Municipal Fund | 06/14/2012 | One Year |
| &nbsp;&nbsp;Origin Emerging Markets Fund | 01/23/2015 | One Year |
| &nbsp;&nbsp;Overseas Fund | 09/30/2008 | One Year |
| &nbsp;&nbsp;Principal Capital Appreciation Fund | 01/12/2007 | One Year |
| &nbsp;&nbsp;Principal LifeTime 2010 Fund | 02/27/2001 | One Year |
| &nbsp;&nbsp;Principal LifeTime 2015 Fund | 02/29/2008 | One Year |
| &nbsp;&nbsp;Principal LifeTime 2020 Fund | 02/27/2001 | One Year |
| &nbsp;&nbsp;Principal LifeTime 2025 Fund | 02/29/2008 | One Year |
| &nbsp;&nbsp;Principal LifeTime 2030 Fund | 02/27/2001 | One Year |
| &nbsp;&nbsp;Principal LifeTime 2035 Fund | 02/29/2008 | One Year |
| &nbsp;&nbsp;Principal LifeTime 2040 Fund | 02/27/2001 | One Year |
| &nbsp;&nbsp;Principal LifeTime 2045 Fund | 02/29/2008 | One Year |
| &nbsp;&nbsp;Principal LifeTime 2050 Fund | 02/27/2001 | One Year |
| &nbsp;&nbsp;Principal LifeTime 2055 Fund | 02/29/2008 | One Year |
| &nbsp;&nbsp;Principal LifeTime 2060 Fund | 03/01/2013 | One Year |
| &nbsp;&nbsp;Principal LifeTime 2065 Fund | 09/06/2017 | One Year |

---

Page 11 of 12

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---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Series** | &nbsp;&nbsp;**Effective Date** | &nbsp;&nbsp;&nbsp;&nbsp;**Initial Term** |
| &nbsp;&nbsp;Principal LifeTime 2070 Fund | 03/01/2023 | Two Years |
| &nbsp;&nbsp;Principal LifeTime Strategic Income Fund | 02/27/2001 | One Year |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2015 Fund | 09/30/2014 | One Year |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2020 Fund | 09/30/2014 | One Year |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2025 Fund | 09/30/2014 | One Year |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2030 Fund | 09/30/2014 | One Year |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2035 Fund | 09/30/2014 | One Year |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2040 Fund | 09/30/2014 | One Year |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2045 Fund | 09/30/2014 | One Year |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2050 Fund | 09/30/2014 | One Year |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2055 Fund | 09/30/2014 | One Year |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2060 Fund | 09/30/2014 | One Year |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2065 Fund | 09/06/2017 | One Year |
| &nbsp;&nbsp;Principal LifeTime Hybrid 2070 Fund | 03/01/2023 | Two Years |
| &nbsp;&nbsp;Principal LifeTime Hybrid Income Fund | 09/30/2014 | One Year |
| &nbsp;&nbsp;Real Estate Securities Fund | 12/06/2000 | One Year |
| &nbsp;&nbsp;SAM\* Balanced Portfolio | 01/12/2007 | One Year |
| &nbsp;&nbsp;SAM\* Conservative Balance Portfolio | 01/12/2007 | One Year |
| &nbsp;&nbsp;SAM\* Conservative Growth Portfolio | 01/12/2007 | One Year |
| &nbsp;&nbsp;SAM\* Flexible Income Portfolio | 01/12/2007 | One Year |
| &nbsp;&nbsp;SAM\* Strategic Growth Portfolio | 01/12/2007 | One Year |
| &nbsp;&nbsp;Short-Term Income Fund | 01/12/2007 | One Year |
| &nbsp;&nbsp;SmallCap Fund | 12/06/2000 | One Year |
| &nbsp;&nbsp;SmallCap Growth Fund I | 12/06/2000 | One Year |
| &nbsp;&nbsp;SmallCap S&P 600 Index Fund | 12/06/2000 | One Year |
| &nbsp;&nbsp;SmallCap Value Fund II | 06/01/2004 | One Year |
| &nbsp;&nbsp;Small-MidCap Dividend Income Fund | 06/06/2011 | One Year |
| &nbsp;&nbsp;Small-MidCap Growth Fund | 06/12/2019 | One Year |
| &nbsp;&nbsp;Spectrum Preferred and Capital Securities Income Fund | 05/01/2002 | One Year |
| &nbsp;&nbsp;Tax-Exempt Bond Fund | 01/12/2007 | One Year |

---

\*Strategic Asset Management

Page 12 of 12

## Ex-99.(D)(2)B

**<u>PRINCIPAL FUNDS, INC.</u>**

**AMENDED AND RESTATED SUB-ADVISORY AGREEMENT**

**BARROW, HANLEY, MEWHINNEY & STRAUSS, LLC**

**SUB-ADVISED FUNDS**

AMENDED AND RESTATED SUB-ADVISORY AGREEMENT (the "Agreement") to be effective as of January 1, 2023, by and between PRINCIPAL GLOBAL INVESTORS, LLC, a Delaware limited liability company (the "Manager"), and BARROW, HANLEY, MEWHINNEY & STRAUSS, LLC, a Delaware limited liability company (the "Sub-Advisor").

W I T N E S S E T H:

WHEREAS, the Manager is the manager and investment adviser to each Series of Principal Funds, Inc. (the "Fund"), an open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"); and

WHEREAS, the Manager desires to retain the Sub-Advisor to render discretionary investment advisory services for all or a portion of the assets of each Series of the Fund identified in <u>Appendix A</u> hereto, as may be amended from time to time (the "Series"), which the Manager has agreed to provide to the Fund, and the Sub-Advisor desires to furnish such services; and

WHEREAS, the Manager and the Sub-Advisor agree to amend and restate the Amended and Restated Sub- Advisory Agreement between the Manager and the Sub-Advisor dated April 1, 2022 with this Agreement; and

WHEREAS, the Manager has furnished the Sub-Advisor with copies properly certified or authenticated of each of the following and will promptly provide the Sub-Advisor with copies properly certified or authenticated of any amendment or supplement thereto:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Management Agreement (the "Management Agreement") with the Fund;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The Fund's registration statement and financial statements as filed with the Securities and Exchange Commission (the "SEC");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Fund's Articles of Incorporation and By-laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Policies, procedures or instructions adopted or approved by the Board of Directors of the Fund relating to obligations and services to be provided by the Sub-Advisor.

NOW, THEREFORE, in consideration of the premises and the terms and conditions hereinafter set forth, the parties agree as follows:

1.<u>Appointment of</u> Sub-Advisor

In accordance with and subject to the Management Agreement, the Manager hereby appoints the Sub-Advisor to perform the services described in Section 2 below for investment and reinvestment of such portion of the assets of each Series as may be allocated to the Sub-Advisor by the Manager, from time to time (the "Allocated Assets"), subject to the control and direction of the Manager and the Fund's Board of Directors, for the period and on the terms hereinafter set forth. The Sub-Advisor accepts such appointment and agrees to furnish the services hereinafter set forth for the compensation herein provided. The Sub-Advisor shall for all purposes herein be deemed to be an independent contractor and shall, except as expressly provided or authorized, have no authority to act for or represent the Fund or the Manager in any way or otherwise be deemed an agent of the Fund or the Manager.

2.<u>Obligations of and Services to be Provided by the</u> <u>Sub-Advisor</u> The Sub-Advisor will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Provide investment advisory services, including but not limited to research, advice and supervision for the Allocated Assets of each Series.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Furnish to the Board of Directors of the Fund for approval (or any appropriate committee of such Board), and revise from time to time as conditions require, a recommended investment program for each Series consistent with each Series' respective investment objective(s) and policies and any specific criteria applicable to the Allocated Assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Implement the approved investment program for the Allocated Assets by placing orders for the purchase and sale of securities without prior consultation with the Manager and without regard to the length of time the securities have been held, the resulting rate of portfolio turnover or any tax considerations, subject

always to the provisions of the Fund's registration statement, Articles of Incorporation and Bylaws and the requirements of the 1940 Act, as each of the same shall be from time to time in effect.

(d)Advise and assist the officers of the Fund, as requested by the officers, in taking such steps as are necessary or appropriate to carry out the decisions of its Board of Directors, and any appropriate committees of such Board, regarding the general conduct of the investment business of each Series.

(e)Maintain, in connection with the Sub-Advisor's investment advisory services provided to the Allocated Assets, compliance with the 1940 Act and the regulations adopted by the SEC thereunder and the Series' investment strategies and restrictions as stated in the Fund's prospectus and statement of additional information and any specific criteria applicable to the Allocated Assets.

(f)Report to the Board of Directors of the Fund at such times and in such detail as the Board of Directors may reasonably deem appropriate in order to enable it to determine that the investment policies, procedures and approved investment program of each Series (and any specific criteria applicable to the Allocated Assets) are being observed.

(g)Upon request, provide assistance and recommendations for the determination of the fair value of certain securities when reliable market quotations are not readily available for purposes of calculating net asset value in accordance with procedures and methods established by the Fund's Board of Directors.

(h)Furnish, at its own expense, (i) all necessary investment and management facilities, including salaries of clerical and other personnel required for it to execute its duties faithfully, and (ii) administrative facilities, including bookkeeping, clerical personnel and equipment necessary for the efficient conduct of the investment advisory affairs of each Series.

(i)Open accounts with Foreign Account Tax Compliance Act compliant broker-dealers, financial counterparties including swap counterparties and futures commission merchants ("broker-dealers"); select broker-dealers to effect all transactions for each Series; place all necessary orders with broker-dealers or issuers (including affiliated broker-dealers); and negotiate commissions, if applicable. To the extent consistent with applicable law, purchase or sell orders for each Series may be aggregated with contemporaneous purchase or sell orders of other clients of the Sub-Advisor. In such event allocation of securities so sold or purchased, as well as the expenses incurred in the transaction, will be made by the Sub-Advisor in the manner the Sub- Advisor considers to be the most equitable and consistent with its fiduciary obligations to the Fund and to other clients. The Sub-Advisor will report on such allocations at the request of the Manager, the Fund or the Fund's Board of Directors providing such information as the number of aggregated trades to which each Series was a party, the broker-dealers to whom such trades were directed and the basis for the allocation for the aggregated trades. The Sub-Advisor shall use its best efforts to obtain execution of transactions for each Series at prices which are advantageous to the Series and at commission rates that are reasonable in relation to the benefits received. However, the Sub-Advisor may select brokers or dealers on the basis that they provide brokerage, research or other services or products to the Sub-Advisor. To the extent consistent with applicable law, the Sub-Advisor may pay a broker or dealer an amount of commission for effecting a securities transaction in excess of the amount of commission or dealer spread another broker or dealer would have charged for effecting that transaction if the Sub-Advisor determines in good faith that such amount of commission is reasonable in relation to the value of the brokerage and research products and/or services provided by such broker or dealer. This determination, with respect to brokerage and research products and/or services, may be viewed in terms of either that particular transaction or the overall responsibilities which the Sub-Advisor and its affiliates have with respect to each Series as well as to accounts over which they exercise investment discretion. Not all such services or products need be used by the Sub-Advisor in managing the Allocated Assets. In addition, joint repurchase or other accounts may not be utilized by the Series except to the extent permitted under any exemptive order obtained by the Sub- Advisor provided that all conditions of such order are complied with.

(j)Section 871(m) Transactions: Sub-Advisor shall not on behalf of the Fund enter into certain U.S. dividend equivalent payment transactions described in Section 871(m) of the U.S. Internal Revenue Code and the regulations thereunder ("871(m) Transaction") with a foreign counterparty unless: (i) Sub-Advisor adheres to the ISDA 2015 Section 871(m) Protocol on behalf of the Fund, and (ii) the foreign counterparty to the 871(m) Transaction provides Sub-Advisor with a properly completed Form W-8IMY certifying to its status as a qualified derivatives dealer ("QDD").

(k)Maintain all accounts, books and records with respect to the Allocated Assets as are required of an investment advisor of a registered investment company pursuant to the 1940 Act and Investment Advisers Act of 1940, as amended (the "Advisers Act"), and the rules thereunder, and furnish the Fund and the Manager with such periodic and special reports as the Fund or the Manager may reasonably request. In

compliance with the requirements of Rule 31a-3 under the 1940 Act, the Sub-Advisor hereby agrees that all records that it maintains for each Series are the property of the Fund, agrees to preserve for the periods described by Rule 31a-2 under the 1940 Act any records that it maintains for the Series and that are required to be maintained by Rule 31a-1 under the 1940 Act, and further agrees to surrender promptly to the Fund any records that it maintains for a Series upon request by the Fund or the Manager. The Sub-Advisor has no responsibility for the maintenance of Fund records except insofar as is directly related to the services the Sub-Advisor provides to a Series.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)Observe and comply with Rule 17j-1 under the 1940 Act and the Sub-Advisor's Code of Ethics adopted pursuant to that Rule as the same may be amended from time to time. The Manager acknowledges receipt of a copy of the Sub-Advisor's current Code of Ethics. The Sub-Advisor shall promptly forward to the Manager a copy of any material amendment to the Sub-Advisor's Code of Ethics along with certification that the Sub-Advisor has implemented procedures for administering the Sub-Advisor's Code of Ethics.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)From time to time as the Manager or the Fund may request, furnish the requesting party reports on portfolio transactions and reports on investments held by a Series, all in such detail as the Manager or the Fund may reasonably request. The Sub-Advisor will make available its officers and employees to meet with the Fund's Board of Directors at the Fund's principal place of business on due notice to review the investments of a Series.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)Provide such information as is customarily provided by a sub-advisor, or as may be required or reasonably requested by the Manager, for the Fund or the Manager to comply with their respective obligations under applicable laws, including, without limitation, the Internal Revenue Code of 1986, as amended (the "Code"), the 1940 Act, the Advisers Act, the Securities Act of 1933, as amended (the "Securities Act"), and any state securities laws, and any rule or regulation thereunder. Such information includes, but is not limited to: the Sub-Advisor's compliance manual and policies and procedures adopted to comply with Rule 206(4)-7 of the Advisers Act; the Sub-Advisor's most recent annual compliance report or a detailed summary of such report; timely, accurate and complete responses to all 15(c) questionnaires; timely, accurate and complete responses to all Quarterly Compliance Questionnaires (including the identification of any material compliance matters and a copy of any material changes to the Sub-Advisor's Rule 206(4)-7 compliance policies and procedures, marked to show changes along with a written summary of the purpose of each such change); Annual Proxy Voting Questionnaires; Annual Best Execution and Soft Dollar Questionnaires, and responses to all other requests from the Manager. The Sub-Advisor agrees to make available for the Manager's review all deficiency letters issued by the SEC together with all responses given by Sub-Advisor to such letters. The Sub-Advisor will advise the Manager of any material changes in the Sub-Advisor's ownership within a reasonable time after any such change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)Vote proxies received on behalf of each Series (with respect to the portion thereof allocated to the Sub- Advisor) in a manner consistent with the Sub-Advisor's proxy voting policies and procedures and provide a record of votes cast containing all of the voting information required by Form N-PX in an electronic format to enable the Series to file Form N-PX as required by SEC rule.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)Respond to tender offers, rights offerings and other voluntary corporate action requests affecting securities held by each Series (with respect to the portion thereof allocated to the Sub- Advisor). For the avoidance of doubt , the Sub-Advisor is not responsible for the filing of claims in class action litigation involving securities held in the Fund or formerly held in the Fund but will provide investment related advice relating to such litigation when requested by the Manager in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)Cooperate with the Manager in its performance of quarterly and annual tax compliance tests to monitor the Series' compliance with Subchapter M of the Code. If it is determined by the Manager or its tax advisors that the Series is not in compliance with the requirements imposed by the Code, the Sub-Advisor, in consultation with the Manager and its tax advisors, will take prompt action to bring the Series back into compliance with the time permitted under the Code.

3.<u>Prohibited Conduct</u>

In providing the services described in this agreement, the Sub-Advisor will not consult with any other investment advisory firm that provides investment advisory services to any investment company sponsored by Principal Financial Group Inc. regarding transactions for the Fund in securities or other assets.

4.<u>Compensation</u>

As full compensation for all services rendered and obligations assumed by the Sub-Advisor hereunder with respect to the Allocated Assets, the Manager shall pay the compensation specified in <u>Appendix A</u> to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

5.<u>Liability of</u> Sub-Advisor

Neither the Sub-Advisor nor any of its directors, officers, employees, agents or affiliates shall be liable to the Manager, the Fund or its shareholders for any loss suffered by the Manager or the Fund resulting from any error of judgment made in the good faith exercise of the Sub-Advisor's investment discretion in connection with selecting investments for a Series or as a result of the failure by the Manager or any of its affiliates to comply with the terms of this Agreement, except for losses resulting from willful misfeasance, bad faith or gross negligence of, or from reckless disregard of, the duties of the Sub-Advisor or any of its directors, officers, employees, agents, or affiliates.

6.<u>Trade Errors</u>

The Sub-Advisor will notify the Manager of any Trade Error(s), regardless of materiality, promptly upon the discovery such Trade Error(s) by the Sub-Advisor. Notwithstanding Section 5, the Sub-Advisor shall be liable to the Manager, the Fund or its shareholders for any loss suffered by the Manager or the Fund resulting from Trade Errors due to negligence, misfeasance, or disregard of duties of the Sub Advisor or any of its directors, officers, employees, agents (excluding any broker-dealer selected by the Sub-Advisor), or affiliates.

For purposes under this Section 6, a "Trade Error" occurs when a transaction results in an unintended, including an impermissible, result. Examples include, but are not limited to, the following:

∙orders by the Sub-Advisor that result in the purchase or sale of securities or other assets that were not intended to be purchased or sold;

∙orders by the Sub-Advisor that result in the purchase or sale of securities or other assets in an unintended amount, which includes price or commission rate; or

∙purchases or sales of securities or other assets that violate the investment limitations or restrictions disclosed in the Fund's registration statement and/or imposed by applicable law, regulation, contract or understanding (calculated at the Sub-Advisor's portfolio level), unless otherwise agreed to in writing.

7.<u>Supplemental Arrangements</u>

The Sub-Advisor may enter into arrangements with other persons affiliated with the Sub-Advisor or with unaffiliated third parties to better enable the Sub-Advisor to fulfill its obligations under this Agreement for the provision of certain personnel and facilities to the Sub-Advisor, subject to written notification to and approval of the Manager and, where required by applicable law, the Board of Directors of the Fund; provided, however, that entry into any such arrangements shall not relieve the Sub-Advisor of any of its obligations under this Agreement.

8.<u>Regulation</u>

The Sub-Advisor shall submit to all regulatory and administrative bodies having jurisdiction over the services provided pursuant to this Agreement any information, reports or other material which any such body may request or require pursuant to applicable laws and regulations.

9.<u>Duration and Termination of This Agreement</u>

This Agreement shall become effective with respect to a Series as of the corresponding date set forth on <u>Appendix B</u> to this Agreement, as may be amended from time to time, and, unless otherwise terminated with respect to such Series, shall continue in effect thereafter for the initial term set forth on <u>Appendix B</u> to this Agreement, and thereafter from year to year, provided that in each case the continuance is specifically approved within the period required by the 1940 Act either by the Board of Directors of the Fund or by a vote of a majority of the outstanding voting securities of the Series and in either event by a vote of a majority of the Board of Directors of the Fund who are not interested persons of the Manager, Principal Life Insurance Company, the Sub-Advisor or the Fund cast in accordance with the requirements of the 1940 Act after taking into effect any exemptive order, no-action assurances or other relief, rule or regulation at which the Fund may rely.

If the shareholders of a Series fail to approve the Agreement or any continuance of the Agreement in accordance with the requirements of the 1940 Act, the Sub-Advisor will continue to act as Sub-Advisor with respect to the Allocated Assets of such Series pending the required approval of the Agreement or its continuance or of any contract with the Sub-Advisor or a different manager or sub-advisor or other definitive action; provided, that the compensation received by the Sub-Advisor in respect to the Allocated Assets of such Series during such period is in compliance with Rule 15a-4 under the 1940 Act.

This Agreement may be terminated with respect to a Series at any time without the payment of any penalty by the Board of Directors of the Fund or by the Sub-Advisor, the Manager or by vote of a majority of the outstanding voting securities of the Series on sixty days' written notice. This Agreement shall automatically terminate in the event of its assignment. In interpreting the provisions of this Section 9, the definitions contained in Section 2(a)

of the 1940 Act (particularly the definitions of "interested person," "assignment," "voting security" and "majority of the outstanding voting securities") shall be applied.

10.<u>Amendment of this Agreement</u>

No amendment of this Agreement shall be effective unless in writing and signed by both parties. No material amendment of this Agreement shall be effective until approved, if required by the 1940 Act or the rules, regulations, interpretations or orders issued thereunder, by vote of the holders of a majority of the outstanding voting securities of the Series (as defined in the 1940 Act) and by vote of a majority of the Board of Directors of the Fund who are not interested persons (as defined in the 1940 Act) of the Manager, the Sub-Advisor, Principal Life Insurance Company or the Fund cast in accordance with the requirements of the 1940 Act after taking into effect any exemptive order, no-action assurances or other relief, rule or regulation at which the Fund may rely.

11.<u>Additional Series</u>

In the event the Manager wishes to appoint the Sub-Advisor to perform the services described in this Agreement with respect to one or more additional Series of the Fund after the effective date of this Agreement, such Series will become a Series under this Agreement upon approval of this Agreement in the manner required by the 1940 Act and the amendment of <u>Appendices A</u> and <u>B</u> hereto.

12.<u>General Provisions</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Iowa. The captions in this Agreement are included for convenience only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any notice under this Agreement shall be in writing, addressed and delivered or mailed postage pre-paid to the other party at such address as such other party may designate for the receipt of such notices. Until further notice to the other party, it is agreed that the address of the Manager for this purpose shall be Principal Financial Group, Des Moines, Iowa 50392-0200, and the address of the Sub-Advisor shall be Barrow, Hanley, Mewhinney & Strauss, LLC, 2200 Ross Avenue, 31st Floor, Dallas, Texas 75201.

(c)The Sub-Advisor will promptly notify the Manager in writing of the occurrence of any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.the Sub-Advisor fails to be registered as an investment adviser under the Advisers Act or under the laws of any jurisdiction in which the Sub-Advisor is required to be registered as an investment advisor in order to perform its obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.the Sub-Advisor is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, involving the affairs of a Series.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.the Sub-Advisor becomes aware of any pending action, suit, proceeding, inquiry or investigation that is reasonably likely to result in a conviction, order, judgment or decree issued with respect to it that could reasonably be expected to result in the Sub-Advisor becoming ineligible to serve as an investment adviser of a registered investment company under the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.the Sub-Advisor becomes aware of a transaction or series of transactions that is reasonably likely to result in a change in the management or control of the Sub-Advisor or a controlling person thereof or otherwise in the assignment (as defined in the 1940 Act) of this Agreement by the Sub-Advisor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The Manager shall provide (or cause the Series custodian to provide) timely information to the Sub-Advisor regarding such matters as the composition of the assets of a Series, cash requirements and cash available for investment in a Series, and all other reasonable information as may be necessary for the Sub-Advisor to perform its duties and responsibilities hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)The Sub-Advisor represents that it will not enter into any agreement, oral or written, or other understanding under which the Fund directs or is expected to direct portfolio securities transactions, or any remuneration, to a broker or dealer in consideration for the promotion or sale of Fund shares or shares issued by any other registered investment company. The Sub-Advisor further represents that it is contrary to the Sub-Advisor's policies to permit those who select brokers or dealers for execution of Fund portfolio securities transactions to take into account the broker's or dealer's promotion or sale of Fund shares or shares issued by any other registered investment company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)The Manager represents, and the Sub-Advisor acknowledges, that with respect to the Series, the Manager is relying on the exclusion from the definition of "commodity pool operator" under Section 4.5 of the General

Regulations under the CEA ("Rule 4.5"). The Sub-Advisor will not exceed the de minimis trading limits set forth in Rule 4.5(c)(2)(iii)(B) unless otherwise agreed to in writing.

(g)The Sub-Advisor agrees that neither it nor any of its affiliates will in any way refer to its relationship with the Fund, the Series, or the Manager or any of their respective affiliates in offering, marketing or other promotional materials without the express written consent of the Manager

(h)This Agreement contains the entire understanding and agreement of the parties.

(i)This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Each party agrees that electronic signatures of the parties included in this Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures.

IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date first above written.

PRINCIPAL GLOBAL INVESTORS, LLC

---

| | | |
|:---|:---|:---|
| By | /s/ Clint L. Woods | /s/ Clint L. Woods |
|  | Name: Clint L. Woods | Name: Clint L. Woods |
|  | Title: | Vice President, Associate General Counsel, |
|  |  | and Assistant Secretary |
| By | /s/ Adam U. Shaikh | /s/ Adam U. Shaikh |
|  | Name: Adam U. Shaikh | Name: Adam U. Shaikh |
|  | Title: | Assistant General Counsel |

---

BARROW, HANLEY, MEWHINNEY & STRAUSS, LLC

---

| | |
|:---|:---|
| By | /s/ Patricia Barron |
|  | Name: Patricia Barron |
|  | Title: Senior Managing Director and |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chief Operating Officer |

---

<u>APPENDIX A</u>

Intentionally Omitted

![](g9jhc8trrom220vmbjc7r.jpg)

APPENDIX B

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Effective Date and Initial T erm of Sub-Advisory Agreement for** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Effective Date and Initial T erm of Sub-Advisory Agreement for** | **each Series** |
| Series | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective Date | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Initial Term |
| LargeCap Value Fund Ill | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11/17/2020 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2 Years |
| Overseas Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11/17/2020 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2 Years |

---

## Ex-99.(D)(2)I

**<u>PRINCIPAL FUNDS, INC.</u>**

**AMENDED AND RESTATED SUB-ADVISORY AGREEMENT**

**EAGLE ASSET MANAGEMENT SUB-ADVISED SERIES**

AMENDED AND RESTATED SUB-ADVISORY AGREEMENT (the "Agreement") to be effective as of January 1, 2023 by and between PRINCIPAL GLOBAL INVESTORS, LLC, a Delaware limited liability company (the "Manager"), and EAGLE ASSET MANAGEMENT, INC. (the "Sub-Advisor").

W I T N E S S E T H:

WHEREAS, the Manager is the manager and investment advisor to each series of Principal Funds, Inc. (the "Fund"), an open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"); and

WHEREAS, the Manager desires to retain the Sub-Advisor to render discretionary investment advisory services for all or a portion of the assets of each series of the Fund identified in <u>Appendix A</u> hereto, as may be amended from time to time (the "Series"), which the Manager has agreed to provide to the Fund, and the Sub-Advisor desires to furnish such services; and

WHEREAS, the Manager and the Sub-Advisor agree to amend and restate the Amended and Restated Sub-Advisory Agreement between the Manager and the Sub-Advisor dated January 1, 2020 with this Agreement; and

WHEREAS, the Manager has furnished the Sub-Advisor with copies properly certified or authenticated of each of the following and will promptly provide the Sub-Advisor with copies properly certified or authenticated of any amendment or supplement thereto:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Management Agreement (the "Management Agreement") with the Fund;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The Fund's registration statement and financial statements as filed with the Securities and Exchange Commission (the "SEC");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Fund's Articles of Incorporation and By-laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Policies, procedures or instructions adopted or approved by the Board of Directors of the Fund relating to obligations and services to be provided by the Sub-Advisor.

NOW, THEREFORE, in consideration of the premises and the terms and conditions hereinafter set forth, the parties agree as follows:

1.<u>Appointment of</u> Sub-Advisor

In accordance with and subject to the Management Agreement, the Manager hereby appoints the Sub-Advisor to perform the services described in <u>Section 2</u> below for investment and reinvestment of such portion of the assets of each Series as may be allocated to the Sub-Advisor by the Manager, from time to time (the "Allocated Assets"), subject to the control and direction of the Manager and the Fund's Board of Directors, for the period and on the terms hereinafter set forth. The Sub-Advisor accepts such appointment and agrees to furnish the services hereinafter set forth for the compensation herein provided. The Sub-Advisor shall for all purposes herein be deemed to be an independent contractor and shall, except as expressly provided or authorized, have no authority to act for or represent the Fund or the Manager in any way or otherwise be deemed an agent of the Fund or the Manager.

2.<u>Obligations of and Services to be Provided by the</u> <u>Sub-Advisor</u> The Sub-Advisor will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Provide investment advisory services, including but not limited to research, advice and supervision for the Allocated Assets of each Series.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Furnish to the Board of Directors of the Fund for approval (or any appropriate committee of such Board), and revise from time to time as conditions require, a recommended investment program for each Series consistent with each Series' respective investment objective(s) and policies and any specific criteria applicable to the Allocated Assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Implement the approved investment program for the Allocated Assets by placing orders for the purchase and sale of securities without prior consultation with the Manager and without regard to the length of time the securities have been held, the resulting rate of portfolio turnover or any tax

considerations, subject always to the provisions of the Fund's registration statement, Articles of Incorporation and Bylaws and the requirements of the 1940 Act, as each of the same shall be from time to time in effect.

(d)Advise and assist the officers of the Fund, as requested by the officers, in taking such steps as are necessary or appropriate to carry out the decisions of its Board of Directors, and any appropriate committees of such Board, regarding the general conduct of the investment business of each Series.

(e)Maintain, in connection with the Sub-Advisor's investment advisory services provided to the Allocated Assets, compliance with the 1940 Act and the regulations adopted by the SEC thereunder and the Series' investment strategies and restrictions as stated in the Fund's prospectus and statement of additional information and any specific criteria applicable to the Allocated Assets.

(f)Report to the Board of Directors of the Fund at such times and in such detail as the Board of Directors may reasonably deem appropriate in order to enable it to determine that the investment policies, procedures and approved investment program of each Series (and any specific criteria applicable to the Allocated Assets) are being observed.

(g)Upon request, provide assistance and recommendations for the determination of the fair value of certain securities when reliable market quotations are not readily available for purposes of calculating net asset value in accordance with procedures and methods established by the Fund's Board of Directors.

(h)Furnish, at its own expense, (i) all necessary investment and management facilities, including salaries of clerical and other personnel required for it to execute its duties faithfully, and (ii) administrative facilities, including bookkeeping, clerical personnel and equipment necessary for the efficient conduct of the investment advisory affairs of each Series.

(i)Open accounts with Foreign Account Tax Compliance Act compliant broker-dealers, financial counterparties including swap counterparties and futures commission merchants ("broker- dealers"); select broker-dealers to effect all transactions for each Series; place all necessary orders with broker-dealers or issuers (including affiliated broker-dealers); and negotiate commissions, if applicable. To the extent consistent with applicable law, purchase or sell orders for each Series may be aggregated with contemporaneous purchase or sell orders of other clients of the Sub- Advisor. In such event allocation of securities so sold or purchased, as well as the expenses incurred in the transaction, will be made by the Sub-Advisor in the manner the Sub-Advisor considers to be the most equitable and consistent with its fiduciary obligations to the Fund and to other clients. The Sub-Advisor will report on such allocations at the request of the Manager, the Fund or the Fund's Board of Directors providing such information as the number of aggregated trades to which each Series was a party, the broker-dealers to whom such trades were directed and the basis for the allocation for the aggregated trades. The Sub-Advisor shall use its best efforts to obtain execution of transactions for each Series at prices which are advantageous to the Series and at commission rates that are reasonable in relation to the benefits received. However, the Sub- Advisor may select brokers or dealers on the basis that they provide brokerage, research or other services or products to the Sub-Advisor. To the extent consistent with applicable law, the Sub- Advisor may pay a broker or dealer an amount of commission for effecting a securities transaction in excess of the amount of commission or dealer spread another broker or dealer would have charged for effecting that transaction if the Sub-Advisor determines in good faith that such amount of commission is reasonable in relation to the value of the brokerage and research products and/or services provided by such broker or dealer. This determination, with respect to brokerage and research products and/or services, may be viewed in terms of either that particular transaction or the overall responsibilities which the Sub-Advisor and its affiliates have with respect to each Series as well as to accounts over which they exercise investment discretion. Not all such services or products need be used by the Sub-Advisor in managing the Allocated Assets. In addition, joint repurchase or other accounts may not be utilized by the Series except to the extent permitted under any exemptive order obtained by the Sub-Advisor provided that all conditions of such order are complied with.

(j)Section 871(m) Transactions: Sub-Advisor shall not on behalf of the Fund enter into certain U.S. dividend equivalent payment transactions described in Section 871(m) of the U.S. Internal Revenue

Code and the regulations thereunder ("871(m) Transaction") with a foreign counterparty unless: (i) Sub-Advisor adheres to the ISDA 2015 Section 871(m) Protocol on behalf of the Fund, and (ii) the foreign counterparty to the 871(m) Transaction provides Sub-Advisor with a properly completed Form W-8IMY certifying to its status as a qualified derivatives dealer ("QDD").

(k)Maintain all accounts, books and records with respect to the Allocated Assets as are required of an investment advisor of a registered investment company pursuant to the 1940 Act and Investment Advisers Act of 1940, as amended (the "Advisers Act"), and the rules thereunder, and furnish the Fund and the Manager with such periodic and special reports as the Fund or the Manager may reasonably request. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Sub-Advisor hereby agrees that all records that it maintains for each Series are the property of the Fund, agrees to preserve for the periods described by Rule 31a-2 under the 1940 Act any records that it maintains for the Series and that are required to be maintained by Rule 31a-1 under the 1940 Act, and further agrees to surrender promptly to the Fund any records that it maintains for a Series upon request by the Fund or the Manager. The Sub-Advisor has no responsibility for the maintenance of Fund records except insofar as is directly related to the services the Sub-Advisor provides to a Series.

(l)Observe and comply with Rule 17j-1 under the 1940 Act and the Sub-Advisor's Code of Ethics adopted pursuant to that Rule as the same may be amended from time to time. The Manager acknowledges receipt of a copy of the Sub-Advisor's current Code of Ethics. The Sub-Advisor shall promptly forward to the Manager a copy of any material amendment to the Sub-Advisor's Code of Ethics along with certification that the Sub-Advisor has implemented procedures for administering the Sub-Advisor's Code of Ethics.

(m)From time to time as the Manager or the Fund may request, furnish the requesting party reports on portfolio transactions and reports on investments held by a Series, all in such detail as the Manager or the Fund may reasonably request. The Sub-Advisor will make available its officers and employees to meet with the Fund's Board of Directors at the Fund's principal place of business on due notice to review the investments of a Series.

(n)Provide such information as is customarily provided by a sub-advisor, or as may be required or reasonably requested by the Manager, for the Fund or the Manager to comply with their respective obligations under applicable laws, including, without limitation, the Internal Revenue Code of 1986, as amended (the "Code"), the 1940 Act, the Advisers Act, the Securities Act of 1933, as amended (the "Securities Act"), and any state securities laws, and any rule or regulation thereunder. Such information includes, but is not limited to: the Sub-Advisor's compliance manual and policies and procedures adopted to comply with Rule 206(4)-7 of the Advisers Act; the Sub-Advisor's most recent annual compliance report or a detailed summary of such report; timely, accurate and complete responses to all 15(c) questionnaires; timely, accurate and complete responses to all Quarterly Compliance Questionnaires (including the identification of any material compliance matters and a copy of any material changes to the Sub-Advisor's Rule 206(4)-7 compliance policies and procedures, marked to show changes along with a written summary of the purpose of each such change); Annual Proxy Voting Questionnaires; Annual Best Execution and Soft Dollar Questionnaires, and responses to all other requests from the Manager. The Sub-Advisor agrees to make available for the Manager's review all deficiency letters issued by the SEC together with all responses given by Sub-Advisor to such letters. The Sub-Advisor will advise the Manager of any material changes in the Sub-Advisor's ownership within a reasonable time after any such change.

(o)Vote proxies received on behalf of each Series (with respect to the portion thereof allocated to the Sub-Advisor) in a manner consistent with the Sub-Advisor's proxy voting policies and procedures and provide a record of votes cast containing all of the voting information required by Form N-PX in an electronic format to enable the Series to file Form N-PX as required by SEC rule.

(p)Respond to tender offers, rights offerings and other voluntary corporate action requests affecting securities held by each Series (with respect to the portion thereof allocated to the Sub-Advisor).

(q)Cooperate with the Manager in its performance of quarterly and annual tax compliance tests to monitor the Series' compliance with Subchapter M of the Code. If it is determined by the Manager or its tax advisors that the Series is not in compliance with the requirements imposed by the Code,

the Sub-Advisor, in consultation with the Manager and its tax advisors, will take prompt action to bring the Series back into compliance within the time permitted under the Code.

3.<u>Prohibited Conduct</u>

In providing the services described in this Agreement, the Sub-Advisor will not consult with any other investment advisory firm that provides investment advisory services to any investment company sponsored by Principal Financial Group, Inc. regarding transactions for the Fund in securities or other assets.

4.<u>Compensation</u>

As full compensation for all services rendered and obligations assumed by the Sub-Advisor hereunder with respect to the Allocated Assets, the Manager shall pay the compensation specified in <u>Appendix A</u> to this Agreement.

5.<u>Liability of</u> Sub-Advisor

Neither the Sub-Advisor nor any of its directors, officers, employees, agents or affiliates shall be liable to the Manager, the Fund or its shareholders for any loss suffered by the Manager or the Fund resulting from any error of judgment made in the good faith exercise of the Sub-Advisor's investment discretion in connection with selecting investments for a Series or as a result of the failure by the Manager or any of its affiliates to comply with the terms of this Agreement, except for losses resulting from willful misfeasance, bad faith or gross negligence of, or from reckless disregard of, the duties of the Sub-Advisor or any of its directors, officers, employees, agents, or affiliates.

6.<u>Trade Errors</u>

The Sub-Advisor will notify the Manager of any Trade Error(s), regardless of materiality, promptly upon the discovery of such Trade Error(s) by the Sub-Advisor. Notwithstanding <u>Section 5</u>, the Sub-Advisor shall be liable to the Manager, the Fund or its shareholders for any loss suffered by the Manager or the Fund resulting from Trade Errors due to negligence, misfeasance, or disregard of duties of the Sub Advisor or any of its directors, officers, employees, agents (excluding any broker-dealer selected by the Sub-Advisor), or affiliates. For purposes under this <u>Section 6</u>, a "Trade Error" occurs when a transaction results in an unintended, including an impermissible, result. Examples include, but are not limited to, the following:

∙orders by the Sub-Advisor that result in the purchase or sale of securities or other assets that were not intended to be purchased or sold;

∙orders by the Sub-Advisor that result in the purchase or sale of securities or other assets in an unintended amount, which includes price or commission rate; or

∙purchases or sales of securities or other assets that violate the investment limitations or restrictions disclosed in the Fund's registration statement and/or imposed by applicable law, regulation, contract or understanding (calculated at the Sub-Advisor's portfolio level), unless otherwise agreed to in writing.

7.<u>Supplemental Arrangements</u>

The Sub-Advisor may enter into arrangements with other persons affiliated with the Sub-Advisor or with unaffiliated third parties to better enable the Sub-Advisor to fulfill its obligations under this Agreement for the provision of certain personnel and facilities to the Sub-Advisor, subject to written notification to and approval of the Manager and, where required by applicable law, the Board of Directors of the Fund; provided, however, that entry into any such arrangements shall not relieve the Sub-Advisor of any of its obligations under this Agreement.

8.<u>Regulation</u>

The Sub-Advisor shall submit to all regulatory and administrative bodies having jurisdiction over the services provided pursuant to this Agreement any information, reports or other material which any such body may request or require pursuant to applicable laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

9.<u>Duration and Termination of This Agreement</u>

This Agreement shall become effective with respect to a Series as of the corresponding date set forth on <u>Appendix B</u> to this Agreement, as may be amended from time to time, and, unless otherwise terminated with respect to such Series, shall continue in effect thereafter for the initial term set forth on <u>Appendix B</u> to this Agreement, and thereafter from year to year, provided that in each case the continuance is specifically approved within the period required by the 1940 Act either by the Board of Directors of the Fund or by a vote of a majority of the outstanding voting securities of the Series and in either event by a vote of a majority of the Board of Directors of the Fund who are not interested persons of the Manager, Principal Life Insurance Company, the Sub-Advisor or the Fund cast in accordance with the requirements of the 1940 Act after taking into effect any exemptive order, no-action assurances or other relief, rule or regulation upon which the Fund may rely.

If the shareholders of a Series fail to approve the Agreement or any continuance of the Agreement in accordance with the requirements of the 1940 Act, the Sub-Advisor will continue to act as Sub-Advisor with respect to the Allocated Assets of such Series pending the required approval of the Agreement or its continuance or of any contract with the Sub-Advisor or a different manager or sub-advisor or other definitive action; provided, that the compensation received by the Sub-Advisor in respect to the Allocated Assets of such Series during such period is in compliance with Rule 15a-4 under the 1940 Act.

This Agreement may be terminated with respect to a Series at any time without the payment of any penalty by the Board of Directors of the Fund or by the Sub-Advisor, the Manager or by vote of a majority of the outstanding voting securities of the Series on sixty days' written notice. This Agreement shall automatically terminate in the event of its assignment. In interpreting the provisions of this <u>Section 9</u>, the definitions contained in Section 2(a) of the 1940 Act (particularly the definitions of "interested person," "assignment," "voting security" and "majority of the outstanding voting securities") shall be applied.

10.<u>Amendment of this Agreement</u>

No amendment of this Agreement shall be effective unless in writing and signed by both parties. No material amendment of this Agreement shall be effective until approved, if required by the 1940 Act or the rules, regulations, interpretations or orders issued thereunder, by vote of the holders of a majority of the outstanding voting securities of the Series (as defined in the 1940 Act) and by vote of a majority of the Board of Directors of the Fund who are not interested persons (as defined in the 1940 Act) of the Manager, the Sub-Advisor, Principal Life Insurance Company or the Fund cast in accordance with the requirements of the 1940 Act after taking into effect any exemptive order, no-action assurances or other relief, rule or regulation upon which the Fund may rely.

11.<u>Additional Series</u>

In the event the Manager wishes to appoint the Sub-Advisor to perform the services described in this Agreement with respect to one or more additional Series of the Fund after the effective date of this Agreement, such Series will become a Series under this Agreement upon approval of this Agreement in the manner required by the 1940 Act and the amendment of <u>Appendices A</u> and <u>B</u> hereto.

12.<u>General Provisions</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Iowa. The captions in this Agreement are included for convenience only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any notice under this Agreement shall be in writing, addressed and delivered or mailed postage pre-paid to the other party at such address as such other party may designate for the receipt of such notices. Until further notice to the other party, it is agreed that the address of the Manager for this purpose shall be Principal Global Investors, LLC, Attn: Principal Funds, 711 High Street, Des Moines, Iowa 50392-0200. The address of the Sub-Advisor for this purpose shall be 880 Carillon Parkway, St Petersburg, Florida 33716.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(c)The Sub-Advisor will promptly notify the Manager in writing of the occurrence of any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.the Sub-Advisor fails to be registered as an investment advisor under the Advisers Act or under the laws of any jurisdiction in which the Sub-Advisor is required to be registered as an investment advisor in order to perform its obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.the Sub-Advisor is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, involving the affairs of a Series.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.the Sub-Advisor becomes aware of any pending or threatened action, suit, proceeding, inquiry or investigation that is reasonably likely to result in a conviction, order, judgment or decree issued with respect to it or any affiliate that could reasonably be expected to result in the Sub- Advisor becoming ineligible to serve as an investment advisor of a registered investment company under the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.the Sub-Advisor becomes aware of a transaction or series of transactions that is reasonably likely to result in a change in the management or control of the Sub-Advisor or a controlling person thereof or otherwise in the assignment (as defined in the 1940 Act) of this Agreement by the Sub-Advisor.

(d)The Manager shall provide (or cause the Series custodian to provide) timely information to the Sub- Advisor regarding such matters as the composition of the assets of a Series, cash requirements and cash available for investment in a Series, and all other reasonable information as may be necessary for the Sub-Advisor to perform its duties and responsibilities hereunder.

(e)The Sub-Advisor represents that it will not enter into any agreement, oral or written, or other understanding under which the Fund directs or is expected to direct portfolio securities transactions, or any remuneration, to a broker or dealer in consideration for the promotion or sale of Fund shares or shares issued by any other registered investment company. The Sub-Advisor further represents that it is contrary to the Sub-Advisor's policies to permit those who select brokers or dealers for execution of Fund portfolio securities transactions to take into account the broker's or dealer's promotion or sale of Fund shares or shares issued by any other registered investment company.

(f)The Sub-Advisor agrees that neither it nor any of its affiliates will in any way refer to its relationship with the Fund, the Series, or the Manager or any of their respective affiliates in offering, marketing or other promotional materials without the express written consent of the Manager

(g)This Agreement contains the entire understanding and agreement of the parties.

(h)This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Each party agrees that electronic signatures of the parties included in this Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures.

IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date first above written.

PRINCIPAL GLOBAL INVESTORS, LLC

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| | |
|:---|:---|
| By | &nbsp;&nbsp;/s/ Clint L. Woods |
| Name: | &nbsp;&nbsp;Clint L. Woods |
| Title: | &nbsp;&nbsp;Vice President, Associate General Counsel, and Assistant |
|  | &nbsp;&nbsp;Secretary |
| By | &nbsp;&nbsp;/s/ Adam U. Shaikh |
| Name: | &nbsp;&nbsp;Adam U. Shaikh |
| Title: | &nbsp;&nbsp;Assistant General Counsel |

---

EAGLE ASSET MANAGEMENT, INC.

---

| | |
|:---|:---|
| By | &nbsp;&nbsp;/s/ Ed Rick |
| Name: | &nbsp;&nbsp;Ed Rick |
| Title: | &nbsp;&nbsp;President |

---

<u>APPENDIX A</u>

Intentionally Omitted

![](g5twpwru26ogsf21olcz6.jpg)

<u>APPENDIX B</u>

**Effective Date and Initial Term of Sub-Advisory Agreement for each Series**

<u>Series</u> <u>Effective Date</u> <u>Initial Term</u> <br> <u>Principal Funds, Inc. - MidCap Growth Fund III</u> <u>June 26, 2017</u> <u>2 Years</u>

## Ex-99.(D)(2)U

**<u>PRINCIPAL FUNDS, INC.</u>**

**AMENDED AND RESTATED SUB-ADVISORY AGREEMENT**

AMENDED AND RESTATED SUB-ADVISORY AGREEMENT (the "Agreement") to be effective as of January 1, 2023 by and between PRINCIPAL GLOBAL INVESTORS, LLC, a Delaware limited liability company (the "Manager"), and ORIGIN ASSET MANAGEMENT LLP, a limited liability partnership organized under the laws of the United Kingdom (the "Sub-Advisor").

W I T N E S S E T H:

WHEREAS, the Manager is the manager and investment advisor to each series of Principal Funds, Inc. (the "Fund"), an open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"); and

WHEREAS, the Manager desires to retain the Sub-Advisor to render discretionary investment advisory services for all or a portion of the assets of each series of the Fund identified in <u>Appendix A</u> hereto, as may be amended from time to time (the "Series"), which the Manager has agreed to provide to the Fund, and the Sub-Advisor desires to furnish such services; and

WHEREAS, the Manager and the Sub-Advisor agree to amend and restate the Amended and Restated Sub-Advisory Agreement between the Manager and the Sub-Advisor dated July 1, 2022 with this Agreement; and

WHEREAS, the Manager has furnished the Sub-Advisor with copies properly certified or authenticated of each of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Amended and Restated Management Agreement between the Fund and the Manager (the "Management Agreement") with the Fund;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The Fund's registration statement and financial statements as filed with the Securities and Exchange Commission (the "SEC");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Fund's Articles of Incorporation and By-laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Policies, procedures or instructions adopted or approved by the Board of Directors of the Fund relating to obligations and services to be provided by the Sub-Advisor.

NOW, THEREFORE, in consideration of the premises and the terms and conditions hereinafter set forth, the parties agree as follows:

1.<u>Appointment of</u> Sub-Advisor

In accordance with and subject to the Management Agreement, the Manager hereby appoints the Sub-Advisor to perform the services described in <u>Section 2</u> below for investment and reinvestment of such portion of the assets of each Series as may be allocated to the Sub-Advisor by the Manager, from time to time (the "Allocated Assets"), subject to the control and direction of the Manager and the Fund's Board of Directors, for the period and on the terms hereinafter set forth. The Sub-Advisor accepts such appointment and agrees to furnish the services hereinafter set forth for the compensation herein provided. The Sub-Advisor shall for all purposes herein be deemed to be an independent contractor and shall, except as expressly provided or authorized, have no authority to act for or represent the Fund or the Manager in any way or otherwise be deemed an agent of the Fund or the Manager.

2.<u>Obligations of and Services to be Provided by the</u> <u>Sub-Advisor</u> The Sub-Advisor will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Provide investment advisory services, including but not limited to research, advice and supervision for the Allocated Assets of each Series.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Furnish to the Board of Directors of the Fund for approval (or any appropriate committee of such Board), and revise from time to time as conditions require, a recommended investment program for each Series consistent with each Series' respective investment objective and policies and any specific criteria applicable to the Allocated Assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Implement the approved investment program for the Allocated Assets by placing orders for the purchase and sale of securities without prior consultation with the Manager and without regard to the length of time the securities have been held, the resulting rate of portfolio turnover or any tax

considerations, subject always to the provisions of the Fund's registration statement, Articles of Incorporation and Bylaws and the requirements of the 1940 Act, as each of the same shall be from time to time in effect.

(d)Advise and assist the officers of the Fund, as reasonably requested by the officers, in taking such steps as are reasonably necessary or appropriate to carry out the decisions of its Board of Directors, and any appropriate committees of such Board, regarding the general conduct of the investment business of each Series.

(e)Maintain, in connection with the Sub-Advisor's investment advisory services provided to the Allocated Assets, compliance with the 1940 Act and the regulations adopted by the SEC thereunder and the Series' investment strategies and restrictions as stated in the Fund's prospectus and statement of additional information and any specific criteria applicable to the Allocated Assets, subject to receipt of such additional information as may be required from the Manager and provided in accordance with <u>Section 12(d)</u> of this Agreement.

(f)Report to the Board of Directors of the Fund at such times and in such detail as the Board of Directors may reasonably deem appropriate in order to enable it to determine that the investment policies, procedures and approved investment program of each Series (and any specific criteria applicable to the Allocated Assets) are being observed.

(g)Upon request, provide reasonable assistance and recommendations for the determination of the fair value of certain securities when reliable market quotations are not readily available for purposes of calculating net asset value in accordance with procedures and methods established by the Fund's Board of Directors.

(h)Furnish, at its own expense, (i) all necessary investment and management facilities, including salaries of clerical and other personnel required for it to execute its duties faithfully, and (ii) administrative facilities, including bookkeeping, clerical personnel and equipment necessary for the efficient conduct of the investment advisory affairs of each Series.

(i)Open accounts with Foreign Account Tax Compliance Act compliant broker-dealers, financial counterparties including swap counterparties and futures commission merchants ("broker- dealers"); select broker-dealers to effect all transactions for each Series; place all necessary orders with broker-dealers or issuers (including affiliated broker-dealers); and negotiate commissions, if applicable. To the extent consistent with applicable law, purchase or sell orders for each Series may be aggregated with contemporaneous purchase or sell orders of other clients of the Sub- Advisor. In such event allocation of securities so sold or purchased, as well as the expenses incurred in the transaction, will be made by the Sub-Advisor in the manner the Sub-Advisor considers to be the most equitable and consistent with its fiduciary obligations to the Fund and to other clients. The Sub-Advisor will report on such allocations at the request of the Manager, the Fund or the Fund's Board of Directors, providing such information as the number of aggregated trades to which each Series was a party, the broker-dealers to whom such trades were directed and the basis for the allocation for the aggregated trades. The Sub-Advisor shall use its best efforts to obtain execution of transactions for each Series at prices which are advantageous to the Series and at commission rates that are reasonable in relation to the benefits received. However, the Sub- Advisor may select brokers or dealers on the basis that they provide brokerage, research or other services or products to the Sub-Advisor. To the extent consistent with applicable law, the Sub- Advisor may pay a broker or dealer an amount of commission for effecting a securities transaction in excess of the amount of commission or dealer spread another broker or dealer would have charged for effecting that transaction if the Sub-Advisor determines in good faith that such amount of commission is reasonable in relation to the value of the brokerage and research products and/or services provided by such broker or dealer. This determination, with respect to brokerage and research products and/or services, may be viewed in terms of either that particular transaction or the overall responsibilities which the Sub-Advisor and its affiliates have with respect to each Series as well as to accounts over which they exercise investment discretion. Not all such services or products need be used by the Sub-Advisor in managing the Allocated Assets. In addition, joint repurchase or other accounts may not be utilized by the Series except to the extent permitted under any exemptive order obtained by the Sub-Advisor provided that all conditions of such order are complied with.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(j)Section 871(m) Transactions: Sub-Advisor shall not on behalf of the Fund enter into certain U.S. dividend equivalent payment transactions described in Section 871(m) of the U.S. Internal Revenue Code and the regulations thereunder ("871(m) Transaction") with a foreign counterparty unless: (i) Sub-Advisor adheres to the ISDA 2015 Section 871(m) Protocol on behalf of the Fund, and (ii) the foreign counterparty to the 871(m) Transaction provides Sub-Advisor with a properly completed Form W-8IMY certifying to its status as a qualified derivatives dealer ("QDD").

(k)Maintain all accounts, books and records with respect to the Allocated Assets as are required of an investment advisor of a registered investment company pursuant to the 1940 Act and Investment Advisers Act of 1940, as amended (the "Advisers Act"), and the rules thereunder, and furnish the Fund and the Manager with such periodic and special reports as the Fund or the Manager may reasonably request. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Sub-Advisor hereby agrees that all records that it maintains for each Series are the property of the Fund, agrees to preserve for the periods described by Rule 31a-2 under the 1940 Act any records that it maintains for the Series and that are required to be maintained by Rule 31a-1 under the 1940 Act, and further agrees to surrender promptly to the Fund any records that it maintains for a Series upon request by the Fund or the Manager. The Sub-Advisor has no responsibility for the maintenance of Fund records except insofar as is directly related to the services the Sub-Advisor provides to a Series.

(l)Observe and comply with Rule 17j-1 under the 1940 Act and the Sub-Advisor's Code of Ethics adopted pursuant to that Rule as the same may be amended from time to time. The Manager acknowledges receipt of a copy of the Sub-Advisor's current Code of Ethics. The Sub-Advisor shall promptly forward to the Manager a copy of any material amendment to the Sub-Advisor's Code of Ethics along with certification that the Sub-Advisor has implemented procedures for administering the Sub-Advisor's Code of Ethics.

(m)From time to time as the Manager or the Fund may request, furnish the requesting party reports on portfolio transactions and reports on investments held by a Series, all in such detail as the Manager or the Fund may reasonably request. The Sub-Advisor will make available its officers and employees to meet with the Fund's Board of Directors at the Fund's principal place of business on reasonable prior notice to review the investments of a Series.

(n)Provide such information as is customarily provided by a sub-advisor, or as may be required or reasonably requested by the Manager, for the Fund or the Manager to comply with their respective obligations under applicable laws, including, without limitation, the Internal Revenue Code of 1986, as amended (the "Code"), the 1940 Act, the Advisers Act, the Securities Act of 1933, as amended (the "Securities Act"), and any state securities laws, and any rule or regulation thereunder. Such information includes, but is not limited to: the Sub-Advisor's compliance manual and policies and procedures adopted to comply with Rule 206(4)-7 of the Advisers Act; the Sub-Advisor's most recent annual compliance report or a detailed summary of such report; timely, accurate and complete responses to all 15(c) questionnaires; timely, accurate and complete responses to all Quarterly Compliance Questionnaires (including the identification of any material compliance matters and a copy of any material changes to the Sub-Advisor's Rule 206(4)-7 compliance policies and procedures, marked to show changes along with a written summary of the purpose of each such change); Annual Proxy Voting Questionnaires; Annual Best Execution and Soft Dollar Questionnaires, and responses to all other requests from the Manager. The Sub-Advisor agrees to make available for the Manager's review all deficiency letters issued by the SEC together with all responses given by Sub-Advisor to such letters. The Sub-Advisor will advise the Manager of any material changes in the Sub-Advisor's ownership within a reasonable time after any such change.

(o)Vote proxies received on behalf of each Series (with respect to the portion thereof allocated to the Sub-Advisor) in a manner consistent with the Sub-Advisor's proxy voting policies and procedures and provide a record of votes cast containing all of the voting information required by Form N-PX in an electronic format to enable the Series to file Form N-PX as required by SEC rule.

(p)Respond to tender offers, rights offerings and other voluntary corporate action requests affecting securities held by each Series (with respect to the portion thereof allocated to the Sub-Advisor).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)Cooperate with the Manager in its performance of quarterly and annual tax compliance tests to monitor the Series' compliance with Subchapter M of the Code. If it is determined by the Manager or its tax advisors that the Series is not in compliance with the requirements imposed by the Code, the Sub-Advisor, in consultation with the Manager and its tax advisors, will take prompt action to bring the Series back into compliance within the time permitted under the Code.

3.<u>Prohibited Conduct</u>

In providing the services described in this Agreement, the Sub-Advisor will not consult with any other investment advisory firm that provides investment advisory services to any investment company sponsored by Principal Financial Group, Inc. regarding transactions for the Fund in securities or other assets.

4.<u>Compensation</u>

As full compensation for all services rendered and obligations assumed by the Sub-Advisor hereunder with respect to the Allocated Assets, the Manager shall pay the compensation specified in <u>Appendix A</u> to this Agreement.

5.<u>Liability of</u> Sub-Advisor

Neither the Sub-Advisor nor any of its partners, members, directors, officers, employees, agents or affiliates shall be liable to the Manager, the Fund or its shareholders for any loss suffered by the Manager or the Fund resulting from any error of judgment made in the good faith exercise of the Sub-Advisor's investment discretion in connection with selecting investments for a Series or as a result of the failure by the Manager or any of its affiliates to comply with the terms of this Agreement, except for losses resulting from willful misfeasance, bad faith or gross negligence of, or from reckless disregard of, the duties of the Sub-Advisor or any of its partners, members, directors, officers, employees, agents, or affiliates.

6.<u>Trade Errors</u>

The Sub-Advisor will notify the Manager of any Trade Error(s), regardless of materiality, promptly upon the discovery of such Trade Error(s) by the Sub-Advisor. Notwithstanding <u>Section 5</u>, the Sub-Advisor shall be liable to the Manager, the Fund or its shareholders for any loss suffered by the Manager or the Fund resulting from Trade Errors due to negligence, misfeasance, or disregard of duties of the Sub- Advisor or any of its partners, members, directors, officers, employees, agents (excluding any broker- dealer selected by the Sub-Advisor), or affiliates. For purposes under this <u>Section 6</u>, a "Trade Error" occurs when a transaction results in an unintended, including an impermissible, result. Examples include, but are not limited to, the following:

∙orders by the Sub-Advisor that result in the purchase or sale of securities or other assets that were not intended to be purchased or sold;

∙orders by the Sub-Advisor that result in the purchase or sale of securities or other assets in an unintended amount, which includes price or commission rate; or

∙purchases or sales of securities or other assets that violate the investment limitations or restrictions disclosed in the Fund's registration statement and/or imposed by applicable law, regulation, contract or understanding (calculated at the Sub-Advisor's portfolio level), unless otherwise agreed to in writing.

7.<u>Supplemental Arrangements</u>

The Sub-Advisor may enter into arrangements with other persons affiliated with the Sub-Advisor or with unaffiliated third parties to better enable the Sub-Advisor to fulfill its obligations under this Agreement for the provision of certain personnel and facilities to the Sub-Advisor, subject to written notification to and approval of the Manager and, where required by applicable law, the Board of Directors of the Fund; provided, however, that entry into any such arrangements shall not relieve the Sub-Advisor of any of its obligations under this Agreement.

8.<u>Regulation</u>

The Sub-Advisor shall submit to all regulatory and administrative bodies having jurisdiction over the services provided pursuant to this Agreement any information, reports or other material which any such body may request or require pursuant to applicable laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

9.<u>Duration and Termination of This Agreement</u>

This Agreement shall become effective with respect to a Series as of the corresponding date set forth on <u>Appendix B</u> to this Agreement, as may be amended from time to time, and, unless otherwise terminated with respect to such Series, shall continue in effect thereafter for the initial term set forth on <u>Appendix B</u> to this Agreement, and thereafter from year to year, provided that in each case the continuance is specifically approved within the period required by the 1940 Act either by the Board of Directors of the Fund or by a vote of a majority of the outstanding voting securities of the Series and in either event by a vote of a majority of the Board of Directors of the Fund who are not interested persons of the Manager, Principal Life Insurance Company, the Sub-Advisor or the Fund cast in accordance with the requirements of the 1940 Act after taking into effect any exemptive order, no-action assurances or other relief, rule or regulation upon which the Fund may rely.

If the shareholders of a Series fail to approve the Agreement or any continuance of the Agreement in accordance with the requirements of the 1940 Act, the Sub-Advisor will continue to act as Sub-Advisor with respect to the Allocated Assets of such Series pending the required approval of the Agreement or its continuance or of any contract with the Sub-Advisor or a different manager or sub-advisor or other definitive action; provided, that the compensation received by the Sub-Advisor in respect to the Allocated Assets of such Series during such period is in compliance with Rule 15a-4 under the 1940 Act.

This Agreement may be terminated with respect to a Series at any time without the payment of any penalty by the Board of Directors of the Fund or by the Sub-Advisor, the Manager or by vote of a majority of the outstanding voting securities of the Series on sixty days' written notice. This Agreement shall automatically terminate in the event of its assignment. In interpreting the provisions of this <u>Section 9</u>, the definitions contained in Section 2(a) of the 1940 Act (particularly the definitions of "interested person," "assignment," "voting security" and "majority of the outstanding voting securities") shall be applied.

10.<u>Amendment of this Agreement</u>

No amendment of this Agreement shall be effective unless in writing and signed by both parties. No material amendment of this Agreement shall be effective until approved, if required by the 1940 Act or the rules, regulations, interpretations or orders issued thereunder, by vote of the holders of a majority of the outstanding voting securities of the Series (as defined in the 1940 Act) and by vote of a majority of the Board of Directors of the Fund who are not interested persons (as defined in the 1940 Act) of the Manager, the Sub-Advisor, Principal Life Insurance Company or the Fund cast in accordance with the requirements of the 1940 Act after taking into effect any exemptive order, no-action assurances or other relief, rule or regulation upon which the Fund may rely.

11.<u>Additional Series</u>

In the event the Manager wishes to appoint the Sub-Advisor to perform the services described in this Agreement with respect to one or more additional Series of the Fund after the effective date of this Agreement, such Series will become a Series under this Agreement upon approval of this Agreement in the manner required by the 1940 Act and the amendment of <u>Appendices A</u> and <u>B</u> hereto.

12.<u>General Provisions</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Iowa. The captions in this Agreement are included for convenience only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any notice under this Agreement shall be in writing, addressed and delivered or mailed postage pre-paid to the other party at such address as such other party may designate for the receipt of such notices. Until further notice to the other party, it is agreed that the address of the Manager for this purpose shall be Principal Financial Group, Des Moines, Iowa 50392-0200, and the address of the Sub-Advisor shall be Origin Asset Management LLP, One Carey Lane, London, EC2V 8AE, United Kingdom.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(c)The Sub-Advisor will promptly notify the Manager in writing of the occurrence of any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.the Sub-Advisor fails to be registered as an investment advisor under the Advisers Act or under the laws of any jurisdiction in which the Sub-Advisor is required to be registered as an investment advisor in order to perform its obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.the Sub-Advisor is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, involving the affairs of a Series.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.the Sub-Advisor becomes aware of any pending or threatened action, suit, proceeding, inquiry or investigation that is reasonably likely to result in a conviction, order, judgment or decree issued with respect to it or any affiliate that could reasonably be expected to result in the Sub- Advisor becoming ineligible to serve as an investment advisor of a registered investment company under the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.the Sub-Advisor becomes aware of a transaction or series of transactions that is reasonably likely to result in a change in the management or control of the Sub-Advisor or a controlling person thereof or otherwise in the assignment (as defined in the 1940 Act) of this Agreement by the Sub-Advisor.

(d)The Manager shall provide (or cause the Series custodian to provide) timely information to the Sub- Advisor regarding such matters as the composition of the assets of a Series, cash requirements and cash available for investment in a Series, and all other reasonable information as may be necessary for the Sub-Advisor to perform its duties and responsibilities hereunder.

(e)The Sub-Advisor represents that it will not enter into any agreement, oral or written, or other understanding under which the Fund directs or is expected to direct portfolio securities transactions, or any remuneration, to a broker or dealer in consideration for the promotion or sale of Fund shares or shares issued by any other registered investment company. The Sub-Advisor further represents that it is contrary to the Sub-Advisor's policies to permit those who select brokers or dealers for execution of Fund portfolio securities transactions to take into account the broker's or dealer's promotion or sale of Fund shares or shares issued by any other registered investment company.

(f)The Manager represents, and the Sub-Advisor acknowledges, that with respect to the Series, the Manager is relying on the exclusion from the definition of "commodity pool operator" under Section 4.5 of the General Regulations under the Commodity Exchange Act ("Rule 4.5"). The Sub-Advisor will not exceed the de minimis trading limits set forth in Rule 4.5(c)(2)(iii)(B) unless otherwise agreed to in writing.

(g)The Sub-Advisor agrees that neither it nor any of its affiliates will in any way refer to its relationship with the Fund, the Series, or the Manager or any of their respective affiliates in offering, marketing or other promotional materials without the express written consent of the Manager; provided, however, that the Manager consents to the Sub-Advisor's use of the Manager's name and the Fund name in the Sub-Advisor's representative client list that may be distributed to potential and existing clients so long as this Agreement is in effect.

(h)Each party represents, warrants and covenants to the other party that (i) it has all requisite power and authority to enter into and perform its obligations under the Agreement, (ii) it has taken all necessary corporate action to authorize its execution, delivery and performance of this Agreement, (iii) it has duly executed and delivered the Agreement, and (iv) this Agreement constitutes its legal, valid and binding agreement, enforceable against it in accordance with its terms.

(i)This Agreement contains the entire understanding and agreement of the parties.

(j)This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Each party agrees that electronic signatures of the parties included in this Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic signature means any electronic sound, symbol, or process attached to or logically associated with

![](gmccnv7lzup7reqdihmsq.jpg)

a record and executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures.

IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date first above written.

PRINCIPAL GLOBAL INVESTORS, LLC

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| | | |
|:---|:---|:---|
| By | /s/ Clint L. Woods | /s/ Clint L. Woods |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Clint L. Woods | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Clint L. Woods |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: | Vice President, Associate General Counsel, |
|  |  | and Assistant Secretary |
| By | /s/ Adam U. Shaikh | /s/ Adam U. Shaikh |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Adam U. Shaikh | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Adam U. Shaikh |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: | Assistant General Counsel |

---

ORIGIN ASSET MANAGEMENT LLP

By /s/ Tarlock Randhawa

Name: Tarlock Randhawa

Title: Managing Partner

By /s/ Nishil Patel

Name: Nishil Patel

Title: Chief Operating Officer

<u>APPENDIX A</u>

The Sub-Advisor shall serve as an investment sub-advisor for the Series identified below. The Manager will pay the Sub-Advisor as full compensation for all services provided under this Agreement, a fee, computed and paid monthly, at an annual rate as shown below of the Series' net assets as of the last business day of the preceding calendar month allocated to Sub-Advisor's management, provided that for the first month the Sub-Advisor is retained, the fee will be computed by using the Series' net assets as of the last business day of the month in which assets are first allocated to the Sub-Advisor's management.

In calculating the fee for a Series included in the table below, assets of any unregistered separate account of Principal Life Insurance Company as well as assets of registered investment companies, collective investment trusts, and Undertakings for Collective Investment in Transferable Securities (UCITS) funds sponsored by Principal Financial Group, Inc. or any affiliate and to which Sub-Advisor provides investment advisory services with the same investment mandate as the Series for which the fee is calculated, will be combined with the assets of the Series to arrive at net assets.

If this Agreement becomes effective or terminates before the end of any month, the fee (if any) for the period from the effective date to the end of such month or from the beginning of such month to the date of termination, as the case may be, shall be prorated according to the proportion which such period bears to the full month in which such effectiveness or termination occurs.

<u>International Fund I</u>

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| | |
|:---|:---|
| All Assets | 0.30% |

---

<u>Origin Emerging Markets Fund</u>

---

| | |
|:---|:---|
| First $500 million | 0.41% |
| Over $500 million | 0.35% |

---

![](gl164ct57abazaruai7pl.jpg)

<u>APPENDIX B</u>

**Effective Date and Initial Term of Sub-Advisory Agreement for each Series**

<u>Series</u> <u>Effective Date</u> <u>Initial Term</u> <br> <u>International Fund I</u> <u>06/03/2014</u> <u>2 Years</u> <br> Origin Emerging Markets Fund 12/30/2015 2 Years

## Ex-99.(D)(2)Z

**<u>PRINCIPAL FUNDS, INC.</u>**

**AMENDED AND RESTATED SUB-ADVISORY AGREEMENT**

**ROBERT W. BAIRD & CO. INCORPORATED SUB-ADVISED FUND**

AMENDED AND RESTATED SUB-ADVISORY AGREEMENT (the "Agreement") to be effective as of January 1, 2023 by and between PRINCIPAL GLOBAL INVESTORS, LLC, a Delaware limited liability company (the "Manager"), and ROBERT W. BAIRD & CO. INCORPORATED, a Wisconsin Corporation (the "Sub-Advisor").

W I T N E S S E T H:

WHEREAS, the Manager is the manager and investment advisor to each series of Principal Funds, Inc. (the "Fund"), an open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"); and

WHEREAS, the Manager desires to retain the Sub-Advisor to render discretionary investment advisory services for all or a portion of the assets of each series of the Fund identified in <u>Appendix A</u> hereto, as may be amended from time to time (the "Series"), which the Manager has agreed to provide to the Fund, and the Sub-Advisor desires to furnish such services on the terms and conditions set forth herein; and

WHEREAS, the Manager and the Sub-Advisor agree to amend and restate the Amended and Restated Sub-Advisory Agreement between the Manager and the Sub-Advisor dated January 1, 2020 with this Agreement; and

WHEREAS, the Manager has furnished the Sub-Advisor with copies properly certified or authenticated of each of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Amended and Restated Management Agreement between the Fund and the Manager (the "Management Agreement") with the Fund;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The Fund's registration statement and financial statements as filed with the Securities and Exchange Commission (the "SEC");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Fund's Articles of Incorporation and By-laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Policies, procedures or instructions adopted or approved by the Board of Directors of the Fund relating to obligations and services to be provided by the Sub-Advisor.

NOW, THEREFORE, in consideration of the premises and the terms and conditions hereinafter set forth, the parties agree as follows:

1.<u>Appointment of</u> Sub-Advisor

In accordance with and subject to the Management Agreement, the Manager hereby appoints the Sub-Advisor to perform the services described in <u>Section 2</u> below for investment and reinvestment of such portion of the assets of each Series as may be allocated to the Sub-Advisor by the Manager, from time to time (the "Allocated Assets"), subject to the control and direction of the Manager and the Fund's Board of Directors, for the period and on the terms hereinafter set forth. The Sub-Advisor accepts such appointment and agrees to furnish the services hereinafter set forth for the compensation herein provided. The Sub-Advisor shall for all purposes herein be deemed to be an independent contractor and shall, except as expressly provided or authorized herein, have no authority to act for or represent the Fund or the Manager in any way or otherwise be deemed an agent of the Fund or the Manager.

2.<u>Obligations of and Services to be Provided by the</u> <u>Sub-Advisor</u> The Sub-Advisor will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Provide investment advisory services, including but not limited to research, advice and supervision for the Allocated Assets of each Series.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Furnish to the Board of Directors of the Fund for approval (or any appropriate committee of such Board), and revise from time to time as conditions require, a recommended investment program for each Series consistent with each Series' respective investment objective(s) and policies and any specific criteria applicable to the Allocated Assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Implement the approved investment program for the Allocated Assets by placing orders for the purchase and sale of securities without prior consultation with the Manager and without regard to the length of time the securities have been held, the resulting rate of portfolio turnover or any tax

considerations, subject always to the provisions of the Fund's registration statement, Articles of Incorporation and Bylaws and the requirements of the 1940 Act, as each of the same shall be from time to time in effect. The Sub-Advisor is also authorized to provide instructions to the Fund's custodian relating to such purchase and sale of the Series' portfolio holdings.

(d)Advise and assist the officers of the Fund, as reasonably requested by the officers, in taking such steps as are reasonably necessary or appropriate to carry out the decisions of its Board of Directors, and any appropriate committees of such Board, regarding the general conduct of the investment business of each Series.

(e)Maintain, in connection with the Sub-Advisor's investment advisory services provided to the Allocated Assets, compliance with the 1940 Act, the regulations adopted by the SEC thereunder, the Series' investment strategies and restrictions as stated in the Fund's prospectus and statement of additional information, and any specific criteria applicable to the Allocated Assets, subject to receipt of such additional information as may be required from the Manager and provided in accordance with Section 12(d) of this Agreement.

(f)Report to the Board of Directors of the Fund at such times and in such detail as the Board of Directors may reasonably deem appropriate in order to enable it to determine that the investment policies, procedures and approved investment program of each Series (and any specific criteria applicable to the Allocated Assets) are being observed.

(g)Upon request, provide reasonable assistance and recommendations for the determination of the fair value of certain securities when reliable market quotations are not readily available for purposes of calculating net asset value in accordance with procedures and methods established by the Fund's Board of Directors; it being agreed that the Sub-Advisor shall have no responsibility for determining the fair value of the Series' portfolio holdings.

(h)Furnish, at its own expense, (i) all necessary investment and management facilities, including salaries of clerical and other personnel required for it to execute its duties faithfully, and (ii) administrative facilities, including bookkeeping, clerical personnel and equipment necessary for the efficient conduct of the investment advisory affairs of each Series . For the avoidance of doubt, the parties agree that the Sub-Advisor shall not be responsible for expenses related to the operation of the Fund, including, without limitation, compensation of the Fund's officers or directors, the Fund's brokerage commissions or taxes, or the Fund's audit, accounting, administrative, transfer agency, custody, legal, registration, or insurance expenses.

(i)Open accounts with Foreign Account Tax Compliance Act compliant broker-dealers, financial counterparties including swap counterparties and futures commission merchants (collectively "broker-dealers"); select broker-dealers to effect all transactions for each Series; place all necessary orders with broker-dealers or issuers (including affiliated broker-dealers); and negotiate commissions, if applicable. To the extent consistent with applicable law, purchase or sell orders for each Series may be aggregated with contemporaneous purchase or sell orders of other clients of the Sub-Advisor. In such event allocation of securities so sold or purchased, as well as the expenses incurred in the transaction, will be made by the Sub-Advisor in the manner the Sub- Advisor considers to be the most equitable and consistent with its fiduciary obligations to the Fund and to other clients of the Sub-Advisor and its affiliates over time. The Sub-Advisor will report on such allocations at the request of the Manager, the Fund or the Fund's Board of Directors providing such information as the number of aggregated trades to which each Series was a party, the broker- dealers to whom such trades were directed and the basis for the allocation for the aggregated trades. The Sub-Advisor shall use its best efforts to obtain execution of transactions for each Series at prices which are advantageous to the Series and at commission rates that are reasonable in relation to the benefits received. However, the Sub-Advisor may select brokers or dealers on the basis that they provide brokerage, research or other services or products to the Sub-Advisor or its affiliates. To the extent consistent with applicable law, the Sub-Advisor may pay a broker or dealer an amount of commission for effecting a securities transaction in excess of the amount of commission or dealer spread another broker or dealer would have charged for effecting that transaction if the Sub-Advisor determines in good faith that such amount of commission is reasonable in relation to the value of the brokerage and research products and/or services provided by such broker or dealer. This determination, with respect to brokerage and research products and/or services, may be viewed in terms of either that particular transaction or the overall

responsibilities which the Sub-Advisor and its affiliates have with respect to each Series as well as to accounts over which they exercise investment discretion. Not all such services or products need be used by the Sub-Advisor in managing the Allocated Assets. In addition, joint repurchase or other accounts may not be utilized by the Series except to the extent permitted under any exemptive order obtained by the Sub-Advisor provided that all conditions of such order are complied with.

(j)Section 871(m) Transactions: Sub-Advisor shall not on behalf of the Fund enter into certain U.S. dividend equivalent payment transactions described in Section 871(m) of the U.S. Internal Revenue Code and the regulations thereunder ("871(m) Transaction") with a foreign counterparty unless: (i) Sub-Advisor adheres to the ISDA 2015 Section 871(m) Protocol on behalf of the Fund, and (ii) the foreign counterparty to the 871(m) Transaction provides Sub-Advisor with a properly completed Form W-8IMY certifying to its status as a qualified derivatives dealer ("QDD").

(k)Maintain all accounts, books and records with respect to the Allocated Assets as are required of an investment advisor of a registered investment company pursuant to the 1940 Act and Investment Advisers Act of 1940, as amended (the "Advisers Act"), and the rules thereunder, and furnish the Fund and the Manager with such periodic and special reports as the Fund or the Manager may reasonably request. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Sub-Advisor hereby agrees that all records that it maintains for each Series are the property of the Fund, agrees to preserve for the periods described by Rule 31a-2 under the 1940 Act any records that it maintains for the Series and that are required to be maintained by Rule 31a-1 under the 1940 Act, and further agrees to surrender promptly to the Fund any records that it maintains for a Series upon request by the Fund or the Manager. The Sub-Advisor may retain copies of any such records, but the Sub-Advisor has no responsibility for the maintenance of Fund records except insofar as is directly related to the services the Sub-Advisor provides to a Series.

(l)Observe and comply with Rule 17j-1 under the 1940 Act and the Sub-Advisor's Code of Ethics adopted pursuant to that Rule as the same may be amended from time to time. The Manager acknowledges receipt of a copy of the Sub-Advisor's current Code of Ethics. The Sub-Advisor shall promptly forward to the Manager a copy of any material amendment to the Sub-Advisor's Code of Ethics along with certification that the Sub-Advisor has implemented procedures for administering the Sub-Advisor's Code of Ethics.

(m)From time to time as the Manager or the Fund may request, furnish the requesting party reports on portfolio transactions and reports on investments held by a Series, all in such detail as the Manager or the Fund may reasonably request. The Sub-Advisor will make available its officers and employees to meet with the Fund's Board of Directors at the Fund's principal place of business on reasonable prior notice to review the investments of a Series.

(n)Provide such information as is customarily provided by a sub-advisor, or as may be required or reasonably requested by the Manager, for the Fund or the Manager to comply with their respective obligations under applicable laws, including, without limitation, the Internal Revenue Code of 1986, as amended (the "Code"), the 1940 Act, the Advisers Act, the Securities Act of 1933, as amended (the "Securities Act"), and any state securities laws, and any rule or regulation thereunder. Such information includes, but is not limited to: the Sub-Advisor's compliance manual and policies and procedures adopted to comply with Rule 206(4)-7 of the Advisers Act; the Sub-Advisor's most recent annual compliance report or a detailed summary of such report; timely, accurate and complete responses to all 15(c) questionnaires; timely, accurate and complete responses to all Quarterly Compliance Questionnaires (including the identification of any material compliance matters and a copy of any material changes to the Sub-Advisor's Rule 206(4)-7 compliance policies and procedures, marked to show changes along with a written summary of the purpose of each such change); Annual Proxy Voting Questionnaires; Annual Best Execution and Soft Dollar Questionnaires, and responses to all other reasonable requests from the Manager. The Sub- Advisor agrees to make available for the Manager's review all deficiency letters issued by the SEC related to the Sub-Advisor's investment advisory activities together with all responses given by Sub-Advisor to such letters. The Sub-Advisor will advise the Manager of any material changes in the Sub-Advisor's ownership within a reasonable time after any such change.

(o)Vote proxies received on behalf of each Series (with respect to the Allocated Assets) in a manner consistent with the Sub-Advisor's proxy voting policies and procedures and provide a record of

votes cast containing all of the voting information required by Form N-PX in an electronic format to enable the Series to file Form N-PX as required by SEC rule.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)Respond to tender offers, rights offerings and other voluntary corporate action requests affecting securities held by each Series (with respect to the Allocated Assets).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)Cooperate with the Manager in its performance of quarterly and annual tax compliance tests to monitor the Series' compliance with Subchapter M of the Code. If it is determined by the Manager or its tax advisors that the Series is not in compliance with the requirements imposed by the Code, the Sub-Advisor, in consultation with the Manager and its tax advisors, will take prompt action to bring the Series back into compliance within the time permitted under the Code.

3.<u>Prohibited Conduct</u>

In providing the services described in this Agreement, the Sub-Advisor will not consult with any other investment advisory firm that provides investment advisory services to any investment company sponsored by Principal Financial Group, Inc. regarding transactions for the Fund in securities or other assets; provided that, this Section shall not prohibit the Sub-Advisor from obtaining or using research services provided by such firms. The Manager agrees to provide a list of such other investment advisory firms to the Sub-Advisor, such list to be promptly updated by the Manager upon any changes thereto.

4.<u>Compensation</u>

As full compensation for all services rendered and obligations assumed by the Sub-Advisor hereunder with respect to the Allocated Assets, the Manager shall pay the compensation specified in <u>Appendix A</u> to this Agreement.

5.<u>Liability of</u> Sub-Advisor

Neither the Sub-Advisor nor any of its directors, officers, employees, agents or affiliates shall be liable to the Manager, the Fund or its shareholders for any loss suffered by the Manager or the Fund resulting from any error of judgment made in the good faith exercise of the Sub-Advisor's investment discretion in connection with selecting investments for a Series or as a result of the failure by the Manager or any of its affiliates to comply with the terms of this Agreement, except for losses resulting from willful misfeasance, bad faith or gross negligence of, or from reckless disregard of, the duties of the Sub-Advisor or any of its directors, officers, employees, agents, or affiliates.

6.<u>Trade Errors</u>

The Sub-Advisor will notify the Manager of any Trade Error(s), regardless of materiality, promptly upon the discovery of such Trade Error(s) by the Sub-Advisor. Notwithstanding <u>Section 5</u>, the Sub-Advisor shall be liable to the Manager, the Fund or its shareholders for any loss suffered by the Manager or the Fund resulting from Trade Errors due to negligence, misfeasance, or disregard of duties of the Sub Advisor or any of its directors, officers, employees, agents (excluding any broker-dealer selected by the Sub-Advisor), or affiliates. Any gains that occur due to a Trade Error shall be retained by the Fund. For purposes under this <u>Section 6</u>, a "Trade Error" occurs when a transaction results in an unintended, including an impermissible, result. Examples include, but are not limited to, the following:

∙orders by the Sub-Advisor that result in the purchase or sale of securities or other assets that were not intended to be purchased or sold;

∙orders by the Sub-Advisor that result in the purchase or sale of securities or other assets in an unintended amount, which includes price or commission rate; or

∙purchases or sales of securities or other assets that violate the investment limitations or restrictions disclosed in the Fund's registration statement and/or imposed by applicable law, regulation, contract or understanding (calculated at the Sub-Advisor's portfolio level), unless otherwise agreed to in writing.

7.<u>Supplemental Arrangements</u>

The Sub-Advisor may enter into arrangements with other persons affiliated with the Sub-Advisor or with unaffiliated third parties to better enable the Sub-Advisor to fulfill its obligations under this Agreement for the provision of certain personnel and facilities to the Sub-Advisor, subject to written notification to and approval of the Manager and, where required by applicable law, the Board of Directors of the Fund; provided, however, that entry into any such arrangements shall not relieve the Sub-Advisor of any of its obligations under this Agreement.

The services of the Sub-Advisor to the Manager and the Fund are not to be deemed exclusive and it shall be free to render similar services to others so long as its services hereunder are not impaired thereby. It is specifically understood that directors, officers and employees of the Sub-Advisor and of its affiliates may continue to engage in providing portfolio management services and advice to other investment advisory clients. The Manager agrees that Sub-Advisor may give advice and take action in the performance of its duties with respect to any of its other clients which may differ from advice given or the timing or nature of action taken with respect to the Fund. Nothing in this Agreement shall be deemed to require Sub-Advisor, its principals, affiliates, agents or employees to purchase or sell for the Fund any security which it or they may purchase or sell for its or their own account or for the account of any other client.

8.<u>Regulation</u>

The Sub-Advisor shall submit to all regulatory and administrative bodies having jurisdiction over the services provided pursuant to this Agreement any information, reports or other material which any such body may request or require pursuant to applicable laws and regulations.

9.<u>Duration and Termination of This Agreement</u>

This Agreement shall become effective with respect to a Series as of the corresponding date set forth on <u>Appendix B</u> to this Agreement, as may be amended from time to time, and, unless otherwise terminated with respect to such Series, shall continue in effect thereafter for the initial term set forth on <u>Appendix B</u> to this Agreement, and thereafter from year to year, provided that in each case the continuance is specifically approved within the period required by the 1940 Act either by the Board of Directors of the Fund or by a vote of a majority of the outstanding voting securities of the Series and in either event by a vote of a majority of the Board of Directors of the Fund who are not interested persons of the Manager, Principal Life Insurance Company, the Sub-Advisor or the Fund cast in accordance with the requirements of the 1940 Act after taking into effect any exemptive order, no-action assurances or other relief, rule or regulation upon which the Fund may rely.

If the shareholders of a Series fail to approve the Agreement or any continuance of the Agreement in accordance with the requirements of the 1940 Act, the Sub-Advisor will continue to act as Sub-Advisor with respect to the Allocated Assets of such Series pending the required approval of the Agreement or its continuance or of any contract with the Sub-Advisor or a different manager or sub-advisor or other definitive action; provided, that the compensation received by the Sub-Advisor in respect to the Allocated Assets of such Series during such period is in compliance with Rule 15a-4 under the 1940 Act.

This Agreement may be terminated with respect to a Series at any time, without the payment of any penalty, by the Board of Directors of the Fund or by the Sub-Advisor, the Manager or by vote of a majority of the outstanding voting securities of the Series on sixty days' written notice. This Agreement shall automatically terminate in the event of its assignment. In interpreting the provisions of this <u>Section 9</u>, the definitions contained in Section 2(a) of the 1940 Act (particularly the definitions of "interested person," "assignment," "voting security" and "majority of the outstanding voting securities") shall be applied.

10.<u>Amendment of this Agreement</u>

No amendment of this Agreement shall be effective unless in writing and signed by both parties. No material amendment of this Agreement shall be effective until approved, if required by the 1940 Act or the rules, regulations, interpretations or orders issued thereunder, by vote of the holders of a majority of the outstanding voting securities of the Series (as defined in the 1940 Act) and by vote of a majority of the Board of Directors of the Fund who are not interested persons (as defined in the 1940 Act) of the Manager, the Sub-Advisor, Principal Life Insurance Company or the Fund cast in accordance with the requirements of the 1940 Act after taking into effect any exemptive order, no-action assurances or other relief, rule or regulation upon which the Fund may rely.

11.<u>Additional Series</u>

In the event the Manager wishes to appoint the Sub-Advisor to perform the services described in this Agreement with respect to one or more additional Series of the Fund after the effective date of this Agreement, such Series will become a Series under this Agreement upon approval of this Agreement in the manner required by the 1940 Act and the amendment of <u>Appendices A</u> and <u>B</u> hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

12.<u>General Provisions</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Iowa. The captions in this Agreement are included for convenience only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any notice under this Agreement shall be in writing, addressed and delivered or mailed postage pre-paid to the other party at such address as such other party may designate for the receipt of such notices. Until further notice to the other party, it is agreed that the address of the Manager for this purpose shall be Principal Financial Group, Des Moines, Iowa 50392-0200. The address of the Sub-Advisor for this purpose shall be Robert W. Baird & Co. Incorporated, Attn: Baird Investment Management, 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Sub-Advisor will promptly notify the Manager in writing of the occurrence of any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.the Sub-Advisor fails to be registered as an investment advisor under the Advisers Act or under the laws of any jurisdiction in which the Sub-Advisor is required to be registered as an investment advisor in order to perform its obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.the Sub-Advisor is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, involving the affairs of a Series.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.the Sub-Advisor becomes aware of any pending or threatened action, suit, proceeding, inquiry or investigation that is reasonably likely to result in a conviction, order, judgment or decree issued with respect to it or any affiliate that could reasonably be expected to result in the Sub- Advisor becoming ineligible to serve as an investment advisor of a registered investment company under the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.the Sub-Advisor becomes aware of a transaction or series of transactions that is reasonably likely to result in a change in the management or control of the Sub-Advisor or a controlling person thereof or otherwise in the assignment (as defined in the 1940 Act) of this Agreement by the Sub-Advisor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The Manager shall provide (or cause the Series custodian to provide) timely information to the Sub- Advisor regarding such matters as the composition of the assets of a Series, cash requirements and cash available for investment in a Series, and all other reasonable information as may be necessary for the Sub-Advisor to perform its duties and responsibilities hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)The Sub-Advisor represents that it will not enter into any agreement, oral or written, or other understanding under which the Fund directs or is expected to direct portfolio securities transactions, or any remuneration, to a broker or dealer in consideration for the promotion or sale of Fund shares or shares issued by any other registered investment company. The Sub-Advisor further represents that it is contrary to the Sub-Advisor's policies to permit those who select brokers or dealers for execution of Fund portfolio securities transactions to take into account the broker's or dealer's promotion or sale of Fund shares or shares issued by any other registered investment company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)The Manager represents, and the Sub-Advisor acknowledges, that with respect to the Series, the Manager is relying on the exclusion from the definition of "commodity pool operator" under Section 4.5 of the General Regulations under the Commodity Exchange Act ("Rule 4.5"). The Sub-Advisor will not exceed the de minimis trading limits set forth in Rule 4.5(c)(2)(iii)(B) unless otherwise agreed to in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)The Sub-Advisor agrees that neither it nor any of its affiliates will in any way refer directly or indirectly to its relationship with the Fund, the Series, or the Manager or any of their respective affiliates in offering, marketing or other promotional materials without the express written consent of the Manager (not to be unreasonably withheld); provided, however, that the Manager consents to the Sub-Advisor's use of the Manager's name and the Fund and Series names in the Sub- Advisor's representative client list that may be distributed to potential and existing clients and in the Sub-Advisor's Form ADV Parts 1 and 2A and other regulatory filings so long as this Agreement is in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(h)The Manager shall promptly notify the Sub-Advisor of the occurrence of any event that would disqualify the Manager from serving as an investment advisor of an investment company pursuant to Section 9(a) of the 1940 Act or other applicable law, rule or regulation.

(i)The Sub-Advisor shall promptly notify the Manager of the occurrence of any event that would disqualify the Sub-Advisor from serving as an investment advisor of an investment company pursuant to Section 9(a) of the 1940 Act or other applicable law, rule or regulation.

(j)Each party represents, warrants and covenants to the other party that (i) it has all requisite power and authority to enter into and perform its obligations under the Agreement, (ii) it has taken all necessary corporate action to authorize its execution, delivery and performance of this Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)it has duly executed and delivered the Agreement, and (iv) this Agreement constitutes its legal, valid and binding agreement, enforceable against it in accordance with its terms. In addition, the Manager represents and warrants that it has the authority to engage the Sub-Advisor on behalf of each Series.

(k)This Agreement contains the entire understanding and agreement of the parties.

(l)This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Each party agrees that electronic signatures of the parties included in this Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures.

IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date first above written.

Principal Global Investors, LLC

---

| | | |
|:---|:---|:---|
| By: | /s/ Clint L. Woods | /s/ Clint L. Woods |
|  | Name: Clint L. Woods | Name: Clint L. Woods |
|  | Title: | Vice President, Associate General Counsel, |
|  |  | and Assistant Secretary |
| By: | /s/ Adam U. Shaikh | /s/ Adam U. Shaikh |
|  | Name: Adam U. Shaikh | Name: Adam U. Shaikh |
|  | Title: | Assistant General Counsel |

---

Robert W. Baird & Co. Incorporated

---

| | |
|:---|:---|
| By: | /s/ Angela Sell |
|  | Name: Angela Sell |
|  | Title: Director of Business Operations |

---

<u>APPENDIX A</u>

Intentionally Omitted

![](giz8qb4rddzjlf6cdcb49.jpg)

<u>APPENDIX B</u>

**Effective Date and Initial Term of Sub-Advisory Agreement for each Series**

<u>Series</u> <u>Effective Date</u> <u>Initial Term</u> <br> <u>MidCap Growth Fund III</u> <u>June 30, 2017</u> <u>2 Years</u>

## Ex-99.(H)(8)

**PRINCIPAL FUNDS, INC.**

**PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.**

**INTERFUND LENDING AGREEMENT**

This Interfund Lending Agreement (as amended, restated, supplemented or otherwise modified from time to time, the "Agreement"), dated effective as of <u>December 28, 2022</u> (the "Effective Date"), is by and among the series listed for Principal Funds, Inc. and Principal Variable Contracts Funds, Inc. on Schedule A or Schedule B hereto (collectively, the "Funds," and each portfolio series of a Fund shall be referred to herein as a "Fund" and collectively as the "Funds") and Principal Global Investors, LLC (the "Adviser").

**WHEREAS,** the Funds and the Adviser have received an exemptive order (the "Order") dated October 25, 2011 from the U.S. Securities and Exchange Commission permitting the Funds to participate in a joint lending and borrowing facility (the "Lending Facility");

**WHEREAS,** the Funds listed on Schedule A hereto (as amended from time to time) are permitted to borrow cash in accordance with the terms and conditions of the Order to satisfy redemption requests, to cover unanticipated cash shortfalls such as a Sales Fail (defined below), or for other temporary purposes (each such borrowing Fund is hereinafter referred to as a "Borrower");

**WHEREAS,** the Funds listed on Schedule B hereto (as amended from time to time) are permitted to lend cash to one or more Borrowers from time to time on the terms set forth below and in accordance with the terms and conditions of the Order (each such lending Fund is hereinafter referred to as a "Lender");

**NOW THEREFORE**, the parties hereto agree as follows:

1.**<u>Definitions</u>**. As used herein, the following terms shall have meanings assigned to them below:

∙"<u>1940 Act</u>" means the Investment Company Act of 1940, as amended.

∙"<u>Bank Loan Rate</u>" for any day means the rate calculated by the Credit Facility Team according to a formula established by the Board of Directors of each Fund intended to approximate the lowest interest rate at which bank short-term loans would be available to a Borrower.

∙"<u>Borrowing Instructions</u>" has the meaning specified in Section 3.1.1 hereof.

∙"<u>Business Day</u>" means a day on which the New York Stock Exchange is open for the purpose of transacting business.

∙"<u>Credit Arrangements</u>" means the credit arrangements that a Fund may have for borrowing for temporary or emergency purposes, including borrowings from banks and other institutional lenders.

∙"<u>Credit Facility Team</u>" means one or more investment, administrative, and fund accounting personnel from the Advisor, a Money Market fund portfolio manager from Principal Global Investors, LLC, and a representative of corporate treasury of Principal Life Insurance Company who are responsible for administering the Interfund Lending Facility.

∙"<u>Interest Rate</u>" means, for each date on which interest accrues hereunder, the average of

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Repo Rate and (ii) the Bank Loan Rate.

Page 1 of 20

∙<u>"Joint Trade Account"</u> means, the account administered by the Adviser (pursuant to an exemptive order issued by the SEC) by which the Adviser administers an account in which Funds may deposit uninvested cash balances for the purpose of investing such balances in short-term instruments to the extent consistent with each participating Fund's investment objectives, policies and restrictions.

∙"<u>Lending Instructions</u>" has the meaning specified in Section 3.1.1 hereof.

∙"<u>Loan</u>" has the meaning specified in Section 2 hereof.

∙"<u>Loan Account</u>" has the meaning specified in Section 3.5 hereof.

∙"<u>Maximum Amount</u>" has the meaning specified in Section 2 hereof.

∙"<u>Obligations</u>" means all of the obligations (whether direct or indirect, absolute or contingent, primary or secondary, due or to become due, now existing or hereafter arising) of a Borrower to a Lender hereunder.

∙"<u>Outstanding Secured Borrowing</u>" means any loan made to a Fund either under this Agreement or under any other agreement that is secured by assets of the Fund.

∙"<u>Prospectus</u>" means with respect to each Borrower the prospectus required to be delivered by the Borrower to offerees of its securities pursuant to the Securities Act of 1933, as amended.

∙"<u>Repo Rate</u>" on any day means the highest rate available to a Lender, directly or through the Funds' Joint Trade Account, from investment in overnight repurchase agreements.

∙"<u>Sales Fail</u>" in connection with the attempted sale of a security means the cash shortfall resulting from circumstances beyond the seller's control, such as the delay in the delivery of cash to the seller's custodian or improper delivery instructions by the broker effecting the transaction.

∙"<u>SEC</u>" means the United States Securities and Exchange Commission.

∙"<u>Secured Loan</u>" has the meaning specified in Section 2(e) hereof.

∙"<u>Security Agreement</u>" has the meaning specified in Section 3.11(d) hereof.

∙"<u>Statement of Additional Information</u>" means with respect to each Borrower the Statement of Additional Information which must be provided by the Borrower to recipients of its Prospectus upon request pursuant to rules and regulations adopted by the SEC.

∙"<u>Unsecured Loan</u>" means any Loan other than a Secured Loan.

2.**<u>Lending Facility</u>**. Subject to the terms and conditions of this Agreement, each Lender may from time to time in its discretion loan its available cash to any Borrower (a "<u>Loan</u>"). Each Loan shall be made for a term no longer than the least of (a) the maximum term on any outstanding loan or advance to the Borrower under its Credit Arrangements; (b) the number of days required for the Borrower to receive payment for securities sold at or prior to the time the Loan is made in an amount sufficient to repay the Loan; or (c) seven (7) days. The maximum principal amount of all Loans outstanding with respect to any Borrower at any time shall not exceed the Maximum Amount the Borrower is permitted to borrow at such time under:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) applicable laws and regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the provisions of Section 5.2 hereof;

Page 2 of 20

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)agreements with federal, state, local or foreign governmental authorities or regulators applicable to the Borrower or limitations specified in the Order applicable to the Borrower's borrowing and pledging activities, all as amended and in effect from time to time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)limitations on borrowing adopted by the Borrower in its Prospectus, Statement of Additional Information or elsewhere, as amended and in effect from time to time; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)in the case of Loans for which the Borrower is required to provide collateral pursuant to Section 3.11 hereof ("<u>Secured Loans</u>"), any limitations specified in the Security Agreement (as defined below) and any limitations on the pledging of assets adopted by the Borrower in its Prospectus, Statement of Additional Information or elsewhere.

As used herein, the term "<u>Maximum Amount</u>" means the maximum amount that the Borrower is permitted to borrow in accordance with the provisions of the preceding sentence.

3.**<u>Loan Requirements</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1<u>Procedural Requirements</u>. All loans shall be requested and funded in accordance with the procedures set forth herein and such other procedures as may be approved and adopted from time to time by the Board of Directors of the applicable Fund (the "<u>Interfund Lending Procedures</u>"), including a majority of the directors who are not "interested persons" as that term is used in Section 2(a)(19) of the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1.1<u>Borrowing and Lending Instructions</u>. The portfolio managers for each participating Fund shall provide the Credit Facility Team with standing instructions as to their desire to have the Fund act as a Lender when such Fund has uninvested cash balances ("<u>Lending Instructions</u>"). The portfolio managers for each participating Fund shall provide the Credit Facility Team with standing instructions as their desire to participate as a Borrower should the borrowing need arise ("<u>Borrowing Instructions</u>"). The respective portfolio managers may revoke or change Lending Instructions and Borrowing Instructions with respect to a Fund by notifying the Credit Facility Team.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1.2<u>Allocation Procedures</u>. On each Business Day, the Credit Facility Team shall seek to collect data on the uninvested cash of Funds listed on <u>Schedule B.</u> The Credit Facility Team will seek to match the amount and term of the Fund's borrowing needs with the cash available from the Funds that have provided Lending Instructions in accordance with allocation and administrative procedures established by the Board of Directors. The Credit Facility Team shall allocate the borrowing demand and lending needs among the Funds on what the Credit Facility Team deems to be an equitable basis and in accordance with the Interfund Lending Procedures. The Credit Facility Team shall not solicit cash for Loans from any Funds or publish or disseminate the amount of any current borrowing demand to the Funds' portfolio managers.

No Loan may be made unless the Interest Rate is more favorable for the Lender than the Repo Rate and more favorable for the Borrower than the Bank Loan Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1.3<u>Funding the Loans</u>. If a Loan has been allocated to a Lender and Borrower pursuant to Section 3.1.2 hereof, and the Loan is otherwise in compliance with the requirements set forth in the Order, the Lender shall make such Loan to the Borrower. The proceeds of each Loan made by the Lender to the Borrower shall be wired (or transferred if Borrower and Lender have the same custodian) at the Borrower's expense in accordance with the wiring instructions for each Fund, as in effect from time to time, to an account maintained on the Borrower's behalf by its custodian.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1.4<u>Obligations Arising from Loan</u>. Each Loan made by the Lender to Borrower shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)obligate the Borrower to borrow the principal amount of the Loan at the Interest Rate applicable thereto for the term thereof solely for use by the Borrower;

Page 3 of 20

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)constitute a representation and warranty by the Borrower to the Lender that

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)the Loan requested thereby

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)is permitted under the Borrower's most recent Prospectus and Statement of Additional Information,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)is in accordance with the requirements of the Order applicable to the Borrower,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)will not, when made, cause the aggregate indebtedness of the Borrower to exceed the Maximum Amount then in effect, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)will be used by the Borrower only in accordance with Section 3.7 hereof; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)all of the representations and warranties of the Borrower contained in Section 4 hereof are true and correct as of the date of such Loan as though made on and as of such date; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)all material facts about the Borrower's intended participation in the Lending Facility are fully disclosed in the Borrower's Prospectus or Statement of Additional Information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)constitute a representation and warranty by the Lender to the Borrower that the Loan thereby

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)is permitted under the Lender's most recent Prospectus and Statement of Additional Information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)is in accordance with the requirements of the Order applicable to the Lender; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)all materials facts about the Lender's intended participation in the Lending Facility are fully disclosed in the Lender's Prospectus or Statement of Additional Information.

3.2<u>Repayment of Loans</u>. The principal amount of each Loan shall be repaid by the Borrower from the assets of the Borrower on the earlier of one (1) Business Day after demand by the Lender or the expiration of the term of the Loan.

3.3<u>Interest</u>. The outstanding principal amount of each Loan shall bear interest until maturity at the Interest Rate. If a Borrowing Fund has other outstanding bank borrowings, the Interest Rate will be at an interest rate equal to or lower than the interest rate of any outstanding bank loans. Interest accrued on each Loan shall be paid by the Borrower upon the earlier of (a) mutually agreed times, or (b) the maturity of such Loan. Amounts overdue hereunder (including, without limitation, overdue principal, and, to the extent permitted by law, overdue interest, fees, charges and expenses) shall bear interest until paid at an annual rate equal to the sum of (i) the Interest Rate applicable to such Loan prior to its maturity and (ii) one and a half percent (1.5%).

3.4<u>Prepayments</u>. Loans may be prepaid in whole or in part prior to the date on which such Loan is due and payable without premium or penalty. The Borrower will not make or permit any payment or prepayment of any Loans owing by Borrower unless Borrower concurrently makes a pro-rata payment or prepayment of all loans owing by Borrower through the Lending Facility.

Page 4 of 20

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3.5<u>Loan Records Accounts</u>. Promptly after a Loan has been made, the Credit Facility Team shall note on its records for the Borrower and Lender, confirming (a) the principal amount of such Loan, (b) the Interest Rate applicable thereto and (c) the maturity thereof. The Credit Facility Team will maintain a separate account on its books for each Lender and Borrower (a "<u>Loan Account</u>") on which will be recorded, in accordance with the Adviser's customary accounting practice, (a) all Loans made by a Lender to a Borrower, (b) all payments of such Loans made to a Lender, and (c) all other charges and expenses properly chargeable to the Borrower. The debit balance of each Fund's Loan Account shall reflect the amount of the Borrower's indebtedness from time to time to the Lenders hereunder. Any written statement maintained by the Credit Facility Team regarding the Loan shall, in the absence of manifest error, constitute conclusive evidence of the indebtedness of the Borrower to the Lender as of the date of such statement, provided, however, that the failure of the Credit Facility Team to make such statement shall not impair the validity or binding nature of the Borrower's Obligations with respect to such Loan.

3.6<u>Computations</u>. All computations hereunder shall be computed on the basis of the actual number of days elapsed and a 360-day year.

3.7<u>Use of Proceeds</u>. The proceeds of each Loan made hereunder with respect to any Fund shall be used only by such Fund in accordance with its Prospectus and Statement of Additional Information for temporary purposes to satisfy redemption requests, to cover unanticipated cash shortfalls such as a Sales Fail, or for other temporary purposes as permitted by the Interfund Lending Procedures.

3.8<u>Discretionary Facility</u>. It is acknowledged and agreed by each Borrower that each Lender has no obligation to make any Loan hereunder unless it has issued Lending Instructions, and that the decision whether or not to issue Lending Instructions under this Agreement is within the sole and exclusive discretion of each Lender. It is acknowledged and agreed by each Lender that no Borrower is obligated to borrow money hereunder unless it has issued Borrowing Instructions.

3.9<u>Termination of Participation in the Lending Facility</u>. Each Lender and each Borrower may terminate its participation in this Agreement at any time by written notice to the Credit Facility Team; provided that on or before the date of any termination the relevant Lender or Borrower has no Loans outstanding. The Adviser may at any time by delivery of a revised <u>Schedule A</u> or <u>Schedule B</u>, as applicable, to the Credit Facility Team add additional Funds that are eligible to rely on the Order as parties to this Agreement, whereupon those additional Funds shall be treated for all purposes as a Borrower and as a Lender, as applicable.

3.10<u>Recourse to Assets</u>. Loans made to any Borrower shall be repaid solely from the assets of such Borrower, and a Lender shall have no right of recourse or offset against the assets of any other Fund with respect to such Loans or any default in respect thereto. Each Lender's liability under this Agreement with respect to a Loan shall be solely limited to the Lender's assets and each Borrower hereby waives any and all rights it may have against any other Funds with respect to such Loan or any default by Lender with respect thereto.

Page 5 of 20

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3.11<u>Collateral Security for Loans</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)As a condition precedent to making any Loan to any Borrower or continuing any Loan made to any Borrower, the Borrower covenants and agrees that in the event that (i) the Borrower's outstanding borrowings from all sources immediately after the Loan would exceed 10% of its total assets, (ii) the Borrower's outstanding borrowings from all sources exceed 10% of the Borrower's total assets for any reason (such as a decline in net asset value or because of shareholder redemptions), or (iii) the Borrower has Outstanding Secured Borrowings, within one (1) Business Day (except as required by Section 3.11(b) below), the Borrower will

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)repay all its outstanding Loans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)reduce its outstanding indebtedness to 10% or less of its total assets; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)secure each outstanding Loan by the pledge of segregated collateral for such Loan and by transfer of such collateral into a segregated account in the name of the Lender or the entering into, by the Borrower, the Lender and the Borrower's custodian, of a control agreement satisfactory to the Lender. The minimum market value of the stock and other portfolio securities of the Borrower required to be pledged as collateral to the Lender hereunder with respect to any Secured Loan shall be determined by the Lender in its discretion but, in all cases, will have a market value at least equal to 102% of the outstanding principal value of the loan.

Until each Loan that is outstanding at any time that a Borrower's outstanding borrowings exceed 10% of its assets is repaid or the Borrower's outstanding borrowings cease to exceed 10% of its total assets, the Borrower shall mark the value of the collateral to market each day and will pledge and transfer to a segregated account in the name of the Lender such additional collateral as is necessary to maintain the market value of the collateral that secures each outstanding Loan at least equal to 102% of the outstanding principal value of the Loan. Subject to Sections 3.11(b) and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) hereof, once a Borrower's outstanding borrowings cease to exceed 10% of its total assets, segregated collateral will no longer be required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any Loan to a Borrower with Outstanding Secured Borrowings (i) will be at an interest rate equal to or lower than that of any outstanding bank loan, (ii) will be secured at least on an equal priority basis with at least an equivalent percentage of collateral to loan value as any outstanding bank loan that requires collateral, and (iii) will have a maturity no longer than any outstanding bank loan (and in any event not more than seven (7) days).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Notwithstanding Sections 3.11(a) and (b), if any other lender to a Borrower imposes conditions with respect to the quality of or access to collateral securing a borrowing, the Borrower's collateral for any Loan will be subject to the same conditions (if the other lender is another Fund) or the same or better conditions (in any other circumstance).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Each pledge of collateral required pursuant to this Section 3.11 shall be made in accordance with and subject to the terms and conditions set forth in the collateral security agreement dated as of the Effective Date and signed by each Fund, substantially in the form set forth in Schedule C hereto (the "<u>Security Agreement</u>").

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)If requested by the Lender, the Borrower agrees to enter into, and use reasonable efforts to cause its custodian to enter into, a control agreement with the Lender on terms satisfactory to the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.12<u>Records and Reports</u>. Each Fund will maintain and preserve for a period of not less than six years from the end of the fiscal year in which any transaction under this Agreement has occurred, the first two years in an easily accessible place, written records of all Loans to which it was a party setting forth: (i) a description of the terms of the transaction, including the amount, the maturity, and the rate of interest on the Loan, (ii) the rate of interest available at the time on short-term repurchase agreements and commercial bank borrowings, and (iii) a quarterly report of the Credit Facility Team to the applicable Board of Directors and the other information presented to the applicable Board of Directors related to their review of the Lending Facility. On a quarterly basis, the Credit Facility Team will prepare a report for the applicable Board of Directors (i) concerning the participation of the Funds in the Lending Facility and the terms and other conditions of any extensions of credit under the Lending Facility and (ii) reporting on the operations of the Lending Facility.

4.**<u>Representations and Warranties</u>**.

Each Borrower represents and warrants to each Lender and each Lender represents and warrants to each Borrower that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) it is a series of the applicable Corporation that is duly organized and validly existing under the laws of its jurisdiction of organization;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the applicable Corporation is registered as an open-end management investment company under the 1940 Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the execution, delivery and performance by the applicable Corporation of this Agreement

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)are within its power,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)have been duly authorized by all necessary action, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)will not

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) contribute to or result in a breach of or default under or conflict with any existing law, order, regulation or ruling of any governmental or regulatory agency or authority, any order, writ, injunction or ruling of any court or other tribunal, or any indenture, lease agreement, instrument or other undertaking to which the Fund is a party or by which it is or its property or assets may be bound or affected, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) result in the imposition of any liens or encumbrances on any property or assets of the Fund (except as contemplated hereby), or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) require any additional approval or consent of, or filing with, shareholders of such Fund or any governmental or regulatory agency or authority bearing on the validity of any borrowing pursuant to this Agreement, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) violate any provision of the Fund's Articles of Incorporation or any amendment thereof, any of its investment policies and limitations, or any provision of its most recent Prospectus or Statement of Additional Information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)this Agreement is a legally valid and binding obligation of the applicable Fund, enforceable against the Fund in accordance with its terms except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws or equitable principles relating to or limiting the rights of creditors generally; and

Page 7 of 20

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)it is not in material violation of any material term of its most recent Prospectus or Statement of Additional Information, or of its organizational documents, or of any investment, borrowing or other similar type of policy or restriction to which it is subject, or of any material term of any material agreement or instrument to which it is a party, or, to the best of its knowledge, of any judgment, decree, order, statute, rule or governmental regulation applicable to it.

5.**<u>Covenants</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1<u>Covenants in Effect Until Termination of Agreement</u>. Until all of the obligations have been performed in full and its participation in the Lending Facility has been terminated as provided herein, each Borrower covenants that it will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)maintain its legal existence and business; provided, however, that nothing contained in this Section 5.1(a) shall prohibit the merger or consolidation of any Borrower with or into another person upon written notice thereof to the Lenders under any Loans then outstanding, subject to the requirement that the surviving entity (if not previously a Borrower) be admitted as such in accordance with this Agreement, and subject to the further requirement that the surviving entity assumes all of the obligations of such Borrower under this Agreement, including, without limitation, the obligations of such Borrower with respect to any Loans outstanding to such Borrower at the time of such merger or consolidation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)at any time and from time to time, at its own expense, promptly execute and deliver or file all further instruments and documents, and take all further action, that may be necessary or desirable, or that the Lender may request, in order to perfect, protect, validate or preserve any security interest granted or pledged to the Lender pursuant to Section 3.11 hereof or to enable the Lender to exercise and enforce its rights and remedies thereunder with respect thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)file all federal and other tax returns, reports and declarations required by all relevant jurisdictions on or before the due dates for such returns, reports and declarations and will pay all taxes and other governmental assessments and charges as and when they become due;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)comply in all material respects with all of its investment policies and restrictions and all applicable statutes, rules, regulations and orders of, and all applicable restrictions

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)imposed by, all governmental authorities in respect of the conduct of its business and the ownership of its properties; provided that such Borrower shall not be required by reason of this section to comply therewith at any time while such Borrower shall be contesting its obligations to do so in good faith by appropriate proceedings promptly initiated and diligently conducted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)promptly notify the Lender of any material change in its agreements with governmental authorities or regulators or its investment policies or restrictions or of any Credit Arrangements or modifications thereof; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)upon request from the Lender from time to time, furnish to the Lender at reasonable times and intervals any information with respect to its financial standing and history or its property or business or prospects.

Page 8 of 20

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2<u>Covenants in Effect While Loans Are Outstanding</u>.

The Borrower covenants that, so long as any principal of or interest on any Loan made to it is outstanding, it will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)not, as long as any Unsecured Loan is outstanding hereunder, create or permit to exist any encumbrance in favor of any person or entity other than the Lender upon any of the assets of the Borrower other than (a) encumbrances created in connection with portfolio investments of the Borrower and (b) to secure the Borrower's obligations under any Credit Arrangement by any assets not then pledged as collateral hereunder, in each case to the extent permitted by the provisions of its Prospectus and Statement of Additional Information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)not take out any Loan that

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)immediately after such Loan would cause the total of such loans to exceed 33 1/3% of the Borrower's total assets, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)would cause such Borrower's total loans to exceed 10% of such Borrower's total assets unless any Loan hereunder is secured in accordance with Section 3.11 hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)not, as long as any Loan made with respect to the Borrower is outstanding, allow the total amount of such Borrower's Loans, as measured on the day when the most recent Loan was made, to exceed the greater of 125% of such Borrower's total net cash redemptions for the preceding seven (7) calendar days or 102% of Sales Fails for the preceding seven (7) calendar days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)notify the Lender if it draws on its Credit Arrangements, borrows from other Lenders under the Agreement, or borrows from other parties; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)notify the Lender promptly of

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)any material changes in its method of business, Prospectus, Statement of Additional Information, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)the occurrence of any event which would make any of the representations and warranties contained herein, or in any document, instrument or certificate delivered in connection herewith, untrue or inaccurate in any material respect.

The Lender covenants that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)its Loans to a single Borrower will not exceed 5% of the Lender's net assets; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)its aggregate Loans to all Borrowers constitute 15% or less of the Lender's net assets at the time of any Loan.

6.**<u>Documents to be Delivered Prior to Initial Loan</u>**. The Borrower shall deliver to the Lender prior to the first Loan between the parties any documents as the Lender shall have requested in order to comply with applicable rules and regulations promulgated by governmental and regulatory authorities.

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7.**<u>Default</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1<u>Events of Default</u>. The occurrence of any one or more of the following events ("<u>Events of Default</u>") shall constitute an immediate Event of Default with respect to the Borrower:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Borrower shall fail to pay principal of, or interest on, any Loan as and when due, or the Borrower shall fail to perform any of its other Obligations; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)There shall be a default by the Borrower under any Credit Arrangement, whether such Credit Arrangement now exists or shall hereafter be created, which default extends beyond any period of grace provided with respect thereto and which default relates to

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)the obligations to pay the principal of or interest on any such indebtedness under the Credit Arrangement, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)an obligation other than the obligation to pay the principal of or interest on any such indebtedness and the effect of such default is to cause, or to permit the lender under the Credit Arrangement to cause, with the giving of notice if required, such indebtedness to become due prior to its stated maturity; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Any representation or warranty made by the Borrower in Section 4 of this Agreement, or in connection with any Loan made to or pledge of pledged collateral made by the Borrower, shall prove to have been incorrect in any material respect when made; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The Borrower shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any governmental or public authority shall take over possession or control of a substantial part of the Borrower's business; or any of the Borrower's property shall become subject to attachment or other involuntary lien or levy; or any action or proceeding shall be commenced by the Borrower seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief or debtors, seeking the entry of an order for relief of the appointment of a receiver, trustee, or similar official for it or for any substantial part of its property, or any such proceeding is commenced against it which results in the entry of an order for such relief or such proceeding is not dismissed or stayed for a period of sixty (60) days following such commencement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)An event of default occurs under any agreement evidencing an outstanding bank loan to the Borrower; provided that, in such circumstance, that event of default will automatically (without need for action or notice by the Lender) constitute an immediate event of default entitling the Lender to call the Loan (and exercise all rights with respect to any collateral) and that such a call will be deemed made if the lending bank exercises its right to call its loan under its agreement with the Borrower.

Page 10 of 20

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2<u>Remedies</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.1<u>Arbitration</u>. In the event an Event of Default under Section 7.1(a) has occurred and not been cured within two Business Days from the Loan's maturity or from the time the Lender makes a demand for payment (and none of the Events of Default specified in Section 7.1(d) has occurred), the Lender and the Borrower agree that such matter shall be submitted for binding arbitration to an independent arbitrator selected by the Board of Directors of the Lender and Borrower. If the dispute involves a Lender and Borrower with different Boards of Directors, the respective Boards of Directors of the Lender and Borrower will select an independent arbitrator that is satisfactory to each party. Such independent arbitrator's decision shall be binding and conclusive between the Lender and the Borrower. Such Arbitrator shall submit at least annually a written report of any dispute to the Boards of Directors of the Funds describing the nature of any dispute and the actions taken by the Lender and Borrower to resolve the dispute.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.2<u>Other Rights and Remedies</u>. If an Event of Default has occurred and has not been resolved pursuant to Section 7.2.1, or any other Event of Default has occurred, then the Lender shall be entitled to exercise any and all rights and remedies available to it at law or in equity, including without limitation any rights and remedies that may be available to it under the Security Agreement referred to in Section 3.11 to the Agreement and, with respect to an Event of Default specified in Section 7.1(e), any rights and remedies available to it under Section 7.1(e), and the Borrower shall pay to the Lender all reasonable expenses and disbursements incurred by the Lender in connection with the enforcement of its rights and remedies under this Agreement including the reasonable fees and out-of-pocket expenses of counsel for the Lender with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.3<u>Multiple Lenders</u>. If an Event of Default occurs with regards to a Borrower with multiple Lenders, the Borrower will not make or permit any payment or prepayment of any Loans owing by Borrower unless Borrower concurrently makes a pro-rata payment or prepayment of all loans owing by Borrower.

8.**<u>Notice</u>**. Except as otherwise expressly provided herein, all notices hereunder to any party shall be in writing and shall be delivered in hand, mailed by United States registered or certified first-class mail, postage prepaid or sent by fax, addressed to such party to the attention of the person specified in the following sentence at the address set forth for such party below, or to such other person or address as such party may designate to the other party hereto by notice delivered in accordance with this Section 8. All notices to the Borrower shall be addressed to the Treasurer of the Borrower and all notices from the Borrower to the Lender shall be addressed to the Treasurer of the Lender. Written notice to the Credit Facility Team shall be sent to the following address: Principal Global Investors, LLC, 650 8<sup>th</sup> Street, Des Moines, Iowa 50392. The address for all Funds listed in this Agreement is: 650 8<sup>th</sup> Street, Des Moines, Iowa 50392.

9.**<u>Amendments</u>**. Neither this Agreement nor any provision hereof may be amended in any respect except by a statement in writing executed by the parties hereto.

10.**<u>Assignment</u>**. All of the terms of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns; provided, that the Borrower shall not assign or transfer any of its rights or obligations hereunder without the prior written consent of the Lender.

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11.**<u>Survival of Covenants, Representations and Warranties</u>**. All covenants, agreements, representations and warranties made herein or in any documents or other papers delivered by or on behalf of the Borrowers, or any of them, pursuant hereto shall be deemed to have been relied upon by the Lenders, regardless of any investigation made by or on behalf of the Lenders and shall survive the execution and delivery of this Agreement and the making by the Lenders of the Loans as herein contemplated and shall continue in full force and effect so long as any Loan, Obligation or any other amount due under this Agreement remains outstanding and unpaid or unsatisfied.

12.**<u>Section Headings</u>**. The descriptive section headings in this Agreement have been inserted for convenience of reference only and shall not be deemed to limit or otherwise affect the construction of any provision thereof or hereof.

13.**<u>Counterparts</u>**. This Agreement and the documents contemplated hereby may be executed simultaneously in any number of counterparts each of which when so executed and delivered shall be an original, but all of which shall together constitute but one and the same document.

14.**<u>Severability</u>**. If any of the provisions of this Agreement or any instrument delivered hereunder or the application thereof to any party hereto or to any person or circumstances is held invalid, the remainder of this Agreement or such instrument and the application thereof to any party hereto or to any other person or circumstances shall not be affected thereby.

15.**<u>Governing Law</u>**. This Agreement shall be governed by, and construed in accordance with, the laws of Iowa, without giving effect to principles of conflicts of law.

16.**<u>Entire Agreement</u>**. This Agreement and the other documents contemplated hereby and executed in connection herewith express the entire understanding of the parties with respect to the transactions contemplated hereby.

17.**<u>Limitation of Liability of the Board of Directors</u>**. A copy of the Articles of Incorporation of each Fund is on file with the Maryland Department of Assessments & Taxation, and notice is hereby given that this instrument is executed on behalf of the Board of Directors of each Fund as Directors of such Fund and not individually and that the obligations of or arising out of this instrument are not binding upon any of the directors, officers or shareholders individually but are binding only upon the assets and property of the applicable Fund.

18.**<u>Electronic Signatures</u>**. Each party agrees that electronic signatures of the parties, if any, included in this Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures.

Page 12 of 20

![](gr1iklh39wdvs4v54tfhk.jpg)

**IN WITNESS WHEREOF**, each of the parties hereto has caused this Agreement to be duly executed as an instrument under seal by its duly authorized officer as of the date first written above.

**PRINCIPAL FUNDS, INC. ON BEHALF OF EACH**

**OF ITS FUNDS LISTED IN SCHEDULES A AND B**

By: /s/ Adam U. Shaikh

Adam U. Shaikh

Assistant Counsel

**PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.**

**ON BEHALF OF EACH OF ITS FUNDS LISTED IN**

**SCHEDULES A AND B**

By: /s/ Adam U. Shaikh

Adam U. Shaikh

Assistant Counsel

**PRINCIPAL GLOBAL INVESTORS, LLC**

By: /s/ Adam U. Shaikh

Adam U. Shaikh

Counsel

Page 13 of 20

**SCHEDULE A**

**BORROWING FUNDS**

**Except as otherwise indicated below, for each Fund, the Agreement was effective as of the Effective Date.**

---

| | | |
|:---|:---|:---|
| **PFI:** |  |  |
| &nbsp;&nbsp;Blue Chip Fund |  | LargeCap Growth Fund I |
| &nbsp;&nbsp;Bond Market Index Fund |  | LargeCap S&P 500 Index Fund |
| &nbsp;&nbsp;California Municipal Fund |  | LargeCap Value Fund III |
| &nbsp;&nbsp;Capital Securities Fund |  | MidCap Fund |
| &nbsp;&nbsp;Core Fixed Income Fund |  | MidCap Growth Fund |
| &nbsp;&nbsp;Core Plus Bond Fund |  | MidCap Growth Fund III |
| &nbsp;&nbsp;Diversified Income Fund |  | MidCap S&P 400 Index Fund |
| &nbsp;&nbsp;Diversified International Fund |  | MidCap Value Fund I |
| &nbsp;&nbsp;Diversified Real Asset Fund |  | Opportunistic Municipal Fund |
| &nbsp;&nbsp;EDGE MidCap Fund |  | Origin Emerging Markets Fund |
| &nbsp;&nbsp;Equity Income Fund |  | Overseas Fund |
| &nbsp;&nbsp;Finisterre Emerging Markets Total Return Bond Fund | &nbsp;&nbsp;Finisterre Emerging Markets Total Return Bond Fund | Principal Capital Appreciation Fund |
| &nbsp;&nbsp;Global Emerging Markets Fund |  | Real Estate Securities Fund |
| &nbsp;&nbsp;Global Multi-Strategy Fund |  | Short-Term Income Fund |
| &nbsp;&nbsp;Global Real Estate Securities Fund |  | Small-MidCap Dividend Income Fund |
| &nbsp;&nbsp;Global Sustainable Listed Infrastructure Fund |  | Small-MidCap Growth Fund |
| &nbsp;&nbsp;Government & High Quality Bond Fund |  | SmallCap Fund |
| &nbsp;&nbsp;High Income Fund |  | SmallCap Growth Fund I |
| &nbsp;&nbsp;High Yield Fund |  | SmallCap Value Fund II |
| &nbsp;&nbsp;Inflation Protection Fund |  | SmallCap S&P 600 Index Fund |
| &nbsp;&nbsp;International Equity Index Fund |  | Spectrum Preferred and Capital Securities |
| &nbsp;&nbsp;International Fund I |  | Income Fund |
| &nbsp;&nbsp;International Fund I |  |  |
| &nbsp;&nbsp;International Small Company Fund |  |  |
| **PVC:** |  |  |
| &nbsp;&nbsp;Blue Chip Account | LargeCap Growth Account I | LargeCap Growth Account I |
| &nbsp;&nbsp;Bond Market Index Account | LargeCap S&P 500 Index Account | LargeCap S&P 500 Index Account |
| &nbsp;&nbsp;Core Plus Bond Account | LargeCap S&P 500 Managed Volatility Index Account | LargeCap S&P 500 Managed Volatility Index Account |
| &nbsp;&nbsp;Diversified Balanced Volatility Control Account | MidCap Account | MidCap Account |
| &nbsp;&nbsp;Diversified Growth Volatility Control Account | Principal Capital Appreciation Account | Principal Capital Appreciation Account |
| &nbsp;&nbsp;Diversified International Account | Real Estate Securities Account | Real Estate Securities Account |
| &nbsp;&nbsp;Equity Income Account | Short-Term Income Account | Short-Term Income Account |
| &nbsp;&nbsp;Global Emerging Markets Account | SmallCap Account | SmallCap Account |
| &nbsp;&nbsp;Government & High Quality Bond Account | U.S. LargeCap Buffer July Account | U.S. LargeCap Buffer July Account |
|  | U.S. LargeCap Buffer October Account | U.S. LargeCap Buffer October Account |
|  | U.S. LargeCap Buffer January Account | U.S. LargeCap Buffer January Account |

---

Page 14 of 20

**SCHEDULE B**

**LENDING FUNDS**

**Except as otherwise indicated below, for each Fund, the Agreement was effective as of the Effective Date.**

---

| | | |
|:---|:---|:---|
| **PFI:** |  |  |
| &nbsp;&nbsp;Blue Chip Fund |  | LargeCap Growth Fund I |
| &nbsp;&nbsp;Bond Market Index Fund |  | LargeCap S&P 500 Index Fund |
| &nbsp;&nbsp;California Municipal Fund |  | LargeCap Value Fund III |
| &nbsp;&nbsp;Capital Securities Fund |  | MidCap Fund |
| &nbsp;&nbsp;Core Fixed Income Fund |  | MidCap Growth Fund |
| &nbsp;&nbsp;Core Plus Bond Fund |  | MidCap Growth Fund III |
| &nbsp;&nbsp;Diversified Income Fund |  | MidCap S&P 400 Index Fund |
| &nbsp;&nbsp;Diversified International Fund |  | MidCap Value Fund I |
| &nbsp;&nbsp;Diversified Real Asset Fund |  | Opportunistic Municipal Fund |
| &nbsp;&nbsp;EDGE MidCap Fund |  | Origin Emerging Markets Fund |
| &nbsp;&nbsp;Equity Income Fund |  | Overseas Fund |
| &nbsp;&nbsp;Finisterre Emerging Markets Total Return Bond Fund | &nbsp;&nbsp;Finisterre Emerging Markets Total Return Bond Fund | Principal Capital Appreciation Fund |
| &nbsp;&nbsp;Global Emerging Markets Fund |  | Real Estate Securities Fund |
| &nbsp;&nbsp;Global Multi-Strategy Fund |  | Short-Term Income Fund |
| &nbsp;&nbsp;Global Real Estate Securities Fund |  | Small-MidCap Dividend Income Fund |
| &nbsp;&nbsp;Global Sustainable Listed Infrastructure Fund |  | Small-MidCap Growth Fund |
| &nbsp;&nbsp;Government & High Quality Bond Fund |  | SmallCap Fund |
| &nbsp;&nbsp;High Income Fund |  | SmallCap Growth Fund I |
| &nbsp;&nbsp;High Yield Fund |  | SmallCap Value Fund II |
| &nbsp;&nbsp;Inflation Protection Fund |  | SmallCap S&P 600 Index Fund |
| &nbsp;&nbsp;International Equity Index Fund |  | Spectrum Preferred and Capital Securities |
| &nbsp;&nbsp;International Fund I |  | Income Fund |
| &nbsp;&nbsp;International Fund I |  |  |
| &nbsp;&nbsp;International Small Company Fund |  |  |
| **PVC:** |  |  |
| &nbsp;&nbsp;Blue Chip Account | LargeCap Growth Account I | LargeCap Growth Account I |
| &nbsp;&nbsp;Bond Market Index Account | LargeCap S&P 500 Index Account | LargeCap S&P 500 Index Account |
| &nbsp;&nbsp;Core Plus Bond Account | LargeCap S&P 500 Managed Volatility Index Account | LargeCap S&P 500 Managed Volatility Index Account |
| &nbsp;&nbsp;Diversified Balanced Volatility Control Account | MidCap Account | MidCap Account |
| &nbsp;&nbsp;Diversified Growth Volatility Control Account | Principal Capital Appreciation Account | Principal Capital Appreciation Account |
| &nbsp;&nbsp;Diversified International Account | Real Estate Securities Account | Real Estate Securities Account |
| &nbsp;&nbsp;Equity Income Account | Short-Term Income Account | Short-Term Income Account |
| &nbsp;&nbsp;Global Emerging Markets Account | SmallCap Account | SmallCap Account |
| &nbsp;&nbsp;Government & High Quality Bond Account |  |  |

---

Page 15 of 20

**SCHEDULE C**

**COLLATERAL SECURITY AGREEMENT**

This Collateral Security Agreement (this "<u>Collateral Agreement</u>") is made this _________ day of

_______, 2012, by and among each investment company listed on the signature pages hereto (each, a "<u>Fund</u>" and collectively, the "<u>Funds</u>"), on behalf of each Borrower and Lender (as such terms are defined in the Agreement (defined below)).

**WHEREAS,** each Fund, on behalf of each Borrower and Lender, have entered into a Interfund Lending Agreement dated as of __________by and among each Fund and Principal Global Investors, LLC (the "<u>Agreement</u>") in accordance with the terms of (i) the exemptive order from the U.S. Securities and Exchange Commission dated October 25, 2011 exempting such Borrowers and Lenders and Principal Global Investors, LLC from certain provisions of the Investment Company Act of 1940, as amended; and (ii) the Interfund Lending Procedures, as in effect from time to time, for Loans by and among the Funds;

**NOW, THEREFORE**, each Borrower, in consideration of Loans heretofore, now or from time to time hereafter made, given or extended to the Borrower by a Lender, hereby agrees with the Lenders as follows:

1. Capitalized terms used herein which are not otherwise defined herein shall have the respective meanings ascribed thereto in the Agreement.

2. Effective upon the transfer of collateral, pursuant to Section 3.11 of the Agreement, or as provided herein, to an account owned or controlled by a Lender, as security for the payment of any and all loans heretofore, now or from time to time hereafter made, given or extended to a Borrower by the Lender under and pursuant to the Agreement (which loans shall hereinafter be referred to collectively as the "<u>Secured Liabilitie</u>s" and each individually as a "<u>Secured Liability</u>"), the Lender shall have, and the Borrower hereby grants to the Lender, a security interest in (i) any and all securities and other instruments owned by the Borrower which have been or at any time shall be delivered to the Lender or its custodian by or on behalf of the Borrower or have or at any time shall otherwise come into the possession, custody or control of the Lender or its custodian, including securities and other instruments held in depository trust companies and other institutions and clearing agencies in segregated accounts in the name of the Lender; (ii) all right, title, interest and power (including the power of hypothecation and disposition) of the Borrower in, or in respect of any and all securities and other instruments owned by the Borrower which have or at any time shall come into the possession, custody or control of the Lender or its custodian in any way for any purpose whatsoever, whether or not the Lender shall have accepted said property for the purpose or purposes for which said property was delivered to or otherwise caused to come into the possession, custody or control of the Lender or its custodian; and (iii) all proceeds of any of the foregoing. All property shall be deemed to be in the possession, custody or control of the Lender as soon as it is transferred to the Lender or its custodian or if the Lender and the Borrower enter into a control agreement satisfactory to the Lender with the Borrower's custodian. If the Lender shall at any time deem itself insecure in respect of any Secured Liability, the Borrower will deliver to the Lender or its custodian upon demand additional collateral owned by the Borrower satisfactory to the Lender. The term "collateral" as hereinafter used shall mean and include the securities and other instruments, together with proceeds of the securities and other instruments, and any and all property, rights, titles, powers, sums, receivables or claims which by virtue of the provisions of this Collateral Agreement are or shall be at the time in question subject to a security interest in favor of the Lender.

3. Upon the occurrence and during the continuance of an Event of Default (as defined in the Agreement), or any time or times thereafter, (i) the Lender may exercise any and all rights and remedies (a) granted to the Lender by the Uniform Commercial Code as in effect in the State of Maryland or otherwise allowed at law, and/or (b) otherwise provided by this Collateral

Page 16 of 20

Agreement or the Agreement, and (ii) any and all Secured Liabilities of the Borrower shall, at the option of the Lender, become due and payable without notice or demand, notwithstanding any credit or time allowed to the Borrower by any instrument or other document evidencing the same or otherwise.

4. Upon the occurrence and during the continuance of an Event of Default, the Lender shall have full power and authority to sell any or all of the collateral of the Borrower. Except as required by law, such sale or other disposition may be made without advertisement or any notice to the Borrower or to any other person. Where reasonable notification of the time or place of such sale or other disposition is so required, such requirement shall be met if such notice is given in the manner prescribed in Paragraph 10 hereof at least five days before the time of such sale or other disposition to each person entitled to such notice, addressed, if to the Borrower, in the manner specified in said Paragraph 10, or, if to any person, to such person at such person's last address known to the Lender. After deducting all costs and expenses of collection, storage, custody, sale or other disposition and delivery (including legal costs and reasonable attorneys' fees) and all other charges against the collateral, the residue of the proceeds of any such sale or other disposition shall be applied to the payment of any and all of the Secured Liabilities, due or to become due, in such order of preference as the Lender may determine, proper allowance for interest on liabilities not then due being made, and, unless otherwise provided by law, any surplus shall be returned to the Borrower.

5. The Borrower will pay when due all taxes, assessments, liens, premiums or other charges against the collateral and, if the Borrower and the Lender agree it is appropriate, the Borrower will fully insure the same in favor and to the satisfaction of the Lender against loss by any risk to which the collateral or any part thereof may be subject and will on demand deposit with the Lender the policies covering any such insurance. Although under no obligation to do so, the Lender may at any time and from time to time pay any taxes, assessments, liens, premiums or other charges against the collateral, and may insure the same or otherwise protect the value thereof and the property represented thereby, and in such event all expenditures so incurred shall be chargeable to the Borrower and secured by the collateral of the Borrower. The Lender shall be under no obligation to take any steps necessary to preserve rights in any collateral against prior parties but may do so at its option. Upon the occurrence and during the continuance of an Event of Default, the Lender may at any time and from time to time transfer into its own name or that of its nominee any securities constituting part of the collateral of the Borrower and receive the income thereon and hold the same as additional collateral or apply it to the payment of any or all of the Secured Liabilities and may at any time notify the obligor(s) on any collateral to make payment of the Lender of any amounts due or to become due thereon.

6. Upon the occurrence and during the continuance of an Event of Default, the Lender may, at any time and from time to time, transfer or assign the whole or any part of any Secured Liability and may transfer therewith, or assign to and set apart for the account of the transferee or assignee thereof, in either event as security therefor, the whole or any part of the collateral of the Borrower. If the Lender does so transfer or assign and set apart the whole or any part of the collateral, the transferee or assignee thereof, without notice to the Borrower, shall thereupon become vested with, and may thereafter exercise, every right and power hereby given to the Lender in respect thereof, and the Lender shall thereafter be forever relieved and fully discharged from any liability or responsibility in respect thereof, except that the Lender shall continue to use reasonable care in the custody and preservation of any collateral so assigned and set apart while such collateral remains in the possession of the Lender. Such transferee or assignee shall have no right or power in respect of any part of the collateral not so transferred or assigned and set apart, in respect whereof the Lender shall retain all rights and powers hereby given in respect thereof.

7. Except as provided in Paragraphs 4, 5 and 6 hereof, the Lender shall at no time transfer or assign the whole or any part of any Secured Liability or assign, transfer or set aside the whole

Page 17 of 20

or any part of the collateral held in security therefor except to an assignee of the Loans secured thereby.

9. Except as is otherwise expressly provided herein or by law, the Borrower waives all demands and notices in connection with this Collateral Agreement or the enforcement of the Lender's rights hereunder and also waives presentment, demand, notice, protest and all other demands and notices in connection with any Secured Liability or the enforcement of the Lender's rights with respect thereto and hereby consents that the time of payment of any Secured Liability may be extended from time to time and that no such extension or other indulgence granted to any other party primarily or secondarily liable on any Secured Liability, no discharge or release of any such party and no substitution, release or surrender of collateral of the Borrower shall discharge or otherwise affect the liability of the Borrower on or in respect of any Secured Liability. No delay or omission on the part of the Lender in exercising any right hereunder shall operate as a waiver of such right on any one occasion and shall not be construed as a bar to or waiver of any such right on any future occasion.

10. Any demand upon or notice to the Borrower permitted or required hereunder shall be sufficient if, and effective when, deposited in the mails, postage prepaid, addressed to the Borrower at

_______________ or at such other address of the Borrower appearing on the first page of this Collateral Agreement or at such other address as the Borrower may furnish to the Lender as the address to which such demands, notices or other communications addressed to the Borrower shall be mailed or forwarded.

11. This Collateral Agreement may be terminated by the Borrower giving written notice of such termination to the Lender, provided, however, that such termination shall not be effective unless and until all loans and Secured Liabilities (including those contingent or not yet due) existing as of the time of receipt of such notice by the Lender have been paid in full.

12. The Borrower will pay on demand all costs and expenses (including legal costs and reasonable attorneys' fees) incurred or paid by the Lender in collecting any loan or Secured Liability upon any default in respect thereof, and all costs and expenses so incurred shall be secured by the collateral.

13. This Collateral Agreement shall inure to the benefit of the Lender, its successors and assigns, and shall be binding upon the Borrower, its successors and assigns.

14. This Collateral Agreement shall be governed by, and construed in accordance with, the laws of the State of Iowa.

15. A copy of the Articles of Incorporation each Fund is on file with the Maryland Department of Assessments & Taxation, and notice is hereby given that this instrument is executed on behalf of the Board of Directors of each Fund as Directors of such Fund and not individually and that the obligations of or arising out of this instrument are not binding upon any of the directors, officers or shareholders individually but are binding only upon the assets and property of the applicable Fund.

16. Each party agrees that electronic signatures of the parties, if any, included in this Collateral Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic signature means any electronic sound, symbol, or process

Page 18 of 20

attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures.

Page 19 of 20

![](ggr9h31mb8pz8wmvec926.jpg)

**IN WITNESS WHEREOF**, the parties have executed this Collateral Agreement as of the day and year first written above.

By:

By:

ALL FUNDS LISTED ON SCHEDULE A OR SCHEDULE B TO THE AGREEMENT, AS SUCH SCHEDULES ARE AMENDED FROM TIME TO TIME

Page 20 of 20

## Ex-99.(H)(9)

![](glm6ajcsobpvnmve98c1e.jpg)

**PRINCIPAL FUNDS, INC.**

**CONTRACTUAL FEE WAIVER AGREEMENT**

AGREEMENT to be effective March 1, 2023 by and between Principal Funds, Inc. (the "Fund") and Principal Global Investors, LLC (the "Advisor") (together, the "Parties").

The Advisor has contractually agreed to limit the Fund's expenses (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and other extraordinary expenses) on certain share classes of certain of the Funds. For avoidance of doubt, the expenses associated with collecting tax reclaims in foreign countries, such as countries in the European Union, for taxes withheld in prior years are extraordinary expenses and, as such, are excluded from the expense limits. The reductions and reimbursements are in amounts that maintain total operating expenses at or below certain limits. The limits are expressed as a percentage of average daily net assets attributable to each respective class on an annualized basis. The expenses borne by the Advisor are subject to reimbursement by the Funds through the fiscal year end, provided no reimbursement will be made if it would result in the Funds' exceeding the total operating expense limits. The operating expense limits are attached on <u>Schedule A</u> to this Agreement.

Further, the Advisor has contractually agreed to waive a portion of the management fee it receives from certain Funds. The waiver is expressed as a percentage of average daily net assets. The management fee waivers are attached as <u>Schedule B</u> to this Agreement.

The Agreement embodies the entire agreement of the Parties relating to the subject matter hereof. This Agreement supersedes all prior agreement and understandings, and all rights and obligations thereunder are hereby canceled and terminated. No amendment or modification of this Agreement will be valid or binding unless it is in writing by the Parties.

This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Each Party agrees that electronic signatures of the Parties included in this Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed effective as of the day and year first written above.

---

| | | | |
|:---|:---|:---|:---|
| **PRINCIPAL FUNDS, INC.** | **PRINCIPAL FUNDS, INC.** | **PRINCIPAL GLOBAL INVESTORS, LLC** | **PRINCIPAL GLOBAL INVESTORS, LLC** |
| By: | /s/ Clint L. Woods | By: | /s/ Clint L. Woods |
| Name: | Clint L. Woods | Name: | Clint L. Woods |
| Title: | Vice President, Counsel, and Assistant Secretary | Title: | Vice President, Associate General Counsel, and |
|  |  |  | Secretary |
| By: | /s/ Beth C. Wilson | By: | /s/ Adam U. Shaikh |
| Name: | Beth C. Wilson | Name: | Adam U. Shaikh |
| Title: | Vice President and Secretary | Title: | Assistant General Counsel |

---

**1**

**SCHEDULE A**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  **Series** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Class A** | &nbsp;&nbsp; **Class C** | &nbsp;&nbsp;&nbsp;&nbsp; **Class J** | | &nbsp;&nbsp; **Expiration** |
|  **Series** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Class A** | &nbsp;&nbsp; **Class C** | &nbsp;&nbsp;&nbsp;&nbsp; **Class J** | &nbsp;&nbsp;&nbsp; **Institutional**<br>&nbsp;&nbsp;&nbsp; **Class** | &nbsp;&nbsp; **Expiration** |
|  California Municipal Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.46% | &nbsp;&nbsp; 02/29/2024 |
|  Core Fixed Income Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.46% | &nbsp;&nbsp; 02/29/2024 |
|  Core Plus Bond Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.84% | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.56% | &nbsp;&nbsp; 02/29/2024 |
|  Diversified Income Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.68% | &nbsp;&nbsp; 02/29/2024 |
|  Diversified International Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.85% | &nbsp;&nbsp; 02/29/2024 |
|  Equity Income Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.52% | &nbsp;&nbsp; 02/29/2024 |
|  Finisterre Emerging Markets Total Return Bond Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.85% | &nbsp;&nbsp; 02/29/2024 |
|  Global Emerging Markets Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.45% | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 1.30% | &nbsp;&nbsp;&nbsp; 1.10% | &nbsp;&nbsp; 02/29/2024 |
|  Global Real Estate Securities Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.94% | &nbsp;&nbsp; 02/29/2024 |
|  Government & High Quality Bond Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.53% | &nbsp;&nbsp; 02/29/2024 |
|  Government Money Market Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.20% | &nbsp;&nbsp; 02/29/2024 |
|  High Yield Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.61% | &nbsp;&nbsp; 02/29/2024 |
|  International Fund I | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.79% | &nbsp;&nbsp; 02/29/2024 |
|  LargeCap S&P 500 Index Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; 1.30% | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; 02/29/2024 |
|  MidCap Growth Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.75% | &nbsp;&nbsp; 02/29/2024 |
|  MidCap Value Fund I | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.69% | &nbsp;&nbsp; 02/29/2024 |
|  Money Market Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.50% | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime 2010 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.38% | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime 2040 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.38% | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime 2040 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.38% | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; N/A |  |
|  Principal LifeTime 2050 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.38% | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime 2050 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.38% | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; N/A |  |
|  Principal LifeTime 2060 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.38% | &nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime 2060 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.38% | &nbsp;&nbsp;&nbsp; N/A |  |
|  Principal LifeTime 2070 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.30% | &nbsp;&nbsp;&nbsp; 0.05% | &nbsp;&nbsp; 02/28/2025 |
|  Principal LifeTime 2070 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.30% | &nbsp;&nbsp;&nbsp; 0.05% |  |
|  Principal LifeTime Hybrid 2015 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.05% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2015 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.05% |  |
|  Principal LifeTime Hybrid 2020 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.05% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2020 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.05% |  |
|  Principal LifeTime Hybrid 2025 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.05% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2025 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.05% |  |
|  Principal LifeTime Hybrid 2030 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.05% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2030 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.05% |  |
|  Principal LifeTime Hybrid 2035 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.05% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2035 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.05% |  |
|  Principal LifeTime Hybrid 2040 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.05% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2040 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.05% |  |
|  Principal LifeTime Hybrid 2045 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.05% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2045 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.05% |  |
|  Principal LifeTime Hybrid 2050 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.05% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2050 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.05% |  |
|  Principal LifeTime Hybrid 2055 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.30% | &nbsp;&nbsp;&nbsp; 0.05% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2055 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.30% | &nbsp;&nbsp;&nbsp; 0.05% |  |
|  Principal LifeTime Hybrid 2060 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.30% | &nbsp;&nbsp;&nbsp; 0.05% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2060 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.30% | &nbsp;&nbsp;&nbsp; 0.05% |  |
|  Principal LifeTime Hybrid 2065 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.30% | &nbsp;&nbsp;&nbsp; 0.05% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2065 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.30% | &nbsp;&nbsp;&nbsp; 0.05% |  |
|  Principal LifeTime Hybrid 2070 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.30% | &nbsp;&nbsp;&nbsp; 0.05% | &nbsp;&nbsp; 02/28/2025 |
|  Principal LifeTime Hybrid 2070 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.30% | &nbsp;&nbsp;&nbsp; 0.05% |  |
|  Principal LifeTime Hybrid Income Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.05% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid Income Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.05% |  |
|  Principal LifeTime Strategic Income Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.38% | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; 02/29/2024 |
|  Real Estate Securities Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.86% | &nbsp;&nbsp; 02/29/2024 |
|  SmallCap Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.85% | &nbsp;&nbsp; 02/29/2024 |
|  SmallCap S&P 600 Index Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.21% | &nbsp;&nbsp; 02/29/2024 |
|  SmallCap Value Fund II | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.96% | &nbsp;&nbsp; 02/29/2024 |
|  SmallCap Value Fund II | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.96% |  |
|  Tax-Exempt Bond Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp; 0.45% | &nbsp;&nbsp; 02/29/2024 |

---

**2**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  **Series** | &nbsp;&nbsp;&nbsp;&nbsp; **R-1** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **R-3** | &nbsp;&nbsp;&nbsp;&nbsp; **R-4** | &nbsp;&nbsp;&nbsp;&nbsp; **R-5** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Expiration** |
|  Government & High Quality Bond Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.29% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.98% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.79% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.67% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime 2070 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.93% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.62% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.43% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.31% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 02/28/2025 |

---

In addition, the Advisor has contractually agreed to limit the expenses identified as "Other Expenses" related to certain share classes of certain of the Funds by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and other extraordinary expenses) to maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) at or below certain limits. For avoidance of doubt, the expenses associated with collecting tax reclaims in foreign countries, such as countries in the European Union, for taxes withheld in prior years are extraordinary expenses and, as such, are excluded from the expense limits. The limits are expressed as a percent of average net assets on an annualized basis. The Other Expenses limits and the agreement terms are as follows:

---

| | | |
|:---|:---|:---|
|  **Series** | &nbsp;&nbsp;&nbsp;&nbsp; **Class R-6** | &nbsp;&nbsp; **Expiration** |
|  Diversified Income Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp; 02/29/2024 |
|  Global Emerging Markets Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.04% | &nbsp;&nbsp; 02/29/2024 |
|  Government Money Market Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.00% | &nbsp;&nbsp; 02/29/2024 |
|  International Fund I | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.04% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2015 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2020 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2025 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2030 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2035 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2040 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2045 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2050 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2055 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2060 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2065 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp; 02/29/2024 |
|  Principal LifeTime Hybrid 2070 Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp; 02/28/2025 |
|  Principal LifeTime Hybrid Income Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp; 02/29/2024 |
|  SmallCap Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp; 02/29/2024 |
|  SmallCap Growth Fund I | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.01% | &nbsp;&nbsp; 02/29/2024 |

---

**3**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  **Series**<br>| &nbsp;&nbsp;&nbsp;&nbsp; **Class A**<br>| &nbsp;&nbsp;&nbsp;&nbsp; **Class C**<br>| &nbsp;&nbsp;&nbsp;&nbsp; **Institutional**<br>&nbsp;&nbsp;&nbsp;&nbsp; **Class** | &nbsp;&nbsp;&nbsp; **Expiration**<br>|
|  Blue Chip Fund | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.66% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |
|  Diversified Real Asset Fund | &nbsp;&nbsp;&nbsp;&nbsp; 1.20% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.83% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |
|  Edge MidCap Fund | &nbsp;&nbsp;&nbsp;&nbsp; 1.10% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.77% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |
|  Global Multi-Strategy Fund | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 1.48% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |
|  Global Sustainable Listed Infrastructure | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.88% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |
|  International Equity Index Fund | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.31% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |
|  International Small Company Fund | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 1.08% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |
|  Opportunistic Municipal Fund | &nbsp;&nbsp;&nbsp;&nbsp; 0.84% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.56% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |
|  Origin Emerging Markets Fund | &nbsp;&nbsp;&nbsp;&nbsp; 1.45% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 1.10% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |
|  Small-MidCap Dividend Income Fund | &nbsp;&nbsp;&nbsp;&nbsp; 1.12% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.87% | &nbsp;&nbsp;&nbsp;&nbsp; 0.85% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |
|  Small-MidCap Growth Fund | &nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; N/A | &nbsp;&nbsp;&nbsp;&nbsp; 0.83% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |

---

For Capital Securities Fund, the Advisor has agreed contractually to limit the Fund's expenses attributable to Class S shares by paying expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.00%. For avoidance of doubt, the expenses associated with collecting tax reclaims in foreign countries, such as countries in the European Union, for taxes withheld in prior years are extraordinary expenses and, as such, are excluded from the expense limit. It is expected that the expense limit will continue permanently (and in any event, at least through December 30, 2023); however, Principal Funds, Inc. and the Advisor, the parties to the agreement, may mutually agree to terminate the expense limit.

In addition, the Advisor has contractually agreed to limit the expenses identified as "Other Expenses" related to certain share classes of certain of the Funds by paying, if necessary, expenses normally payable by the Fund (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and other extraordinary expenses) to maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) at or below certain limits. For avoidance of doubt, the expenses associated with collecting tax reclaims in foreign countries, such as countries in the European Union, for taxes withheld in prior years are extraordinary expenses and, as such, are excluded from the expense limits. The limits are expressed as a percent of average net assets on an annualized basis. The Other Expenses limits and the agreement terms are as follows:

---

| | | |
|:---|:---|:---|
|  **Series** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Class R-6** | &nbsp;&nbsp;&nbsp;&nbsp; **Expiration** |
|  Diversified Real Asset Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |
|  Edge MidCap Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |
|  Global Multi-Strategy Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |
|  International Equity Index Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.04% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |
|  International Small Company Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.04% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |
|  Small-MidCap Dividend Income Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |

---

**4**

**SCHEDULE B**

---

| | | |
|:---|:---|:---|
|  **Series** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Waiver** | &nbsp;&nbsp;&nbsp;&nbsp; **Expiration** |
|  Blue Chip Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.03% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |
|  Bond Market Index Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.015% | &nbsp;&nbsp;&nbsp;&nbsp; 12/30/2023 |
|  High Income Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.015% | &nbsp;&nbsp;&nbsp;&nbsp; 02/29/2024 |
|  LargeCap Growth Fund I | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.016% | &nbsp;&nbsp;&nbsp;&nbsp; 02/29/2024 |
|  LargeCap Value Fund III | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.065% | &nbsp;&nbsp;&nbsp;&nbsp; 02/29/2024 |
|  MidCap Growth Fund III | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp;&nbsp;&nbsp; 02/29/2024 |
|  MidCap Value Fund I | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp;&nbsp;&nbsp; 02/29/2024 |
|  Overseas Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp;&nbsp;&nbsp; 02/29/2024 |
|  SmallCap Growth Fund I | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp;&nbsp;&nbsp; 02/29/2024 |
|  SmallCap Value Fund II | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02% | &nbsp;&nbsp;&nbsp;&nbsp; 02/29/2024 |

---

**5**

## Ex-99.(H)(11)

**Principal Funds, Inc.**

**<u>POWER OF ATTORNEY</u>**

The member of the Board of Directors of Principal Funds, Inc. (the "Fund"), whose signature appears below, hereby constitutes and appoints Kamal Bhatia, Adam U. Shaikh, and Clint L. Woods, and each of them, his/her true and lawful attorneys and agents, with full power and authority of substitution and resubstitution, to do any and all acts and things and to execute any and all instruments which said attorneys and agents, or any of them, may deem necessary or advisable or which may be required to enable the Fund to comply with the Investment Company Act of 1940, as amended, and the Securities Act of 1933, as amended (collectively, the "Acts"), and any rules, regulations or requirements of the Securities and Exchange Commission (the "SEC") in respect thereof, in connection with the filing and effectiveness of the Fund's registration statements and any amendments thereto including specifically, but without limiting the generality of the foregoing, the power and authority to sign in the name and on behalf of the undersigned as a directors and/or officer of the Fund any and all such registration statements and amendments filed with the SEC under the Acts, and any other instruments or documents related thereto, and the undersigned does hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof.

Dated effective: January 26, 2023

<u>/s/ K. Dyer</u>____________________________

K. Dyer

**Principal Funds, Inc.**

**<u>POWER OF ATTORNEY</u>**

The member of the Board of Directors of Principal Funds, Inc. (the "Fund"), whose signature appears below, hereby constitutes and appoints Kamal Bhatia, Adam U. Shaikh, and Clint L. Woods, and each of them, his/her true and lawful attorneys and agents, with full power and authority of substitution and resubstitution, to do any and all acts and things and to execute any and all instruments which said attorneys and agents, or any of them, may deem necessary or advisable or which may be required to enable the Fund to comply with the Investment Company Act of 1940, as amended, and the Securities Act of 1933, as amended (collectively, the "Acts"), and any rules, regulations or requirements of the Securities and Exchange Commission (the "SEC") in respect thereof, in connection with the filing and effectiveness of the Fund's registration statements and any amendments thereto including specifically, but without limiting the generality of the foregoing, the power and authority to sign in the name and on behalf of the undersigned as a directors and/or officer of the Fund any and all such registration statements and amendments filed with the SEC under the Acts, and any other instruments or documents related thereto, and the undersigned does hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof.

Dated effective: January 26, 2023

<u>/s/ F. Grieb</u>____________________________

F. Grieb

## Ex-99.(I)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| Principal Funds, Inc.<br> 711 High Street, Des Moines, IA 50392<br> 515 247 5111 tel<br>| &nbsp;&nbsp; ![](img374503c01.jpg)<br>|

---

February 27, 2023

Principal Funds, Inc.

Des Moines, IA 50392-0200

Re:

Principal Funds, Inc. (the "Registrant")

Registration Statement on Form N-1A (the "Registration Statement")

Pursuant to Securities Act of 1933, as amended

Registration No. 033-59474

Post-Effective Amendment No. 284 (the "Amendment")

I am familiar with the Registrant, which is organized under the laws of the State of Maryland, and have reviewed the above-referenced Amendment filed with the Securities and Exchange Commission relating to the offer and sale of an indefinite number of shares of the Registrant's common stock (the "Shares"). Based upon such review as I have deemed necessary, I am of the opinion that the Shares proposed to be sold pursuant to the Amendment to the Registration Statement, when the Amendment becomes effective, will have been validly authorized and, when sold in accordance with the terms of the Amendment and the requirements of federal and state law, will have been legally issued, fully paid and non-assessable.

I consent to the filing of this opinion as an exhibit to the Registration Statement.

Sincerely,

/s/ Deanna Y. Pellack

Deanna Y. Pellack

Assistant Counsel and Assistant Secretary, Registrant

------

## Ex-99.(J)(1)

Consent of Independent Registered Public Accounting Firm

We consent to the references to our firm under the captions "Appendix C – Financial Highlights" in the Prospectus and "Portfolio Holdings Disclosure" and "Independent Registered Public Accounting Firm" in the Statement of Additional Information, each dated March 1, 2023, and each included in this Post-Effective Amendment No. 284 on the Registration Statement (Form N-1A, File No. 033-59474) of Principal Funds, Inc (the "Registration Statement").

We also consent to the incorporation by reference of our report dated December 22, 2022, with respect to the financial statements and financial highlights of California Municipal Fund, Core Fixed Income Fund, Core Plus Bond Fund , Diversified Income Fund (formerly Global Diversified Income Fund), Diversified International Fund, Equity Income Fund, Finisterre Emerging Markets Total Return Bond Fund, Global Emerging Markets Fund (formerly International Emerging Markets Fund), Global Real Estate Securities Fund, Government & High Quality Bond Fund, Government Money Market Fund, High Income Fund, High Yield Fund, Inflation Protection Fund, International Fund I, LargeCap Growth Fund I, LargeCap S&P 500 Index Fund, LargeCap Value Fund III, MidCap Fund, MidCap Growth Fund, MidCap Growth Fund III, MidCap S&P 400 Index Fund, MidCap Value Fund I, Money Market Fund, Overseas Fund, Principal Capital Appreciation Fund, Principal LifeTime 2010 Fund, Principal LifeTime 2015 Fund, Principal LifeTime 2020 Fund, Principal LifeTime 2025 Fund, Principal LifeTime 2030 Fund, Principal LifeTime 2035 Fund , Principal LifeTime 2040 Fund, Principal LifeTime 2045 Fund, Principal LifeTime 2050 Fund, Principal LifeTime 2055 Fund, Principal LifeTime 2060 Fund, Principal LifeTime 2065 Fund, Principal LifeTime Hybrid 2015 Fund, Principal LifeTime Hybrid 2020 Fund, Principal LifeTime Hybrid 2025 Fund, Principal LifeTime Hybrid 2030 Fund, Principal LifeTime Hybrid 2035 Fund, Principal LifeTime Hybrid 2040 Fund, Principal LifeTime Hybrid 2045 Fund, Principal LifeTime Hybrid 2050 Fund, Principal LifeTime Hybrid 2055 Fund, Principal LifeTime Hybrid 2060 Fund, Principal LifeTime Hybrid 2065 Fund, Principal LifeTime Hybrid Income Fund, Principal LifeTime Strategic Income Fund, Real Estate Securities Fund, SAM Balanced Portfolio, SAM Conservative Balanced Portfolio, SAM Conservative Growth Portfolio, SAM Flexible Income Portfolio, SAM Strategic Growth Portfolio, Short-Term Income Fund, SmallCap Fund, SmallCap Growth Fund I, SmallCap S&P 600 Index Fund, SmallCap Value Fund II, Tax-Exempt Bond Fund (63 of the portfolios constituting Principal Funds, Inc) included in the Annual Report to Shareholders (Form N-CSR) for the year ended October 31, 2022, into this Registration Statement filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

Minneapolis, Minnesota

February 27, 2023

------

## Ex-99.(M)(3)

**PRINCIPAL FUNDS, INC.**

**AMENDED AND RESTATED**

**DISTRIBUTION PLAN AND AGREEMENT**

**CLASS J SHARES**

AMENDED AND RESTATED DISTRIBUTION PLAN AND AGREEMENT made effective as of March 1, 2023, by and between PRINCIPAL FUNDS, INC., a Maryland corporation (the "Fund"), and PRINCIPAL FUNDS DISTRIBUTOR, INC., a Washington corporation (the "Underwriter").

1. This Distribution and Service Plan (the "Plan"), when effective in accordance with its terms, shall be the written plan contemplated by Securities and Exchange Commission Rule 12b-1 under the Investment Company Act of 1940, as amended (the "Act") for the Class J shares of each Series identified in Appendix A, attached hereto (the "Series"), a class of shares of Principal Funds, Inc. (the "Fund").

2. The Fund has entered into a Distribution Agreement on behalf of the Fund with Principal Funds Distributor, Inc. (the "Distributor"), under which the Distributor will use all reasonable efforts, consistent with its other business, to secure purchasers of shares of each Series of the Fund (the "Shares"). Such efforts may include, but neither are required to include nor are limited to, the following: (1) formulation and implementation of marketing and promotional activities, such as mail promotions and television, radio, newspaper, magazine and other mass media advertising; (2) preparation, printing and distribution of sales literature provided to the Fund's shareholders and prospective shareholders; (3) preparation, printing and distribution of prospectuses and statements of additional information of the Fund and reports to recipients other than existing shareholders of the Fund; (4) obtaining such information, analyses and reports with respect to marketing and promotional activities as the Distributor may, from time to time, deem advisable; (5) making payment of sales commission, ongoing commissions and other payments to brokers, dealers, financial institutions or others who sell Shares pursuant to Selling Agreements; (6) paying compensation to registered representatives or other employees of the Distributor who engage in or support distribution of the Fund's Shares; (7) paying compensation to, and expenses (including overhead and telephone expenses) of, the Distributor; (8) providing training, marketing and support to dealers and others with respect to the sale of Shares; (9) receiving and answering correspondence from prospective shareholders including distributing prospectuses, statements of additional information, and shareholder reports; (10) providing of facilities to answer questions from prospective investors about Shares; (11) complying with federal and state securities laws pertaining to the sale of Shares; (12) assisting investors in completing application forms and selecting dividend and other account options; (13) providing of other reasonable assistance in connection with the distribution of the Fund's shares; (14) organizing and conducting of sales seminars and making payments in the form of transactional compensation or promotional incentives; and (15) such other distribution and services activities as the Fund determines may be paid for by the Fund pursuant to the terms of this Plan and in accordance with Rule 12b-1 of the Act.

3. The Distribution Agreement also authorizes the Distributor to enter into Service Agreements with other selling dealers and with banks or other financial institutions to provide shareholder services to existing Class J shareholders, including without limitation, services such as furnishing information as to the status of shareholder accounts, responding to telephone and written inquiries of shareholders, and assisting shareholders with tax information.

Page 1 of 5

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

4. In consideration for the services provided and the expenses incurred by the Distributor pursuant to the Distribution Agreement and Paragraphs 2 and 3 hereof, all with respect to Class J shares of a Series of the Fund, Class J shares of each Series shall pay to the Distributor a fee at the annual rate of 0.15% (or such lesser amount as the Fund Directors may, from time to time, determine) of the average daily net assets of Class J shares of such Series. This fee shall be accrued daily and paid monthly or at such other intervals as the Fund Directors shall determine. The determination of daily net assets shall be made at the close of business each day throughout the month and computed in the manner specified in the Fund's then current Prospectus for the determination of the net asset value of the Fund's Class J shares. The Distributor may use all or any portion of the fee received pursuant to this Plan to compensate securities dealers or other persons who have engaged in the sale of Class J shares or to pay any of the expenses associated with other activities authorized under Paragraphs 2 and 3 hereof.

5. The Fund presently pays, and will continue to pay, a management fee to Principal Global Investors, LLC (the "Manager") pursuant to a Management Agreement between the Fund and the Manager (the "Management Agreement"). It is recognized that the Manager may use its management fee revenue, as well as its past profits or its resources from any other source, to make payment to the Distributor with respect to any expenses incurred in connection with the distribution of Class J shares, including the activities referred to in Paragraph 2 hereof. To the extent that the payment of management fees by the Fund to the Manager should be deemed to be indirect financing of any activity primarily intended to result in the sale of Class J shares within the meaning of Rule 12b-1, then such payment shall be deemed to be authorized by this Plan.

6. This Plan shall not take effect until it has been approved (a) by a vote of at least a majority (as defined in the Act) of the outstanding Class J shares of the Series of the Fund and (b) by votes of the majority of both (i) the Board of Directors of the Fund, and (ii) those Directors of the Fund who are not "interested persons" (as defined in the Act) of the Fund and who have no direct or indirect financial interest in the operation of this Plan or any agreements related to this Plan (the "Disinterested Directors"), cast in person at a meeting called for the purpose of voting on this Plan or such agreements.

7. Unless sooner terminated pursuant to Paragraph 6, this Plan shall continue in effect for a period of twelve months from the date it takes effect and thereafter shall continue in effect so long as such continuance is specifically approved at least annually in the manner provided for approval of this Plan in Paragraph 6(b).

8. A representative of the Underwriter shall provide to the Board and the Board shall review at least quarterly a written report of the amounts so expended and the purposes for which such expenditures were made.

9. This Plan may be terminated at any time by vote of a majority of the Disinterested Directors, or by vote of a majority (as defined in the Act) of the outstanding Class J shares of the Series of the Fund.

Page 2 of 5

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

10. Any agreement of the Fund related to this Plan shall be in writing and shall provide:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.That such agreement may be terminated at any time, without payment of any penalty, by vote of a majority of the Disinterested Directors or by a vote of a majority (as defined in the Act) of the outstanding Class J shares of the Series of the Fund on not more than sixty (60) days' written notice to any other party to the agreement); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.That such agreement shall terminate automatically in the event of its assignment.

11. While the Plan is in effect, the Fund's board of directors shall satisfy the fund governance standards as defined in Securities and Exchange Commission Rule 0-1(a)(7).

12. This Plan does not require the Manager or Distributor to perform any specific type or level of distribution activities or to incur any specific level of expenses for activities primarily intended to result in the sale of Class J shares.

13. The Fund shall preserve copies of this Plan and any related agreements and all reports made pursuant to Paragraph 8, for a period of not less than six years from the date of the Plan, or the agreements or such report, as the case may be, the first two years in an easily accessible place.

14. This Plan may not be amended to increase materially the amount of Fees provided for in Paragraph 4 hereof unless such amendment is approved in the manner provided for initial approval in Paragraph 6 hereof and no other material amendment to this Plan shall be made unless approved in the manner provided for initial approval in Paragraph 6(b) hereof.

15. This Plan may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Each party agrees that electronic signatures of the parties included in this Plan are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures.

Page 3 of 5

![](gje7w6q451iy4iv72m3of.jpg)

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Plan as of the first date written above.

**PRINCIPAL FUNDS, INC.**

By /s/ Clint L. Woods

Clint L. Woods, Counsel, Vice President, and

Assistant Secretary

By /s/ Adam U. Shaikh

Adam U. Shaikh, Assistant Counsel and

Assistant Secretary

**PRINCIPAL FUNDS DISTRIBUTOR, INC.**

By /s/ Clint L. Woods

Clint L. Woods, Vice President, Associate

General Counsel and Secretary

Page 4 of 5

![](gujopgtonez3dz6ugmbga.jpg)

---

| | |
|:---|:---|
| PRINCIPAL FUNDS, INC. | PRINCIPAL FUNDS, INC. |
| APPENDIX A | APPENDIX A |
|  | **<u>Series</u>** |
| &nbsp;&nbsp;Blue Chip Fund | &nbsp;&nbsp;Principal LifeTime Hybrid Income |
| &nbsp;&nbsp;Bond Market Index Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2015 |
| &nbsp;&nbsp;Core Fixed Income Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2020 |
| &nbsp;&nbsp;Core Plus Bond | &nbsp;&nbsp;Principal LifeTime Hybrid 2025 |
| &nbsp;&nbsp;Diversified International Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2030 |
| &nbsp;&nbsp;Equity Income Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2035 |
| &nbsp;&nbsp;Global Emerging Markets Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2040 |
| &nbsp;&nbsp;Government & High Quality Bond Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2045 |
| &nbsp;&nbsp;Inflation Protection Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2050 |
| &nbsp;&nbsp;LargeCap Growth Fund I | &nbsp;&nbsp;Principal LifeTime Hybrid 2055 |
| &nbsp;&nbsp;LargeCap S&P 500 Index Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2060 |
| &nbsp;&nbsp;LargeCap Value Fund III | &nbsp;&nbsp;Principal LifeTime Hybrid 2065 |
| &nbsp;&nbsp;MidCap Fund | &nbsp;&nbsp;Principal LifeTime Hybrid 2070 |
| &nbsp;&nbsp;MidCap Growth Fund | &nbsp;&nbsp;Real Estate Securities Fund |
| &nbsp;&nbsp;MidCap Growth Fund III | &nbsp;&nbsp;SAM Balanced Portfolio Fund |
| &nbsp;&nbsp;MidCap S&P 400 Index Fund | &nbsp;&nbsp;SAM Conservative Balanced Portfolio Fund |
| &nbsp;&nbsp;MidCap Value Fund I | &nbsp;&nbsp;SAM Conservative Growth Portfolio Fund |
| &nbsp;&nbsp;Money Market Fund | &nbsp;&nbsp;SAM Flexible Income Portfolio Fund |
| &nbsp;&nbsp;Principal LifeTime Strategic Income Fund | &nbsp;&nbsp;SAM Strategic Growth Portfolio Fund |
| &nbsp;&nbsp;Principal LifeTime 2010 Fund | &nbsp;&nbsp;Short-Term Income Fund |
| &nbsp;&nbsp;Principal LifeTime 2020 Fund | &nbsp;&nbsp;SmallCap Fund |
| &nbsp;&nbsp;Principal LifeTime 2030 Fund | &nbsp;&nbsp;SmallCap Growth Fund I |
| &nbsp;&nbsp;Principal LifeTime 2040 Fund | &nbsp;&nbsp;SmallCap S&P 600 Index Fund |
| &nbsp;&nbsp;Principal LifeTime 2050 Fund | &nbsp;&nbsp;SmallCap Value Fund II |
| &nbsp;&nbsp;Principal LifeTime 2060 Fund | &nbsp;&nbsp;Spectrum Preferred and Capital Securities |
|  | &nbsp;&nbsp;Income Fund |
| &nbsp;&nbsp;Principal LifeTime 2070 Fund |  |

---

Page 5 of 5

## Ex-99.(M)(4)

**PRINCIPAL FUNDS, INC.**

**AMENDED AND RESTATED**

**DISTRIBUTION PLAN AND AGREEMENT**

**CLASS R-1 SHARES**

AMENDED AND RESTATED DISTRIBUTION PLAN AND AGREEMENT made effective as of <u>March 1, 2023</u>, by and between PRINCIPAL FUNDS, INC., a Maryland corporation (the "Fund"), and PRINCIPAL FUNDS DISTRIBUTOR, INC., a Washington corporation (the "Underwriter").

1. This Distribution and Service Plan (the "Plan"), when effective in accordance with its terms, shall be the written plan contemplated by Securities and Exchange Commission Rule 12b-1 under the Investment Company Act of 1940, as amended (the "Act") for the Class R-1 shares of each Series identified in Appendix A, attached hereto (the "Series"), a class of shares of Principal Funds, Inc. (the "Fund").

2. The Fund has entered into a Distribution Agreement on behalf of the Fund with Principal Funds Distributor, Inc. ("Distributor"), under which the Distributor will use all reasonable efforts, consistent with its other business, to secure purchasers of shares of each Series of the Fund (the "Shares"). Such efforts may include, but neither are required to include nor are limited to, the following: (1) formulation and implementation of marketing and promotional activities, such as mail promotions and television, radio, newspaper, magazine and other mass media advertising; (2) preparation, printing and distribution of sales literature provided to the Fund's shareholders and prospective shareholders; (3) preparation, printing and distribution of prospectuses and statements of additional information of the Fund and reports to recipients other than existing shareholders of the Fund; (4) obtaining such information, analyses and reports with respect to marketing and promotional activities as the Distributor may, from time to time, deem advisable; (5) making payment of sales commission, ongoing commissions and other payments to brokers, dealers, financial institutions or others who sell Shares pursuant to Selling Agreements; (6) paying compensation to registered representatives or other employees of the Distributor who engage in or support distribution of the Fund's Shares; (7) paying compensation to, and expenses (including overhead and telephone expenses) of, the Distributor; (8) providing training, marketing and support to dealers and others with respect to the sale of Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9)receiving and answering correspondence from prospective shareholders including distributing prospectuses, statements of additional information, and shareholder reports;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10)providing of facilities to answer questions from prospective investors about Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11)complying with federal and state securities laws pertaining to the sale of Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12)assisting investors in completing application forms and selecting dividend and other account options; (13) providing of other reasonable assistance in connection with the distribution of the Fund's shares; (14) organizing and conducting of sales seminars and making payments in the form of transactional compensation or promotional incentives; and (15) such other distribution and services activities as the Fund determines may be paid for by the Fund pursuant to the terms of this Plan and in accordance with Rule 12b-1 of the Act.

3. The Distribution Agreement also authorizes the Distributor to enter into Service Agreements with other selling dealers and with banks or other financial institutions to provide shareholder services to existing Class R-1 shareholders, including without limitation, services such as furnishing information as to the status of shareholder accounts, responding to telephone and written inquiries of shareholders, and assisting shareholders with tax information.

4. In consideration for the services provided and the expenses incurred by the Distributor pursuant to the Distribution Agreement and Paragraphs 2 and 3 hereof, all with respect to Class R-1 shares of a Series of the Fund, Class R-1 shares of each Series shall pay to the Distributor a fee at the annual rate of 0.35% (or such lesser amount as the Fund Directors may, from time to time,

Page 1 of 4

determine) of the average daily net assets of Class R-1 shares of such Series. This fee shall be accrued daily and paid monthly or at such other intervals as the Fund Directors shall determine. The determination of daily net assets shall be made at the close of business each day throughout the month and computed in the manner specified in the Fund's then current Prospectus for the determination of the net asset value of the Fund's Class R-1 shares. The Distributor may use all or any portion of the fee received pursuant to this Plan to compensate securities dealers or other persons who have engaged in the sale of Class R-1 shares or to pay any of the expenses associated with other activities authorized under Paragraphs 2 and 3 hereof.

5. The Fund presently pays, and will continue to pay, a management fee to Principal Global Investors, LLC (the "Manager") pursuant to a Management Agreement between the Fund and the Manager (the "Management Agreement"). It is recognized that the Manager may use its management fee revenue, as well as its past profits or its resources from any other source, to make payment to the Distributor with respect to any expenses incurred in connection with the distribution of Class R-1 shares, including the activities referred to in Paragraph 2 hereof. To the extent that the payment of management fees by the Fund to the Manager should be deemed to be indirect financing of any activity primarily intended to result in the sale of Class R-1 shares within the meaning of Rule 12b-1, then such payment shall be deemed to be authorized by this Plan.

6. This Plan shall not take effect until it has been approved (a) by a vote of at least a majority (as defined in the Act) of the outstanding Class R-1 shares of the Series of the Fund and (b) by votes of the majority of both (i) the Board of Directors of the Fund, and (ii) those Directors of the Fund who are not "interested persons" (as defined in the Act) of the Fund and who have no direct or indirect financial interest in the operation of this Plan or any agreements related to this Plan (the "Disinterested Directors"), cast in person at a meeting called for the purpose of voting on this Plan or such agreements.

7. Unless sooner terminated pursuant to Paragraph 6, this Plan shall continue in effect for a period of twelve months from the date it takes effect and thereafter shall continue in effect so long as such continuance is specifically approved at least annually in the manner provided for approval of this Plan in Paragraph 6(b).

8. A representative of the Underwriter shall provide to the Board and the Board shall review at least quarterly a written report of the amounts so expended and the purposes for which such expenditures were made.

9. This Plan may be terminated at any time by vote of a majority of the Disinterested Directors, or by vote of a majority (as defined in the Act) of the outstanding Class R-1 shares of the Series of the Fund.

10. Any agreement of the Fund related to this Plan shall be in writing and shall provide:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.That such agreement may be terminated at any time, without payment of any penalty, by vote of a majority of the Disinterested Directors or by a vote of a majority (as defined in the Act) of the outstanding Class R-1 shares of the Series of the Fund on not more than sixty (60) days' written notice to any other party to the agreement); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.That such agreement shall terminate automatically in the event of its assignment.

11. While the Plan is in effect, the Fund's board of directors shall satisfy the fund governance standards as defined in Securities and Exchange Commission Rule 0-1(a)(7).

Page 2 of 4

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

![](gzkvmq49nip9uxhqgyote.jpg)

12. This Plan does not require the Manager or Distributor to perform any specific type or level of distribution activities or to incur any specific level of expenses for activities primarily intended to result in the sale of Class R-1 shares.

13. The Fund shall preserve copies of this Plan and any related agreements and all reports made pursuant to Paragraph 8, for a period of not less than six years from the date of the Plan, or the agreements or such report, as the case may be, the first two years in an easily accessible place.

14. This Plan may not be amended to increase materially the amount of Fees provided for in Paragraph 4 hereof unless such amendment is approved in the manner provided for initial approval in Paragraph 6 hereof and no other material amendment to this Plan shall be made unless approved in the manner provided for initial approval in Paragraph 6(b) hereof.

15. This Plan may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Each party agrees that electronic signatures of the parties included in this Plan are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Plan as of the first date written above.

**PRINCIPAL FUNDS, INC.**

By: /s/ Clint L. Woods

Clint L. Woods, Counsel, Vice President, and

Assistant Secretary

By: /s/ Adam U. Shaikh

Adam U. Shaikh, Assistant Counsel and Assistant

Secretary

**PRINCIPAL FUNDS DISTRIBUTOR, INC.**

By: /s/ Clint L. Woods

Clint L. Woods, Vice President, Associate General

Counsel and Secretary

Page 3 of 4

![](g47on3bo0ydihd8mvjsck.jpg)

PRINCIPAL FUNDS, INC.

APPENDIX A

**SERIES**

Bond Market Index Fund

Core Fixed Income Fund

Core Plus Bond Fund I

Diversified International Fund

Equity Income Fund

Global Emerging Markets

Government & High Quality Bond Fund

Inflation Protection Fund

International Equity Index Fund

International Fund I

LargeCap Growth Fund I

LargeCap S&P 500 Index Fund

LargeCap Value Fund III

MidCap Fund

MidCap Growth Fund

MidCap Growth Fund III

MidCap S&P 400 Index Fund

MidCap Value Fund I

Overseas Fund

Principal Capital Appreciation Fund

Principal LifeTime 2010 Fund

Principal LifeTime 2015 Fund

Principal LifeTime 2020 Fund

Principal LifeTime 2025 Fund

Principal LifeTime 2030 Fund

Principal LifeTime 2035 Fund

Principal LifeTime 2040 Fund

Principal LifeTime 2045 Fund

Principal LifeTime 2050 Fund

Principal LifeTime 2055 Fund

Principal LifeTime 2060 Fund

Principal LifeTime 2065 Fund

Principal LifeTime 2070 Fund

Principal LifeTime Strategic Income Fund

Real Estate Securities Fund

SAM Balanced Portfolio

SAM Conservative Balanced Portfolio

SAM Conservative Growth Portfolio

SAM Flexible Income Portfolio

SAM Strategic Growth Portfolio

Short Term Income Fund

SmallCap Fund

SmallCap Growth Fund I

SmallCap S&P 600 Index Fund

SmallCap Value Fund II

Spectrum Preferred and Capital Securities Income Fund

Page 4 of 4

## Ex-99.(M)(5)

**PRINCIPAL FUNDS, INC.**

**AMENDED AND RESTATED**

**DISTRIBUTION PLAN AND AGREEMENT**

**CLASS R-3 SHARES**

AMENDED AND RESTATED DISTRIBUTION PLAN AND AGREEMENT made effective as of <u>March 1, 2023</u>, by and between PRINCIPAL FUNDS, INC., a Maryland corporation (the "Fund"), and PRINCIPAL FUNDS DISTRIBUTOR, INC., a Washington corporation (the "Underwriter").

1. This Distribution and Service Plan (the "Plan"), when effective in accordance with its terms, shall be the written plan contemplated by Securities and Exchange Commission Rule 12b-1 under the Investment Company Act of 1940, as amended (the "Act") for the Class R-3 shares of each Series identified in Appendix A, attached hereto (the "Series"), a class of shares of Principal Funds, Inc. (the "Fund").

2. The Fund has entered into a Distribution Agreement on behalf of the Fund with Principal Funds Distributor, Inc. ("Distributor"), under which the Distributor will use all reasonable efforts, consistent with its other business, to secure purchasers of shares of each Series of the Fund (the "Shares"). Such efforts may include, but neither are required to include nor are limited to, the following: (1) formulation and implementation of marketing and promotional activities, such as mail promotions and television, radio, newspaper, magazine and other mass media advertising; (2) preparation, printing and distribution of sales literature provided to the Fund's shareholders and prospective shareholders; (3) preparation, printing and distribution of prospectuses and statements of additional information of the Fund and reports to recipients other than existing shareholders of the Fund; (4) obtaining such information, analyses and reports with respect to marketing and promotional activities as the Distributor may, from time to time, deem advisable; (5) making payment of sales commission, ongoing commissions and other payments to brokers, dealers, financial institutions or others who sell Shares pursuant to Selling Agreements; (6) paying compensation to registered representatives or other employees of the Distributor who engage in or support distribution of the Fund's Shares; (7) paying compensation to, and expenses (including overhead and telephone expenses) of, the Distributor; (8) providing training, marketing and support to dealers and others with respect to the sale of Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9)receiving and answering correspondence from prospective shareholders including distributing prospectuses, statements of additional information, and shareholder reports;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10)providing of facilities to answer questions from prospective investors about Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11)complying with federal and state securities laws pertaining to the sale of Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12)assisting investors in completing application forms and selecting dividend and other account options; (13) providing of other reasonable assistance in connection with the distribution of the Fund's shares; (14) organizing and conducting of sales seminars and making payments in the form of transactional compensation or promotional incentives; and (15) such other distribution and services activities as the Fund determines may be paid for by the Fund pursuant to the terms of this Plan and in accordance with Rule 12b-1 of the Act.

3. The Distribution Agreement also authorizes the Distributor to enter into Service Agreements with other selling dealers and with banks or other financial institutions to provide shareholder services to existing Class R-3 shareholders, including without limitation, services such as furnishing information as to the status of shareholder accounts, responding to telephone and written inquiries of shareholders, and assisting shareholders with tax information.

4. In consideration for the services provided and the expenses incurred by the Distributor pursuant to the Distribution Agreement and Paragraphs 2 and 3 hereof, all with respect to Class R-3 shares of a Series of the Fund, Class R-3 shares of each Series shall pay to the Distributor a fee at the annual rate of 0.25% (or such lesser amount as the Fund Directors may, from time to time,

Page 1 of 4

determine) of the average daily net assets of Class R-3 shares of such Series. This fee shall be accrued daily and paid monthly or at such other intervals as the Fund Directors shall determine. The determination of daily net assets shall be made at the close of business each day throughout the month and computed in the manner specified in the Fund's then current Prospectus for the determination of the net asset value of the Fund's Class R-3 shares. The Distributor may use all or any portion of the fee received pursuant to this Plan to compensate securities dealers or other persons who have engaged in the sale of Class R-3 shares or to pay any of the expenses associated with other activities authorized under Paragraphs 2 and 3 hereof.

5. The Fund presently pays, and will continue to pay, a management fee to Principal Global Investors, LLC (the "Manager") pursuant to a Management Agreement between the Fund and the Manager (the "Management Agreement"). It is recognized that the Manager may use its management fee revenue, as well as its past profits or its resources from any other source, to make payment to the Distributor with respect to any expenses incurred in connection with the distribution of Class R-3 shares, including the activities referred to in Paragraph 2 hereof. To the extent that the payment of management fees by the Fund to the Manager should be deemed to be indirect financing of any activity primarily intended to result in the sale of Class R-3 shares within the meaning of Rule 12b-1, then such payment shall be deemed to be authorized by this Plan.

6. This Plan shall not take effect until it has been approved (a) by a vote of at least a majority (as defined in the Act) of the outstanding Class R-3 shares of the Series of the Fund and (b) by votes of the majority of both (i) the Board of Directors of the Fund, and (ii) those Directors of the Fund who are not "interested persons" (as defined in the Act) of the Fund and who have no direct or indirect financial interest in the operation of this Plan or any agreements related to this Plan (the "Disinterested Directors"), cast in person at a meeting called for the purpose of voting on this Plan or such agreements.

7. Unless sooner terminated pursuant to Paragraph 6, this Plan shall continue in effect for a period of twelve months from the date it takes effect and thereafter shall continue in effect so long as such continuance is specifically approved at least annually in the manner provided for approval of this Plan in Paragraph 6(b).

8. A representative of the Underwriter shall provide to the Board and the Board shall review at least quarterly a written report of the amounts so expended and the purposes for which such expenditures were made.

9. This Plan may be terminated at any time by vote of a majority of the Disinterested Directors, or by vote of a majority (as defined in the Act) of the outstanding Class R-3 shares of the Series of the Fund.

10. Any agreement of the Fund related to this Plan shall be in writing and shall provide:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.That such agreement may be terminated at any time, without payment of any penalty, by vote of a majority of the Disinterested Directors or by a vote of a majority (as defined in the Act) of the outstanding Class R-3 shares of the Series of the Fund on not more than sixty (60) days' written notice to any other party to the agreement); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.That such agreement shall terminate automatically in the event of its assignment.

11. While the Plan is in effect, the Fund's board of directors shall satisfy the fund governance standards as defined in Securities and Exchange Commission Rule 0-1(a)(7).

Page 2 of 4

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

![](gnpaebx5xwu97a8sxy0jb.jpg)

12. This Plan does not require the Manager or Distributor to perform any specific type or level of distribution activities or to incur any specific level of expenses for activities primarily intended to result in the sale of Class R-3 shares.

13. The Fund shall preserve copies of this Plan and any related agreements and all reports made pursuant to Paragraph 8, for a period of not less than six years from the date of the Plan, or the agreements or such report, as the case may be, the first two years in an easily accessible place.

14. This Plan may not be amended to increase materially the amount of Fees provided for in Paragraph 4 hereof unless such amendment is approved in the manner provided for initial approval in Paragraph 6 hereof and no other material amendment to this Plan shall be made unless approved in the manner provided for initial approval in Paragraph 6(b) hereof.

15. This Plan may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Each party agrees that electronic signatures of the parties included in this Plan are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Plan as of the first date written above.

**PRINCIPAL FUNDS, INC.**

By: /s/ Clint L. Woods

Clint L. Woods, Counsel, Vice President, and

Assistant Secretary

By: /s/ Adam U. Shaikh

Adam U. Shaikh, Assistant Counsel and Assistant

Secretary

**PRINCIPAL FUNDS DISTRIBUTOR, INC.**

By: /s/ Clint L. Woods

Clint L. Woods, Vice President, Associate General

Counsel and Secretary

Page 3 of 4

![](gfib6fe1dju0l3tzi1mvs.jpg)

PRINCIPAL FUNDS, INC.

APPENDIX A

**SERIES**

Blue Chip Fund

Bond Market Index Fund

Core Fixed Income Fund

Core Plus Bond Fund

Diversified International Fund

Diversified Real Asset Fund

Equity Income Fund

Global Emerging Markets Fund

Global Real Estate Securities Fund

Government & High Quality Bond Fund

Inflation Protection Fund

International Equity Index Fund

International Fund I

LargeCap Growth Fund I

LargeCap S&P 500 Index Fund

LargeCap Value Fund III

MidCap Fund

MidCap Growth Fund

MidCap Growth Fund III

MidCap S&P 400 Index Fund

MidCap Value Fund I

Overseas Fund

Principal Capital Appreciation Fund

Principal LifeTime 2010 Fund

Principal LifeTime 2015 Fund

Principal LifeTime 2020 Fund

Principal LifeTime 2025 Fund

Principal LifeTime 2030 Fund

Principal LifeTime 2035 Fund

Principal LifeTime 2040 Fund

Principal LifeTime 2045 Fund

Principal LifeTime 2050 Fund

Principal LifeTime 2055 Fund

Principal LifeTime 2060 Fund

Principal LifeTime 2065 Fund

Principal LifeTime 2070 Fund

Principal LifeTime Strategic Income Fund

Real Estate Securities Fund

SAM Balanced Portfolio

SAM Conservative Balanced Portfolio

SAM Conservative Growth Portfolio

SAM Flexible Income Portfolio

SAM Strategic Growth Portfolio

Short-Term Income Fund

SmallCap Fund

SmallCap Growth Fund I

SmallCap S&P 600 Index Fund

SmallCap Value Fund II

Spectrum Preferred and Capital Securities Income Fund

Page 4 of 4

## Ex-99.(M)(6)

**PRINCIPAL FUNDS, INC.**

**AMENDED AND RESTATED**

**DISTRIBUTION PLAN AND AGREEMENT**

**CLASS R-4 SHARES**

AMENDED AND RESTATED DISTRIBUTION PLAN AND AGREEMENT made effective as of <u>March 1, 2023</u>, by and between PRINCIPAL FUNDS, INC., a Maryland corporation (the "Fund"), and PRINCIPAL FUNDS DISTRIBUTOR, INC., a Washington corporation (the "Underwriter").

1. This Distribution and Service Plan (the "Plan"), when effective in accordance with its terms, shall be the written plan contemplated by Securities and Exchange Commission Rule 12b-1 under the Investment Company Act of 1940, as amended (the "Act") for the Class R-4 shares of each Series identified in Appendix A, attached hereto (the "Series"), a class of shares of Principal Funds, Inc. (the "Fund").

2. The Fund has entered into a Distribution Agreement on behalf of the Fund with Principal Funds Distributor, Inc. ("Distributor"), under which the Distributor will use all reasonable efforts, consistent with its other business, to secure purchasers of shares of each Series of the Fund (the "Shares"). Such efforts may include, but neither are required to include nor are limited to, the following: (1) formulation and implementation of marketing and promotional activities, such as mail promotions and television, radio, newspaper, magazine and other mass media advertising; (2) preparation, printing and distribution of sales literature provided to the Fund's shareholders and prospective shareholders; (3) preparation, printing and distribution of prospectuses and statements of additional information of the Fund and reports to recipients other than existing shareholders of the Fund; (4) obtaining such information, analyses and reports with respect to marketing and promotional activities as the Distributor may, from time to time, deem advisable; (5) making payment of sales commission, ongoing commissions and other payments to brokers, dealers, financial institutions or others who sell Shares pursuant to Selling Agreements; (6) paying compensation to registered representatives or other employees of the Distributor who engage in or support distribution of the Fund's Shares; (7) paying compensation to, and expenses (including overhead and telephone expenses) of, the Distributor; (8) providing training, marketing and support to dealers and others with respect to the sale of Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9)receiving and answering correspondence from prospective shareholders including distributing prospectuses, statements of additional information, and shareholder reports;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10)providing of facilities to answer questions from prospective investors about Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11)complying with federal and state securities laws pertaining to the sale of Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12)assisting investors in completing application forms and selecting dividend and other account options; (13) providing of other reasonable assistance in connection with the distribution of the Fund's shares; (14) organizing and conducting of sales seminars and making payments in the form of transactional compensation or promotional incentives; and (15) such other distribution and services activities as the Fund determines may be paid for by the Fund pursuant to the terms of this Plan and in accordance with Rule 12b-1 of the Act.

3. The Distribution Agreement also authorizes the Distributor to enter into Service Agreements with other selling dealers and with banks or other financial institutions to provide shareholder services to existing Class R-4 shareholders, including without limitation, services such as furnishing information as to the status of shareholder accounts, responding to telephone and written inquiries of shareholders, and assisting shareholders with tax information.

4. In consideration for the services provided and the expenses incurred by the Distributor pursuant to the Distribution Agreement and Paragraphs 2 and 3 hereof, all with respect to Class R-4 shares of a Series of the Fund, Class R-4 shares of each Series shall pay to the Distributor a fee at the annual rate of 0.10% (or such lesser amount as the Fund Directors may, from time to time,

Page 1 of 4

determine) of the average daily net assets of Class R-4 shares of such Series. This fee shall be accrued daily and paid monthly or at such other intervals as the Fund Directors shall determine. The determination of daily net assets shall be made at the close of business each day throughout the month and computed in the manner specified in the Fund's then current Prospectus for the determination of the net asset value of the Fund's Class R-4 shares. The Distributor may use all or any portion of the fee received pursuant to this Plan to compensate securities dealers or other persons who have engaged in the sale of Class R-4 shares or to pay any of the expenses associated with other activities authorized under Paragraphs 2 and 3 hereof.

5. The Fund presently pays, and will continue to pay, a management fee to Principal Global Investors, LLC (the "Manager") pursuant to a Management Agreement between the Fund and the Manager (the "Management Agreement"). It is recognized that the Manager may use its management fee revenue, as well as its past profits or its resources from any other source, to make payment to the Distributor with respect to any expenses incurred in connection with the distribution of Class R-4 shares, including the activities referred to in Paragraph 2 hereof. To the extent that the payment of management fees by the Fund to the Manager should be deemed to be indirect financing of any activity primarily intended to result in the sale of Class R-4 shares within the meaning of Rule 12b-1, then such payment shall be deemed to be authorized by this Plan.

6. This Plan shall not take effect until it has been approved (a) by a vote of at least a majority (as defined in the Act) of the outstanding Class R-4 shares of the Series of the Fund and (b) by votes of the majority of both (i) the Board of Directors of the Fund, and (ii) those Directors of the Fund who are not "interested persons" (as defined in the Act) of the Fund and who have no direct or indirect financial interest in the operation of this Plan or any agreements related to this Plan (the "Disinterested Directors"), cast in person at a meeting called for the purpose of voting on this Plan or such agreements.

7. Unless sooner terminated pursuant to Paragraph 6, this Plan shall continue in effect for a period of twelve months from the date it takes effect and thereafter shall continue in effect so long as such continuance is specifically approved at least annually in the manner provided for approval of this Plan in Paragraph 6(b).

8. A representative of the Underwriter shall provide to the Board and the Board shall review at least quarterly a written report of the amounts so expended and the purposes for which such expenditures were made.

9. This Plan may be terminated at any time by vote of a majority of the Disinterested Directors, or by vote of a majority (as defined in the Act) of the outstanding Class R-4 shares of the Series of the Fund.

10. Any agreement of the Fund related to this Plan shall be in writing and shall provide:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.That such agreement may be terminated at any time, without payment of any penalty, by vote of a majority of the Disinterested Directors or by a vote of a majority (as defined in the Act) of the outstanding Class R-4 shares of the Series of the Fund on not more than sixty (60) days' written notice to any other party to the agreement); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.That such agreement shall terminate automatically in the event of its assignment.

11. While the Plan is in effect, the Fund's board of directors shall satisfy the fund governance standards as defined in Securities and Exchange Commission Rule 0-1(a)(7).

Page 2 of 4

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

![](gzu94ul1yczbgx8uke93s.jpg)

12. This Plan does not require the Manager or Distributor to perform any specific type or level of distribution activities or to incur any specific level of expenses for activities primarily intended to result in the sale of Class R-4 shares.

13. The Fund shall preserve copies of this Plan and any related agreements and all reports made pursuant to Paragraph 8, for a period of not less than six years from the date of the Plan, or the agreements or such report, as the case may be, the first two years in an easily accessible place.

14. This Plan may not be amended to increase materially the amount of Fees provided for in Paragraph 4 hereof unless such amendment is approved in the manner provided for initial approval in Paragraph 6 hereof and no other material amendment to this Plan shall be made unless approved in the manner provided for initial approval in Paragraph 6(b) hereof.

15. This Plan may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Each party agrees that electronic signatures of the parties included in this Plan are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Plan as of the first date written above.

**PRINCIPAL FUNDS, INC.**

By: /s/ Clint L. Woods

Clint L. Woods, Counsel, Vice President, and

Assistant Secretary

By: /s/ Adam U. Shaikh

Adam U. Shaikh, Assistant Counsel and Assistant

Secretary

**PRINCIPAL FUNDS DISTRIBUTOR, INC.**

By: /s/ Clint L. Woods

Clint L. Woods, Vice President, Associate General

Counsel and Secretary

Page 3 of 4

![](g12nvareqxnpmb371to30.jpg)

PRINCIPAL FUNDS, INC.

APPENDIX A

**SERIES**

Blue Chip Fund

Bond Market Index Fund

Core Fixed Income Fund

Core Plus Bond Fund

Diversified International Fund

Diversified Real Asset Fund

Equity Income Fund

Global Emerging Markets Fund

Global Real Estate Securities Fund

Government & High Quality Bond Fund

Inflation Protection Fund

International Equity Index Fund

International Fund I

LargeCap Growth Fund I

LargeCap S&P 500 Index Fund

LargeCap Value Fund III

MidCap Fund

MidCap Growth Fund

MidCap Growth Fund III

MidCap S&P 400 Index Fund

MidCap Value Fund I

Overseas Fund

Principal Capital Appreciation Fund

Principal LifeTime 2010 Fund

Principal LifeTime 2015 Fund

Principal LifeTime 2020 Fund

Principal LifeTime 2025 Fund

Principal LifeTime 2030 Fund

Principal LifeTime 2035 Fund

Principal LifeTime 2040 Fund

Principal LifeTime 2045 Fund

Principal LifeTime 2050 Fund

Principal LifeTime 2055 Fund

Principal LifeTime 2060 Fund

Principal LifeTime 2065 Fund

Principal LifeTime 2070 Fund

Principal LifeTime Strategic Income Fund

Real Estate Securities Fund

SAM Balanced Portfolio

SAM Conservative Balanced Portfolio

SAM Conservative Growth Portfolio

SAM Flexible Income Portfolio

SAM Strategic Growth Portfolio

Short-Term Income Fund

SmallCap Fund

SmallCap Growth Fund I

SmallCap S&P 600 Index Fund

SmallCap Value Fund II

Spectrum Preferred and Capital Securities Income Fund

Page 4 of 4

## Ex-99.(P)(1)

**J a n u a r y 2 0 2 2**

**A l l i a n c e B e r n s t e i n**

**CODE OF BUSINESS CONDUCT AND ETHICS**

**Personal Trading Policies and Procedures (Appendix A)**

501 Commerce Street, Nashville, TN 37203

**A Message from Seth Bernstein, Chief Executive Officer of AllianceBernstein**

Client trust is the foundation of a financial services company. As we have seen, trust takes years to establish and constant vigilance to maintain but can be destroyed in a matter of days. Honesty, integrity, and high ethical standards must therefore be practiced on a daily basisin order to protect this most critical asset.

Enhancing our sensitivity to our ethical obligations – putting the interests of our clientsfirst and foremost -- and ensuring that we meet those obligations is an imperative for all.

AllianceBernstein has long been committed to maintaining and promoting high ethical standardsand business practices. We have prepared this Code of Business Conduct and Ethics (the "Code") in order to establish a common vision of our ethical standards and practices. While notan exhaustive guide to the rules and regulations governing our businesses, the Code is intended to establish certain guiding principles for all of us. Separately, the firm has in place a series of ethics, fiduciary and business-related policies and procedures, which set forth detailed requirements to which employees are subject. We also have prepared various Compliance Manuals, which provide in summary form, an overview of the concepts described in more detail both in this Code and in our other policies and procedures.

You should take the time to familiarize yourself with the policies in this Code and use common sense in applying them to your daily work environment and circumstances. Your own personal integrity and good judgment are the best guides to ethical and responsible conduct. Ifyou have questions, you should discuss them with your supervisor, the General Counsel, the Chief Compliance Officer or a representative of the Legal and Compliance Department or Human Capital. If the normal channels for reporting are not appropriate, or if you feel uncomfortable utilizing them, issues may be brought to the attention of the Company Ombudsman, who is an independent, informal and confidential resource for concerns about AllianceBernstein business matters that may raise issues of ethics or questionable practices.

Our continued success depends on each of us maintaining high ethical standards andbusiness practices. I count on each of you to place our clients' interests first – and to do so always by applying good ethics and sound judgment in your daily responsibilities.

Seth Bernstein

**AllianceBernstein L.P**

**CODE OF BUSINESS CONDUCT AND ETHICS**

---

| | | | |
|:---|:---|:---|:---|
| 1. | **Introduction** |  | **1** |
| 2. | **The AB Fiduciary Culture** |  | **2** |
| 3. | **Compliance with Laws, Rules and Regulations** | **Compliance with Laws, Rules and Regulations** | **2** |
| 4. | **Policy Against Discrimination and Sexual and Unlawful Harassment** | **Policy Against Discrimination and Sexual and Unlawful Harassment** | **3** |
| 5. | **Conflicts of Interest / Unlawful Actions** | **Conflicts of Interest / Unlawful Actions** | **3** |
| 6. | **Insider Trading** |  | **5** |
| 7. | **Personal Trading: Summary of Restrictions** | **Personal Trading: Summary of Restrictions** | **5** |
| 8. | **Outside Directorships and Other Outside Activities and Interests** | **Outside Directorships and Other Outside Activities and Interests** | **6** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;(a) Board Member or Trustee |  | 7 |
|  | Other Affiliations |  | 8 |
|  | Outside Financial or Business Interests | Outside Financial or Business Interests | **8** |
| 9. | **Entertainment, and Inducements** | **Entertainment, and Inducements** | **9** |
| 10. | **Compliance with Anti-Corruption Laws** | **Compliance with Anti-Corruption Laws** | **9** |
| 11. | **Political Contributions/Activities** |  | **10** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;(a) By or on behalf of AB |  | 10 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;(b) By Employees / Directors |  | **11** |
| 12. | **"Ethical Wall" Policy** |  | **11** |
| 13. Use of Client Relationships | 13. Use of Client Relationships |  | **12** |
| 14. Corporate Opportunities and Resources | 14. Corporate Opportunities and Resources | 14. Corporate Opportunities and Resources | **12** |
| 15. Antitrust and Fair Dealing | 15. Antitrust and Fair Dealing |  | **13** |
| 16. Recordkeeping and Retention | 16. Recordkeeping and Retention |  | **13** |
| 17. Improper Influence on Conduct of | 17. Improper Influence on Conduct of | &nbsp;&nbsp; **Audits** | **13** |
| 18. Accuracy of Disclosure | 18. Accuracy of Disclosure |  | **14** |
| 19. | **Confidentiality** |  | **14** |
| 20. Protection and Proper Use of AB | 20. Protection and Proper Use of AB | **Assets** | **15** |
| 21. | **Policy on Intellectual Property** |  | **16** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;(a) Overview |  | 16 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;(b) Employee Responsibilities |  | 16 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;(c) Company Policies and Practices |  | **16** |
| 22. Exceptions from the Code | 22. Exceptions from the Code |  | **17** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;(a) Written Statement and Supporting Documentation | &nbsp;&nbsp;&nbsp;&nbsp;(a) Written Statement and Supporting Documentation | 17 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;(b) Compliance Interview |  | **17** |
| 23. Regulatory Inquiries, Investigations and Litigation | 23. Regulatory Inquiries, Investigations and Litigation | 23. Regulatory Inquiries, Investigations and Litigation | **17** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;(a) Requests for Information |  | 17 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;(b) Types of Inquiries |  | 18 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;(c) Responding to Information Requests | &nbsp;&nbsp;&nbsp;&nbsp;(c) Responding to Information Requests | 18 |
| ablegal - 3350966 v6 | ablegal - 3350966 v6 |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;(d) Use of Outside Counsel 18

&nbsp;&nbsp;&nbsp;&nbsp;(e) Regulatory Investigation 18

&nbsp;&nbsp;&nbsp;&nbsp;(f) Litigation **18** 

---

| | | |
|:---|:---|:---|
| 24. Compliance and | **Reporting of Misconduct** | **/** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **"Whistleblower"** | **Protection** | **18** |
| 25. Company Ombudsman | 25. Company Ombudsman | **19** |
| 26. Sanctions |  | **20** |
| 27. Annual Certifications | 27. Annual Certifications | **20** |

---

ablegal - 3350966 v6

**PERSONAL TRADING POLICIES AND PROCEDURES**

**Appendix A**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| 1. | &nbsp;&nbsp; **Overview** |  |  |  |  | **A - 1** |
| &nbsp;&nbsp;&nbsp;&nbsp;(a) | Introduction | Introduction |  |  |  | A - 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;(b) | Definitions | Definitions |  |  |  | A - 1 |
| 2. | &nbsp;&nbsp; **Requirements and Restrictions –** | &nbsp;&nbsp; **Requirements and Restrictions –** | &nbsp;&nbsp; **Requirements and Restrictions –** | &nbsp;&nbsp; **Requirements and Restrictions –** | **All Employees** | **A - 5** |
| &nbsp;&nbsp;&nbsp;&nbsp;(a) | General Standards | General Standards |  |  |  | A - 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;(b) | Disclosure of Personal Accounts | Disclosure of Personal Accounts | Disclosure of Personal Accounts | Disclosure of Personal Accounts |  | A - 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;(c) | Designated Brokerage Accounts | Designated Brokerage Accounts | Designated Brokerage Accounts | Designated Brokerage Accounts |  | A - 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;(d) | Pre-Clearance Requirement | Pre-Clearance Requirement | Pre-Clearance Requirement | Pre-Clearance Requirement |  | A - 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;(e) | Limitation on the Number of Trades | Limitation on the Number of Trades | Limitation on the Number of Trades | Limitation on the Number of Trades | Limitation on the Number of Trades | A - 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;(f) | Short-Term Trading | Short-Term Trading |  |  |  | A - 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;(g) | Short | Sales |  |  |  | A - 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;(h) | Trading in AB Units and AB Open and Closed-End Mutual Funds | Trading in AB Units and AB Open and Closed-End Mutual Funds | Trading in AB Units and AB Open and Closed-End Mutual Funds | Trading in AB Units and AB Open and Closed-End Mutual Funds | Trading in AB Units and AB Open and Closed-End Mutual Funds | A-10 |
| &nbsp;&nbsp;&nbsp;&nbsp;(i) | Securities Being Considered for Purchase or Sale | Securities Being Considered for Purchase or Sale | Securities Being Considered for Purchase or Sale | Securities Being Considered for Purchase or Sale | Securities Being Considered for Purchase or Sale | A-10 |
| &nbsp;&nbsp;&nbsp;&nbsp;(j) | Restricted List | Restricted List |  |  |  | A-12 |
| &nbsp;&nbsp;&nbsp;&nbsp;(k) | Dissemination of Research Information | Dissemination of Research Information | Dissemination of Research Information | Dissemination of Research Information | Dissemination of Research Information | A-12 |
| &nbsp;&nbsp;&nbsp;&nbsp;(l) | Initial Public Offerings | Initial Public Offerings | Initial Public Offerings |  |  | A-14 |
| &nbsp;&nbsp;&nbsp;&nbsp;m) | Limited Offerings/Private Placements | Limited Offerings/Private Placements | Limited Offerings/Private Placements | Limited Offerings/Private Placements | Limited Offerings/Private Placements | A-14 |
| 3. | &nbsp;&nbsp; **Additional** | **Restrictions** | &nbsp;&nbsp;&nbsp; **–** | **Portfolio** | &nbsp;&nbsp;&nbsp;&nbsp; **Managers** | **A-14** |
| &nbsp;&nbsp;&nbsp;&nbsp;(a) | Blackout Periods | Blackout Periods |  |  |  | A-15 |
| &nbsp;&nbsp;&nbsp;&nbsp;(b) | Actions During Blackout Periods | Actions During Blackout Periods | Actions During Blackout Periods | Actions During Blackout Periods |  | A-15 |
| &nbsp;&nbsp;&nbsp;&nbsp;(c) | Transactions Contrary to Client Positions | Transactions Contrary to Client Positions | Transactions Contrary to Client Positions | Transactions Contrary to Client Positions | Transactions Contrary to Client Positions | A-15 |
| 4. | &nbsp;&nbsp; **Additional** | **Restrictions** | &nbsp;&nbsp;&nbsp;&nbsp; **–** | &nbsp;&nbsp; **Research Analysts** | &nbsp;&nbsp; **Research Analysts** | **A-15** |
| &nbsp;&nbsp;&nbsp;&nbsp;(a) | Blackout Periods | Blackout Periods |  |  |  | A-16 |
| &nbsp;&nbsp;&nbsp;&nbsp;(b) | Actions During Blackout Periods | Actions During Blackout Periods | Actions During Blackout Periods | Actions During Blackout Periods |  | A-16 |
| &nbsp;&nbsp;&nbsp;&nbsp;(c) | Actions Contrary to Ratings | Actions Contrary to Ratings | Actions Contrary to Ratings | Actions Contrary to Ratings |  | A-16 |
| 5. | &nbsp;&nbsp; **Additional** | **Restrictions – Buy-Side Equity Traders** | **Restrictions – Buy-Side Equity Traders** | **Restrictions – Buy-Side Equity Traders** | **Restrictions – Buy-Side Equity Traders** | **A-16** |
| 6. | &nbsp;&nbsp; **Additional Restrictions** | &nbsp;&nbsp; **Additional Restrictions** | **– Alternate** | **– Alternate** | **Investment Strategies Groups** | **A-17** |
| 7. | &nbsp;&nbsp; **Reporting** | **Requirements** | **Requirements** |  |  | **A-17** |
| &nbsp;&nbsp;&nbsp;&nbsp;(a) | Duplicate Confirmations and Account Statements | Duplicate Confirmations and Account Statements | Duplicate Confirmations and Account Statements | Duplicate Confirmations and Account Statements | Duplicate Confirmations and Account Statements | A-17 |
| &nbsp;&nbsp;&nbsp;&nbsp;(b) | Initial Holdings Reports by Employees | Initial Holdings Reports by Employees | Initial Holdings Reports by Employees | Initial Holdings Reports by Employees | Initial Holdings Reports by Employees | A-17 |
| &nbsp;&nbsp;&nbsp;&nbsp;(c) | Quarterly Reports by Employees – including Certain Funds | Quarterly Reports by Employees – including Certain Funds | Quarterly Reports by Employees – including Certain Funds | Quarterly Reports by Employees – including Certain Funds | Quarterly Reports by Employees – including Certain Funds |  |
|  | &nbsp;&nbsp; and Limited Offerings | &nbsp;&nbsp; and Limited Offerings | &nbsp;&nbsp; and Limited Offerings |  |  | A-18 |
| &nbsp;&nbsp;&nbsp;&nbsp;(d) | Annual Certification by Employees with Managed Accounts | Annual Certification by Employees with Managed Accounts | Annual Certification by Employees with Managed Accounts | Annual Certification by Employees with Managed Accounts | Annual Certification by Employees with Managed Accounts | A-18 |
| &nbsp;&nbsp;&nbsp;&nbsp;(e) | Annual Holdings Reports by Employees | Annual Holdings Reports by Employees | Annual Holdings Reports by Employees | Annual Holdings Reports by Employees | Annual Holdings Reports by Employees | A-18 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Report and Certification of Adequacy to the Board of Directors

of Fund Clients A-19

ablegal - 3350966 v6

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) | Report Representations | A-19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) | Maintenance of Reports | A-19 |
| 8. Reporting Requirements for Directors who are not Employees | 8. Reporting Requirements for Directors who are not Employees | **A-20** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) | Outside Directors / Affiliated Outside Directors | A-20 |

---

ablegal - 3350966 v6

**<u>CODE CERTIFICATION FORM</u>**

---

| | |
|:---|:---|
| **Annual Certification Form .............................................................................................** | **Last Page** |

---

ablegal - 3350966 v6

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**1. Introduction**

This Code of Business Conduct and Ethics (the "Code") summarizes the values, principles and business practices that guide our business conduct. The Code establishes a set of basic principles and expectations to guide all AllianceBernstein employees, officers and directors, and consultants where applicable. The Code applies to all of our offices worldwide. It is not, however, intended to provide an exhaustive list of all the detailed internal policies and procedures, regulations and legal requirements that may apply to you as an AllianceBernstein employee, officer, director, consultant, and/or a representative of one of our regulated subsidiaries. AllianceBernstein maintains more detailed policies and procedures addressing many of the topics covered by this Code, including the Compliance Manual, available on the Legal and Compliance Department intranet site. All AllianceBernstein employees, officers, and directors are responsible for knowing and abiding by the relevant policies.

All individuals subject to the provisions of this Code must conduct themselves in a manner consistent with the requirements and procedures set forth herein. Adherence to the Code is a fundamental condition of service with us, any of our subsidiaries or joint venture entities, or our general partner (the "AB Group").

AllianceBernstein L.P. ("AB," "we" or "us") is a registered investment adviser and acts as investment manager or adviser to registered investment companies, institutional investment clients, employee benefit trusts, high net worth individuals and other types of investment advisory clients. In this capacity, we serve as fiduciaries. The fiduciary relationship mandates adherence to the highest standards of conduct and integrity.

Personnel acting in a fiduciary capacity must carry out their duties for the **exclusive benefit** of our clients. Consistent with this fiduciary duty, the interests of clients take priority over the personal investment objectives and other personal interests of AB personnel. Accordingly:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Employees must work to mitigate or eliminate any conflict, or appearance of conflict, between the self-interest of any individual covered under the Code and his or her responsibility to our clients, or to AB and its unitholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Employees must never improperly use their position with AB for personal gain to themselves, their family, or any other person.

The Code is intended to comply with Rule 17j-1 under the (U.S.) Investment Company Act of 1940(the "1940 Act") which applies to us because we serve as an investment adviser to registered investment companies. Rule 17j-1 specifically requires us to adopt a code of ethics that contains provisions reasonably necessary to prevent our "access persons" (as defined herein) from engaging in fraudulent conduct, including insider trading. In addition, the Code is intended to comply with the provisions of the (U.S.) Investment Advisers Act of 1940 (the "Advisers Act"), including Rule 204A-1, which requires registered investment advisers to adopt and enforce codes of ethics applicable to their supervised persons. Finally, the Code is intended to comply with Section 303A.10 of the New York Stock Exchange ("NYSE") Listed Company Manual, which applies to us because the units of AllianceBernstein Holding L.P. ("AllianceBernstein Holding") are traded on the NYSE.

Additionally, certain entities within the AB Group, such as Sanford C. Bernstein & Co., LLC and Sanford C. Bernstein Limited, have adopted supplemental codes of ethics to address specific regulatory requirements applicable to them. All employees are obligated to determine if any of these codes are applicable to them and to abide by such codes as appropriate.

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**2. The AB Fiduciary Culture**

The primary objective of AB's business is to provide value, through investment advisory and other financial services, to a wide range of clients, including governments, corporations, financial institutions, high net worth individuals and pension funds.

AB requires that all dealings with, and on behalf of existing and prospective clients be handled with honesty, integrity, and high ethical standards, and that such dealings adhere to the letter and the spirit of applicable laws, regulations and contractual guidelines. As a general matter, AB is a fiduciary that owes its clients a duty of undivided loyalty, and each employee has a responsibility to act in a manner consistent with this duty.

When dealing with or on behalf of a client, every employee must act solely in the best interests of that client. In addition, various comprehensive statutory and regulatory structures such as the 1940 Act, the Advisers Act and the Employee Retirement Income Security Act ("ERISA") impose specific responsibilities governing the behavior of personnel in carrying out their responsibilities. AB and its employees must comply fully with these rules and regulations. Legal and Compliance Department personnel are available to assist employees in meeting these requirements.

All employees are expected to adhere to the high standards associated with our fiduciary duty, including care and loyalty to clients, competency, diligence and thoroughness, and trust and accountability. Further, all employees must actively work to avoid the possibility that the advice or services we provide to clients is, or gives the appearance of being, based on the self-interests of AB or its employees and not the clients' best interests.

Our fiduciary responsibilities apply to a broad range of investment and related activities, including sales and marketing, portfolio management, securities trading, allocation of investment opportunities, client service, operations support, performance measurement and reporting, new product development as well as your personal investing activities. These obligations include the duty to avoid material conflicts of interest (and, if this is not possible, to provide full and fair disclosure to clients in communications), to keep accurate books and records, and to supervise personnel appropriately. These concepts are further described in the Sections that follow.

**3. Compliance with Laws, Rules and Regulations**

AB has a long-standing commitment to conduct its business in compliance with applicable laws and regulations and in accordance with the highest ethical principles. This commitment helps ensure our reputation for honesty, quality, and integrity. All individuals subject to the Code are required to comply with all such laws and regulations. All U.S. employees, as well as non-U.S. employees who act on behalf of U.S. clients or funds, are required to comply with the U.S. federal securities laws. These laws include, but are not limited to, the 1940 Act, the Advisers Act, ERISA, the Securities Act of 1933 ("Securities Act"), the Securities Exchange Act of 1934 ("Exchange Act"), the Sarbanes-Oxley Act of 2002, Title V of the Gramm-Leach-Bliley Act, any rules adopted by the SEC under any of these statutes, the Bank Secrecy Act as it applies to our activities, and any rules adopted thereunder by the Securities and Exchange Commission ("SEC"), Department of the Treasury or the Department of Justice. As mentioned above, as a listed company, we are also subject to specific rules promulgated by the NYSE. Similarly, our non-US affiliates are subject to additional laws and regulatory mandates in their respective jurisdictions, which must be fully complied with.

Our obligation to comply with all applicable laws, regulations, and rules, and to act in an honest and ethical manner, trumps all other considerations, including the interests of our clients. Policies referenced in this Code provide additional details and requirements to ensure compliance. A violation under any of these policies may be deemed a violation of the Code.

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**4. Policy Against Discrimination and Sexual and Unlawful Harassment**

AB is committed to providing a working environment free from all forms of discrimination and harassment on the basis of race, color, religion, creed, ancestry, national origin, sex, age, disability, marital status, citizenship status, sexual orientation, gender identity expression, military or veteran status, or any other basis that is by applicable law. Harassment or discrimination by any AB employee, officer, or director will not be tolerated.

AB's policies on nondiscrimination and sexual or unlawful harassment and how to report instances of such conduct can be found in the Employee Handbook. All employees, officers, and directors are responsible for knowing and abiding by these policies. Anyone who reports in good faith an incident of discrimination or harassment will not be subject to reprisals. Anyone who is found to have engaged in conduct inconsistent with these policies will be subject to appropriate disciplinary action, up to and including termination of employment or dismissal from the Board.

**5. Conflicts of Interest / Unlawful Actions**

A "conflict of interest" may exist when a person's private interests are contrary to, or inconsistent with, the interests of AB's clients or to the interests of AB or its unitholders.

A conflict situation can arise when an AB employee, officer, or director takes actions or has interests (business, financial or otherwise) that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest may arise, for example, when an AB employee, or a member of his or her family,[<sup>1</sup>](#page_10)receives improper personal benefits (including personal loans, services, or payment for services that the AB employee performs in the course of AB business) asa result of his or her position at AB, or gains personal enrichment or benefits through access to confidential information. Conflicts may also arise when an AB employee, or a member of his or her family, holds a significant financial interest in a company that does an important amount of business with AB or has outside business interests that may result in divided loyalties or compromise independent judgment. Moreover, conflicts may arise when making securities investments for personal accounts or when determining how to allocate trading opportunities.

Conflicts of interest can also arise because of personal relationships with others within or outside AB (such as family relationships, romantic relationships, or close friendships) that may compromise objectivity and independent judgment.

1For purposes of this section of the Code, unless otherwise specifically provided, (i) "family" means your spouse/domestic partner, parents, children, siblings, in-laws by marriage (i.e., mother-in-law, father-in-law, son-in-law, and/or daughter-in- law) and anyone who shares your home; and (ii) "relative" means members of your family (as defined), your aunts and uncles, and your first cousins.

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AB has adopted policies, procedures, and controls designed to manage conflicts of interest, including the Compliance Manual, Policy and Procedures for Giving and Receiving Gifts and Entertainment, copies of which can be found on the Legal and Compliance Department intranet site. These policies highlight additional potential conflicts of interest.

Conflicts of interest can arise in many common situations, despite one's best efforts to avoid them. This Code does not attempt to identify all possible conflicts of interest. Literal compliance with each of the specific procedures will not shield you from liability for personal trading or other conduct that violates your fiduciary duties to our clients. All AB employees, officers, and directors are encouraged to seek clarification of, and discuss questions about, potential conflicts of interest. If you have questions about a particular situation or become aware of a conflict or potential conflict, you should bring it to the attention of your supervisor, the General Counsel, the Conflicts Officer, the Chief Compliance Officer or a representative of the Legal and Compliance Department or Human Capital.

In addition to the specific prohibitions contained in the Code, you are, of course, subject to a general requirement not to engage in any act or practice that would defraud our clients. This general prohibition (which also applies specifically in connection with the purchase and sale of a Security held or to be acquired or sold, as this phrase is defined in the Appendix) includes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Making any untrue statement of a material fact or employing any device, scheme, or artifice to defraud a client;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Omitting to state (or failing to provide any information necessary to properly clarify any statements made, in light of the circumstances) a material fact, thereby creating a materially misleading impression;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Accepting any compensation for the purchase or sale of any property to or for a fund or other client account;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Making investment decisions, changes in research ratings and trading decisions other than exclusively for the benefit of, and in the best interest of, our clients;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Using information about investment or trading decisions or changes in research ratings (whether considered, proposed or made) to benefit or avoid economic injury to you or anyone other than our clients;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Taking, delaying or omitting to take any action with respect to any research recommendation, report or rating or any investment or trading decision for a client in order to avoid economic injury to you or anyone other than our clients;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Purchasing or selling a security on the basis of knowledge of a possible trade by or for a client with the intent of personally profiting from personal holdings in the same or related securities ("front- running" or "scalping");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Revealing to any other person (except in the normal course of your duties on behalf of a client)any information regarding securities transactions by any client or the consideration by any client of any such securities transactions; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Engaging in any act, practice or course of business that operates or would operate as a fraud or deceit on a client or engaging in any manipulative practice with respect to any client.

AB requires all employees and directors to disclose any Conflicts of Interests that any person may become aware of upon joining AB or during their course of employment or board service.

These disclosures must be made to the Compliance Department through StarCompliance.

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**6. Insider Trading**

There are instances where AB employees or directors may have confidential "inside" information about AB or its affiliates, or about a company with which we do business, or about a company in which we may invest on behalf of clients that is not known to the investing public. AB employees must maintain the confidentiality of such information. If a reasonable investor would consider this information important in reaching an investment decision, the AB employee or director with this information must not buy or sell securities of any of the companies in question or give this information to another person who trades in such securities. This rule is very important, and AB has adopted the following three specific policies that address it: Policy and Procedures Concerning Purchases and Sales of AB Units, Policy and Procedures Concerning Purchases and Sales of AB Closed-End Mutual Funds, and Policy and Procedures Regarding Insider Trading and Control of Material Nonpublic Information (collectively, the "AB Insider Trading Policies"). A copy of the AB Insider Trading Policies may be found on the Legal and Compliance Department intranet site. All AB employees and directors are required to be familiar with these policies[<sup>2</sup>](#page_12)and to abide by them.

**7. Personal Trading: Summary of Restrictions**

AB recognizes the importance to its employees and directors of being able to manage and develop their own and their dependents' financial resources through long-term investments and strategies. However, because of the potential conflicts of interest inherent in our business, our industry and AB have implemented certain standards and limitations designed to minimize these conflicts and help ensure that we focus on meeting our duties as a fiduciary for our clients. As a general matter, AB discourages personal investments by employees in individual securities and encourages personal investments in managed collective vehicles, such as mutual funds.

AB senior management believes it is important for employees to align their own personal interests with the interests of our clients. **Consequently, employees are encouraged to invest in the mutual fund products and services offered by AB, where available and appropriate**.

The policies and procedures for personal trading are set forth in full detail in the AB Personal Trading Policies and Procedures, included in the Code as Appendix A. The following is a summary of the major requirements and restrictions that apply to personal trading by employees, their immediate family members and other financial dependents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Employees must disclose all of their securities accounts to the Legal and Compliance Department;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Employees may maintain securities accounts only at specified designated broker-dealers (exceptions may apply outside of the U.S.);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Employees must pre-clear all securities trades with the Legal and Compliance Department (via the StarCompliance Code of Ethics application) prior to placing trades with their broker-dealer (prior supervisory approval is required for portfolio managers, research analysts, traders, persons with access to AB research, and others designated by the Legal and Compliance Department);

Employees may only make twenty trades in individual securities during any rolling thirty calendar-day period;

2The subject of insider trading will be covered in various Compliance training programs and materials.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Employee purchases of individual securities, ETFs, ETNs, and closed-end mutual funds (as well as AB managed open-end funds) are subject to a 60-day holding period (6 months for AB Japan Ltd.);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Employees may not engage in short-term trading of a mutual fund in violation of that fund's short- term trading policies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Employees may not participate in initial public offerings of equity securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Employees must get written approval, and make certain representations, in order to participate in limited or private offerings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Employees must submit initial and annual holding reports, disclosing all securities and holdings in mutual funds managed by AB held in personal accounts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Employees must, on a quarterly basis, submit or confirm reports identifying all transactions in securities (and mutual funds managed by AB) in personal accounts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Legal and Compliance Department has the authority to deny:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Any personal trade by an employee if the security is being considered for purchase or sale in a client account, there are open orders for the security on a trading desk, or the security appears on any AB restricted list;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Any short sale by an employee for a personal account if the security is being held long in AB - managed portfolios; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Any personal trade by a portfolio manager or research analyst in a security that is subject to a blackout period as a result of client portfolio trading or recommendations to clients.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Separate requirements and restrictions apply to Directors who are not employees of AB, as explained in further detail in the AB Personal Trading Policies and Procedures, Appendix A of this document.

This summary should not be considered a substitute for reading, understanding, and complying with the detailed restrictions and requirements that appear in the AB Personal Trading Policies and Procedures, included as Appendix A to the Code.

**8. Outside Directorships and Other Outside Activities and Interests**

Although activities outside of AB are not necessarily a conflict of interest, a conflict may exist depending upon your position within AB and AB's relationship with the particular activity in question. Outside activities may also create a potential conflict of interest if they cause an AB employee to choose between that interest and the interests of AB or any client of AB. AB recognizes that the guidelines in this Section are not applicable to directors of AB who do not also serve in management positions within AB.

**Important Note for Research Analysts:** Notwithstanding the standards and prohibitions that follow in this section, any employee who acts in the capacity of a research analyst is prohibited from serving on any board of directors or trustees or in any other capacity with respect to any company, public or private, whose business is directly or indirectly related to the industry covered by that research analyst.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)Board Member or Trustee**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.AB employees are prohibited from serving on any board of directors or trustees or in any other management capacity of any unaffiliated public company. However, under certain limited circumstances, Compliance will consider exceptions to this prohibition where the employee has received prior written approval from both AB's Chief Executive Officer and their supervisor. Once the necessary business approvals have been obtained, the employee must submit an <u>Outside Business Activities Approval Form</u> for review and approval by Compliance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii.No AB employee shall serve on any board of directors or trustees or in any other management capacity of any private company (other than not-for-profit organizations, see below) without prior written approval from the employee's supervisor and Compliance Department via an *Outside Business Activities Approval Form*. This approval is also subject to review by, and may require the approval of, AB's Chief Executive Officer. The decision as to whether to grant such authorization will be based on a determination that such service would not be inconsistent with the interests of any client, as well as an analysis of the time commitment and potential personal liabilities and responsibilities associated with the outside affiliation.[<sup>3</sup>](#page_14)**Any AB employee who serves as a director, trustee or in any other management capacity of any private company must resign that position prior to the company becoming a publicly traded company**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii.**Not-for-Profit Organizations**: Generally, no approval is required to serve as a trustee/board member of not-for-profit organizations such as religious organizations, foundations, educational institutions, co-ops, private clubs etc., provided that (a) the organization has not issued, and does not have future plans to issue, publicly held securities, including debt obligations; and/or (b) the employee does not act in any investment-related advisory capacity (i.e., any direct or indirect role relating to investment advice or choosing investment advisers; serving on investment committee).[<sup>4</sup>](#page_14)If the employee does act in such a capacity, or the organization has issued or plans to issue, public securities, the <u>Not-For-Profit Activities Disclosure Form</u> must be submitted and approved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv.This approval requirement applies regardless of whether an AB employee plans to serve as a director of an outside business organization (1) in a personal capacity or (2) as a representative of AB or of an entity within the AB Group holding a corporate board seat on the outside organization (e.g., where AB or its clients may have a significant but non- controlling equity interest in the outside company).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v.New employees with pre-existing relationships are required to resign from the boards of public companies and seek and obtain the required approvals to continue to serve on the boards of private companies.

3Such authorization requires an agreement on the part of the employee to not hold him or herself out as acting on behalf of AB

(or any affiliate) and to use best efforts to ensure that AB's name (or that of any AB affiliated company) is not used in connection with the proposed affiliation (other than in a "bio" section), and in particular, activities relating to fundraising or to the advancement of a specific entity mission or agenda.

4Indeed, AB recognizes that its employees often engage in community service in their local communities and engage in a variety of charitable activities, and it commends such service. However, it is the duty of every AB employee to ensure that all outside activities, even charitable or pro bono activities, do not constitute a conflict of interest or are not otherwise inconsistent with employment by AB. Accordingly, although no approval is required, each employee must use his/her best efforts to ensure that the organization does not use the employee's affiliation with AllianceBernstein, including his/her corporate title, in any promotional (other than a "bio" section) or fundraising activities, or to advance a specific mission or agenda of the entity. Such positions also must be reported to the firm pursuant to other periodic requests for information (e.g., the AB 10-K questionnaire).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)Other Affiliations**

AB discourages employees from committing to secondary employment, particularly if it poses any conflict in meeting the employee's ability to satisfactorily meet all job requirements and business needs. Before an AB employee accepts a second job, that employee must:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Complete and submit an <u>Outside Business Activities Approval Form</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Ensure that AB's business takes priority over the secondary employment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Ensure that no conflict of interest exists between AB's business and the secondary employment (see also footnote 3); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Require no special accommodation for late arrivals, early departures, or other special requests associated with the secondary employment.

For employees associated with any of AB's registered broker-dealer subsidiaries, written approval of the Chief Compliance Officer for the subsidiary is also required.<sup>5</sup> New employees with pre- existing relationships are required to ensure that their affiliations conform to these restrictions, and must obtain the requisite approvals. On a periodic basis, such employees will be required to confirm that the circumstances of the approved activities have not changed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)Outside Financial or Business Interests**

AB employees should be cautious with respect to personal investments that may lead to conflicts of interest or raise the appearance of a conflict. Conflicts of interest in this context may arise in cases where an AB employee, a member of his or her family, or a close personal acquaintance, holds a substantial interest in a company that has significant dealings with AB or any of its subsidiaries either on a recurring or "one-off" basis. For example, holding a substantial interest in a family-controlled or other privately-held company that does business with, or competes against, AB or any of its subsidiaries may give rise to a conflict of interest or the appearance of a conflict. In contrast, holding shares in a widely held public company that does business with AB from time to time may not raise the same types of concerns. Prior to making any such personal investments, AB employees must pre-clear the transaction, in accordance with the Personal Trading Policies and Procedures, attached as Appendix A of this Code, and should consult as appropriate with their supervisor, the Conflicts Officer, General Counsel, Chief Compliance Officer or other representative of the Legal and Compliance Department.

AB employees should also be cautious with respect to outside business interests that may create divided loyalties, divert substantial amounts of their time and/or compromise their independent judgment. If a conflict of interest situation arises, you should report it to your supervisor, the Conflicts Officer, General Counsel, Chief Compliance Officer and/or other representative of AB's Human Capital or Legal and Compliance Department. Business transactions that benefit relatives or close personal friends, such as awarding a service contract to them or a company in which they have a controlling or other significant interest, may also create a conflict of interest or the appearance of a conflict. AB employees must consult their supervisor and/or the Conflicts Officer, General Counsel, Chief Compliance Officer or other representative of AB's Human Capital or Legal and Compliance Department before entering into any such transaction. New employees that have outside financial or business interests (as described herein) should report them as required and bring them to the attention of their supervisor immediately.

5In the case of AB subsidiaries that are holding companies for consolidated subgroups, unless otherwise specified by the holding company's Chief Executive Officer, this approval may be granted by the Chief Executive Officer or Chief Financial

Officer of each subsidiary or business unit within such a consolidated subgroup.

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**9. Gifts, Entertainment, and Inducements**

Business gifts and entertainment are designed to build goodwill and sound working relationships among business partners. However, under certain circumstances, gifts, entertainment, favors, benefits, and/or job offers may be or appear to be attempts to "purchase" favorable treatment. Accepting or offering such inducements could raise doubts about an AB employee's ability to make independent business judgments in our clients' or AB's best interests. For example, a problem would arise if (i) the receipt by an AB employee of a gift, entertainment or other inducement would compromise, or could be reasonably viewed as compromising, that individual's ability to make objective and fair business decisions on behalf of AB or its clients, or (ii) the offering by an AB employee of a gift, entertainment or other inducement appears to be an attempt to obtain business through improper means or to gain any special advantage in our business relationships through improper means.

These situations can arise in many different circumstances (including with current or prospective suppliers and clients) and AB employees should keep in mind that certain types of inducements may constitute illegal bribes, pay-offs or kickbacks. In particular, the rules of various securities regulators place specific constraints on the activities of persons involved in the sales and marketing of securities. AB has adopted the <u>Policy and Procedures for Giving and Receiving Gifts</u> <u>and Entertainment</u> to address these and other matters. AB employees must familiarize themselves with this policy and comply with its requirements, which include reporting the acceptance of most business meals, gifts and entertainment to the Compliance Department. A copy of this policy can be found on the Legal and Compliance Department intranet site, and will be supplied by the Compliance Department upon request.

Each AB employee must use good judgment to ensure there is no violation of these principles. If you have any question or uncertainty about whether any gifts, entertainment or other types of inducements are appropriate, please contact your supervisor or a representative of AB's Legal and Compliance Department and/or the Conflicts Officer, as appropriate. If you feel uncomfortable utilizing the normal channels, issues may be brought to the attention of the Company Ombudsman, who is a neutral, independent, informal and confidential resource to assist employees with concerns about AB business matters that may implicate issues of ethics or questionable practices. Please see Section 25 for additional information on the Company Ombudsman.

10. Compliance with Anti-Corruption Laws

AB employees should be aware that AB strictly prohibits the acceptance, offer, payment or authorization, whether directly or via a third party, of any bribe, and any other form of corruption, whether involving a government official or an employee of a public or private commercial entity. Therefore, it is the responsibility of all AB employees to adhere to all applicable anti-corruption laws and regulations in the jurisdictions in which they do business, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and similar international laws regulating payments to public and private sector individuals (collectively, the "Anti-Corruption Laws").

We expect all AB employees to refuse to make or accept questionable and/or improper payments. As a component of this commitment, no AB employee may give money, gifts, or anything else of value (which include providing jobs or internships) to any official or any employee of a governmental or commercial entity if doing so could reasonably be construed as an attempt to provide AB with an improper business advantage. In addition, any proposed payment or gift to a government official, including employees of government-owned or controlled enterprises (e.g., sovereign wealth and pension funds, public utilities, and national banks), must be reviewed in advance by a representative of the Legal and Compliance Department, even if such payment is common in the country of payment (see discussion of the Anti-Corruption Laws below and in the firm's <u>Anti- Bribery and Corruption Policy</u>). AB employees should be aware that they do not actually have to make the payment to violate AB's policy and the law — merely offering, promising or authorizing it will be considered a violation.

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In order to ensure that AB fully complies with the requirements of the Anti-Corruption Laws, employees must be familiar with the firm's <u>Anti-Bribery and Corruption Policy</u>. Generally, the Anti-Corruption Laws make it illegal (with civil and criminal penalties) for AB, and its employees and agents, to provide anything of value to public or private sector employees, directly or indirectly, for the purpose of obtaining an improper business advantage (which can include improperly securing government licenses and permits). Accordingly, the use of AB funds or assets (or those of any third party) to make a payment directly or through another person or company for any illegal, improper and/or corrupt purpose is strictly prohibited.

It is often difficult to determine at what point a business courtesy extended to another person crosses the line into becoming excessive, and what ultimately could be considered a bribe. Therefore, no entertainment or gifts may be offered to, or travel or hotel expenses paid for, any public official, including employees of government- owned or controlled enterprises, under any circumstances, without the express prior written approval (e-mail correspondence is acceptable) of the General Counsel, Chief Compliance Officer, or their designees in the Legal and Compliance Department.

11. Political Contributions/Activities

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)By or on behalf of AB**

Election laws in many jurisdictions generally prohibit political contributions by corporations to candidates. Many local laws also prohibit corporate contributions to local political campaigns. In accordance with these laws, AB does not make direct contributions to any candidates for national or local offices where applicable laws make such contributions illegal. In these cases, contributions to political campaigns must not be, nor appear to be, made with or reimbursed byAB assets or resources. AB assets and resources include (but are not limited to) AB facilities, personnel, office supplies, letterhead, telephones, electronic communication systems and fax machines. This means that AB office facilities may not be used to host receptions or other events for political candidates or parties which include any fund raising activities or solicitations. In limited circumstances, AB office facilities may be used to host events for public office holders as a public service, but only where steps have been taken (such as not providing to the office holder a list of attendees) to avoid the facilitation of fund raising solicitations either during or after the event, and where the event has been pre-approved in writing by the General Counsel or Deputy General Counsel.

Please see the <u>Policy and Procedures for Giving and Receiving Gifts and Entertainment</u>, which can be found on the Legal and Compliance Department intranet site, for a discussion relating to political contributions suggested by clients.

Election laws in many jurisdictions allow corporations to establish and maintain political action or similar committees, which may lawfully make campaign contributions. AB or companies affiliated with AB may establish such committees or other mechanisms through which AB employees may make political contributions, if permitted under the laws of the jurisdictions in which they operate. Any questions about this policy should be directed to the General Counsel or Chief Compliance Officer.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)By Employees / Directors**

AB employees who hold or seek to hold political office must do so on their own time, whether through vacation, after work hours or on weekends. Additionally, the employee must notify the General Counsel or Chief Compliance Officer prior to running for political office to ensure that there are no conflicts of interest with AB business.

AB employees may make **personal political contributions** as they see fit in accordance with all applicable laws and the guidelines in the <u>Policy and Procedures for Giving and Receiving</u> <u>Gifts and Entertainment</u> , the <u>Pay-to-Play: Political Contributions Policy,</u> as well as the **pre- clearance requirement** as described below.

Certain employees involved with the offering or distribution of municipal fund securities (e.g., a"529 Plan") or acting as a director for certain subsidiaries must also adhere to the restrictions and reporting requirements of the Municipal Securities Rulemaking Board.

Several (U.S.) states and localities have enacted "pay-to-play" laws. Some of these laws could prohibit AB from entering into a government contract for a certain number of years if a covered employee makes or solicits a covered contribution. Other jurisdictions require AB to report contributions made by certain employees, without the accompanying ban on business. In certain jurisdictions, the laws also cover the activities of the spouse and dependent children of the covered person. **In response to these laws, in addition to SEC Rule 206(4)-5, which also prohibits certain political contributions, AB has in place a pre-clearance requirement, under which all employees must pre-clear with the Compliance Department through StarCompliance, all personal political contributions (including those of their spouses and dependent children) made to, or solicited on behalf of, any (U.S.) federal, state or local candidate or political party.**

Similarly, members of the AB Board of Directors are covered by the Policy Regarding Pre- Clearance of Personal Political Contributions by AllianceBernstein Directors, which also requires that they pre-clear with the Compliance Department all personal political contributions (including those of their spouses and dependent children) made to, or solicited on behalf of, any U.S. federal, state or local candidate or political party.

12. "Ethical Wall" Policy

AB has established a policy entitled Insider Trading and Control of Material Non-Public Information("<u>Ethical Wall Policy</u>"), a copy of which can be found on the Legal and Compliance Department intranet site. This policy was established to prevent the flow of material non-public information about a listed company or its securities from AB employees who receive such information in the course of their employment to those AB employees performing investment management activities. If "Ethical Walls" are in place, AB's investment management activities may continue despite the knowledge of material non-public information by other AB employees involved in different parts of

AB's business. "Investment management activities" involve making, participating in, or obtaining information regarding purchases or sales of securities of public companies or making, or obtaining information about, recommendations with respect to purchases or sales of such securities. Given AB's extensive investment management activities, it is very important for AB employees to familiarize themselves with AB's Ethical Wall Policy and abide by it.

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13. Use of Client Relationships

As discussed previously, AB owes fiduciary duties to each of our clients. These require that our actions with respect to client assets or vendor relationships be based solely on the clients' best interests and avoid any appearance of being based on our own self-interest. Therefore, we must avoid using client assets or relationships to inappropriately benefit AB.

Briefly, AB regularly acquires services directly for itself, and indirectly on behalf of its clients (e.g., brokerage, investment research, custody, administration, auditing, accounting, printing and legal services). Using the existence of these relationships to obtain discounts or favorable pricing on items purchased directly for AB or for clients other than those paying for the services may create conflicts of interest. Accordingly, business relationships maintained on behalf of our clients may not be used to leverage pricing for AB when acting for its own account unless all pricing discounts and arrangements are shared ratably with those clients whose existing relationships were used to negotiate the arrangement and the arrangement is otherwise appropriate under relevant legal/regulatory guidelines. For example, when negotiating printing services for the production of AB's Form 10-K and annual report, we may not ask the proposed vendor to consider the volume of printing business that they may get from AB on behalf of the investment funds we manage when proposing a price. On the other hand, vendor/service provider relationships with AB may be used to leverage pricing on behalf of AB's clients.

In summary, while efforts made to leverage our buying power are good business, efforts to obtain a benefit for AB as a result of vendor relationships that we structure or maintain on behalf of clients may create conflicts of interest, which should be escalated to your line manager and Compliance so that they can be reviewed and addressed.

14. Corporate Opportunities and Resources

AB employees owe a duty to AB to advance the firm's legitimate interests when the opportunity todo so arises and to use corporate resources exclusively for that purpose. Corporate opportunities and resources must not be taken or used for personal gain or promotion. AB employees are prohibited from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Taking for themselves personally opportunities that are discovered through the use of company property, information or their position;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Using company property, information, resources, or their company position for personal gain or promotion;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Creating personal websites related to the financial services industry or which promote themselves and their skills based on their responsibilities at AB;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Using company property, information or their company position on personal websites or social media platforms (e.g. YouTube, Twitter, LinkedIn, Facebook, etc.) or other marketing channels in a way that is inconsistent with AB's Use of Social Media Policy; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Competing with AB directly or indirectly.

Please also refer to the <u>Policy and Procedures for Giving and Receiving Gifts and Entertainment</u>, <u>and its Appendix B, the</u> <u>Code of Conduct Regarding the Purchase of Products and Services on Behalf of AB and its Clients</u><u>, which can be found on the Legal and Compliance Department intranet site.</u>

<u>AB directors also owe AB a duty of loyalty, which requires, among other things, that they may not misappropriate company opportunities or</u> misuse company assets for their personal benefit.

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15. Antitrust and Fair Dealing

AB believes that the welfare of consumers is best served by economic competition. Our policy isto compete vigorously, aggressively, and successfully in today's increasingly competitive business climate and to do so at all times in compliance with all applicable antitrust, competition and fair dealing laws in all the markets in which we operate. We seek to excel while operating honestly and ethically, never through taking unfair advantage of others. Each AB employee should endeavor to deal fairly with AB's customers, suppliers, competitors, and other AB employees. No one should take unfair advantage through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing practices.

The antitrust laws of many jurisdictions are designed to preserve a competitive economy and promote fair and vigorous competition. We are all required to comply with these laws and regulations. AB employees involved in marketing, sales and purchasing, contracts or in discussions with competitors have a particular responsibility to ensure that they understand our standards and are familiar with applicable competition laws. Because these laws are complex and can vary from one jurisdiction to another, AB employees are urged to seek advice from the General Counsel, Chief Compliance Officer or Corporate Secretary if questions arise. Please also refer to the Policy and Procedures for Giving and Receiving Gifts and Entertainment, which can be found on the Legal and Compliance Department intranet site, for a discussion relating to some of these issues.

16. Recordkeeping and Retention

Properly maintaining and retaining company records is of the utmost importance. AB employees are responsible for ensuring that AB's business records are properly maintained and retained in accordance with applicable laws and regulations in the jurisdictions where it operates. AB Employees should familiarize themselves with these laws and regulations. Please see the Record Retention Policy on the Legal and Compliance intranet site for more information.

17. Improper Influence on Conduct of Audits

AB employees, and persons acting under their direction, are prohibited from taking any action to coerce, manipulate, mislead, hinder, obstruct or fraudulently influence any external auditor, internal auditor or regulator engaged in the performance of an audit or review of AB's financial statements and/or procedures. AB employees are required to cooperate fully with any such auditor review.

The following is a non-exhaustive list of actions that might constitute improper influence:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Offering or paying bribes or other financial incentives to an auditor, including offering future employment or contracts for audit or non-audit services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Knowingly providing an internal or external auditor or regulator with inaccurate or misleading data or information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Threatening to cancel or canceling existing non-audit or audit engagements if the auditor objects to the company's accounting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Seeking to have a partner or other team member removed from the audit engagement because such person objects to the company's accounting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Knowingly altering, tampering or destroying company documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Knowingly withholding pertinent information; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Knowingly providing incomplete information.

Under the (U.S.) Sarbanes Oxley Law, any false statement -- that is, any lie or attempt to deceive an investigator -- may result in criminal prosecution.

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18. Accuracy of Disclosure

Securities and other laws impose public disclosure requirements on AB and require it to regularly file reports and financial information and make other submissions to various regulators and stock market authorities around the globe. Such reports and submissions must comply with all applicable legal requirements and may not contain misstatements or omit material facts.

AB employees who are directly or indirectly involved in preparing such reports and submissions, or who regularly communicate with the press, investors and analysts concerning AB, must ensure within the scope of the employee's job activities that such reports, submissions and communications are (i) full, fair, timely, accurate and understandable, and (ii) meet applicable legal requirements. This applies to all public disclosures, oral statements, visual presentations, press conferences and media calls concerning AB, its financial performance and similar matters. In addition, members of AB's Board, executive officers and AB employees who regularly communicate with analysts or actual or potential investors in AB securities are subject to the AB <u>Regulation FD Compliance Policy</u>. A copy of the policy can be found on the Legal and Compliance Department intranet site.

19. Confidentiality

Subject to Section 23, AB employees must maintain the confidentiality of sensitive non-public and other confidential information entrusted to them by AB or its clients and vendors and must not disclose such information to any persons except when disclosure is authorized by AB or mandated by regulation or law. However, disclosure may be made to (1) other AB employees who have a bona fide "need to know" in connection with their duties, (2) persons outside AB (such as attorneys, accountants or other advisers) who need to know in connection with a specific mandate or engagement from AB or who otherwise have a valid business or legal reason for receiving it and have executed appropriate confidentiality agreements, or (3) regulators pursuant to an appropriate written request (see Section 22).

Confidential information includes all non-public information that might be of use to competitors, or harmful to AB or our clients and vendors, if disclosed. The identity of certain clients may also be confidential. Intellectual property (such as confidential product information, trade secrets, patents, trademarks, and copyrights), business, marketing and service plans, databases, records, salary information, unpublished financial data and reports as well as information that joint venture partners, suppliers or customers have entrusted to us are also viewed as confidential information. Please note that the obligation to preserve confidential information continues even after employment with AB ends.

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To safeguard confidential information, AB employees should observe at least the following procedures:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Special confidentiality arrangements may be required for certain parties, including outside business associates and governmental agencies and trade associations, seeking access to confidential information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Papers relating to non-public matters should be appropriately safeguarded;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Appropriate controls for the reception and oversight of visitors to sensitive areas should be implemented and maintained;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Document control procedures, such as numbering counterparts and recording their distribution, should be used where appropriate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If an AB employee is out of the office in connection with a material non-public transaction, staff members should use caution in disclosing the AB employee's location;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Sensitive business conversations, whether in person or on the telephone, should be avoided in public places and care should be taken when using portable computers and similar devices in public places; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•E-mail messages and attachments containing material non-public information should be treated with similar discretion (including encryption, if appropriate), and recipients should be made aware of the need to exercise similar discretion.

Nothing herein, or in any contractual confidentiality provision to which any employee is subject, prohibits employees from reporting possible violations of law or regulation to any governmental agency or entity, or self- regulatory authority, or from making other disclosures that are protected under the whistleblower provisions of state or federal law or regulation. Employees do not need AB's prior authorization to make any such reports or disclosures and are not required to notify AB that they have made such reports or disclosures.

Please see the <u>Privacy Policy</u> on the Legal and Compliance intranet site for more information.

20. Protection and Proper Use of AB Assets

AB employees have a responsibility to safeguard and make proper and efficient use of AB's property. Every AB employee also has an obligation to protect AB's property from loss, fraud, damage, misuse, theft, embezzlement or destruction. Acts of fraud, theft, loss, misuse, carelessness and waste of assets may have a direct impact on AB's profitability. Any situations or incidents that could lead to the theft, loss, fraudulent or other misuse or waste of AB property should be reported to your supervisor or a representative of AB's Human Capital or Legal and Compliance Department as soon as they come to an employee's attention. Should an employee feel uncomfortable utilizing the normal channels, issues may be brought to the attention of the Company Ombudsman, who is a neutral, independent, informal and confidential resource to assist employees with concerns about AB business matters that may implicate issues of ethics or questionable practices. Please see Section 24 for additional information on the Company Ombudsman.

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21. Policy on Intellectual Property

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Overview

Ideas, inventions, discoveries, and other forms of so-called "intellectual property" are becoming increasingly important to all businesses, including ours. Recently, financial services companies have been applying for and obtaining patents on their financial product offerings and "business methods" for both offensive and defensive purposes. For example, business method patents have been obtained for information processing systems, data gathering and processing systems, billing and collection systems, tax strategies, asset allocation strategies and various other financial systems and strategies. The primary goals of the AB policy on intellectual property are to preserve our ability to use our own proprietary business methods, protect our IP investments and reduce potential risks and liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)Employee Responsibilities**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•New Products and Methods. Employees must maintain detailed records and all work papers related to the development of new products and methods in a safe and secure location.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Trademarks. Clearance must be obtained from the Legal and Compliance Department before any new word, phrase or slogan, which we consider proprietary and in need of trademark protection, is adopted or used in any written materials. To obtain clearance, the proposed word, phrase or slogan and a brief description of the products or services for which it is intended to be used should be communicated to the Legal and Compliance Department sufficiently well in advance of any actual use in order to permit any necessary clearance investigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)Company Policies and Practices**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Ownership. Employees acknowledge that any discoveries, inventions, or improvements

(collectively, "Inventions") made or conceived by them in connection with, and during the course of, their employment belong, and automatically are assigned, to AB. AB can keep any such Inventions as trade secrets or include them in patent applications, and Employees will assist AB in doing so. Employees agree to take any action requested by AB, including the execution of appropriate agreements and forms of assignment, to evidence the ownership by AB of any such Invention.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Use of Third Party Materials. In performing one's work for, or on behalf of AB, Employees will not knowingly disclose or otherwise make available, or incorporate anything that is proprietary to a third party without obtaining appropriate permission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Potential Infringements. Any concern regarding copyright, trademark, or patent infringement should be immediately communicated to the Legal and Compliance Department. Questions of infringement by AB will be investigated and resolved as promptly as possible.

By certifying in accordance with Section 26 of this Code, the individual subject to this Code agrees to comply with AB's policies and practices related to intellectual property as described in this Section 20.

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22. Exceptions from the Code

In addition to the exceptions contained within the specific provisions of the Code, the General Counsel, Chief Compliance Officer (or his or her designee) may, in very limited circumstances, grant other exceptions under any Section of this Code on a case-by-case basis. In these situations, the following may be required as deemed necessary considering the circumstances:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)Written Statement and Supporting Documentation**

The individual seeking the exception may need to furnish to the Chief Compliance Officer, or designee, as applicable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)A written statement detailing the request or efforts made to comply with the requirement from which the individual seeks an exception;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)A written statement containing a representation and warranty that (i) compliance with the requirement would impose a severe undue hardship on the individual and (ii) the exception would not, in any manner or degree, harm or defraud a client, violate the general principles herein or compromise the individual's or AB's fiduciary duty to any client; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Any supporting documentation that the Chief Compliance Officer may require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)Compliance Interview**

The Chief Compliance Officer (or designee) may conduct an interview with the individual or take such other steps deemed appropriate in order to determine whether granting the exception will not, in any manner or degree, harm or defraud a client, violate the general principles herein or compromise the individual's or AB's fiduciary duty to any client; and shall maintain all written statements and supporting documentation, as well as documentation of the basis for granting the exception.

**<u>PLEASE NOTE:</u>** To the extent required by law or NYSE rule, any waiver or amendment of this Code for AB's executive officers (including AB's Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer) or directors shall be made at the discretion of the Board of AllianceBernstein Corporation and promptly disclosed to the unitholders of AllianceBernstein Holding pursuant to Section 303A.10 of the NYSE Exchange Listed Company Manual.

**23. Regulatory Inquiries**, Investigations and Litigation

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)Requests for Information**

Governmental agencies and regulatory organizations may from time to time conduct surveys or make inquiries that request information about AB, its customers or others that generally would be considered confidential or proprietary.

All regulatory inquiries concerning AB are to be handled by the Chief Compliance Officer or General Counsel. Employees receiving such inquiries should refer such matters immediately to the Legal and Compliance Department.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)Types of Inquiries**

Regulatory inquiries may be received by mail, e-mail, telephone or personal visit. In the case of a personal visit, demand may be made for the immediate production or inspection of documents. While any telephone or personal inquiry should be handled in a courteous manner, the caller or visitor should be informed that responses to such requests are the responsibility of

AB's Legal and Compliance Department. Therefore, the visitor should be asked to wait briefly while a call is made to the Chief Compliance Officer or General Counsel for guidance on how to proceed. In the case of a telephone inquiry, the caller should be referred to the Chief Compliance Officer or General Counsel or informed that his/her call will be promptly returned. Letter or e-mail inquiries should be forwarded promptly to the Chief Compliance Officer or General Counsel, who will provide an appropriate response.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)Responding to Information Requests**

Subject to Section 23, under no circumstances should any documents or material be released to a regulator without prior approval of the Chief Compliance Officer or General Counsel.

Likewise, no employee should have substantive discussions with any regulatory personnel without prior consultation with either of these individuals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d)Use of Outside Counsel**

It is the responsibility of the Chief Compliance Officer or General Counsel to retain and provide information to AB's outside counsel in those instances deemed appropriate and necessary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(e)Regulatory Investigation**

Any employee that is notified that they are the subject of a regulatory investigation, whether in connection with his or her activities at AB or at a previous employer, must immediately notify the Chief Compliance Officer or General Counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(f)Litigation**

Any receipt of service or other notification of a pending or threatened action against the firm should be brought to the immediate attention of the General Counsel or Chief Compliance Officer. These individuals also should be informed of any instance in which an employee is sued in a matter involving his/her activities on behalf of AB. Notice also should be given to either of these individuals upon receipt of a subpoena for information from AB relating to any matter in litigation or receipt of a garnishment lien or judgment against the firm or any of its clients or employees. The General Counsel or Chief Compliance Officer will determine the appropriate response.

**24. Compliance** and Reporting of Misconduct / "Whistleblower" Protection

No Code can address all specific situations. Accordingly, each AB employee is responsible for applying the principles set forth in this Code in a responsible fashion and with the exercise of good judgment and common sense. Whenever uncertainty arises, an AB employee should seek guidance from an appropriate supervisor or a representative of Human Capital or the Legal and Compliance Department before proceeding.

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All AB employees should promptly report any practices or actions the employee believes to be inappropriate or inconsistent with any provisions of this Code. In addition, all employees <u>must</u> promptly report any actual violations of the Code to the General Counsel, the Chief Compliance Officer or a designee. Any person reporting a violation in good faith, or asserting any right provided by law or in exercising their duties as set forth in our policies, will be protected against reprisals. If you have information about Code or other AB policy violations or potentially illegal or unethical activity, visit the Legal & Compliance Loop site for further information or visit <u>https://secure.ethicspoint.com/domain/media/en/gui/44414/index.html</u>.

If you feel uncomfortable utilizing the formal channels, issues may be brought to the attention of the Company Ombudsman, who is a neutral, independent, informal and confidential resource to assist employees with concerns about AB business matters that may implicate issues of ethics or questionable practices. Please see Section 24 for additional information on the Company Ombudsman.

Nothing herein, or in any contractual confidentiality provision to which any employee is subject, prohibits employees from reporting possible violations of law or regulation to any governmental agency or entity, or self-regulatory authority, or from making other disclosures that are protected under the whistleblower provisions of state or federal law or regulation. Employees do not need AB's prior authorization to make any such reports or disclosures and are not required to notify AB that they have made such reports or disclosures.

**25. Company** Ombudsman

AB's Company Ombudsman provides a neutral, confidential, informal and independent communications channel where any AB employee can obtain assistance in surfacing and resolving work-related issues. The primary purpose of the Ombudsman is to help AB:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Safeguard its reputation and financial, human and other company assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Maintain an ethical and fiduciary culture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Demonstrate and achieve its commitment to "doing the right thing;" and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Comply with relevant provisions of the Sarbanes-Oxley Act of 2002, the U.S. Sentencing

Guidelines, as well as AB's 2003 SEC Order, New York Stock Exchange Rule 303A.10 and other laws, regulations and policies.

The Ombudsman seeks to provide early warnings and to identify changes that will prevent malfeasance and workplace issues from becoming significant or recurring. The Ombudsman has a reporting relationship to the AB CEO, the Audit Committee of the Board of Directors of AllianceBernstein Corporation and independent directors of AB's U.S. mutual fund boards.

Any type of work-related issue may be brought to the Ombudsman, including potential or actual financial malfeasance, security matters, inappropriate business practices, compliance issues, unethical behavior, violations of law, health and safety issues, and employee relations issues. The Ombudsman supplements but does not replace existing formal channels for reporting work- related issues, such as Human Capital, Legal and Compliance, Internal Audit and line management.

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**26. Sanctions**

Upon learning of a violation of this Code, any member of the AB Group, with the advice of the General Counsel, the Chief Compliance Officer and/or the AB Code of Ethics Oversight Committee, may impose such sanctions as such member deems appropriate, including, among other things, restitution, censure, suspension or termination of service. Persons subject to this Code who fail to comply with it may also be violating the U.S. federal securities laws or other federal, state or local laws within their particular jurisdictions.

**27. Annual** Certifications

Each person subject to this Code must certify at least annually to the Chief Compliance Officer that he or she has read and understands the Code, recognizes that he or she is subject hereto and has complied with its provisions and disclosed or reported all personal securities transactions and other items required to be disclosed or reported under the Code. The Chief Compliance Officer may require interim certifications for significant changes to the Code.

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**APPENDIX A**

**ALLIANCEBERNSTEIN L.P.**

<u>PERSONAL TRADING POLICIES AND PROCEDURES</u>

**1. Overview**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)Introduction**

AB recognizes the importance to its employees of being able to manage and develop their own and their dependents' financial resources through long-term investments and strategies. However, because of the potential conflicts of interest inherent in our business, our industry and AB have implemented certain standards and limitations designed to minimize these conflicts and help ensure that we focus on meeting our duties as a fiduciary for our clients. **Employees should be aware that their ability to liquidate positions may be severely restricted under these policies, including during times of market volatility**. Therefore, as a general matter, AB discourages personal investments by employees in individual securities and encourages personal investments in managed collective vehicles, such as mutual funds.

AB senior management believes it is important for employees to align their own personal interests with the interests of our clients. **Consequently, employees are encouraged to invest in the mutual fund products and services offered by AB, where available and appropriate**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)Definitions**

The following definitions apply for purposes of this Appendix A of the Code; however additional definitions are contained in the text itself.[<sup>1</sup>](#page_28)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.**"AllianceBernstein" or "AB"** mean AllianceBernstein L.P., its subsidiaries and its joint venture entities.

**"Beneficial Ownership"** is interpreted in the same manner as in determining whether a person is subject to the provisions of Section 16 of the Securities Exchange Act of 1934 ("Exchange Act"), Rule 16a-1 and the other rules and regulations thereunder and includes ownership by any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares a direct or indirect pecuniary interest in a Security. For example, an individual has an indirect pecuniary interest in any Security owned bythe individual's spouse. Beneficial Ownership also includes, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, having or sharing "voting power" or "investment power," as those terms are used inSection 13(d) of the Exchange Act and Rule 13d-3 thereunder.

1Due to the importance that AB places on promoting responsible personal trading, we have applied the definition of "access person," as used in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, and related requirements to all AB employees and officers. We have drafted special provisions for directors of AB who are not also employees of AB.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

2.**"Client"** means any person or entity, including an investment company, for which AB serves as investment manager or adviser.

3.**"Chief Compliance Officer"** refers to AB's Chief Compliance Officer.

4.**"Code of Ethics Oversight Committee**" refers to the committee of AB's senior officers that is responsible for monitoring compliance with the Code.

5.**"Conflicts Officer"** refers to AB's Conflicts Officer, who reports to the Chief

Compliance Officer.

6.**"Control"** has the meaning set forth in Section 2(a)(9) of the 1940 Act.

7.**"Director"** means any person who serves in the capacity of a director of AllianceBernstein Corporation. **"Affiliated Outside Director"** means any Director who is not an Employee (as defined below) but who is an employee of an entity affiliated with AB. **"Outside Director"** means any Director who is neither an Employee (as defined below) nor an employee of an entity affiliated with AB.

8.**"Employee"** refers to any person who is an employee or officer of AB, including part- time employees and consultants (acting in the capacity of a portfolio manager, trader or research analyst, or others at the discretion of the Compliance Department) under the Control of AB.

9.**"Initial Public Offering"** means an offering of equity Securities registered under the Securities Act of 1933 (the "1933 Act"), the issuer of which, immediately before the registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act, as well as similar offerings of Securities issued outside the United States.

10.**"Investment Personnel"** refers to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Any Employee who acts in the capacity of a portfolio manager, research analyst or trader or any other capacity (such as an assistant to one of the foregoing) and in connection with his or her regular duties makes or participates in making, or is in a position to be aware of, recommendations regarding the purchase or sale of securities by a Client;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Any Employee who receives or has access to AB equity research or Bernstein Research via Outlook distribution, Factset, Bloomberg, Research Wire or other medium/platform;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Any other Employee designated as such by the Legal and Compliance Department; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Any natural person who Controls AB and who obtains information concerning recommendations made to a Client regarding the purchase or sale of securities by the Client.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

11.**"Limited Offering"** means an offering that is exempt from registration under the 1933 Act pursuant to Sections 4(2) or 4(6) thereof or pursuant to Rules 504, 505 or 506 under the 1933 Act, as well as similarly exempted offerings of Securities issued outside the United States. Investments in hedge funds are typically sold in a limited offering setting.

12.**"Ombudsman" aka "Ombuds"** means the Company Ombudsman of AB, or any of his/her staff members.

13.**"Personal Account"** refers to any account (including, without limitation, a custody account, safekeeping account and an account maintained by an entity that may actin

a brokerage or a principal capacity) in which any type of Security (as defined in Section 2(a)(36) of the Investment Company Act of 1940) may be traded or custodied, and in which an Employee has any Beneficial Ownership, and any such account maintained by or for a financial dependent of an Employee. For example, this definition includes Personal Accounts of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.An Employee's spouse/domestic partner (of same or opposite gender), including a legally separated or divorced spouse who is a financial dependent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Financial dependents of an Employee, including both those residing with the Employee and those not residing with the Employee, such as financially dependent children away at college; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Any person or entity for which the Employee acts as a fiduciary (e.g., acting as a Trustee) or who has given investment discretion to the Employee, other than accounts over which the employee has discretion as a result of his or her responsibilities at AB.

**Personal Accounts include any account meeting the above definition even if the Employee has given discretion over the account to someone else.**

14.**"Purchase or Sale of a Security"** includes, among other transactions, the writingor purchase of an option to sell a Security and any short sale of a Security.

15.**"Security"** has the meaning set forth in Section 2(a)(36) of the Investment Company Act and includes any derivative thereof, commodities, options or forward contracts, except that it shall not include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Securities issued by the government of the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Short-term debt securities that are government securities within the meaning of Section 2(a)(16) of the Investment Company Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Shares issued by money market funds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Shares issued by open-end mutual funds, **other than Exchange-Traded Funds ("ETFs"), and mutual funds managed by AB**; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.Bankers' acceptances, bank certificates of deposit, commercial paper, high quality short-term debt instruments and such other instruments as may be designated from time to time by the Chief Compliance Officer.

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<u>IMPORTANT NOTES<u>:</u></u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Exchange-Traded Funds are covered under this definition of Security, and therefore **are subject** to the governing rules. (See exceptions in Sections 2(d)(ii)and 2(e)(ii) of this Appendix.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Direct investment in **Bitcoin** or other crypto currencies are currently not covered under this definition of Security. However, as global regulators move closer to regulating them, the lack of prohibition and our position on pre-clearance and/or reporting, will likely change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.A Security is "Being Considered for Purchase or Sale" when:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.An AB Growth research analyst issues research information regarding initial coverage of, or changing a rating with respect to, a Security;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.A portfolio manager has indicated his or her intention to purchase or sell a Security; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.An open order[<sup>2</sup>](#page_31)in the Security exists on any buy-side trading desk.

This is not an exhaustive list. At the discretion of the Legal and Compliance Department, a Security may be deemed "Being Considered for Purchase or Sale" even if none of the above events have occurred, particularly if a portfolio manager is contemplating the purchase or sale of that Security, as evidenced by e-mails or the manager's preparation of, or request for, research.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.**"Security held or to be acquired or sold"** means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Any Security which, within the most recent 15 days (i) is or has been held by a Client in an AB-managed account or (ii) is being or has been considered by AB for purchase or sale for the Client; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Any option to purchase or sell, and any Security convertible into or exchangeable for, a Security.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.**"StarCompliance Code of Ethics application"** means the web-based application used to electronically pre-clear personal securities transactions and file many of the reports required herein. The application can be accessed via the AB network at: <u>https://alliance-ng.starcompliance.com</u>/.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.**"Subsidiary"** refers to entities with respect to which AB, directly or indirectly, through the ownership of voting securities, by contract or otherwise has the power to direct or cause the direction of management or policies of such entity.

2Defined as any client order on a Growth trading desk which has not been completely executed, as well as any "significant" open Value client orders, or Value "priority" purchases or sales, as those terms are defined by the applicable Value SBU CIO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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**2. Requirements and Restrictions – All Employees**

The following are the details of the standards which must be observed:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)General Standards**

Employees have an obligation to conduct their personal investing activities and related Securities transactions lawfully and in a manner that avoids actual or potential conflicts between their own interests and the interests of AB and its clients. Employees must carefully consider the nature of their AB responsibilities - and the type of information that he or she might be deemed to possess in light of any particular securities transaction - before engaging in any investment-related activity or transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.Material Nonpublic Information: Employees in possession of material nonpublic information about or affecting Securities, or their issuer, are prohibited from buying or selling such Securities, or advising any other person to buy or sell such Securities. Similarly, they may not disclose such information to anyone without the permission of the General Counsel or Chief Compliance Officer. Please see the AB <u>Insider Trading</u> <u>Policies</u> , which can be found on the Legal and Compliance Department intranet site.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii.Short-Term Trading: Employees are encouraged to adopt long-term investment strategies (see Section 2(f) for applicable holding period for individual securities). Similarly, purchases of shares of most mutual funds should be made for investment purposes. Employees are therefore prohibited from engaging in transactions in a mutual fund that are in violation of the fund's prospectus, including any applicable short-term trading or market-timing prohibitions.

**With respect to the AB funds, Employees are prohibited from short-term trading, and may not effect a purchase and redemption, regardless of size, in and out of the same mutual fund within any sixty (60) day period.<sup>3</sup>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii.Personal Responsibility: It is the responsibility of each Employee to ensure that all Securities transactions in Personal Accounts are made in strict compliance with the restrictions and procedures in the Code and this Appendix A, and otherwise comply with all applicable legal and regulatory requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv.Affiliated Directors and Outside Directors: The personal trading restrictions of Appendix A of the Code do not apply to any Affiliated Director or Outside Director, provided that at the time of the transaction, he or she has no actual knowledge that the Security involved is "Being Considered for Purchase or Sale." Affiliated Directors and Outside Directors, however, are subject to reporting requirements as described in Section 8 below.

3These restrictions shall not apply to investments in mutual funds through professionally managed asset allocation programs; automatic reinvestment programs; automatic investments through 401(k) and similar retirement accounts; and any other non-volitional investment vehicles. These restrictions also do not apply to transactions in money market funds and other short duration funds used as checking accounts or for similar cash management purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

![](gzap07d568pmu18oycnib.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)Disclosure of Personal Accounts**

All Employees must disclose their Personal Accounts to the Compliance Department (and take all necessary actions to close any accounts held with non-designated brokers, see next section). It is each Employee's responsibility to ensure that the Compliance

Department is appropriately notified of all accounts and to direct the broker to provide the Compliance Department with electronic and/or paper brokerage transaction confirmations and account statements (and verify that it has been done). Do not assume that the broker- dealer will automatically arrange for this information to be set up and forwarded correctly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)Designated Brokerage Accounts**

Personal Accounts of an Employee that are maintained as brokerage accounts must be held only at the following approved designated broker-dealers <u>Approved Designated</u> <u>Broker-Dealer</u> <u>List</u> (each a "Designated Broker")[.](#page_33)<sup>4 5</sup>

Under limited circumstances, the Compliance Department may grant exceptions to this policy and approve the use of other broker-dealers or custodians (such as in the case of proprietary products that can only be held at specific firms). In addition, the Chief Compliance Officer may in the future modify this list.

All Securities in which an Employee has any Beneficial Ownership must be held in Personal Accounts and maintained in accordance with the Designated Broker requirements described above (except that shares of open-end mutual funds may be held directly with the investment company). Additionally, Employees may affect Securities transactions only in Personal Accounts (or directly through a mutual fund's transfer agent). In limited circumstances, the Chief Compliance Officer, or his designee,may grant an exception to these requirements (see Section 21 of the Code). This requirement applies to all types of Securities and personal Securities transactions including, for example, Securities issued in a Limited Offering or other direct investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d)Pre-Clearance** Requirement

Subject to the exceptions specified below, an Employee may not purchase or sell, directly or indirectly, any Security (please note the limited pre-clearance requirement related to AB mutual funds in Section 2(h) below) in which the Employee has (or after such transaction would have) any Beneficial Ownership unless the Employee obtains the prior approval from the Compliance Department and, in the case of Investment Personnel, the head of the business unit (or a designated manager) in which the Employee works.[<sup>6</sup>](#page_33)Pre-clearance requests must be made on the date of the contemplated transaction, through the use of the appropriate pre-clearance form, which can be accessed via the StarCompliance Code of Ethics application at <u>http://starcompliance.acml.com/</u>/. These requests will document (a) the details of the proposed transaction and (b) representations as to compliance with the personal trading restrictions of this Code.

4Exceptions may apply in certain non-U.S. locations. Please consult with your local compliance officer.

5Non-discretionary accounts at Sanford C. Bernstein & Co., LLC. may only be used for the following purposes:

(a)Custody of securities and related activities (such as receiving and delivering positions, corporate actions, and subscribing to offerings commonly handled by operations such as State of Israel bonds, etc.); (b) Transacting in US Treasury securities; and (c) Transacting in AB products outside of a private client relationship (such as hedge funds and AB/SCB mutual funds). All equity and fixed income transactions (other than US Treasuries) are prohibited.

6For purposes of the pre-clearance requirement, all employees in the Value SBU are considered Investment Personnel and are therefore required to have all of their trades pre-approved by the head of their respective

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Pre-Clearance requests will generally be acted on by the automated pre-clearance system only between the hours of 10:00 a.m. and 3:30 p.m. (New York time). The Legal and Compliance Department (including via its electronic pre-clearance utility) will review the request to determine if the proposed transaction complies with the Code, whether that security is restricted for AB personnel, and if appropriate, contact the appropriate supervisor (or a person designated by the supervisor) to determine whether the proposed transaction raises any potential conflicts of interest or other issues. The Compliance Department will communicate to the requesting Employee its approval or denial of the proposed transaction, either in writing (e-mail) or orally. In North America, any approval given under this paragraph will remain in effect only until the end of the trading day on which the approval was granted. For employees in offices outside North America, such approval will remain in effect for the following business day as well. Good-until-cancel limit orders are not permitted without daily requests for pre-clearance approval. **Employees must wait for Compliance Department approval before placing the order with their broker.**

The Legal and Compliance Department will maintain an electronic log of all pre- clearance requests and indicate the approval or denial of the request in the log.

PLEASE NOTE: When a Security is Being Considered for Purchase or Sale for a Client (see Section 2(i) below) or is being purchased or sold for a Client following the approval on the same day of a personal trading request form for the same Security, the Legal and Compliance Department is authorized to cancel the personal order if

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)it has not been executed and the order exceeds a market value of $50,000 or (b) the Legal and Compliance Department determines, after consulting with the trading desk and the appropriate business unit head (if available), that the order, based on market conditions, liquidity and other relevant factors, could have an adverse impact on a Client or on a Client's ability to purchase or sell the Security or other Securities of the issuer involved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i.<u>Exceptions: The</u> <u>pre-clearance requirements do not apply to</u>**[<sup>7</sup>](#page_34):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.<u>Non-Volitional</u> <u>Transactions, including</u>:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Transactions in a Personal Account over which the Employee has no direct or indirect influence or control (i.e., managed for an Employee on a discretionary basis by a third person or entity, when the Employee does not discuss any specific transactions for the account with the third-party manager);

The receipt of any Security received as part of an Employee's compensation (although any subsequent sales must be pre-cleared);

departments (or a designee).

7Additional Securities may be exempted from the pre-clearance requirement if, in the opinion of the Chief Compliance Officer, no conflict of interest could arise from personal trades in such Security.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any Securities transaction effected in an Employee's Personal Account pursuant to an automatic investment plan, which means a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) a Personal Account in accordance with a predetermined schedule and allocation, and includes dividend reinvestment plans. Additional purchases and sales that are not automatic, however, are subject to the pre-clearance requirement.

The Legal and Compliance Department may request an Employee to certify as to the non-volitional nature of these transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.<u>Exercise of</u> <u>Pro Rata</u> Issued Rights

Purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of the issuer's Securities, to the extent such rights were acquired from such issuer, and sales of such rights so acquired. This exemption applies only to the exercise or sale of rights that are issued in connection with a specific upcoming public offering on a specified date, as opposed to rights acquired from the issuer (such as warrants or options), which may be exercised from time-to-time up until an expiration date. This exemption does not apply to the sale of stock acquired pursuant to the exercise of rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.<u>Certain</u> Exchange-Traded Funds ("ETFs")/AB Managed Open-end Mutual Funds

ETFs and open-end mutual funds managed by AB are covered under the Code's definition of Security and therefore are subject to all applicable Code rules and prohibitions. However, investments in AB-managed funds, if transacted through the ABI Employee Desk, do not require pre-clearance. (If not transacted via ABI, pre- clearance is required.) In addition, certain broad-based ETFs (including those that follow) are not subject to the pre-clearance provisions (but the 60-day hold requirement still applies to these transactions):

**Please note that the number of exempt ETFs has significantly expanded. Please check here for the complete list of exempt ETFs. Again, the 60-day hold still applies to these Securities.**

**(e)Limitation on the Number of Trades**

i.No more than an aggregate of twenty (20) transactions in individual Securities may occur in an Employee's Personal Accounts during any rolling thirty-day period.

ii.<u>Exceptions</u>:

&nbsp;&nbsp;&nbsp;&nbsp;a.The limitation on the permissible number of trades over a 30-day period does not apply to the AB-managed funds or the exempt ETFs listed in Section 2(d)(ii)(c) or included on the listing of exempt ETFs on the intranet. **Note that the 60-day hold requirement (see next section) still applies to these Securities.**

&nbsp;&nbsp;&nbsp;&nbsp;b.The limitation is also inapplicable to transactions in a Personal Account over which the Employee has no direct or indirect influence or control (i.e., managed for an Employee on a discretionary basis by a third person or entity), or pursuant to an automatic investment plan, including dividend reinvestment plans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(f)Short-Term** Trading

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.Employees must always conduct their personal trading activities lawfully, properly and responsibly, and are encouraged to adopt long-term investment strategies that are consistent with their financial resources and objectives. AB discourages short- term trading strategies, and Employees are cautioned that such strategies may inherently carry a higher risk of regulatory and other scrutiny. In any event, excessive or inappropriate trading that interferes with job performance, or compromises the duty that AB owes to its Clients will not be tolerated.

**Employees are subject to a mandatory buy and hold of all Securities for 60 days**.[<sup>8</sup>](#page_36)By regulation, employees of AB Japan Ltd. are subject to a 6-month hold.A first-in-first-out accounting methodology will be applied to a series of Securities purchases for determining compliance with this holding rule. As noted in Section 2(a)(ii), the applicable holding period for AB open-end funds is also 60 days.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**ii.<u>Exceptions to the</u>** short-term trading rules (i.e., the 60-day hold):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Securities transactions in Personal Accounts of spouses and domestic partners and other non-Employees (e.g., financially dependent children) **which are not directed by the Employee** are subject to the mandatory buy and hold (or sale and buyback) of 60-calendar days. However, after 30 calendar days, such a transaction will be permitted for these Personal Accounts if necessary to minimize a loss.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Transactions in a Personal Account over which the Employee has no direct or indirect influence or control (i.e., managed for an Employee on a discretionary basis by a third person or entity).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Transactions in Securities held by the Employee prior to his or her employment with AB.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Shares in the publicly traded units of AB that were acquired in connection with a compensation plan. However, units purchased on the open market must comply with the holding period requirements herein.

Any trade made in violation of this section of the Code shall be unwound, or, if that is not practicable, all profits from the short-term trading may be disgorged as directed by the Chief Compliance Officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Short Sales

The Legal and Compliance Department will prohibit an Employee from engaging in any short sale of a Security in a Personal Account if, at the time of the transaction, any Client has a long position in such Security in an AB-managed portfolio (except that an Employee may engage in short sales against the box and covered call writing provided that these personal Securities transactions do not violate the prohibition against short- term trading).

8Relating to the buyback of a previously sold Security, an employee must wait 60 days if the new purchase price is lower than the previous sale, and 30 days if the new purchase price exceeds the previous sale price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(h) Trading in AB Units and AB Open and Closed-End Mutual Funds

During certain times of the year (typically in the weeks leading up to the firm's quarterly earnings announcement), Employees may be prohibited from conducting transactions in the equity units of AB. Additional restricted periods may be required for certain individuals and events, and the Legal and Compliance Department will announce when such additional restricted periods are in effect. Transactions in AB Units and closed-end mutual funds managed by AB are subject to the same pre-clearance process as other Securities, with certain additional Legal and Compliance Department approval required. See the <u>Statement of Policy and Procedures Concerning Purchases and Sales of AB</u> <u>Units</u> and the <u>Statement of Policy and Procedures Concerning Purchases and Sales of</u> <u>AB Closed- End Mutual Funds</u> . Employees are not permitted to transact in short sales of AB Units.

**Employees who transact in open-end AB mutual funds outside of the Employee Desk at AllianceBernstein Investments – i.e., in a regular brokerage account, must pre-clear the transaction via StarCompliance.**

**(i)Securities Being Considered for Purchase or Sale**

i.The Legal and Compliance Department will, subject to the exceptions below, prohibit an Employee from purchasing or selling a Security (or a derivative product), or engaging in any short sale of a Security, in a Personal Account if, at the time of the transaction, the Security is Being Considered for Purchase or Sale for a Client or is being purchased or sold for a Client. Please see the definition of a Security "Being Considered for Purchase or Sale" (Section 1(b)(17) of this Appendix) for a non- exhaustive list of examples which illustrate this prohibition.

**ii.<u>Exceptions: This prohibition does not apply to</u>:** a. <u>Non-Volitional Transactions, including</u>:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Transactions in a Personal Account over which the Employee has no direct or indirect influence or control (i.e., managed for an Employee on a discretionary basis by a third person or entity, when the Employee does not discuss any specific transactions for the account with the third-party manager);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The receipt of any Security received as part of an Employee's compensation (although any subsequent sales must be pre-cleared);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any Securities transaction effected in an Employee's Personal Account pursuant to an automatic investment plan, which means a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) a Personal Account in accordance with a predetermined schedule and allocation, and includes dividend reinvestment plans. Additional purchases and sales that are not automatic, however, are subject to this prohibition.

The Legal and Compliance Department may request an Employee to certify as to the non-volitional nature of these transactions.

b.<u>Exercise of</u> <u>Pro Rata</u> Issued Rights

Purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of the issuer's Securities, to the extent such rights were acquired from such issuer, and sales of such rights so acquired. This exemption applies only to the exercise or sale of rights that are issued in connection with a specific upcoming public offering on a specified date, as opposed to rights acquired from the issuer (such as warrants or options), which may be exercised from time-to-time up until an expiration date. This exemption does not apply to the sale of stock acquired pursuant to the exercise of rights.

c.<u>De Minimis</u> Transactions -- Fixed Income Securities

Any of the following Securities, if at the time of the transaction, the Employee has no actual knowledge that the Security is Being Considered for Purchase or Sale by a Client or that the Security is being purchased or sold by or for the Client:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Fixed income securities transactions having a principal amount not exceeding $25,000; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Non-convertible debt securities and non-convertible preferred stocks which are rated by at least one nationally recognized statistical rating organization ("NRSRO") in one of the three highest investment grade rating categories.

d.<u>De Minimis</u> Transactions -- Equity Securities

Any equity Security transaction, or series of related transactions, involving shares of common stock and excluding options, warrants, rights and other derivatives, provided:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any orders are entered after 10:00 a.m. and before 3:00 p.m. and are not designated as "market on open" or "market on close;"

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The aggregate value of the transactions do not exceed (1) $10,000 for Securities of an issuer with a market capitalization of less than $1 billion; (2)

$25,000 for Securities of an issuer with a market capitalization of $1 billion to

$5 billion and (3) $50,000 for Securities of an issuer with a market capitalization of greater than $5 billion; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Employee has no actual knowledge that the Security is Being Considered for Purchase or Sale by a Client or that the Security is being purchased or sold by or for the Client.

PLEASE NOTE: Even if a trade qualifies for a de minimis exception, it must be pre-cleared by the Legal and Compliance Department in advance of being placed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(j) Restricted List

A Security may not be purchased or sold in a Personal Account if, at the time of the transaction, the Security appears on the AB Daily Restricted List and is restricted for Employee transactions. The Daily Restricted List is made available each business day to all Employees via the AB intranet page.

**(k)Dissemination of Research Information**

i.An Employee may not buy or sell any Security for a Personal Account that is the subject of "significantly new" or "significantly changed" research during the period commencing with the approval of the research and continuing for twenty-four hours subsequent to the first publication or release of the research. An Employee also may not buy or sell any Security on the basis of research that AB has not yet made public or released. The terms "significantly new" and "significantly changed" include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.The initiation of coverage by an AB or Sanford C. Bernstein & Co., LLC research analyst;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Any change in a research rating or position by an AB or Sanford C. Bernstein & Co., LLC research analyst;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Any other rating, view, opinion, or advice from an AB or Sanford C. Bernstein & Co., LLC research analyst, the issuance (or re-issuance) of which in the opinion of such research analyst, or his or her director of research, would be reasonably likely to have a material effect on the price of the security.

**ii.<u>Exceptions: This prohibition does not apply to</u>**:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.<u>Non-Volitional</u> <u>Transactions, including</u>:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Transactions in a Personal Account over which the Employee has no direct or indirect influence or control (i.e., managed for an Employee on a discretionary basis by a third person or entity, when the Employee does not discuss any specific transactions for the account with the third-party manager);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any Security received as part of an Employee's compensation (although any subsequent sales must be pre-cleared);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any Securities transaction effected in an Employee's Personal Account pursuant to an automatic investment plan, which means a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) a Personal Account in accordance with a predetermined schedule and allocation, and includes dividend reinvestment plans. Additional purchases and sales that are not automatic, however, are subject to this prohibition.

The Legal and Compliance Department may request an Employee to certify as to the non-volitional nature of these transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

b.<u>Exercise of</u> <u>Pro Rata</u> Issued Rights

Purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of the issuer's Securities, to the extent such rights were acquired from such issuer, and sales of such rights so acquired. This exemption applies only to the exercise or sale of rights that are issued in connection with a specific upcoming public offering on a specified date, as opposed to rights acquired from the issuer (such as warrants or options), which may be exercised from time-to-time up until an expiration date. This exemption does not apply to the sale of stock acquired pursuant to the exercise of rights.

c.<u>De Minimis</u> Transactions -- Fixed Income Securities

**This exception does not apply to research issued by Sanford C. Bernstein& Co., LLC. Any of the following Securities, if at the time of the transaction, the Employee has no actual knowledge that the issuer is the subject of significantly new or significantly changed research:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Fixed income securities transactions having a principal amount not exceeding $25,000; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Non-convertible debt securities and non-convertible preferred stocks which are rated by at least one nationally recognized statistical rating organization ("NRSRO") in one of the three highest investment grade rating categories.

d.<u>De Minimis</u> Transactions -- Equity Securities

**This exception does not apply to research issued by Sanford C. Bernstein& Co., LLC. Any equity Securities transaction, or series of related transactions, involving shares of common stock and excluding options, warrants, rights and other derivatives, provided:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any orders are entered after 10:00 a.m. and before 3:00 p.m. and are not designated as "market on open" or "market on close;"

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The aggregate value of the transactions do not exceed (1) $10,000 for Securities of an issuer with a market capitalization of less than $1 billion; (2)

$25,000 for Securities of an issuer with a market capitalization of $1 billion to

$5 billion and (3) $50,000 for Securities of an issuer with a market capitalization of greater than $5 billion; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Employee has no actual knowledge that the issuer is the subject of significantly new or significantly changed research.

PLEASE NOTE: Even if a trade qualifies for a de minimis exception, it must be pre-cleared by the Legal and Compliance Department in advance of being placed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Initial Public Offerings

No Employee, or other person whose Personal Accounts are covered under this Code (see Section 1(b)(14)) shall acquire for a Personal Account, any equity Security issued in an Initial Public Offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Limited Offerings/Private Placements

No Employee, or other person whose Personal Accounts are covered under this Code (see Section 1(b)(14)), shall acquire any Security issued in any limited or private offering (please note that hedge funds are sold as limited or private offerings) unless the Chief Compliance Officer (or designee) and the Employee's Business Unit Head give express prior written approval and document the basis for granting approval after due inquiry.

The Chief Compliance Officer, in determining whether approval should be given, will take into account, among other factors, whether the investment opportunity should be reserved for a Client and whether the opportunity is being offered to the individual by virtue of his or her position with AB. Employees authorized to acquire Securities issued in a limited or private offering must disclose that investment when they play a part in any Client's subsequent consideration of an investment in the issuer, and in such a case, the decision of AB to purchase Securities of that issuer for a Client will be subject to an independent review by Investment Personnel with no personal interest in such issuer.<sup>9</sup> Additional restrictions or disclosures may be required if there is a business relationship between the Employee or AB and the issuer of the offering. See also - additional restrictions that apply to employees of the Fund of Funds Group (Section 6).

**3. Additional Restrictions – Portfolio Managers**

In addition to the requirements and restrictions on Employee trading in Section 2 of this Appendix A of the Code, the following restrictions apply to all persons acting in the capacityof a portfolio manager of a Client account. For purposes of the restrictions in this section, a portfolio manager is defined as an Employee who has decision-making authority regarding specific securities to be traded for Client accounts, as well as such Employee's supervisor. Please see Section 6 for restrictions relating to the Alternate Investment Strategies Group.

**General Prohibition**: No person acting in the capacity of a portfolio manager will be permitted to trade for a Personal Account, a Security that is an eligible portfolio investment in that manager's product group (e.g., Large Cap Growth).

This prohibition does not apply to transactions directed by spouses or other persons whose Personal Accounts are covered under this Code (see Section 1(b)(14)) provided that the employee has no input into the investment decision. Nor does it apply to sales of securities held prior to the application of this restriction or employment with the firm. However, such transactions are subject to the following additional restrictions.

9Any Employee who acquires (or any new Employee with a pre-existing position in) an interest in any private investment fund (including a "hedge fund") or any other Security that cannot be purchased and held in an account at a Designated Broker shall be exempt from the Designated Broker requirement as described in this Appendix A of the Code. The Legal and Compliance Department may require an explanation as to why such Security cannot be purchased and held in such manner. Transactions in these Securities nevertheless remain subject to all other requirements of this Code, including applicable private placement procedures, pre-clearance requirements and blackout-period trading restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)Blackout Periods**

No person acting in the capacity of a portfolio manager will be permitted to trade a Security for a Personal Account within seven calendar days before and after any Client serviced in that manager's product group (e.g., Large Cap Growth) trades in the same Security. If a portfolio manager engages in such a personal securities transaction during a blackout period, the Chief Compliance Officer may break the trade or, if the trade cannot be broken, the Chief Compliance Officer may direct that any profit realized on the trade be disgorged.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)Actions During Blackout Periods**

No person acting in the capacity of a portfolio manager shall delay or accelerate a Client trade due to a previous purchase or sale of a Security for a Personal Account. In the event that a portfolio manager determines that it is in the best interest of a Client to buy or sell a Security for the account of the Client within seven days of the purchase or sale of the same Security in a Personal Account, the portfolio manager must contact the Chief Compliance Officer immediately, who may direct that the trade in the Personal Account be canceled, grant an exception or take other appropriate action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)Transactions Contrary to Client Positions**

No person acting in the capacity of a portfolio manager shall trade a Security in a Personal Account contrary to investment decisions made on behalf of a Client, unless the portfolio manager represents and warrants in the personal trading request form that

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)it is appropriate for the Client account to buy, sell or continue to hold that Security and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)the decision to purchase or sell the Security for the Personal Account arises from the need to raise or invest cash or some other valid reason specified by the portfolio manager and approved by the Chief Compliance Officer and is not otherwise based on the portfolio manager's view of how the Security is likely to perform.

**4. Additional Restrictions – Research Analysts**

In addition to the requirements and restrictions on Employee trading in Section 2 of this Appendix A of the Code, the following restrictions apply to all persons acting in the capacity of a research analyst. To be clear, these additional restrictions apply to both sell-side and buy- side research analysts. Please note that rules of the Financial Industry Regulatory Authority (FINRA) may impose additional limitations on the personal trading of the research analysts of Sanford C. Bernstein & Co., LLC and their family members. Such research analysts should refer to the relevant policy documents that detail those additional restrictions.

**General Prohibition**: No person acting in the capacity of research analyst will be permitted to trade for his or her Personal Account, any security of an issuer that is in the sector covered by such research analyst (i.e., an equity research analyst cannot trade in the fixed income securities of a covered issuer nor can a fixed income analyst trade in the equity securities of one). This prohibition does not apply to transactions directed by spouses or other persons whose Personal Accounts are covered under this Code (see Section 1(b)(14)), provided that the employee has no input into the investment decision. Nor does it apply to sales of securities held prior to the application of this restriction or employment with the firm. However, such transactions are subject to the following additional restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)Blackout Periods**

No person acting as a research analyst shall trade a Security for a Personal Account within seven calendar days before and after making a change in a rating or other published view with respect to that Security. If a research analyst engages in such a personal securities transaction during a blackout period, the Chief Compliance Officer may break the trade or, if the trade cannot be broken, the Chief Compliance Officer may direct that any profit realized on the trade be disgorged.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)Actions During Blackout Periods**

No person acting as a research analyst shall delay or accelerate a rating or other published view with respect to any Security because of a previous purchase or sale of a Security in such person's Personal Account. In the event that a research analyst determines that it is appropriate to make a change in a rating or other published view within seven days of the purchase or sale of the same Security in a Personal Account, the research analyst must contact the Chief Compliance Officer immediately, who may direct that the trade in the Personal Account be canceled, grant an exception or take other appropriate action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)Actions Contrary to Ratings**

No person acting as a research analyst shall trade a Security (to the extent such Security is included in the research analyst's research universe) contrary to an outstanding rating or a pending ratings change or traded by a research portfolio, unless

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the research analyst represents and warrants in the personal trading request form that (as applicable) there is no reason to change the outstanding rating and (2) the research analyst's personal trade arises from the need to raise or invest cash, or some other valid reason specified by the research analyst and approved by the Chief Compliance Officer and is not otherwise based on the research analyst's view of how the security is likely to perform.

**5. Additional Restrictions –** Buy-Side Equity Traders

In addition to the requirements and restrictions on Employee trading in Section 2 of this Appendix A of the Code, the following restrictions apply to all persons acting in the capacity of Trader on any buy-side equity trading desk.

**General Prohibition**: No person acting in the capacity of buy-side equity trader will be permitted to trade for his or her Personal Account, a Security that is among the eligible portfolio investments traded on that Desk.

This prohibition does not apply to transactions directed by spouses or other persons whose Personal Accounts are covered under this Code (see Section 1(b)(14)) provided that the employee has no input into the investment decision. Nor does it apply to sales of securities held prior to the application of this restriction or employment with the firm. Such transactions are, of course, subject to all other Code provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**6. Additional Restrictions – Alternate Investment Strategies Groups**

In addition to the requirements and restrictions on Employee trading in Section 2 of this Appendix A of the Code, the following restrictions 0 Alternative Investment Services platform.

**7. Reporting Requirements**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)Duplicate Confirmations and Account Statements**

All Employees must direct their brokers to supply to the Chief Compliance Officer, on a timely basis, duplicate copies of broker trade confirmations of, and account statements concerning, all Securities transactions in any Personal Account. Even for Designated

Brokers, each Employee must verify that the Employee's account(s) is properly "coded" for AB to receive electronic data feeds.

The Compliance Department will review such documents for Personal Accounts to ensure that AB's policies and procedures are being complied with, and make additional inquiries as necessary. Access to duplicate confirmations and account statements will be restricted to those persons who are assigned to perform review functions, and all such materials will be kept confidential except as otherwise required by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)Initial Holdings Reports by Employees**

An Employee must, within 10 days of commencement of employment with AB, provide a signed (electronic in most cases) and dated Initial Holdings Report to the Chief Compliance Officer. New employees will receive an electronic request to perform this task via the StarCompliance Code of Ethics application. The report must contain the following information current as of a date not more than 45 days prior to the date of the report:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.All Securities (including private investments as well as any AB-managed mutual funds) held in a Personal Account of the Employee, including the title and type of Security, and as applicable, the exchange ticker symbol or CUSIP number, number of shares and/or principal amount of each Security/fund beneficially owned;

The name of any broker-dealer or financial institution with which the Employee maintains a Personal Account in which any Securities are held for the Employee; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii.Details of any outside business affiliations.

Employees must then take all necessary actions to bring their accounts into compliance with the designated broker guidelines detailed in Section 2(c) of this Appendix.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(c)Quarterly Reports by Employees – including Certain Funds and Limited Offerings**

Following each calendar quarter, the Legal and Compliance Department will forward (electronically via the StarCompliance Code of Ethics application) to each Employee, an individualized form containing all Securities transactions in the Employee's Personal

Accounts during the quarter based on information reported to AB by the Employee's brokers. Transactions in Personal Accounts over which the Employee has no direct or indirect influence or control (i.e., managed for an Employee on a discretionary basis by a third person or entity) or pursuant to an automated investment program need not be included for purposes of this reporting requirement.

Within thirty (30) days following the end of each calendar quarter, every Employee must review the form and certify its accuracy, making any necessary changes to the information provided on the pre-populated form (generally this will include those shares of mutual funds sub-advised by AB and held directly with the investment company and Securities issued in limited offerings which are not sent directly to the Compliance Department). For each such Security, the report must contain the following information:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the date of the transaction, the title, and as applicable the exchange ticker symbol or CUSIP number, interest rate and maturity date, number of shares, and principal amount of each Security involved; (2) the nature of the transaction (i.e., purchase or sale or any other type of acquisition or disposition); (3) the price of the Security at which the transaction was effected; (4) the name of the broker or other financial institution through which the transaction was effected; and (5) the date the Employee submits the report.

In addition, any new Personal Account established during the calendar quarter must be reported, including (1) the name of the broker or other financial institution with which the account was established and (2) the date the account was established.

(d) Annual Certification by Employees with Managed Accounts

On an annual basis, by a date to be specified by the Compliance Department (typically August

15<sup>th</sup>), each Employee who has reported managed accounts in the StarCompliance Code of Ethics application must provide to the Chief Compliance Officer, a signed and dated (or electronically certified via the StarCompliance application) certification. This certification confirms:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.All managed accounts have been disclosed by the Employee in the StarCompliance application; and

&nbsp;&nbsp;&nbsp;&nbsp;ii.The Employee had no influence or investment discretion as to the transactions or holdings of such accounts.

**(e)Annual Holdings Reports by Employees**

On an annual basis, by a date to be specified by the Compliance Department (typically February 15<sup>th</sup>), each Employee must provide to the Chief Compliance Officer, a signed and dated (or electronically certified via the StarCompliance Code of Ethics application) Annual Holdings Report containing data current as of a date not more than forty five (45)days prior to the date of the submission.<sup>10</sup> The report must disclose:

&nbsp;&nbsp;&nbsp;&nbsp;i.All Securities (including shares of mutual funds managed by AB and limited offerings), held in a Personal Account of the Employee, including the title and type of security, and as applicable the exchange ticker symbol or CUSIP number, number of shares and/or principal amount of each Security beneficially owned); and

&nbsp;&nbsp;&nbsp;&nbsp;ii.The name of any broker-dealer or financial institution with which the Employee maintains a Personal Account in which any Securities are held for the Employee.

![](ge69nb18ye4tmge3gqehj.jpg)

In the event that AB already maintains a record of the required information via duplicate copies of broker trade confirmations and account statements received from the Employee's broker-dealer, an Employee may satisfy this requirement by (i) confirming in writing (which may include e-mail) the accuracy of the record on at least an annual basis and (ii) recording the date of the confirmation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(f)Report and Certification of Adequacy to the Board of Directors of Fund Clients**

On a periodic basis, but not less than annually, the Chief Compliance Officer shall prepare a written report to the management and the board of directors of each registered investment fund (other than a unit investment trust) in which AB acts as investment adviser setting forth the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.A certification on behalf of AB that AB has adopted procedures reasonably necessary to prevent Employees and Directors from violating the Code;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii.A summary of existing procedures concerning personal investing and any changes in procedures made during the past year; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii.A description of any issues arising under the Code or procedures since the last report to the Board including, but not limited to, information about material violations of the Code or procedures and sanctions imposed in response to the material violations.

AB shall also submit any material changes to this Code to each Fund's Board at the next regular board meeting during the quarter following the change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(g)Report Representations**

Any Initial or Annual Holdings Report or Quarterly Transaction Report may contain a statement that the report is not to be construed as an admission by the person making the report that he or she has any direct or indirect Beneficial Ownership in the Security to which the report relates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(h)Maintenance of Reports**

The Chief Compliance Officer shall maintain the information required by this Section and such other records, if any, and for such time periods required by Rule 17j-1 under the Investment Company Act and Rules 204-2 and 204A-1 under the Advisers Act. All reports furnished pursuant to this Section will be kept confidential, subject to the rights of inspection and review by the General Counsel, the Chief Compliance Officer and his or her designees, the Code of Ethics Oversight Committee (or subcommittee thereof), the Securities and Exchange Commission and by other third parties pursuant to applicable laws and regulations.

10Employees who join the Firm after the annual process has commenced will submit their initial holdings report (see Section 7(b)) and complete their first Annual Holdings Report during the next annual cycle and thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**8. Reporting Requirements for Directors who are not Employees**

All Affiliated Outside Directors (i.e., not Employees of AB, but employees of an AB affiliate) and Outside Directors (i.e., neither Employees of AB, nor of an AB affiliate) are subject to the specific reporting requirements of this Section 8 as described below. Directors who are Employees of AB, however, are subject to the full range of personal trading requirements, restrictions and reporting obligations outlined in Sections 1 through 7 of this Appendix A of the Code, as applicable. In addition, all Directors are expected to adhere to the fiduciary duties and high ethical standards described in the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)Outside Directors / Affiliated Outside Directors**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.**In general, pursuant to various regulatory rule exceptions and interpretations, no reporting is required of Outside Directors and Affiliated Outside Directors. However, if an Outside or Affiliated Outside Director knew, or in the ordinary course of fulfilling his or her official duties as a Director should have known**, that during the 15-day period immediately before or after the Outside or Affiliated Outside

Director's transaction in a Security for a Personal Account, a Client bought or sold the Security, or the Client or AB considered buying or selling the Security, thefollowing reporting would be required.

<u>Transaction Report</u>

In the event that a transaction report is required pursuant to the scenario in the preceding paragraph, other than for accounts over which the director had no influence or control, each outside director must within thirty (30) days following the end of each calendar quarter, provide to the Chief Compliance Officer, a signed and dated report disclosing all Securities transactions in any Personal Account. For each such Security, the report must contain the following information:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.The date of the transaction, the title, and as applicable the exchange ticker symbol or CUSIP number, interest rate and maturity date, number of shares, and principal amount of each Security involved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.The nature of the transaction (i.e., purchase or sale or any other type of acquisition or disposition);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.The price of the Security at which the transaction was effected; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.The name of the broker or other financial institution through which the transaction was effected.

**ALLIANCEBERNSTEIN L.P.**

CODE OF BUSINESS CONDUCT AND ETHICS

CERTIFICATION

I hereby acknowledge receipt of the Code of Business Conduct and Ethics (the "Code") of AllianceBernstein L.P., its subsidiaries and joint ventures, which includes the AB Personal Trading Policies and Procedures attached as Appendix A to the Code. I certify that I have read and understand the Code, recognize that I am subject to its provisions, and that I must report any violations to the Legal and Compliance Department.

I have reviewed my own situation and conduct and confirm that:

&nbsp;&nbsp;&nbsp;&nbsp;1.I am in compliance with the Code and the AB Insider Trading Policies, including the requirements regarding the manner in which I maintain and report my Securities holdings and transactions (public and private) in my Personal Accounts (as defined in Appendix A of the Code) and conduct my personal securities trading activities. I certify that I am not circumventing the requirements of the Code through the use of derivatives. This includes futures, options, and other types of derivatives.

&nbsp;&nbsp;&nbsp;&nbsp;2.I have disclosed any potential conflicts of interest and have been pre-approved for any reportable outside business activities.

&nbsp;&nbsp;&nbsp;&nbsp;3.I am in compliance with the requirements associated with the firm's Outside Business Activities Policy, Policy and Procedures for Giving and Receiving Gifts and Entertainment (including its requirement to pre-clear certain political contributions); and the requirements associated with the firm's Anti-Corruption Policy.

&nbsp;&nbsp;&nbsp;&nbsp;4.I have read the firm's Compliance Manual (which can be found on the Loop) and agree to abide by the policies contained therein.

**For those Employees with Securities Licenses: I have contacted Compliance with any changes to information that would require a Form U4 amendment, including a change of address, name change, addition of any new, or the discontinuance of any previously reported outside business activity, and any occurrence or matter which would change my answer to a disclosure question (e.g., arrests and other criminal or civil matters, regulatory events, tax liens and bankruptcies).**

I understand that any violation(s) of the Code is grounds for immediate disciplinary action up to, and including, termination of employment.

**Please note that this signoff is performed electronically through the StarCompliance Code of Ethics application.**

ablegal - 3350966 v6

## Ex-99.(P)(2)

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| | | |
|:---|:---|:---|
| **CODE OF ETHICS AND CONDUCT** | **CODE OF ETHICS AND CONDUCT** |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Table of Contents** |  |
|  | &nbsp;&nbsp; Introduction .................................................................................................................................................. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1 |
|  | &nbsp;&nbsp; Definitions..................................................................................................................................................... | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2 |
| I. | Policy for Possession of Material Non"Public Information ("MNPI") .............................................. | 6 |
| II. | Duty of Confidentiality .................................................................................................................... | 8 |
| III. | Procedures for Access Persons........................................................................................................ | 9 |
| IV. | Exempted Transactions ................................................................................................................... | 13 |
| V. | Compliance Procedures................................................................................................................... | 13 |
| VI. | CCO's Authority and Duties............................................................................................................. | 18 |
| VII. | Reporting of Violations.................................................................................................................... | 18 |
| VIII. | Reporting to the Board of Managers............................................................................................... | 18 |
| IX. | Sanctions ......................................................................................................................................... | 19 |
| X. | Retention of Records....................................................................................................................... | 19 |
|  | Exhibits ........................................................................................................................................................... | Exhibits ........................................................................................................................................................... |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Initial Report of Access Persons ........................................................................................... | &nbsp;&nbsp; Exhibit A |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Annual Report of Access Persons ......................................................................................... | &nbsp;&nbsp; Exhibit B |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Quarterly Transactions Report of Access Persons................................................................ | &nbsp;&nbsp; Exhibit C |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Personal Reportable Securities Transaction Pre"Clearance Form of Access Persons ........... | &nbsp;&nbsp; Exhibit D |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Personal Political Contribution Pre"Clearance Form of Access Persons............................... | &nbsp;&nbsp; Exhibit E |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; List of Reportable Funds of Access Persons.......................................................................... | &nbsp;&nbsp; Exhibit F |

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**Introduction**

Barrow Hanley Global Investors ("Barrow Hanley" or "the Firm") has adopted this Code of Ethics and Conduct ("Code") in its current form in compliance with the requirements of Section 204A"1 of the Investment Advisers Act of 1940 (the "Advisers Act") and Section 17(j) of the Investment Company Act of 1940. This Code was last amended on December 31, 2021. The Code requires the Firm's Access Persons to comply with the federal securities laws and the Firm's policies and procedures, sets standards of business conduct required of the Firm's supervised persons, and addresses conflicts that arise from personal transactions and other activity by Access Persons. The policies and procedures outlined in the Code are intended to promote compliance with fiduciary standards by the Firm and its Access Persons. As a fiduciary, the Firm and its employees: (i) have the responsibility to render professional, continuous, and unbiased investment advice, (ii) owe its clients a duty of honesty, good faith, and fair dealing, (iii) must act at all times in the best interests of clients, and (iv) must avoid or disclose conflicts of interest.

A.Barrow Hanley's Code of Ethics and Conduct is designed to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Set standards for ethical conduct based on the fundamental principles of openness, integrity, honesty, and trust;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Protect the Firm's clients by deterring misconduct;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Educate employees regarding the Firm's expectations and the laws governing their conduct;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Remind employees that they are in a position of trust and must act with complete propriety at all times;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.Protect the reputation of the Firm;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.Guard against violations of the securities laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.Establish procedures for employees to monitor the Firm's business and uphold its ethical principles; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.Discourage excessive risk"taking in employees' personal investments and/or in a client's account.

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B.This Code of Ethics and Conduct is based upon the principle that the directors, officers, and employees of the Firm owe a fiduciary duty to the Firm's clients to conduct their affairs, including their personal transactions, in such a manner as to avoid:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Serving their own personal interests ahead of a client's interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Taking inappropriate advantage of their position with the Firm;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Actual or potential conflicts of interest; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Abuse of their position of trust and responsibility.

C.As a fiduciary, employees should avoid conflicts of interest where possible. This Code requires disclosure and reporting of any unavoidable conflicts of interest.

D.This Code is designed to implement controls that discourage employees from taking excessive risk in a client's account and/or in the employee's personal investments and Reportable Account(s).

E.Barrow Hanley's fiduciary duty includes the duty of the Chief Compliance Officer ("CCO") of the

Firm to maintain, monitor, and enforce the Code, periodically review and amend the Code, and to report material violations of the Code to the Firm's Board of Managers and clients.

F.This Code contains requirements necessary to prevent Access Persons from violating the Firm's standards and procedures designed to prevent violations of the Code. Each Access Person at the commencement of their employment must certify to their understanding of the Code's requirements and acknowledge to abide by all of the Code's provisions and prohibitions. Each Access Person must recertify their understanding and acknowledgement of the Code annually, and any time the Code is amended.

**Definitions**

The following terms are used throughout this Code and are defined here to describe and explain their use and purpose for the Code's provisions and prohibitions.

A.**"Access Person"** means supervised persons of the Firm including any director, officer, general partner, Advisory Person, Investment Personnel, Portfolio Manager, or employee of the Firm. The CCO may, in her discretion, designate other individuals (e.g., consultants, interns and temporary employees) that have access to client information as Access Persons of the Firm. The CCO may exempt certain Access Person(s) and/or Members of its Board of Managers from certain provisions and prohibitions of this Code who are subject to another code of ethics that has been approved by the CCO.

B.**"Advisory Person"** means any person in a Control relationship to the Firm who obtains information concerning recommendations made to the Firm with regard to the purchase or sale of a security by the Firm.

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C."**Affiliate" or "Affiliated Company**" means a company which is an affiliate of the Firm through a corporate relationship, including the Firm's parent company, Perpetual Limited ("Perpetual") (ASX ticker: PPT).

D.**"Beneficial Ownership"** means any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, has or shares a direct or indirect beneficial interest in a Reportable Security. Such relationships may include but are not limited to an employee's spouse, children, parents, guardians, or person for whom the employee has control or owes a duty of care.

E.**"Black"out Period"** means the time period designated by the CCO whereby an Access Person and/or Family Members must not trade a Reportable Security, see Trading Restriction for Access Persons, Section III.D., page 13.

F.**"Business Entertainment**" means an Access Person's participation, whether as a guest or host, in lunches, dinners, cocktail parties, sporting activities or similar business gatherings conducted for business purposes. Business Entertainment is not a Gift.

G.**"Control"** means the power to exercise a controlling influence over the management or policies of a company or person unless such power is solely the result of an official position with such company. Any Person or entity who owns beneficially, either directly or through one or more controlled companies or relationships, more than 25% of the voting securities of a company shall generally be presumed to control such company. Any Person who does not own more than 25% of the voting securities of any company shall not be presumed to control such company.

H.**"Covered Associate"** means any general partner, managing member, executive officer, or other individual with a similar status or function, any employee who solicits a government entity for the investment adviser and any person who supervises, directly or indirectly, such employee.

I.**"Direct Beneficial Interest"** means a Person has a direct interest as an owner of something or receives a direct benefit from an investment in a Reportable Security. A direct benefit may derive from an indirect interest in, among other things, something owned by a Person's spouse, domestic partner, or Family Trust.

J.**"Family Member"** means an Access Person's spouse, domestic partner, minor children, and relatives by blood or marriage living in the same household as the Access Person.

K.**"Gift"** means cash or any item of value.

L.**"Government Entity"** means any state or local government agency, authority, or instrumentality of a state or local government, any pool of assets sponsored by a state or local government (i.e., defined benefit pension plan, separate account or general fund), and any participant"directed government plan.

M.**"Indirect Beneficial Interest"** means a Person, who is not an owner, receives an indirect benefit from an investment in a Reportable Security. An Indirect Beneficial Interest may be derived from any number of sources, as noted above.

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N.**"Investment Personnel"** means: any Portfolio Manager of the Firm, Research Analysts, Traders, Client Portfolio Managers, and other personnel who provide information and advice to the Portfolio Manager, or who help execute the Portfolio Manager's investment selection.

O."**Managed Fund**" means any Reportable Fund for which the Firm serves as an Investment Adviser or Sub"Adviser. A list of Managed Funds is attached as Exhibit F, and is available on

StarCompliance, or from the Compliance Department.

P.**"Person"** means any Person or company.

Q.**"Political Action Committee" or "PAC"** means an organization whose purpose is to solicit and make Political Contributions.

R.**"Political Contribution"** means any Gift, subscription, loan, advance, or deposit of money (such as gift certificates or merchandise), or anything of value given to a candidate or PAC for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.The purpose of influencing any election;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.The payment of debt incurred in connection with any such election;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Transition or inaugural expenses of the successful candidate for office;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Coordinating contributions through bundling or facilitating the contributions of other persons or PACs, including acting as a host to solicit contributions.

Examples of contributions include, (i) the cost of attending or hosting fundraising events; (ii) payments to bond ballot campaigns; (iii) expenses incurred in connection with fundraising; or (iv) expenses incurred from other volunteer activities (e.g., hosting a reception).

S.**"Political Fundraising Activities"** include, but are not limited to, the following activities on behalf of a state or local candidate or official:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Coordinating contributions (generally, bundling, pooling, or otherwise facilitating the contributions made by other persons, including hosting events);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Soliciting contributions (generally, communicating, directly or indirectly, for the purpose of obtaining or arranging a Political Contribution); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Directing fundraising efforts.

T.**"Portfolio Directional Trade"** means a trade directed by a Portfolio Manager intended to increase or decrease a security's investment weighting in a client's account. This is a separate type of trade from a trade required to satisfy a client's cashflow request.

U.**"Portfolio Manager"** means an employee of the Firm entrusted with the direct responsibility and authority to make investment selection decisions for a client's account.

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V."**Reportable Account**" means any account maintained with a bank, broker, or other entity in which an Access Person or Family Member owns Reportable Securities or has the ability to transact in Reportable Securities or has discretion over trading Reportable Securities on behalf of another.

W."**Reportable Fund**" means any Fund or Trust where the Firm or an Affiliate acts as the investment adviser, sub"adviser or principal underwriter for the fund.

X.**"Reportable Security"** means a Security that is subject to the requirements of this Code, including any note, stock, treasury stock, corporate or municipal bond, foreign government bond, debenture, exchange"traded fund ("ETF"), evidence of indebtedness, bank loan, certificate of interest or participation in any profit sharing agreement, collateral trust certificate, pre" organization certificate or subscription, transferable share, investment contract, voting trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, future, swap, convertible, or privilege on any security, group, or index of Reportable Securities on a national securities exchange, relating to foreign currency, or, in general, any interest or instrument commonly known as a security, or instrument for trading speculation, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing, Reportable Fund, Managed Fund, limited offering or partnership, bank loan for the purpose of investing, private placement, or hedge fund investment. **Reportable Security does not mean** direct obligations of the Government of the United States, high quality short-term debt instruments, bankers' acceptances, bank certificates of deposit, commercial paper, repurchase agreements, crypto currencies and other blockchain technologies, and shares issued by mutual funds that are not Reportable Funds.

Y.**"Solicit a Government Entity for Investment Advisory Services"** means a direct or indirect communication with a state or local Government Entity for the purpose of obtaining or retaining investment advisory services business including, but not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Leading, participating in, or attending a sales/solicitation meeting with a state or local Government Entity, such as a government pension plan or general fund;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Otherwise holding oneself out as part of the Barrow Hanley's representative or sales/solicitation effort with a state or local Government Entity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Signing a submission to an RFP in connection with Barrow Hanley's business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Making introductions between government officials and Barrow Hanley.

Z.**"State or Local Official(s)"** means any person, including any election committee for such person, who was, at the time of a Political Contribution, an official, incumbent, candidate, or successful candidate for elective office of a state or local government, including, but not limited to, any state or local agency, authority, or instrumentality, limited exceptions may apply depending on the nature of the office, as identified by the Firm's CCO.

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**I.Policy for Possession of Material** Non-Public Information ("MNPI")

The Firm's Policy for possession of material non-public information applies to every Person subject to this Code, including Access Persons and their Family Members, and extends to his/her activities within and outside of his/her duties at the Firm. Any questions regarding this policy and procedures should be referred to the Firm's CCO.

A.In compliance with Section 204A of the Advisers Act, the Firm forbids any officer, director, Access Person or Family Member, from acting on and/or trading, either personally, on behalf of clients, or others, including accounts managed by the Firm, on material non-public information, or communicating material non-public information to others in violation of the law, frequently referred to as "insider trading".

B.The term "material non-public information" means information that is material to a company, a government policy, or other regulatory entity or policy that is not known to the public and is material to the value of such company, or related industry or entity, and if made public would affect the value of such company's shares, or impact the investment market(s), and investments of a Person, or client.

C.The term "insider trading" is not defined in the federal securities laws, but generally is used to refer to the use of material non-public information to trade in Securities (whether or not one is an "insider"), or to communicate material non-public information to others. The term "insider information" includes non-public facts about a publicly traded company that may be used to a Person's financial advantage when trading shares of the Company and includes information about the firm's securities recommendation(s), and client holdings and transactions. While the law concerning insider trading is not static, it is generally understood that the law prohibits:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Trading by a Person while in possession of material non-public information, (i) whether the Person is an insider or not; (ii) whether the information was disclosed to the Person in violation of an insider's duty to keep it confidential; whether the information was misappropriated or received inadvertently; or whether the trade was profitable or not.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Communicating material non-public information to others in a breach of fiduciary duty, or for another's intent to trade on the information.

D.Information is material if or when there is a substantial likelihood that a reasonable investor would consider it important in making his/her investment decisions(s), or information that is reasonably certain to have a substantial effect on the price of a company's securities (shares or bonds) whether it is determined factual or a rumor. Information that a Person subject to this Code should consider material includes, but is not limited to: dividend changes, earnings estimates, changes in previously released earnings estimates, significant merger or acquisition proposals or agreements, major litigation, debt service and liquidation problems, extraordinary management developments, write-downs or write-offs of assets, additions to reserves for bad debts, new product/services announcements, criminal, civil, and government investigations and indictments.

Material information does not have to relate to a company's business. For example, material information about the contents of any upcoming press release, media column, or blog that may

![](barrow-hanleycoerev9x1.jpg)

affect the price of a security, and therefore, may be considered material. Disclosure of a mutual fund client's trades or holdings, or any client's holdings that are not publicly available, may be considered material information and must be kept confidential. All employees of Barrow Hanley are subject to this Policy and to the Duty of Confidentiality of this Code.

E.Information is non-public until it has been effectively communicated to the marketplace. A Person must be able to point to some fact to show that the information is generally public. For example, information found in a report filed with the SEC, or appearing in the media, internet, or other publications of general circulation would be considered public. A Person should be particularly careful with information received from contacts at public companies or received through their position with Barrow Hanley.

F.Each Person must consider the following before trading for themselves or others in the Reportable Securities of a company about which that Person has potential inside information:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Is the information material? Is this information that an investor would consider important in making his/her investment decisions? Is this information that would affect the market price of the Reportable Security if generally disclosed?

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Is the information non-public? To whom has this information been provided? Has the information been effectively communicated to the marketplace?

G.The role of the Firm's CCO is critical to the implementation and maintenance of the Firm's policy and procedures against insider trading. If, after consideration of the above, a Person believes that the information is material and non-public, or if a Person has questions as to whether the information is material and non-public, that Person should take the following steps:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Report the matter immediately to the Firm's CCO. After the CCO has reviewed the issue, a determination will be made as to trading or restricting the security, and the employee will be instructed to continue the prohibition against communication or will be allowed to trade and communicate the information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Do not purchase or sell the securities on behalf of him/herself or others. The Firm may determine to restrict trading in the security for Access Persons, for the clients' portfolios or both.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Do not communicate the information to anyone inside or outside the Firm, other than to the Firm's CCO as required under this Policy.

H.The CCO may communicate potential insider information to outside counsel and compliance/legal personnel at Perpetual, for consultative purposes. In addition, care should be taken so that such information is secure. For example, files containing material non-public information should be sealed; access to computer files containing material non-public information should be restricted.

The CCO will review and appropriately document each circumstance where the possibility of insider information has been reported. Further actions to restrict trading in the security, to release a restriction against trading, or to limit trading, are based on the facts and circumstances of the information.

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**II.Duty of Confidentiality**

Any Person subject to this Code must keep confidential at all times any non-public information they may obtain in the course of their employment at the Firm. This information includes but is not limited to:

A.Information about a client's account, including account holdings, recent or pending securities transactions, investment recommendations, and/or activities of the Portfolio Managers and

Research Analysts for clients' accounts;

B.Information about the Firm's clients and prospective clients' investments and account transactions;

C.Information about the Firm's personnel, including private personally identifiable information (PII), pay, salary, bonus, equity interest, benefits, position level, performance rating, discipline history, non"business information obtained in the course of the employee's job, and other things; and

D.Information about the Firm's financial information, business activities, including new investment strategies, services, products, technologies, business initiatives, client gains/losses, and negotiated fee details.

The Firm's personnel have the highest fiduciary obligation to keep confidential information relating to Perpetual to any party that does not have a clear and compelling need to know such information, and to safeguard all confidential information about the Firm and its clients. Barrow Hanley's Privacy Policy for safeguarding clients' personal information, account information, and transactions is provided in the Firm's Compliance Policies and Procedures. The information for data security and systems are provided in the Firm's IT Security Policies and Procedures.

Nothing in this Code precludes any Access Person from contacting, filing a complaint with, providing information to, or cooperating with an investigation conducted by the U.S. Securities and Exchange Commission or any other governmental agency.

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**III.Procedures for Access Persons**

In an effort to comply with federal securities regulations and the high standards Barrow Hanley has set to avoid potential conflicts of interest, the following procedures have been adopted:

**Who Must Comply with these Procedures?**

All employees of Barrow Hanley and their Family Members are subject to, and must comply with, the requirements of this Code. (In general, you must report all securities-related accounts for yourself, household members, and/or any person whose investments you may direct, see Section B., Personal Trading Procedures for Access Persons and Family Members, below.) In addition to employees, under certain circumstances, other individuals who work for or with Barrow Hanley may also be required to comply with this Code (e.g., interns, temporary workers, and consultants). A member of Barrow Hanley's Compliance team will notify such individuals when, and if, they are required to comply.

A.**General Procedures for Access Persons.** As defined by this Code, all employees of the Firm are identified as Access Persons and are subject to the following restrictions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.**Restriction on Accepting and Giving Gifts of More than de Minimis** Value. Without pre" approval of the CCO, Access Persons are restricted from accepting or giving any Gift(s) of more than de minimis value under this Code from/to any Person or entity/organization when the Gift(s) is related to conducting the Firm's business. Gifts must be reported monthly, or at the time a Gift is accepted or given. Reports should be made in StarCompliance or the Gift and Entertainment Form available on the Firm's shared file network at: S:\BHMS_Shared\Compliance\Forms

Questions about this Gift policy should be directed to the CCO. A Gift does not include Business Entertainment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.The de minimis amount for accepting a Gift(s) is USD $100 (in total) per Person and is considered to be the annual receipt of Gift(s) from the same source valued at up to USD $100;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.The de minimis amount for Gift(s) giving by the Firm or its employees is USD $250 (in total) per Person, and is considered to be the annual giving of Gift(s) to the same Person valued at up to USD $250;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.ERISA and Taft Hartley regulations have specific limitations for Gifts and Entertainment and reporting requirements when Gifts are given. To ensure proper reporting the CCO should be notified when an employee intends to give a Gift to an ERISA or Taft Hartley client.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.**Reporting Business Entertainment.** Access Persons, whether the employee is the provider or participant, must report Business Entertainment activity monthly, or at the time it occurs. Extravagant or excessive entertainment is prohibited. Questions about what may be considered extravagant or excessive should be directed to the CCO. Any exceptions to this policy must be approved by the CCO. Business Entertainment should be reported in StarCompliance or on the Gift and Entertainment Form available on the Firm's shared file network at: S:\BHMS_Shared\Compliance\Forms

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.**Prohibition on Service as a Director or Public Official.** Due to the obvious conflict of interest, Access Persons, including Investment Personnel, are prohibited from serving on the board of directors of any publicly traded company, or for-profit company, without prior authorization of the Firm's CCO. Any such authorization shall be based upon a determination that the board service would be consistent with and not detract from the interests of the Firm's clients. Authorization of board service shall be subject to a review of such service and implementation of procedures to identify and isolate such a Person from making decisions about investments or trading in that company's securities, or advising about investing the company's assets, and adequate disclosure of any conflicts of interest must be provided to the CCO and may be disclosed in the Firm's Form ADV, and/or other documentation.

B.**Personal Trading Procedures for Access Persons and Family Members.** The policies of this Code apply to all employees of the Firm identified as Access Persons and the procedures extend to accounts of which the Access Person is the beneficial owner, or accounts in which he/she has any financial interest, or ability to exercise control or influence over its investments or trading. The procedures <u>also</u> extend to any account belonging to immediate Family Members (including any relative by blood or marriage) living in the Access Person's household or dependent on the Access Person for financial support. Thus, a Person subject to this Code is required to abide by the following procedures:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.**Prohibition on Initial Public Offerings ("IPO").** Persons subject to this Code are prohibited from acquiring securities in an initial public offering or secondary offerings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.**Prohibition on Initial Coin Offerings ("ICO").** Persons subject to this Code are prohibited from securities transactions involving an initial coin offering.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.**Restriction on Private Placements.** Persons subject to this Code are restricted from acquiring securities in a private placement without prior approval from the Firm's CCO. In the event that an Access Person receives approval to purchase securities in a private placement, the Access Person must disclose that investment if/when the company intends to offer shares to the public in an IPO and/or if he/she plays any part in the Firm's later consideration of an investment in the issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.**Prohibition on purchasing Perpetual securities.** Persons subject to this Code are prohibited from acquiring securities issued by the Firm's parent company, Perpetual

Limited (ASX ticker: PPT), or any publicly traded securities of other related or Affiliated

Company(s) in their own account or in a client's account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.**Restriction on Options, Swaps, Futures, or Derivatives.** Persons subject to this Code are restricted from purchasing or selling any option, swap, future, or derivative on any Security.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.**Prohibition on Naked Options.** Persons subject to this Code are prohibited from trading Options, Swaps, Futures or Derivatives on any Security or instrument that the Access

Person does not have previously set-aside shares, Securities, or cash to fulfill the obligation of the transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.**Prohibition on Short-selling.** Persons subject to this Code are prohibited from selling any

Security that the Access Person does not own, or otherwise engaging in "short-selling" activities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.**Prohibition on Short"term Trading Profits.** Persons subject to this Code are prohibited from profiting in the purchase and sale, or sale and purchase, of the same (or related)

Reportable Securities within 60 calendar days. Profits realized on such short-term trades are generally subject to disgorgement, as determined by the Firm's CCO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.**Prohibition on Short-term Trading of Managed Funds.** Persons subject to this Code are prohibited from short-term trading of any Managed Fund shares. For the purpose of this Code, short-term trading is defined as a purchase and redemption/sell of a Managed

Fund's shares within 30 calendar days. This prohibition does not cover purchases and redemptions/sales: (i) into or out of money market funds or short-term bond funds; (ii) purchases effected on a regular periodic basis by automated means, such as 401(k) purchases, or Voluntary Deferral Plan "VDP" contributions ("automated means" are pre" selected investment allocations; 401(k) or VDP trades that are not automated are subject to at least a 30"day holding period).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

![](barrow-hanleycoerev14x1.jpg)

C.**Political Contribution and Charitable Contribution Procedures for Access Persons and Family Members.** The Firm is prohibited from making political contributions. Employees of Barrow Hanley are prohibited from making Political Contributions in the name of the Firm. As defined by this Code, all employees of the Firm are identified as Access Persons and are subject to the following restrictions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.**Personal Political Contributions to Candidates.** All Access Persons and their Family Members are limited in the amount of any political contribution to any state or local office holder or candidate to the following: (i) if the Access Person or their Family Member is Eligible to Vote for such candidate, contributions are limited to the di minimus amount of USD $350; (ii) if the Access Person or their Family Member is not entitled to vote for such candidate, contributions are limited to the di minimus amount of USD $150. Certain exceptions to this policy based on the Pay-to-Play Rule may be permitted by theCCO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.**Pre"Clearance of Personal Political Contributions and Fundraising Activities.** All Access Persons and their Family Members must obtain approval in advance from the CCO before:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) making any Political Contribution to any state, or local candidate, or official running for state or local office, or candidate for a federal office who is currently a State or Local Official, and (ii) participating in any Political Fundraising Activities. Political Contributions and Political Fundraising Activity will be approved on a case-by-case basis. Pre-clearance should be obtained prior to making a Political Contribution or participating in a Political

Fundraising Activity by completing and submitting a Personal Political Contribution Pre"

Clearance Form for fundraising activity in StarCompliance or Exhibit E. The CCO will review each request to determine whether the Political Contribution or Political Fundraising Activity is permitted under applicable law and is consistent with this policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.**Prohibition on Certain Political Contributions.** Access Persons may not make personal Political Contributions for the purpose of obtaining or retaining advisory contracts with government entities, clients, or for any other business-related purpose. Access Persons also may not consider any of the Firm's current or anticipated business relationships asa factor in soliciting or making Political Contributions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.**Prohibition on Certain Charitable Contributions.** Access Persons may not consider any of the Firm's current or anticipated business relationships as a factor in soliciting or making charitable contributions and may not make charitable contributions for the purpose of obtaining or retaining advisory contracts with government entities or clients. The Firm may make charitable contributions as part of its formal charitable efforts and not for the purpose of obtaining or retaining advisory contracts with government entities or clients and must be made in the name of Barrow Hanley and payable directly to the tax-exempt charitable organization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

![](barrow-hanleycoerev15x1.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.**Indirect Action by an Access Person.** Access Persons are prohibited from doing anything indirectly that, if done directly, would result in a violation of applicable law or this policy.

For example, it is a violation of this policy for an Access Person to direct someone on their behalf to make a Political Contribution in excess of applicable limits.

D.**Trading Restriction for Access Persons and Family Members on the Same Day as a Portfolio Directional Trade.** Access Persons and Family Members are restricted from purchasing or selling any Reportable Security on the same day the Firm executes a Portfolio Directional Trade in that same security for a client account. Reasonable exceptions may be granted by the CCO when the trade does not appear to affect or harm any client.

IV. Exempted Transactions

Certain prohibitions and restrictions for Access Persons and Family Members in Section III., B. and D. above, do not apply to:

A.Purchases or sales of a Reportable Security made on the same day that a cash flow trade is executed in that same security for a client account, as determined and authorized by the Firm's CCO or her representative;

B.Purchases which are part of an automatic dividend reinvestment plan, or an automatic investment plan, or automated means of 401(k) purchases, or VDP contributions;

C.Purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its Reportable Securities, to the extent such rights were acquired from such issuer; or sales of such rights so acquired, or sales occurring simultaneously with the exercise of such rights;

D.Purchases and sales in shares of unaffiliated mutual funds, or ETFs or Options on ETFs. Holdings in unaffiliated mutual funds, ETFs and Options on ETFs must be reported annually, and transactions must be reported quarterly; however, generally trades in unaffiliated mutual funds,

ETFs, and Options on ETFs do not require pre-clearance and are exempt from the 60"day holding for realizing a profit. Exceptions to this exemption may apply when an ETF is purchased for a client's account;

E.In addition to the above exemptions, the CCO may make exceptions to the restrictions imposed upon persons subject to the Code on a case-by-case basis, as deemed appropriate by the CCO, and which appear upon inquiry and investigation to present no reasonable likelihood of harm to any client.

**V.Compliance Procedures**

All access persons are subject to the following procedures:

A.**StarCompliance Application.** Access Persons should use the StarCompliance Application for pre-clearance and reporting requirements under this Code. Certain transactions may require written pre-clearance and reporting on Reports identified as Code Exhibits A, B, C, D, or E, and these forms are available on the Firm's shared drive at: S:\BHMS_Shared\Compliance\Policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

![](barrow-hanleycoerev16x1.jpg)

B.**Records of Reportable Securities Transactions**. Access Persons must notify the Firm's CCO if they or a Family Member have opened a Reportable Account during the quarter. Access Persons must direct their brokers to report into StarCompliance via a data feed or provide the Firm's CCO with duplicate brokerage confirmations of their Reportable Securities transactions and duplicate statements of their Reportable Account(s).

C.**Pre-Clearance of Reportable Securities Transactions.** Access Persons and Family Members must receive prior approval from a designated member of compliance, before purchasing or selling Reportable Securities. Exclusions to this are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Managed Funds in the Firm's 401K Plan or VDP Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Exchange Traded Funds (ETFs);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Purchases and sales over which a Person subject to the Code has no direct or indirect influence or control, such as automatic investments in 401K or VDP accounts, Family Trust Funds, or other accounts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Purchases or sales pursuant to an automatic action under an automated investment plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.Purchases effected upon exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuers, and sales of such rights so acquired or sales occurring simultaneously with the exercise of such rights, acquisition of securities through stock dividends, dividend reinvestments, stock splits, reverse stock splits, mergers, consolidations, spin-offs, and other similar corporate reorganizations, or distributions generally applicable to all holders of the same class of securities;

D.**Open"End Investment Company Shares Other Than Managed Funds.** This Code provides a limited exception on Reportable Securities from pre-clearance and short-term trading profit requirements; securities under this exception include ETFs. (Reportable Funds must be held 30 days).

E.**Pre"Clearance for Reportable Securities is Valid for That Trading Day.** Personal Reportable

Securities transactions should be pre-cleared using the StarCompliance or Exhibit D, Personal Reportable Securities Transaction(s) Pre-Clearance Form. The CCO or another authorized member of the compliance team may approve transactions which appear upon inquiry and investigation to present no reasonable likelihood of harm to any client. Exceptions to this requirement may include the CCO's approval of a pre-clearance request(s) for a calendar week for trades in

Reportable Securities that are not held in a client's account, do not fit the Firm's investment strategies, and are thinly traded such that a trade order will not likely be filled on the day of the pre-clearance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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F.**Pre"Clearance of Any Transaction in a Managed Fund.** All Access Persons and Family Members must receive prior written approval from a designated member of compliance before purchasing or selling any Managed Fund. Pre-clearance for Managed Funds is valid for that trading day. This pre-clearance requirement does not cover purchases and redemptions/sales: (i) into or out of money market funds or short-term bond funds; (ii) effected on a regular periodic basis by automated means, such as 401(k) purchases and VDP transactions, or (iii) 401(k) investment reallocation.

G.**Disclosure of Personal Holdings, and Certification of Compliance with the Code of Ethics and Conduct.** All Access Persons must disclose to the Firm's CCO all personal Reportable Securities holdings at commencement of employment, and annually thereafter as of December 31. Every Access Person must certify on Exhibit A, Initial Report of Access Persons, or Exhibit B, Annual Report of Access Persons, or through StarCompliance:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.The employee recognizes that he/she and family member(s) is subject to all provisions and prohibitions of this Code, and has read, understands, and will follow the Code's requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.The employee and family member(s) have complied with the requirements of this Code, and have reported all personal Reportable Securities, Reportable Accounts, holdings in Managed Funds, and Personal Transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Initial holdings report must be made within ten days of hire.

H.**Reporting Requirements.** The CCO of the Firm will notify each Access Person that he/she is subject to these reporting requirements, will deliver a copy of this Code to each Access Person prior to, or upon, their date of employment, and at any time the Code is amended, and will train each Access Person on appropriate compliance matters. A member of the compliance team will train employees to use StarCompliance for personal reporting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Reportable Securities managed by a third-party in a discretionary advisory account are subject to the annual reporting requirements contained in this Section and are excluded from certain other provisions and prohibitions of the Code. (IPOs and private placements are not excluded.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Reports, personal trades and holdings, and other information submitted pursuant to this Code shall be reviewed periodically by the CCO, kept confidential, and when necessary, provided to the CEO of the Firm, Perpetual, the Firm's legal counsel, regulatory authorities, or auditors upon appropriate request. The designated backup to the CCO is responsible for reviewing and monitoring the personal securities transactions of the CCO, and for assuming the responsibilities of the CCO in her absence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Every Access Person must report to the CCO all Reportable Accounts currently open at the time of his/her initial employment, and any new Reportable Account (this includes any account belonging to Family Members) opened, including the name of the bank or brokerage, the account number, and date the account was opened, and must disclose the new Reportable Account with his/her quarterly transaction report. Information reported in StarCompliance or on Exhibit A must be current within at least 45 days of the date of his/her employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Every Access Person must report to the CCO of the Firm any/all Reportable Account(s) and any/all personal Securities holdings (this includes any account(s) or holdings belonging to Family Members) at the time of his/her initial employment with the Firm. A report must be made through StarCompliance or the designated form, Exhibit A, Initial Report of Access Persons, with account statements attached containing the following information:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Name and principal amount of the Reportable Security, ticker or cusip, share quantity, bond quantity, interest rate, and/or maturity date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Name and account number of the Reportable Account where the Reportable Security is held;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Name of any broker, dealer, or bank with which the Access Person maintains an account in which any Reportable Securities are held for the Access Person's direct or indirect benefit (account statements may be attached); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.The date the Access Person submits the report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.Every Access Person must report to the CCO of the Firm the information described in Paragraph 4 of this Section with respect to transactions in any Reportable Security in which such Access Person has, or by reason of such transaction acquires, any direct or indirect Beneficial Ownership in the Reportable Security.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.Quarterly transaction reports must be made no later than thirty days after the end of the calendar quarter in which the transaction was executed. Every Access Person is required to submit a report for all periods, including those periods in which no Reportable Securities transactions were executed. A report should be made through StarCompliance, or the designated form, Exhibit C, Quarterly Report of Access Persons, account statements may be attached to the form for reporting purposes, containing the following information:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.The Reportable Security name, ticker and/or cusip, interest rate, maturity date, the share quantity, bond quantity, and the principal amount of each Reportable Security transacted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.The nature of the transaction (i.e., purchase or sale);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.The price at which the transaction was executed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.The name of the broker, dealer or bank with or through whom the transaction was executed. Trade confirmations of all personal transactions and copies of periodic Reportable Account statements may be attached to Exhibit C to fulfill the reporting requirement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.The name of the broker, dealer, or bank with whom the Access Person established a new Reportable Account during the period and the date the account was established;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.The date of the transaction(s) and, if different, the date that the report is submitted by the Access Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.Every Access Person must report to the CCO all Political Contributions (this includes contributions made by Family Members) described in Section III.C. of this Code, Restrictions for Access Persons. made during the quarter. A report should be made using StarCompliance or Exhibit E, Political Contribution Pre-Clearance Form.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.Every Access Person should report Gifts accepted or given, and/or Business Entertainment as a provider or participant, using StarCompliance or the Gift & Entertainment Report. Gifts and Entertainment must be reported monthly or upon each occurrence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.A member of the compliance team or the CCO shall periodically review the reports provided by the Firm's Access Persons. Review will include personal transactions and brokerage activity in StarCompliance, personal brokerage statements and holdings, and Political Contributions, among other things.

I.**Conflict of Interest.** Every Access Person must notify the CCO of any personal conflict of interest relationship which may involve the Firm's clients, such as the existence of any economic relationship between their transactions and Reportable Securities held or to be acquired by any client's account. Such notification shall occur in the pre-clearance process or immediately upon becoming aware of the conflict.

J.The CCO must implement and enforce this Code, maintain copies of the Code, keep records of

Code violations, and maintain records of Access Persons' reports as required by the Code.

K.A designated member of the firm serves as the backup to the Chief Compliance Officer. The designated member reviews and signs"off on the CCO's personal reports required under the Code and Compliance Manual. Other compliance personnel may be designated to perform certain functions of the CCO. In the absence of the CCO, the designated backup to the CCO may perform all duties of the CCO as defined in the Code and must report to the CCO any disclosed conflicts or violations that may have occurred in her absence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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VI. CCO's Authority and Duties

The Firm's CCO has a fiduciary duty to the Firm's clients and to Barrow Hanley and is responsible for enforcing and monitoring this Code. The CCO is authorized to grant reasonable exceptions to the provisions and prohibitions of this Code, as permitted by law, and when such exceptions do not conflict with a client's interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;VII. **Reporting of Violations** 

A.Any Access Person of the Firm who becomes aware of a violation of (i) this Code of Ethics and Conduct, (ii) the Compliance Policies and Procedures, (iii) the Governing Policies, (iv) the IT Security Policies & Procedures, or (v) any other internal policies or procedures, must promptly report such violation to the Firm's CCO or the CEO. This reporting requirement includes self"reporting when an employee discovers he/she has violated an internal policy.

B.The Firm's CCO must report to the Firm's Board of Managers all material violations of this Code, the Compliance Policies and Procedures, the Governing Policies, or other internal controls. Material violations may be reported to the CCO of any Managed Fund client, as required.

C.The CCO and CEO will consider reports made to the Board and determine what sanctions, if any, should be imposed.

VIII. Reporting to the Board of Manager

Upon request, the Firm's CCO will prepare an annual report relating to this Code to the Boards of Managed Funds. Such annual report will:

A.Summarize existing procedures concerning personal investing and any changes in the procedures made during the past year;

B.Identify any violations requiring significant remedial action during the past year; and

C.Identify any recommended changes in the existing restrictions or procedures based upon the Firm's experience under the Code, evolving industry practices, or developments in applicable laws or regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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IX. Sanctions

This Code provides disciplinary measures for violations, as follows:

A.Upon discovering a violation of this Code by an Access Person or Family Member, the CCO may impose sanctions as deemed appropriate, including, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Disgorgement: The Firm generally requires that profits realized on transactions made in violation of the Code's procedures be disgorged. A charity shall be selected by the Firm to receive any disgorged or relinquished amounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Extended Holding Period: Any security purchased during the black"out period may be prohibited from being sold for six months.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Unwinding the transaction: Purchases or sales made during a black"out period may be required to be reversed and any profit may be disgorged.

B.The Pay"to"Play Rule imposes a two"year ban on an adviser's ability to receive compensation for advisory services if the Firm or certain of its Covered Associates makes certain Political Contributions to a State or Local Official over the de minimus amount.

C.For sanctions imposed, a memo of correction, suspension, or termination of employment will be retained according to the Code's records retention requirement. This includes violations committed by a Family Member.

**X.Retention of Records**

This Code and the Firm's Compliance Policies and Procedures require all books and records related to this Code to be retained, including:

A.**Code of Ethics and Conduct Records**. This Code (and prior versions in effect during the past seven years), a copy of the reports made by each Access Person, each memorandum made by the Firm's CCO, and a record of any violation and actions taken as a result of such violation, must be maintained by the Firm for a minimum of seven years.

B.**Political Contribution Records**. A list of: (i) all Access Persons; (ii) all government entities to which the Firm provides or has provided investment advisory services or which are or were investors in any covered investment pool to which the Firm has provided services in the past five years; (iii) all direct or indirect Political Contributions made by any Access Person to an official of a Government Entity, or direct or indirect payments to a political party of a state or political subdivision thereof, or to a PAC; and (iv) the name and business address of each regulated Person to whom the Firm provides or agrees to provide, directly or indirectly, payment to solicit a Government Entity for investment advisory services on its behalf. Records relating to Political Contributions must be listed in chronological order and must indicate: (i) the name and title of each contributor; (ii) the name and title of each recipient; (iii) the amount and date of each Political Contribution; and (iv) whether any such Political Contribution was the subject of the exception for returned Political Contributions.

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**Exhibits**

Exhibit A – Initial Report of Access Persons

Exhibit B – Annual Report of Access Persons

Exhibit C – Quarterly Transactions Report of Access Persons

Exhibit D – Personal Reportable Securities Transaction Pre"Clearance Form of Access Persons

Exhibit E – Personal Political Contribution Pre"Clearance Form of Access Persons

Exhibit F – List of Reportable Funds of Access Persons

![](barrow-hanleycoerev23x1.jpg)

**BARROW HANLEY GLOBAL INVESTORS**

**CODE OF ETHICS AND CONDUCT**

**Initial Report of Access Persons**

To the Chief Compliance Officer of Barrow Hanley Global Investors ("Barrow Hanley"), I certify:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I acknowledge receipt of the Code of Ethics and Conduct for Barrow Hanley.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.I recognize that I am subject to Barrow Hanley's Code as an Access Person and have read, understood, and will follow the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Except as noted below, I have no knowledge of the existence of any personal conflict of interest relationship which may involve the Firm, such as any economic relationship between my transactions and Securities held or to be acquired by Barrow Hanley or any of its portfolios.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.As of the date below I and/or a Family Member had a direct or indirect ownership in the following Reportable Securities (brokerage or financial statements may be attached):

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **TYPE OF** |
|  |  |  | **INTEREST** |
| **SECURITY NAME/TYPE/TICKER/CUSIP** | **NUMBER OF** | **PRINCIPAL** | **(DIRECT OR** |
| **INTEREST RATE & MATURITY DATE** | **SHARES** | **VALUE** | **INDIRECT)** |

---

Exhibit A

![](barrow-hanleycoerev24x1.jpg)

**BARROW HANLEY GLOBAL INVESTORS**

**CODE OF ETHICS AND CONDUCT**

**Initial Report of Access Persons**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Continued)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.I and/or a Family Member have the following Reportable Accounts open and have directed the bank or brokerage to send duplicate confirmations and statements to Barrow Hanley:

---

| | |
|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **TYPE OF INTEREST** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **NAME OF FIRM** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **(DIRECT OR INDIRECT)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.I and/or a Family Member have made the following Political Contributions in the previous 2 years:

---

| | | |
|:---|:---|:---|
|  |  | **TYPE OF POLITICAL** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **DATE OF** | **ACTIVITY/** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **NAME OF CANDIDATE** | &nbsp;&nbsp;&nbsp;&nbsp; **CONTRIBUTION** | **CONTRIBUTION** |

---

Date:Signature:

Print Name:

Title:

---

| | |
|:---|:---|
| Employer: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **BARROW HANLEY GLOBAL INVESTORS** |

---

Date:Signature:

Firm's CCO

Exhibit A

![](barrow-hanleycoerev25x1.jpg)

**BARROW HANLEY GLOBAL INVESTORS**

**CODE OF ETHICS AND CONDUCT**

**Annual Report of Access Persons**

To the Chief Compliance Officer of Barrow Hanley Global Investors, ("Barrow Hanley"), I certify:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.That I am subject to the Code as an Access Person, I have read, understood, and agreeto follow the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.During the year ended December 31, 20 , I have complied with the reporting requirements of the Code regarding personal transactions that I, and/or a Family Member, have executed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.I have not disclosed confidential information of the Firm to any Persons outside, or inside,

Barrow Hanley or PPT, except where it was required for the execution of the Firm's business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Except as noted below, I have no knowledge of the existence of any personal conflict of interest relationship which may involve the Firm, such as any economic relationship between my transactions and securities held or to be acquired by Barrow Hanley or any of its portfolios.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.During the year I have abided by the requirements of Barrow Hanley's Code of Ethics and

Conduct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.As of December 31, 20 , I and/or a Family Member had a direct or indirect Beneficial Ownership in the following Reportable Securities:

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | &nbsp;&nbsp; **TYPE OF INTEREST** |
| **SECURITY NAME/TYPE/TICKER/CUSIP** | **NUMBER OF** |  | **(DIRECT OR** |
| **INTEREST RATE & MATURITY DATE** | **SHARES** | &nbsp;&nbsp; **PRINCIPAL VALUE** | **INDIRECT)** |

---

Exhibit B

![](barrow-hanleycoerev26x1.jpg)

**BARROW HANLEY GLOBAL INVESTORS**

**CODE OF ETHICS AND CONDUCT**

**Annual Report of Access Persons**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Continued)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.I and/or a Family Member have the following Reportable Accounts open, and I have directed the bank or brokerage firm to send duplicate confirmations and statements to Barrow Hanley:

---

| | |
|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **TYPE OF INTEREST** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **NAME OF FIRM** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **(DIRECT OR INDIRECT)** |

---

Date:Signature:

Print Name:

Title:

---

| | |
|:---|:---|
| Employer: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **BARROW HANLEY GLOBAL INVESTORS** |

---

Date:Signature:

Firm's CCO

Exhibit B

![](barrow-hanleycoerev27x1.jpg)

**BARROW HANLEY GLOBAL INVESTORS**

**CODE OF ETHICS AND CONDUCT**

**Quarterly Transactions Report of Access Persons**

**For the Calendar Quarter Ended:**

To the Chief Compliance Officer of Barrow Hanley Global Investors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.During the quarter identified above, the following transactions were made in Reportable Securities and are required to be reported under the Barrow Hanley Code of Ethics andConduct:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp; **DATE OF** |  |  | &nbsp;&nbsp;&nbsp;&nbsp; **NATURE OF** |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **BROKER/** |
|  | &nbsp;&nbsp;&nbsp;&nbsp; **DATE OF** |  |  | **TRANSACTION** |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **BROKER/** |
| **SECURITY NAME/TYPE/TICKER/CUSIP** | **TRANS"** | **NUMBER** | &nbsp;&nbsp; **DOLLAR AMOUNT** | **TRANSACTION** |  | **DEALER OR BANK** |
| **SECURITY NAME/TYPE/TICKER/CUSIP** | **TRANS"** | **NUMBER** | &nbsp;&nbsp; **DOLLAR AMOUNT** | (Purchase, Sale, |  | **DEALER OR BANK** |
| **INTEREST RATE & MATURITY DATE** |  |  |  | (Purchase, Sale, |  |  |
| **INTEREST RATE & MATURITY DATE** | **ACTION** | **OF SHARES** | &nbsp;&nbsp; **OF TRANSACTION** | Other) | &nbsp;&nbsp;&nbsp;&nbsp; **PRICE** | **NAME** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.During the quarter identified above, the following Reportable Accounts were opened with direct or indirect beneficial ownership and are required to be reported under the Code.

---

| | | |
|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **TYPE OF INTEREST** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **NAME OF FIRM** | **(DIRECT OR INDIRECT)** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **DATE ACCOUNT OPENED** |

---

Exhibit C

![](barrow-hanleycoerev28x1.jpg)

**BARROW HANLEY GLOBAL INVESTORS**

**CODE OF ETHICS AND CONDUCT**

**Quarterly Transactions Report of Access Persons**

**For the Calendar Quarter Ended:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Continued)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.During the quarter identified above, the following Political Contributions were made, and are required to be reported under the Code.

---

| | | |
|:---|:---|:---|
|  |  | &nbsp;&nbsp;&nbsp;&nbsp; **TYPE OF POLITICAL** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **DATE OF** | **ACTIVITY/** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **NAME OF CANDIDATE** | &nbsp;&nbsp;&nbsp;&nbsp; **CONTRIBUTION** | **CONTRIBUTION** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Except as noted below, I have no knowledge of the existence of any personal conflict of interest relationship which may involve the Firm, such as any economic relationship between my transactions and securities held or to be acquired by the Firm or any of its portfolios.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.During the quarter I have abided by the requirements of Barrow Hanley's Code of Ethics

and Conduct.

Date:Signature:

Print Name:

Title:

---

| | |
|:---|:---|
| Employer: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **BARROW HANLEY GLOBAL INVESTORS** |

---

Date:Signature:

Firm's CCO

Exhibit C

![](barrow-hanleycoerev29x1.jpg)

**BARROW HANLEY GLOBAL INVESTORS**

**CODE OF ETHICS AND CONDUCT**

**Personal Reportable Securities Transaction Pre"Clearance Form of Access Persons**

**(See Code of Ethics and Conduct, V. Compliance Procedures, Section C.)**

To the Chief Compliance Officer of Barrow Hanley Global Investors:

Pre"clearance is requested for the following proposed transactions:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **BROKER** |  |  |
|  |  |  | **NATURE** |  | **/DEALER** |  |  |
|  |  |  | **NATURE** |  |  |  |  |
|  |  |  | **OF** | **PRICE** | **OR BANK** |  |  |
|  | **NUMBER** |  | **OF** | **PRICE** | **THROUGH** | &nbsp;&nbsp;&nbsp;&nbsp; **AUTHORIZED** | &nbsp;&nbsp;&nbsp;&nbsp; **AUTHORIZED** |
|  | **NUMBER** |  |  | **PRICE** | **THROUGH** | &nbsp;&nbsp;&nbsp;&nbsp; **AUTHORIZED** | &nbsp;&nbsp;&nbsp;&nbsp; **AUTHORIZED** |
|  | **NUMBER** |  | **TRANSACTION** | (or | **THROUGH** | &nbsp;&nbsp;&nbsp;&nbsp; **AUTHORIZED** | &nbsp;&nbsp;&nbsp;&nbsp; **AUTHORIZED** |
| **SECURITY NAME/TYPE/TICKER/CUSIP** | **OF** | &nbsp;&nbsp; **DOLLAR AMOUNT** | **TRANSACTION** | (or | **WHOM** |  |  |
| **SECURITY NAME/TYPE/TICKER/CUSIP** | **OF** | &nbsp;&nbsp; **DOLLAR AMOUNT** | (Purchase, Sale, | Proposed | **WHOM** |  |  |
| **INTEREST RATE & MATURITY DATE** |  |  | (Purchase, Sale, | Proposed |  |  |  |
| **INTEREST RATE & MATURITY DATE** | **SHARES** | &nbsp;&nbsp; **OF TRANSACTION** | Other) | Price) | **EFFECTED** | &nbsp;&nbsp;&nbsp;&nbsp; **YES** | &nbsp;&nbsp; **NO** |

---

Date:Signature:

Print Name:

Title:

---

| | |
|:---|:---|
| Employer: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **BARROW HANLEY GLOBAL INVESTORS** |

---

Date:Signature:

Firm's CCO

Exhibit D

![](barrow-hanleycoerev30x1.jpg)

**BARROW HANLEY GLOBAL INVESTORS**

**CODE OF ETHICS AND CONDUCT**

**Personal Political Contribution Pre"Clearance Form of Access Persons**

**(See Code of Ethics and Conduct, III. Procedures for Access Persons, Section C.2)**

To the Chief Compliance Officer of Barrow Hanley Global Investors:

Pre"clearance is requested for the following proposed Political Contribution(s):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  | &nbsp;&nbsp;&nbsp;&nbsp; **IS COVERED** |  |  |
|  |  |  |  | **PERSON ELIGIBLE** | &nbsp;&nbsp;&nbsp;&nbsp; **AUTHORIZED** | &nbsp;&nbsp;&nbsp;&nbsp; **AUTHORIZED** |
|  |  |  |  | **PERSON ELIGIBLE** |  |  |
|  |  | **STATE AND COUNTY OF** | **WHAT OFFICE IS** | **TO VOTE FOR** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **NAME OF CANDIDATE** | &nbsp;&nbsp;&nbsp;&nbsp; **AMOUNT** | **ELECTION** | **CANDIDATE SEEKING?** | **CANDIDATE?** | &nbsp;&nbsp;&nbsp;&nbsp; **YES** | &nbsp;&nbsp; **NO** |

---

Date:Signature:

Print Name:

Title:

---

| | |
|:---|:---|
| Employer: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **BARROW HANLEY GLOBAL INVESTORS** |

---

Date:Signature:

Firm's CCO

Exhibit E

![](barrow-hanleycoerev31x1.jpg)

**BARROW HANLEY GLOBAL INVESTORS**

**CODE OF ETHICS AND CONDUCT**

**List of Reportable Funds of Access Persons**

**(See Code of Ethics and Conduct, V. Compliance Procedures, Section F.)**

---

| | |
|:---|:---|
| **U.S. Registered Funds – 21** | **Non"U.S. Registered Funds – 8** |
| American Beacon Balanced Fund | Australia |
| American Beacon Diversified Fund | Barrow Hanley Global Equity Trust |
| American Beacon Large Cap Value Fund | Colonial First State Investments Ltd " |
| American Beacon Mid Cap Value Fund | &nbsp;&nbsp; Commonwealth Global Shares Fund 5 |
| American Beacon Small Cap Value Fund | Perpetual Global Share Fund |
| Barrow Hanley Emerging Markets Value Fund | Perpetual Select International Share Fund |
| Barrow Hanley International Value Fund |  |
| Brinker " Destinations International Equity Fund | Canada |
| Edward D. Jones " Bridge Builder Large Value | Integra U.S. Value Growth Fund |
| Fund | Leith Wheeler Emerging Markets Equity Fund |
| Equitable " 1290 VT Equity Income Portfolio |  |
| GuideStone Value Equity Fund | Ireland |
| MassMutual Fundamental Value Fund | Old Mutual Value Global Equity Fund |
| MassMutual Small Cap Value Equity Fund |  |
| MML Income & Growth Fund | United Kingdom |
| Principal LargeCap Value III Fund | F&C Investment Trust plc |
| Principal Overseas Fund |  |
| Timothy Plan Defensive Strategies Fund |  |
| Timothy Plan Fixed Income Fund | **Non"Registered Funds – 3** |
| Timothy Plan Growth & Income Fund | Cayman Islands |
| Timothy Plan High Yield Bond Fund | EQ Offshore Aggressive Multimanager Fund |
| Touchstone Value Fund | EQ Offshore Conservative Multimanager Fund |
|  | EQ Offshore Moderate Multimanager Fund |

---

As of January 1, 2022

Exhibit F

![](barrow-hanleycoerev32x1.jpg)

**BARROW HANLEY GLOBAL INVESTORS**

**CODE OF ETHICS AND CONDUCT**

**List of Reportable Funds of Access Persons**

**(See Code of Ethics and Conduct, V. Compliance Procedures, Section F.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Continued)

**Trillium Advised and Sub"Advised Registered Funds**

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp; **Fund Name** | &nbsp;&nbsp; **Share Class** | &nbsp;&nbsp; **Symbol** | &nbsp;&nbsp; **Domicile** | &nbsp;&nbsp; **Role** |
| &nbsp;&nbsp; Green Century Balanced Fund | &nbsp;&nbsp; Retail | &nbsp;&nbsp; GCBLX | &nbsp;&nbsp; US | &nbsp;&nbsp; Sub"Advisor |
| &nbsp;&nbsp; Green Century Balanced Fund | &nbsp;&nbsp; Institutional | &nbsp;&nbsp; GCBUX | &nbsp;&nbsp; US | &nbsp;&nbsp; Sub"Advisor |
| &nbsp;&nbsp; JHF ESG Large Cap Core Fund | &nbsp;&nbsp; A | &nbsp;&nbsp; JHJAX | &nbsp;&nbsp; US | &nbsp;&nbsp; Sub"Advisor |
| &nbsp;&nbsp; JHF ESG Large Cap Core Fund | &nbsp;&nbsp; C | &nbsp;&nbsp; JHJCX | &nbsp;&nbsp; US | &nbsp;&nbsp; Sub"Advisor |
| &nbsp;&nbsp; JHF ESG Large Cap Core Fund | &nbsp;&nbsp; I | &nbsp;&nbsp; JHJIX | &nbsp;&nbsp; US | &nbsp;&nbsp; Sub"Advisor |
| &nbsp;&nbsp; JHF ESG Large Cap Core Fund | &nbsp;&nbsp; R6 | &nbsp;&nbsp; JHJRX | &nbsp;&nbsp; US | &nbsp;&nbsp; Sub"Advisor |
| &nbsp;&nbsp; Trillium ESG Global Equity Fund | &nbsp;&nbsp; Retail | &nbsp;&nbsp; PORTX | &nbsp;&nbsp; US | &nbsp;&nbsp; Advisor |
| &nbsp;&nbsp; Trillium ESG Global Equity Fund | &nbsp;&nbsp; Institutional | &nbsp;&nbsp; PORIX | &nbsp;&nbsp; US | &nbsp;&nbsp; Advisor |
| &nbsp;&nbsp; Trillium ESG Global Equity Fund | &nbsp;&nbsp; A | &nbsp;&nbsp; PER2095AU | &nbsp;&nbsp; Australia | &nbsp;&nbsp; Sub"Advisor |

---

As of December 31, 2021

Exhibit F

## Ex-99.(P)(3)

![](blackrock-coerev1x1.jpg)

Code of Business Conduct and Ethics

December 7, 2021

**Code of Business Conduct and Ethics**

Effective Date: December 7, 2021

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.Introduction**

This global Code of Business Conduct and Ethics ("Code") governs the general commitment by BlackRock, Inc. and its subsidiaries (collectively, "BlackRock") to conduct its business activities in the highest ethical and professional manner and to put client interests first. BlackRock's reputation for integrity is one of its most important assets and is instrumental to its business success. While this Code covers a wide range of business activities, practices, and procedures, it does not cover every issue that may arise in the course of BlackRock's many business activities. Rather, it sets out basic principles designed to guide BlackRock's employees and directors. Consultants and contingent, contract, or temporary workers are expected to comply with the principles of this Code and policies applicable to their location, function, and status.

Every BlackRock employee and director — whatever his or her position — is responsible for upholding high ethical and professional standards and must seek to avoid even the appearance of improper behavior. Any violation of this Code may result in disciplinary action to the extent permitted by applicable law. Any employee who becomes aware of an actual or potential violation of this Code or other BlackRock policy is required to follow the reporting process described in the Global Policy for Reporting Illegal or Unethical Conduct and in Section 10 below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.Compliance with Laws and Regulations**

BlackRock's global business activities are subject to extensive governmental regulation and oversight and it is critical that BlackRock and its employees comply with applicable laws, rules, and regulations, including those relating to insider trading. Employees are expected to refer to the guidance contained in the Compliance Manual and the various policies and procedures contained in the Policy Library in compliance with these laws and regulations and to seek advice from supervisors and Legal & Compliance ("L&C") as necessary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.Conflicts of Interest**

Conflicts of interest may arise when a person's private interest interferes, or appears to interfere, with the interests of BlackRock, or where the interests of an employee or the firm are inconsistent with those of a client or potential client, resulting in the risk of damage to the interests of BlackRock or one or more of its clients. A conflict may arise, for example, if an employee takes an action or has an interest that could appear to make it difficult for the employee to conduct the employee's responsibilities to BlackRock and/or the client objectively and effectively, or if such employee or any person associated with the employee, including but not limited to members of the employee's family or household, receives an improper personal benefit, such as money or a loan, as a result of the individual's position at BlackRock. BlackRock has adopted policies, procedures, and controls designed to manage conflicts of interest, including the Global Conflicts of Interest Policy and the Global Outside Activity Policy. Employees are required to comply with these and other compliance related policies, procedures, and controls and to help mitigate potential conflicts of interest by adhering to the following standard of conduct:

Limited

![](blackrock-coerev2x1.jpg)

Code of Business Conduct and Ethics

December 7, 2021

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Act solely in the best interests of clients;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Uphold BlackRock's high ethical and professional standards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Identify, report, and manage actual, apparent, or potential conflicts of interest; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Make full and fair disclosure of any conflicts of interests, as may be required.

Conflicts of interest may not always be clear-cut and it is not possible to describe every situation in which a conflict of interest may arise – any question with respect to whether a conflict of interest exists, together with any actual or potential conflict of interest, should be directed to managers and L&C.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.Insider Trading and Personal Trading**

Employees and directors who have access to confidential information about BlackRock, its clients, or issuers in which it invests client assets, are prohibited from using or sharing that information for security trading purposes or for any other purpose except in the proper conduct of our business. All non-public information about BlackRock or any of our clients or issuers should be considered "confidential information." Use of material, non-public information in connection with any investment decision or recommendation or to "tip" others who might make an investment decision on the basis of this information is unethical and illegal and could result in civil and/or criminal penalties. Under the Global Personal Trading Policy, BlackRock employees are required to pre-clear all transactions in securities (except for certain exempt securities). Please consult the Global Insider Trading Policy for additional information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.Gifts and Entertainment**

Employees must act in the best interests of our clients and consider the reputation of BlackRock when receiving or providing any gift or entertainment. Employees are prohibited from offering, promising, giving or receiving, or authorizing others to offer, promise, give or receive anything of value, either directly or indirectly, to any party in order to improperly obtain or retain business, or to otherwise gain an improper business advantage.

In addition, strict laws (including criminal laws) govern the provision of gifts and entertainment, including meals, transportation, and lodging, to public officials. Employees are prohibited from providing gifts or anything of value to public officials or their employees or family members in connection with BlackRock's business for the purpose of obtaining or retaining business or a business advantage. Please consult the Global Gifts and Entertainment Policy for additional information. Regional specific regulatory restrictions also apply.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.Political Contributions**

Employees are required to pre-clear political contributions in accordance with the U.S. Political Contributions Policy - Global.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.Corporate Opportunities**

Employees and directors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•are prohibited from taking personal opportunities for themselves that are discovered through the use of corporate property, information, or position without the consent of L&C

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•are prohibited from using corporate property, information, or position for improper personal gain;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•may not compete with BlackRock either directly or indirectly; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•owe a duty to BlackRock to advance its legitimate interests when the opportunity to do so arises.

Limited

![](blackrock-coerev3x1.jpg)

Code of Business Conduct and Ethics

December 7, 2021

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.Competition and Fair Dealing**

BlackRock seeks to outperform its competition fairly and honestly by seeking competitive advantage through superior performance; BlackRock does not engage in illegal or unethical business practices. BlackRock and its employees and directors should endeavor to respect the rights of, and deal fairly with, BlackRock's clients, vendors, and competitors. Specifically, the following conduct is prohibited:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•misappropriating proprietary information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•possessing trade secret information obtained without the owner's consent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•inducing disclosure of proprietary information or trade secret information by past or present employees of other companies; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•taking unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other intentional unfair-dealing practice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.Confidentiality**

BlackRock's employees and directors have an obligation of confidentiality to BlackRock and its clients. Confidential information includes non-public information that might be of use to competitors or that might harm BlackRock or its clients, if disclosed, and non-public information that clients and other parties have entrusted to BlackRock. The obligation to preserve confidential information continues even after employment ends. This obligation does not limit employees from reporting possible violations of law or regulation to a regulator or from making disclosures under whistleblower provisions, as discussed in greater detail in the Global Policy for Reporting Illegal or Unethical Conduct and relevant confidentiality policies and agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.Reporting Any Illegal or Unethical Behavior**

Every employee is required to report any illegal or unethical conduct about which they become aware, including those concerning accounting or auditing matters. Employees may report concerns to L&C by contacting a Managing Director in L&C directly or by contacting the Business Integrity Hotline, contact details for which are available via the intranet homepage. BlackRock will not retaliate or discriminate against any employee because of a good faith report. Employees have the right to report directly to a regulator and may do so anonymously; employees may provide protected disclosures under whistleblower laws and cooperate voluntarily with regulators, in each case without fear of retaliation by BlackRock. Please consult the Global Policy for Reporting Illegal or Unethical Conduct and local compliance manuals for additional detail.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.Protection and Proper Use of BlackRock Assets**

Employees and directors should make every effort to protect BlackRock's assets and use them efficiently. This obligation extends to BlackRock's proprietary information, including intellectual property such as trade secrets, patents, trademarks, and copyrights, as well as business, marketing and service plans, engineering and manufacturing ideas, systems, software programs, designs, databases, records, salary information, and any unpublished financial data and reports. Unauthorized use or distribution of proprietary information constitutes a violation of BlackRock policy and could result in civil and/or criminal penalties. Employees should refer to the Intellectual Property Policy and the Corporate Information Security and Acceptable Use of Technology Policy for additional information on the obligation to protect BlackRock's property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.Bribery and Corruption**

BlackRock employees and directors are prohibited from making payments or offering or giving anything of value, directly or indirectly, to public officials of any country, or to persons in the private sector, if the intent is to influence such persons to perform (or reward them for performing) a relevant function or activity improperly or to obtain or retain business or an advantage in the course of business conduct.

Limited

![](blackrock-coerev4x1.jpg)

Code of Business Conduct and Ethics

December 7, 2021

Employees should refer to the Global Anti-Bribery and Corruption Policy for additional information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.Equal Employment Opportunity and Harassment**

The diversity of BlackRock's employees is a tremendous asset. BlackRock is firmly committed to providing equal opportunity in all aspects of employment and will not tolerate any illegal discrimination or harassment of any kind. In particular, it is BlackRock's policy to afford equal opportunity to all qualified applicants and existing employees without regard to race, ethnicity, religion, color, national origin, sex, pregnancy status, pregnancy-related medical conditions, gender, gender identity or expression, sexual orientation, age, ancestry, physical or mental disability, familial or marital status, political affiliation, citizenship status, genetic information, or protected veteran or military status or any other basis that would be in violation of any applicable ordinance or law. In addition, BlackRock will not tolerate harassment, bias, or other inappropriate conduct on the basis of any of the above protected categories. BlackRock's Global Diversity, Equity and Inclusion Guidelines , which outline the firm's Equal Employment Opportunity policies, and other employment policies are available in the Policy Library.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.Recordkeeping**

BlackRock requires honest and accurate recording and reporting of information in order to conduct its business and to make responsible business decisions. BlackRock, as a financial services provider and a public company, is subject to extensive regulations regarding maintenance and retention of books and records. BlackRock's books, records, accounts, and financial statements must be maintained in reasonable detail, must appropriately reflect BlackRock's transactions, and must conform both to applicable legal requirements and to BlackRock's system of internal controls. Please consult the Global Records Management Policy and other record retention policies, available in the Policy Library, for additional information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.Waivers of the Code**

Any waiver of this Code for an executive officer or director must be made only by BlackRock's Board of Directors or a Board committee and must be promptly disclosed as required by law or stock exchange regulation.

Limited

## Ex-99.(P)(5)

**<u>CODE OF ETHICS</u>**

**CAUSEWAY CAPITAL MANAGEMENT TRUST**

**and**

**CAUSEWAY CAPITAL MANAGEMENT LLC**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**I.<u>INTRODUCTION</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Standards of Conduct</u>. This Code of Ethics has been adopted by the Trust and the Adviser in compliance with Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act. Capitalized terms used in this Code are defined in Appendix 1 to this Code. All Appendixes referred to herein are attached to and are a part of this Code.

This Code is based on the principles that the trustees, managers, officers, and employees of the Trust and the Adviser have a fiduciary duty to the Trust and that the board of managers, officers, and employees of the Adviser or its parent holding company also have a fiduciary duty to the Adviser's other clients. Fiduciaries owe their clients duties of loyalty, honesty, good faith and fair dealing. As fiduciaries, Covered Persons must at all times:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Place the interests of the Funds and Private Accounts first</u>. Covered Persons must scrupulously avoid serving their own personal interests ahead of the interests of the Funds and Private Accounts. Covered Persons may not induce or cause a Fund or Private Account to take action, or not to take action, for personal benefit, rather than for the benefit of the Fund or Private Account. For example, a Covered Person would violate this Code by causing a Fund or Private Account to purchase a Security he or she owned for the purpose of increasing the price of that Security or by Market Timing Funds or Private Accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Avoid taking inappropriate advantage of their positions</u>. Covered Persons may not, for example, use their knowledge of portfolio transactions to profit by the market effect of such transactions. Receipt of investment opportunities, perquisites, or gifts from persons seeking business with the Trust or the Adviser could call into question the exercise of a Covered Person's independent judgment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Conduct all personal Securities Transactions in full compliance with this Code including the reporting requirements</u>. All personal Securities Transactions must be conducted consistent with this Code and in such a manner as to avoid actual or potential conflict of interest or any abuse of an individual's position of trust and responsibility. Doubtful situations should be brought to the attention of the Compliance Officer (or a designee) and resolved in favor of the Funds and Private Accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Comply with all applicable federal securities laws</u>. Covered Persons must comply with all applicable federal securities laws. It is prohibited for a Covered Person, in connection with the purchase or sale, directly or indirectly, by the person of a Security held or to be acquired by a Fund or Private Account:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)To employ any device, scheme or artifice to defraud a Fund or Private Account;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)To make any untrue statement of a material fact to a Fund or Private Account or omit to state a material fact necessary in order to make the statements made to a Fund or Private Account, in light of the circumstances under which they are made, not misleading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)To engage in any act, practice or course of business that operates or would operate as a fraud or deceit on a Fund or Private Account; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)To engage in any manipulative practice with respect to a Fund or Private Account.

This Code does not attempt to identify all possible conflicts of interest, and literal compliance with each of its specific provisions will not act as a shield from liability for personal trading or other conduct that violates a fiduciary duty to Fund shareholders or Private Account clients.

Violations of the Code must be reported promptly to the Compliance Officer. Failure to comply with the Code may result in sanctions, including termination of employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Appendixes to the Code</u>. The Appendixes to this Code are attached to and are a part of the Code. The Appendixes include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Definitions</u> (Appendix 1),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Contact Persons</u> (Appendix 2),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Certification of Compliance with Code of Ethics</u> (Appendix 3 and 3-I),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)<u>Personal Securities Holdings and Accounts Disclosure Form</u> (Appendix 3-A)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Form Letter to Broker, Dealer or Bank</u> (Appendix 4).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>Report of Securities Transactions</u> (Appendix 5)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<u>Initial Public Offering / Private Placement Clearance Form</u> (Appendix 6)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Application of the Code to Independent Fund Trustees</u>. The following provisions do not apply to Independent Fund Trustees and their Immediate Families.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Personal Securities Transactions (Section II)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Initial, Quarterly and Annual Holdings Reporting Requirements (Section III.A)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**II. <u>PERSONAL SECURITIES TRANSACTIONS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Prohibited Transactions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Prohibited Securities Transactions</u>. The following Securities Transactions are prohibited and will not be authorized by the Compliance Officer (or a designee) absent exceptional circumstances. The prohibitions apply only to the categories of persons specified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.<u>Pending Buy or Sell Orders (Investment Personnel and Access Persons)</u>. Any purchase or sale of Securities (except Funds) by Investment Personnel or Access Persons on any day during which any Fund or Private Account has a pending "buy" or "sell" order in the same Security (or Equivalent Security) until that order is executed or withdrawn.

This prohibition applies whether the Securities Transaction is in the same direction (<u>e.g.</u>, two purchases) or the opposite direction (a purchase and sale) as the transaction of the Fund or Private Account. See exemption in Section II.B.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.<u>Seven-Day</u> <u>Blackout (Investment Personnel and Access Persons)</u>. Purchases or sales of Securities (except Funds and registered open-end investment companies that are not ETFs) by Investment Personnel or Access Persons within seven calendar days before and after a purchase or sale of the same Securities (or Equivalent Securities) by any Fund or Private Account. For example, if a Fund or Private Account trades a Security on day one, day eight is the first day any Investment Personnel or Access Persons may trade that Security (or Equivalent Security) for an account in which he or she has a beneficial interest. This prohibition applies whether the Securities Transaction is in the same direction or the opposite direction as the transaction of the Fund or Private Account. This prohibition also does not apply where a personal trade follows or precedes a Fund or Private Account trade to purchase or sell a basket of securities to invest cash or raise cash (<u>e.g</u>., program trades or cash equitization trades). Investment Personnel and Access Persons may not cause a Fund or Private Account to refrain from trading in order to avoid the application of this prohibition. See exemption in Section II.B.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.<u>Intention to Buy or Sell for a Fund or Private Account (Investment Personnel and Access Persons)</u>. Purchases or sales of Securities (except Funds) by an Access Person or Investment Person at a time when that Access Person or Investment Person intends, or knows of another's intention, to purchase or sell that Security (or an Equivalent Security) on behalf of a Fund or Private Account. This prohibition also applies whether the Securities Transaction is in the same direction or the opposite direction as the transaction of the Fund or Private Account. This prohibition does not apply with respect to Fund or Private Account trades to purchase or sell a basket of securities to invest cash or raise cash (<u>e.g.</u>, program trades or cash equitization trades).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.<u>Sixty Day</u> <u>Short-Term Trading Profit Restriction (Investment Personnel and Access Persons)</u>. Investment Personnel are prohibited from profiting from any purchase and sale, or sale and purchase, of a Security or Equivalent Security within sixty calendar days.

All Access Persons are prohibited from profiting from any purchase and sale, or sale and purchase, of a Fund or Private Account within sixty calendar days.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.<u>Restricted List (Investment Personnel and Access Persons)</u>. Investment Personnel and Access Persons are prohibited from purchases or sales of Securities on the Adviser's Restricted List, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.<u>Holdings Restriction (Investment Personnel and Access Persons)</u>. Investment Personnel and Access Persons are prohibited from purchasing Securities or Equivalent Securities (except Funds and ETFs) currently held or sold short by any Fund or Private Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g.<u>Excessive Trading (Investment Personnel and Access Persons)</u>. Excessive trading is strongly discouraged. Excessive trading means trading with a frequency that potentially imposes an administrative burden on the Compliance department, interferes with regular job duties, or adversely affects clients, as determined by the Compliance Officer in his or her discretion. In general, any Access Person requesting preclearance for more than 10 Securities Transactions in a month should expect additional scrutiny regarding his or her trades. The Compliance Officer or a designee monitors trading

activity, and may report such activity to Adviser management and/or limit the number of Securities Transactions by an Access Person during a given period. Notwithstanding the foregoing, this rule does not apply to Securities Transactions in an account that is managed by a broker or adviser with discretionary authority over the account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Always Prohibited Securities Transactions</u>. The following Securities Transactions for Funds or Private Accounts are prohibited for all Access Persons and Investment Persons and will not be authorized under any circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.<u>Inside Information</u>. Any transaction in a Security while in possession of material nonpublic information regarding the Security or the issuer of the Security. For more detailed information, see the Adviser's Insider Trading Policy in its Compliance Policies and Procedures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.<u>Market Manipulation</u>. Transactions intended to raise, lower, or maintain the price of any Security or to create a false appearance of active trading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.<u>Others</u>. Any other transactions deemed by the Compliance Officer (or a designee) to involve a conflict of interest, possible diversions of a corporate opportunity, an appearance of impropriety, or an administrative burden, or determined by the Compliance Officer (or designee) in his or her discretion to be prohibited for any other reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Initial Public Offerings (Investment Personnel and Access Persons)</u>. Any purchase of Securities by Investment Personnel or Access Persons in an initial public offering (other than a new offering of a registered open-end investment company) or purchase of cryptocurrency tokens or Initial Coin Offerings (which may be analogous to IPOs) is only permitted if the Compliance Officer grants permission in advance after considering, among other facts, whether the investment opportunity should be reserved for a Fund or Private Account and whether the opportunity is being offered to the person by virtue of the person's position as an Investment Person or Access Person. If authorized, the Compliance Officer will maintain a record of the reasons for such authorization (see Appendix 6).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Private Placements (Investment Personnel and Access Persons)</u>. Acquisition of Beneficial Interests in Securities in a Private Placement by Investment Personnel or Access Persons is only permitted if the Compliance Officer (or a designee) grants permission in advance after considering, among other facts, whether the investment opportunity should be reserved for a Fund or Private Account and whether the opportunity is being offered to the person by virtue of the person's position as an Investment Person or Access Person. If a Private Placement transaction is permitted, the Compliance Officer will maintain a record of the reasons for such approval (see Appendix 6). Investment Personnel who have acquired securities in a Private Placement are required to disclose that investment to the Compliance Officer when they play a part in any subsequent consideration of an investment in the issuer by a Fund or Private Account, and the decision to purchase securities of the issuer by a Fund or Private Account must be independently authorized by a Portfolio Manager with no personal interest in the issuer.

B.<u>Exemptions.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.The following Securities Transactions are exempt from the restrictions set forth in

Section II.A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.<u>Mutual Funds</u>. Securities issued by any registered open-end investment companies (excluding Funds and mutual fund clients for which the Adviser serves as investment adviser or subadviser and ETFs);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.<u>No Knowledge</u>. Securities Transactions where neither the Access Person nor Investment Person nor an Immediate Family member knows of the transaction before it is completed (for example, Securities Transactions effected for an Access Person or Investment Person by a trustee of a blind trust or by an automated or "robo" adviser without Access Person or Investment Person input or approval, or discretionary trades involving an investment partnership or investment club in which the Access Person or Investment Person is neither consulted nor advised of the trade before it is executed);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.<u>Certain Corporate Actions</u>. Any acquisition of Securities through stock dividends, dividend reinvestments, stock splits, reverse stock splits, mergers, consolidations, spin-offs, or other similar corporate reorganizations or distributions generally applicable to all holders of the same class of Securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.<u>Rights</u>. Any acquisition of Securities through the exercise of rights issued by an issuer <u>pro rata</u> to all holders of a class of its Securities, to the extent the rights were acquired in the issue;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.<u>Charities and Inheritances</u>. Any disposition of Securities (or Equivalent Securities) donated or transferred to charitable or similar organizations, or any acquisition of Securities (or Equivalent Securities) through inheritance or similar estate transfer processes. This exception does not apply to a donation where the Access Person or Investment Person knows that the recipient will immediately sell the Securities (or Equivalent Securities).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.<u>Miscellaneous</u>. Any transaction in the following: (1) bankers' acceptances,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)bank certificates of deposit, (3) commercial paper, (4) high quality short-term debt, including repurchase agreements, (5) Securities that are direct obligations of the U.S. Government, (6) municipal bonds, and (7) other Securities as may from time to time be designated in writing by the Compliance Officer on the grounds that the risk of abuse is minimal or non-existent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Personal Transactions in Securities that also are being purchased, sold or held by a Fund or Private Account are exempt from the prohibitions of Sections II.A.1. a and b if the Investment Person or Access Person does not, in connection with his or her regular functions or duties, make, participate in, or obtain information regarding the purchase or sale of Securities by that Fund or Private Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Application to Commodities, Futures, Options on Futures and Options on Broad- Based Indexes</u>. Commodities, futures (including currency futures and futures on securities comprising part of a broad-based, publicly traded market based index of stocks, but not including futures on single securities) and options on futures and options on broad-based indexes are not subject to the prohibited transaction provisions of Section II.A., but are subject to the Code's transaction reporting requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Application to Currencies and Cryptocurrencies</u>. Currencies, such as US Dollars or euros, are not Securities and are not subject to the Code. Similarly, cryptocurrencies, such as Bitcoin, which are a virtual or digital representation of value, are not Securities and are not subject to

the Code. However, purchases of cryptocurrency tokens and ICOs are subject to preclearance, and, depending on the instrument, derivatives on tokens are subject to preclearance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**III.** <u>**REPORTING AND PRECLEARANCE REQUIREMENTS**</u>

A. <u>Reporting and Preclearance Requirements for Access Persons and Investment Personnel</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Preclearance Procedures</u>. Access Persons and Investment Persons must obtain approval from the Compliance Officer prior to entering into any Securities Transactions (including IPOs and Private Placements) or purchases or sales of cryptocurrency tokens or ICOs (which are subject to the same procedures as Securities Transactions below), except that preclearance is not required for the exempt Securities Transactions set forth in Section II.B or for Securities Transactions in Funds or federal Thrift Savings Plan funds. An Access Person's or Investment Person's first failure to preclear a Securities Transaction within a five year period will not be considered a violation and will receive a warning, unless the Securities Transaction involves a violation of the prohibitions of Section II.A. Access Persons and Investment Persons may preclear Securities Transactions only where they have a present intent to transact in the Security.

To preclear a Securities Transaction, an Access Person or Investment Person shall communicate his or her request to the Compliance Officer, either through the automated preclearance system or a manual process, and provide the following information:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)Issuer name;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Type of security (stock, bond, note, etc.); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)Nature of transaction (purchase or sale).

Approval of a Securities Transaction, once given, is effective only for two business days or until the employee discovers that the information provided at the time the transaction was approved is no longer accurate, whichever is shorter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Initial Holdings and Accounts Report</u>. Every Access Person and Investment Person must submit within 10 days of becoming an Access Person or Investment Person an Initial Holdings and Accounts Report (see Appendix 3-A) to the Compliance Officer listing all Securities accounts and Securities that he or she holds in such accounts in which that Access Person or Investment Person (or Immediate Family member) has a Beneficial Interest. The information in the Initial Holdings and Accounts Report must be current as of a date not more than 45 days prior to the date the person becomes an Access Person or Investment Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Quarterly Reporting Requirements</u>. Every Access Person and Investment Person (and Immediate Family member) must arrange for the Compliance Officer or a designee to receive directly from any broker, dealer, or bank that effects any Securities Transaction, duplicate copies of each confirmation for each such transaction and periodic statements for each brokerage account in which such Access Person or Investment Person (and Immediate Family member) has a Beneficial Interest. Attached hereto as Appendix 4 is a form of letter that may be used to request such documents from such entities. All copies must be received no later than 30 days after the end of the calendar quarter. Each confirmation or statement must disclose the following information:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)the date of the transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)the title (and exchange ticker symbol or CUSIP number, interest rate and maturity date, as applicable);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)the number of shares and principal amount;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)the nature of the transaction (<u>e.g.</u>, purchase or sale);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e)the price of the Security; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f)the name of the broker, dealer or bank through which the trade was effected.

If an Access Person or Investment Person (or Immediate Family member) is not able to arrange for duplicate confirmations and periodic statements to be sent that contain the information required above, or if a transaction is consummated without an intermediary, he or she must submit a quarterly transaction report (see Appendix 5) within 30 days after the completion of each calendar quarter to the Compliance Officer or a designee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Every Access Person or Investment Person who establishes a Securities account during the quarter in which that Access Person or Investment Person (or Immediate Family member) has a Beneficial Interest must submit an Account Report (see Appendix 5) to the Compliance Officer or a designee. This report must be submitted to the Compliance Officer or a designee within 30 days after the completion of each calendar quarter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>Annual Holdings and Accounts Report</u>. Every Access Person and Investment Person must annually submit an Annual Holdings and Accounts Report (see Appendix 3-A) listing all Securities accounts and Securities in which that Access Person or Investment Person (or Immediate Family member) has a Beneficial Interest. The information in the Annual Holdings Report must be current as of a date no more than 45 days before the report is submitted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.An Access Person or Investment Person is not required to report Securities accounts that may only hold open-end mutual funds (except ETFs); however, an Access Person or Investment Person is required to report Securities accounts that are permitted to hold other Securities or ETFs even if the Securities account does not currently hold other Securities or ETFs.

B.<u>Reporting Requirements for Independent Fund Trustees</u>

Each Independent Fund Trustee (and his or her Immediate Family) must report to the

Compliance Officer or a designee any trade in a Security by any account in which the Independent Fund Trustee has any Beneficial Interest if the Independent Fund Trustee knew or, in the ordinary course of fulfilling his or her duty as a Trustee of the Trust, should have known that during the 15- day period immediately preceding or after the date of the transaction in a Security by the Trustee such Security (or an Equivalent Security) was or would be purchased or sold by a Fund or such purchase or sale by a Fund was or would be considered by the Fund, except with respect to purchases or sales of a basket of securities to invest cash or raise cash (<u>e.g.</u>, program trades or cash equitization trades). Independent Fund Trustees who need to report such transactions should refer to the procedures outlined in Section III.A.2.

C.<u>Exemptions, Disclaimers and Availability of Reports</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Exemptions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)A Securities Transaction involving the following circumstances or Securities is exempt from the reporting requirements discussed above: (1) neither the Access Person or Investment Person nor an Immediate Family member had any direct or indirect influence or control over the transaction; (2) Securities directly issued by the U.S. Government; (3) bankers' acceptances;

(4)bank certificates of deposit; (5) commercial paper; (6) high quality short-term debt instruments,

including repurchase agreements; and (7) shares issued by open-end mutual funds (excluding Funds and mutual fund clients for which the Adviser serves as investment adviser or subadviser and ETFs).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)An Access Person or Investment Person shall not be required to make a transaction report under Section III.A. to the extent that information in the report would duplicate information recorded by the Adviser pursuant to Rule 204-2(a)(13) of the Advisers Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)With respect to transactions effected pursuant to an Automatic Investment Plan, Access Persons and Investment Persons need not make quarterly transaction reports under Section III.A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Disclaimers</u>. Any report of a Securities Transaction for the benefit of a person other than the individual in whose account the transaction is placed may contain a statement that the report should not be construed as an admission by the person making the report that he or she has any direct or indirect beneficial ownership in the Security to which the report relates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Availability of Reports</u>. All information supplied pursuant to this Code may be made available for inspection to the Board of Trustees of the Trust, the management of the Adviser, the Compliance Officer, any party to which any investigation is referred by any of the foregoing, the SEC, any self-regulatory organization of which the Adviser is a member, any state securities commission or regulator, and any attorney or agent of the foregoing or of the Trust. Information supplied pursuant to this Code may also be maintained by a third-party vendor engaged by the Adviser to facilitate administration of the Code, provided the vendor has agreed to maintain the confidentiality of such information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**IV. <u>FIDUCIARY DUTIES</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Confidentiality</u>. Covered Persons are prohibited from revealing information relating to the investment intentions or activities of the Funds or Private Accounts except to persons whose responsibilities require knowledge of the information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Corporate Opportunities</u>. Access Persons and Investment Persons may not take personal advantage of any opportunity properly belonging to the Funds or Private Accounts. This includes, but is not limited to, acquiring Securities for one's own account that would otherwise be acquired for a Fund or Private Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Undue Influence</u>. Covered Persons may not cause or attempt to cause any Fund or Private Account to purchase, sell or hold any Security in a manner calculated to create any personal benefit to the Covered Person. If a Covered Person (or Immediate Family member) stands to benefit materially from an investment decision for a Fund or Private Account which the Covered Person is recommending or participating in, the Covered Person must disclose to those persons with authority to make investment decisions for the Fund or Private Account (or, if the Covered Person in question is a person with authority to make investment decisions for the Fund or Private Account, to the Compliance Officer) any Beneficial Interest that the Covered Person (or Immediate Family member) has in that Security or an Equivalent Security, or in the issuer thereof, where the decision could create a material benefit to the Covered Person (or Immediate Family member) or the appearance of impropriety. The person to whom the Covered Person reports the interest, in consultation with the Compliance Officer, must determine whether or not the Covered Person will be restricted in making investment decisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**V.** <u>**COMPLIANCE WITH THIS CODE OF ETHICS**</u>

A.<u>Compliance Officer Review</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Monitoring of Personal Securities Transactions</u>. The Compliance Officer or a designee will review personal Securities Transactions and holdings reports made pursuant to Section

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Investigating Violations of the Code</u>. The Compliance Officer will investigate any suspected violation of the Code and report the results of each investigation to the Chief Operating Officer of the Adviser. The Chief Operating Officer together with the Compliance Officer will review the results of any investigation of any reported or suspected violation of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Annual Reports</u>. At least annually, the Compliance Officer must furnish to the Trust's Board of Trustees, and the Board of Trustees must consider, a written report that (1) describes any issues arising under this Code or procedures since the last report to the Board of Trustees, including, but not limited to, information about material violations of the Code or procedures and sanctions imposed in response to the material violations, and (2) certifies that the Fund and the Adviser have adopted procedures reasonably necessary to prevent Covered Persons from violating the Code.

B.<u>Remedies</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Sanctions</u>. If the Compliance Officer and the Chief Operating Officer of the Adviser determine that a Covered Person has committed a violation of the Code following a report of the Compliance Officer, the Compliance Officer and the Chief Operating Officer of the Adviser may impose sanctions and take other actions as they deem appropriate, including a letter of caution, suspension of personal trading rights, suspension of employment (with or without compensation), fine, civil referral to the SEC, criminal referral, and termination of the employment of the violator for cause. Absent exceptional circumstances, an Access Person's first violation of the Code within a five year period would result in a 30-day suspension of personal trading privileges, a second violation within a five year period would result in a 90-day suspension of personal trading privileges, and a third violation within a five year period would result in a 2-year suspension of trading privileges. For these purposes, violations would be measured from the date the violation occurred and include, for accumulation purposes, past violations. A suspension of trading privileges would generally entail a prohibition from purchasing Securities, but would not prohibit purchases of registered open-end investment companies and would not prohibit sales of Securities or purchases of Securities to cover short positions.

The Compliance Officer and the Chief Operating Officer of the Adviser also may require the Covered Person to reverse the trade(s) in question and forfeit any profit or absorb any loss derived therefrom. The amount of profit shall be calculated by the Compliance Officer and the Chief Operating Officer of the Adviser. Such profit and any other monetary fine imposed hereunder shall be paid by the Covered Person to the Adviser and forwarded by the Adviser to a charitable organization selected by the Compliance Officer and the Chief Operating Officer of the Adviser. The Compliance Officer and the Chief Operating Officer of the Adviser may not review his or her own transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Sole Authority</u>. The Compliance Officer and the Chief Operating Officer of the Adviser have sole authority, subject to the review set forth in Section V.B.1 above, to determine the remedy for any violation of the Code, including appropriate disposition of any monies forfeited

pursuant to this provision. Failure to promptly abide by a directive to reverse a trade or forfeit profits may result in the imposition of additional sanctions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Exceptions to the Code</u>. Exceptions to the Code will rarely, if ever, be granted. The Compliance Officer may grant exceptions to the requirements of the Code on a case by case basis if the Compliance Officer finds that the proposed conduct involves negligible opportunity for abuse, or upon a showing by the employee that he or she would suffer extreme financial hardship should an exception not be granted. Should the subject of the exception request involve a Securities Transaction, a change in the employee's investment objectives, tax strategies, or special new investment opportunities would not constitute acceptable reasons for an exception. Any exceptions granted must be in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Compliance Certification</u>. The Adviser shall provide each Covered Person with a copy of the Code of Ethics and any amendments. Each Access Person and Investment Person shall certify that he or she has received, read and understands the Code and any amendments by executing the Certification of Compliance with the Code of Ethics form (see Appendix 3). In addition, on an annual basis, all Access Persons and Investment Persons will be required to re-certify on such form (see Appendix 3) that they have read and understand the Code and any amendments, that they have complied with the requirements of the Code, and that they have reported all Securities Transactions required to be disclosed or reported pursuant to the requirements of the Code. Independent Fund Trustees and members of the board of managers of the Adviser's parent holding company should complete Appendix 3-I only.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.<u>Inquiries Regarding the Code</u>. The Compliance Officer will answer any questions about the Code or any other compliance-related matters.

DATED: April 25, 2005

REVISED: November 1, 2005; January 30, 2006; January 28, 2008; February 1, 2010; August 2, 2010; August 10, 2010; July 1, 2013; June 30, 2015; June 30, 2016; December 29, 2017; June 29, 2018; June 3, 2019; June 30, 2020; October 1, 2020; June 30, 2021

**Appendix 1**

**DEFINITIONS**

"<u>1940 Act</u>" means the Investment Company Act of 1940, as amended.

"<u>Access Person</u>" means any officer, general partner or Advisory Person of the Trust, the Adviser, or Causeway (Shanghai) Information Consulting Co., Ltd.; provided, that the employees of SEI Investments Global Funds Services and its affiliates (collectively, "SEI") shall not be deemed to be "Access Persons" as their trading activity is covered by the Code of Ethics adopted by SEI in compliance with Rule 17j-1 under the 1940 Act. Unless otherwise determined by the Compliance Officer in writing, Independent Fund Trustees and members of the board of managers of the Adviser's parent holding company who are not Advisory Persons are deemed not to be Access Persons under this Code on the grounds that they do not have regular access to information or recommendations regarding the purchase or sale of Securities by Funds or Private Accounts and the risk of abuse is deemed minimal.

"<u>Adviser</u>" means Causeway Capital Management LLC.

"<u>Advisers Act</u>" means the Investment Advisers Act of 1940, as amended.

"<u>Advisory Person</u>" means

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)any trustee, member of the board of managers of the Adviser's parent holding company, or officer, general partner or employee of the Adviser, Causeway (Shanghai) Information Consulting Co., Ltd., or the Trust (or of any company in a Control relationship with any of such companies) who, in connection with his or her regular functions or duties, makes, participates in, or obtains or has access to information regarding the purchase or sale of Securities by, or the nonpublic portfolio holdings of, the Funds or Private Accounts, or has access to or whose functions relate to the making of any recommendations with respect to such purchases or sales, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)any natural person in a Control relationship to the Trust or the Adviser who obtains information concerning recommendations made to the Funds or Private Accounts with respect to the purchase or sale of Securities by the Funds or Private Accounts.

"<u>Automatic Investment Plan</u>" means a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An Automatic Investment Plan includes a dividend reinvestment plan.

"<u>Beneficial Interest</u>" means the opportunity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, to profit, or share in any profit derived from, a transaction in the subject Securities. A Covered Person is deemed to have a Beneficial Interest in Securities owned by members of his or her Immediate Family. Common examples of Beneficial Interest include joint accounts, spousal accounts, UTMA accounts, partnerships, trusts and controlling interests in corporations. Any uncertainty as to whether a Covered Person has a Beneficial Interest in a Security should be brought to the attention of the Compliance Officer. Such questions will be resolved in accordance with, and this definition shall be subject to, the definition of "beneficial owner" found in Rules 16a-1(a)(2) and (5) promulgated under the Securities Exchange Act of 1934.

"<u>Code</u>" means this Code of Ethics, as it may be amended from time to time.

i

"<u>Compliance Officer</u>" means the Chief Compliance Officer of the Adviser and the Trust and the persons designated in Appendix 2, as such Appendix shall be amended from time to time.

"<u>Control</u>" shall have the same meaning as that set forth in Section 2(a)(9) of the 1940 Act.

"<u>Covered Person</u>" means any Access Person, Investment Person, Independent Fund Trustee, member of the board of managers of the Adviser's parent holding company, or member, officer or employee of the Adviser, Causeway (Shanghai) Information Consulting Co., Ltd., or the Adviser's parent holding company (or of any company in a Control relationship with any of such companies).

"<u>Equivalent Security</u>" means any Security issued by the same entity as the issuer of a subject Security, including options, rights, stock appreciation rights, warrants, preferred stock, restricted stock, phantom stock, futures on single securities, bonds, and other obligations of that company or security otherwise convertible into that security. Options on securities and futures on single securities are included even if, technically, they are issued by the Options Clearing Corporation, a futures clearing authority, or a similar entity.

"<u>ETF</u>" means exchange-traded fund.

"<u>Fund</u>" means a portfolio of the Trust.

"<u>Immediate Family</u>" of a person means any of the following persons who reside in the same household as such person:

---

| | | |
|:---|:---|:---|
| child | grandparent | son-in-law |
| stepchild | spouse | daughter-in-law |
| grandchild | sibling | brother-in-law |
| parent | mother-in-law | sister-in-law |
| stepparent | father-in-law |  |

---

Immediate Family includes adoptive relationships and any other relationship (whether or not recognized by law) which the Compliance Officer determines could lead to the possible conflicts of interest, diversions of corporate opportunity, or appearances of impropriety which this Code is intended to prevent.

"<u>Independent Fund Trustee</u>" means a trustee of the Trust who is not an "interested person" as that term is defined in Section 2(a)(19) of the 1940 Act.

"<u>Initial Coin Offering</u>" or "ICO", which may also be referred to as a "token" offering, is similar to an IPO and used to raise capital, often providing the buyer certain rights once issued.

"<u>Initial Public Offering</u>" or "IPO" is an offering of securities registered under the Securities Act of 1933 by an issuer who immediately before the registration of such securities was not subject to the reporting requirements of sections 13 or 15(d) of the Securities Exchange Act of 1934.

"<u>Investment Personnel" and "Investment Person</u>" mean (1) employees of the Adviser, Causeway (Shanghai) Information Consulting Co., Ltd., or the Trust (or of any company in a Control relationship with any of such companies) who, in connection with his or her regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of Securities, or (2) any natural person who Controls the Adviser or the Trust and who obtains information concerning recommendations made to the Funds or Private Accounts regarding the purchase and sale of Securities by the Funds or Private Accounts. References to Investment Personnel include without limitation Portfolio Managers.

ii

"<u>Market Timing</u>" means transactions deemed by the Compliance Officer to constitute the short-term buying and selling of shares of Funds or Private Accounts to exploit pricing inefficiencies.

"<u>Portfolio Manager</u>" means a person who has or shares principal day-to-day responsibility for managing the portfolio of a Fund or Private Account.

"<u>Private Account</u>" means the portion of a portfolio of a private client or mutual fund client for which the Adviser serves as investment adviser or subadviser.

"<u>Private Placement</u>" means a limited offering exempt from registration pursuant to Rules 504, 505 or 506 or under Section 4(2) or 4(6) of the Securities Act of 1933.

"<u>Restricted List</u>" means the list of companies maintained by the Compliance Officer about which the Adviser or its affiliates potentially possess material nonpublic information.

"<u>SEC</u>" means the Securities and Exchange Commission.

"<u>Security</u>" means a security as defined in Section 2(a)(36) of the 1940 Act or Section 202(a)(18) of the Advisers Act, including, but not limited to, stock, notes, bonds, debentures, and other evidences of indebtedness (including loan participations and assignments), limited partnership interests, investment contracts, and all derivative instruments of the foregoing, such as options and warrants. "Security" does not include futures and options on futures (except for single security futures and options on futures), but the purchase and sale of such instruments are nevertheless subject to the reporting requirements of the Code. "Security" also does not include currencies or cryptocurrencies, but the purchase and sale of ICOs and tokens are nevertheless subject to the reporting requirements of the Code.

"<u>Securities Transaction"</u> means a purchase or sale of Securities in which a person (or Immediate Family member of such person) has or acquires a Beneficial Interest.

"<u>Trust</u>" means Causeway Capital Management Trust, an investment company registered under the 1940 Act for which the Adviser serves as investment adviser.

iii

**Appendix 2**

**CONTACT PERSONS**

COMPLIANCE OFFICER

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Kurt J. Decko, Chief Compliance Officer/General Counsel

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Nicolas Chang, Senior Compliance Officer

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Kevin Hu, Compliance Officer

No Compliance Officer is permitted to preclear or review his/her own transactions or reports under this Code.

**Appendix 3**

**CERTIFICATION OF COMPLIANCE WITH CODE OF ETHICS**

I acknowledge that I have received the Code of Ethics dated June 30, 2021, and certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have read the Code of Ethics and any amendments and I understand that it applies to me and to all accounts in which I or a member of my Immediate Family has any Beneficial Interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.In accordance with Section III.A of the Code of Ethics, I will report or have reported all Securities Transactions in which I have, or a member of my Immediate Family has, a Beneficial Interest, except for transactions exempt from reporting under Section III.C.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.I have listed on Appendix 3-A of this form all accounts and securities in which I have, or any member of my Immediate Family has, any Beneficial Interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.I will comply or have complied with the Code of Ethics in all other

respects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.I agree to disgorge and forfeit any profits on prohibited transactions in accordance with the requirements of the Code of Ethics.

_____________________________________

Access Person's/Investment Person's Signature

_____________________________________

Print Name

Date:____________________

**Appendix 3-A**

**PERSONAL SECURITIES HOLDINGS and ACCOUNTS DISCLOSURE FORM**

**(for use as an Initial or Annual Holdings and Accounts Report)**

Pursuant to Section III.A.1 or III.A.3 of the Code of Ethics, please list all Securities accounts and, if not included in a listed Securities account, all Securities holdings in which you or your Immediate Family member has a Beneficial Interest. You do not need to list those Securities that are exempt pursuant to Section III.C.

Is this an Initial or Annual Report? ____________________________ <br> Name of Access Person/Investment Person: ____________________________ <br> Name of Account Holder(s): ____________________________

Relationship to Access Person/Investment Person: ____________________________

<u>SECURITIES ACCOUNTS:</u>

<u>Account Name</u> <u>Account Number</u> <u>Name of Broker/Dealer/Bank</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. (Include additional rows as necessary)

<u>SECURITIES HOLDINGS:</u>

List below Securities held <u>other than</u> in a Securities account listed above :

---

| | | | |
|:---|:---|:---|:---|
| <u>Title and type of Security (and</u> | <u>No. of</u> | <u>Principal Amount</u> | <u>Name of Broker/Dealer/Bank (if</u> |
| <u>exchange ticker symbol or CUSIP</u> | <u>Shares/Units</u> |  | <u>any)</u> |
| <u>number)</u> | <u>(if applicable)</u> |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. (Attach separate sheets as necessary)

I certify that this Report constitutes all the Securities accounts and Securities that must be reported pursuant to this Code.

____________________________________

Access Person/Investment Person Signature

---

| | |
|:---|:---|
| **____________________________________** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **__________________________** |
| Print Name | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Date |

---

**Appendix 3-I**

**CERTIFICATION OF COMPLIANCE WITH CODE OF ETHICS**

**(Independent Fund Trustees**

**and**

**members of the board of managers of the Adviser's parent holding company)**

I acknowledge that I have received the Code of Ethics dated June 30, 2021, and certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have read the Code of Ethics and any amendments, and I understand that it applies to me and to all accounts in which I or a member of my Immediate Family has any Beneficial Interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.I will report or have reported all Securities Transactions required to be reported under Section III.B of the Code in which I have, or a member of my Immediate Family has, a Beneficial Interest (Independent Fund Trustees only).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.I will comply or have complied with applicable provisions of the Code of Ethics in all other respects.

______________________________

Independent Fund Trustee/Manager Signature

______________________________

Print Name

Date:__________________

**Appendix 4**

**Form of Letter to Broker, Dealer or Bank**

Subject:Account # _________________

Dear ________________:

Causeway Capital Management LLC ("Adviser"), my employer, is a registered investment adviser. In connection with the Code of Ethics adopted by the Adviser, I am required to request that you send duplicate confirmations of individual transactions as well as duplicate periodic statements for the referenced account to my employer. Please note that the confirmations and/or periodic statements must disclose the following information:

1)date of the transaction;

2)the title of the security (including exchange ticker symbol or CUSIP number, interest rate and maturity date, as applicable);

3)the number of shares and principal amount;

4)the nature of the transaction (e.g., purchase or sale);

5)the price of the security; and

6)the name of the firm effecting the trade.

If you are unable to provide this information, please let me know immediately. Otherwise, please address the confirmations and statements directly to:

Your cooperation is most appreciated. If you have any questions regarding these requests, please contact me or the Adviser's Chief Compliance Officer/General Counsel, Kurt J. Decko at (310) 231-6100.

Sincerely,

![](causeway-coejun202119x1.jpg)

**Appendix 5**

**REPORT OF SECURITY TRANSACTIONS**

**FOR QUARTER ENDED**

<u>Investment Persons and Access Persons:</u> You do not need to report transactions in 1) direct obligations of the U.S. Government, 2) bankers' acceptances, bank CDs, commercial paper, high quality short-term debt instruments, including repurchase agreements, 3) shares of an open-end investment company (excluding Funds and mutual fund clients for which the Adviser serves as investment adviser or subadviser and ETFs), 4) transactions for which you had no direct or indirect influence or control; and 5) transactions effected pursuant to an Automatic Investment Plan.

<u>Independent Fund Trustees</u>: If you are an Independent Fund Trustee, then you only need to report a transaction if you, at the time of that transaction, knew or, in the ordinary course of fulfilling your official duties as a Trustee to the Trust, should have known that, during the 15-day period immediately before or after your transaction in a Security:

1)a Fund purchased or sold such Security or

2)a Fund or the Adviser considered purchasing or selling such Security.

Note that purchases or sales of a basket of securities by a Fund to invest cash or raise cash (<u>e.g.</u>, program trades or cash equitization trades) do not trigger a reporting obligation.

Disclose all Securities Transactions for the period covered by this report:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  |  | &nbsp;&nbsp;&nbsp;&nbsp; Price at |  |  |  |
| Title of | Number | Date of | Which | Principal | &nbsp;&nbsp;&nbsp;&nbsp; Bought | Name of |
| Security\* | Shares | Transaction | Effected | Amount | &nbsp;&nbsp;&nbsp;&nbsp; or Sold | Broker/Dealer/Bank |

---

\* Please disclose the interest rate or maturity date and exchange ticker symbol or CUSIP number, as applicable.

Did you establish any securities accounts during the period covered by this report? ___ Yes ___ No

If Yes, please complete the following:

![](causeway-coejun202120x1.jpg)

---

| | | |
|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Date of |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name of Broker | Account Opening | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Account Number |

---

____ The above is a record of every Securities Transaction or account opened which I had, or in which I acquired, any direct or indirect Beneficial Interest during the period indicated above.

____ I certify that the Compliance Officer has received confirmations or account statements pertaining to all Securities Transactions executed that disclose the information required above, and has received notice of any accounts opened, during the period covered by this report.

____ I have nothing to report for the period covered by this report.

Date:Signature:

**Appendix 6**

**INITIAL PUBLIC OFFERING / PRIVATE PLACEMENT**

**CLEARANCE FORM**

**(for the use of the Compliance Officer only)**

The Code for the Trust and the Adviser prohibits any acquisition of Securities in an Initial Public Offering (other than shares of open-end investment companies) and Private Placement by any Investment Person or Access Person unless permitted by the Compliance Officer. In these instances, a record of the rationale supporting the approval of such transactions must be completed and retained for a period of five years after the end of the fiscal year in which approval is granted. This form should be used for such recordkeeping purposes; the Compliance Officer's signature on an appropriate preclearance form for such securities also shall suffice for record keeping purposes.

---

| | | |
|:---|:---|:---|
| Name: | _________________________________ | _________________________________ |
| Date of Request | Date of Request | _________________________________ |
| Name of IPO / Private Placement: | Name of IPO / Private Placement: | _________________________________ |
| Date of Offering: | Date of Offering: | _________________________________ |
| Number of Shares/Interests | Number of Shares/Interests | _________________________________ |
| Price: |  | _________________________________ |
| Name of Broker/Dealer/Bank | Name of Broker/Dealer/Bank | _________________________________ |
| ___ | I have cleared the IPO / Private Placement transaction described above. | I have cleared the IPO / Private Placement transaction described above. |
|  | Reasons supporting the decision to approve the above transaction: | Reasons supporting the decision to approve the above transaction: |

---

____________________________________

Name of Compliance Officer

____________________________________

Signature of Compliance Officer

____________________________________

Date

## Ex-99.(P)(6)

![](clearbridge-coeoct20211x1.jpg)

**Code of Ethics**

**October 2021**

**ClearBridge Investments Limited (CIL)**

**ClearBridge RARE Infrastructure International Pty Limited (CBI RIIPL) ClearBridge Investments (North America) Pty Limited (CINA)**

**(the above entities are referred to as "ClearBridge" for the purposes of this policy. ClearBridge and ClearBridge Investments, LLC. are collectively referred to as "ClearBridge Investments".)**

**Document Owner: Head of Legal, Risk & Compliance**

**This document is confidential and is only intended for the purposes of the above entities. This document may only be provided to third parties with the express prior written approval of the Head of Legal, Risk & Compliance. No recipient is authorised to pass this document or its contents on to any other**

**person whatsoever or reproduce it by any means. All intellectual property contained in this document remains the property of the above entities and 1 any rights in relation to this intellectual property are not intended to be diluted by the distribution of this document.**

**Code of Ethics**

**Background**

ClearBridge provides investment management and advisory services to clients in Australia, the Asia Pacific, the United States, Canada, the UK and Europe.

CIL and CBI RIIPL each hold an Australian Financial Services License with the Australian Securities & Investments Commission. CINA is registered with the US Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940 (the Advisers Act). CINA also provides investment advisory services to funds that are registered under the Investment Company Act of 1940 (Investment Company Act). CIL and CINA have entered into a Memorandum of Understanding (MOU) whereby CINA has appointed as "associated persons" all of the employees of CIL. As such, all employees of CIL are required to meet:

1)Applicable provisions of the Securities Act 1933, and related rules thereunder

2)Applicable provisions of the Securities Exchange Act of 1934 and related rules thereunder

3)Applicable provisions of the Investment Advisers Act of 1940 and related rules thereunder

4)Applicable provisions of the Investment Company Act of 1940 and related rules thereunder

5)Applicable provisions of the Employee Retirement Income Security Act of 1974 and related rules thereunder. This Code of Ethics is designed to meet the requirements of each of the above registrations and theMOU.

**Code of Ethics**

Set forth below is the Code of Ethics (the Code) for ClearBridge as required by Rule 204A-1 under the Advisers Act, and Rule 17j- 1 under the Investment Company Act.

This Code is based on the principle that ClearBridge and its employees owe a fiduciary duty to clients, and that all persons covered by this Code must therefore avoid activities, interests and relationships that might (i) present a conflict of interest or the appearance of a conflict of interest, or (ii) otherwise interfere with ClearBridge's ability to make decisions in the best interests of any of its clients.

This Code applies to all officers, directors and employees (full and part time) of ClearBridge (Access Persons).

**Statement of Policies**

(A) Standards of Business Conduct

All Access Persons must comply with the following standards of business conduct:

1)Clients Come First. At all times, Access Persons are required to place the interests of clients before their own and not to take inappropriate advantage of their position with ClearBridge. An Access Person may not induce or cause a client to take action, or not to take action, for the Access Person's personal benefit, rather than for the benefit of the client.

2)Do Not Take Advantage. Access Persons may not use their knowledge of open, executed, or pending portfolio transactions to profit by the market effect of such transactions, nor may they use their knowledge of transactions or portfolio holdings of investment companies and separate accounts managed by ClearBridge to engage in short term or other abusive trading.

3)Avoid Conflicts of Interest. Conflicts of interest may arise in situations where client relationships may tempt preferential treatment, e.g., where account size or fee structure would make it more beneficial for the adviser to allocate certain trades to a client. Conflicts of interest may also arise in connection with securities transactions by employees of the adviser, especially those employees who are aware of actual transactions or client holdings or transactions under consideration for clients.

Compliance policies and procedures have been adopted by ClearBridge in order to meet all legal obligations to our clients, particularly those arising under the US federal securities laws and ERISA. Procedures have been instituted to mitigate or obviate actual or potential conflicts of interest. The Legal, Risk & Compliance team's role is to ensure that appropriate procedures are

adopted by the business and to monitor to ascertain that such procedures are followed. Any questions relating to this Code or other policies or procedures should be addressed to the Head of Legal, Risk & Compliance.

(B) Confidentiality

Access Persons are expected to honour the confidential nature of company and client affairs. Confidential information shall not be communicated outside of ClearBridge or to other affiliated companies of Franklin Resources, Inc. (Franklin), in compliance with the Information Barrier Policy, and shall only be communicated within ClearBridge Investments on a "need to know"basis.

Access Persons must also avoid making unnecessary disclosure of ANY internal information concerning ClearBridge Investments, Franklin, and their affiliates and their business relationships. For information relating to "material non-public information" and "insider trading," please see ClearBridge's Material Non-Public Information Policy.

**(C)Requirements**

**(i)**All Access Persons who are subject to this Code are required to comply with all financial services, and other pertinent laws in each jurisdiction applicable to ClearBridge's business.

(ii)All Access Persons are required to comply with the Personal Trading Policy incorporated herein.

**(D)Duty to Report and** Non-Retaliation Policy

Should an employee become aware of any conduct which the employee believes may constitute a violation of this Code, the law or regulation, or any ClearBridge policy, the employee must promptly report such conduct to the Head of Legal, Risk & Compliance or her designee. All information about potential or suspected violations reported to the Head of Legal, Risk & Compliance will be investigated, and the identity of the reporting person will be kept confidential. ClearBridge's Whistleblower Policy prohibits any retaliatory action against a reporting person, including discharge, demotion, suspension, threats or harassment.

(E) Administration of the Code

The Legal, Risk & Compliance team is responsible for ensuring that a copy of the Code is delivered to all persons at the commencement of their employment with ClearBridge. As a condition of continuing employment, each employee is required to acknowledge, in writing (See Exhibit A), receipt of a copy of the Code and that s/he understands his/her obligations and responsibilities hereunder within 10 days of becoming an Access Person subject to this Code. Each Access Person is also obligated to acknowledge receipt of any amendments to the Code. On an annual basis, each Access Person must certify that s/he has complied with the Code.

Monitoring for compliance with the Code shall be conducted by the Legal, Risk & Compliance team. Any violation of this Code by Access Persons will be considered serious and may result in disciplinary action, which may include the unwinding of trades, disgorgement of profits, monetary fine or censure and suspension or termination of employment. Any violation of this Code will be reported by the Legal, Risk & Compliance team, to the person's supervisor, and, as appropriate, to ClearBridge's Senior Management and/or to the Chief Compliance Officers of any funds managed by ClearBridge.

(F) Outside Directorships

Access Persons must obtain approval, in accordance with the Outside Business and Other Affiliations Policy, prior to accepting an appointment to serve as a director on a Pty Limited or non-listed public company (See Exhibit B).

Access Persons are prohibited from serving on the board of directors of any publicly listed or traded company or of any company whose securities are held in any client portfolio, except with the prior authorization (See Exhibit B) of the Head of Legal, Risk & Compliance, the General Counsel of ClearBridge Investments and the CIO based upon a determination that the board service would be consistent with the best interests of ClearBridge's clients. If permission to serve as a director is given, the company will be placed on a Restricted List. Transactions in that company's securities for client and personal securities accounts will only be authorized when certification has been obtained from that company's Secretary or similar officer that its directors are not in possession of material price sensitive information with respect to its securities.

(G) Questions

All questions about an individual's responsibilities and obligations under the Code of Ethics should be referred to ClearBridge's Head of Legal, Risk & Compliance or her designee.

**PERSONAL TRADING POLICY**

While Access Persons are neither prohibited from holding individual securities nor engaging in individual securities transactions, by promulgating this Policy, ClearBridge is not endorsing or encouraging such activity. ClearBridge recognises that in its role as an investment adviser, its responsibility is to its clients and their investments. Clients always come first. ClearBridge believes that its primary obligation is that any potential investment first be considered from the perspective of its appropriateness for any client portfolios. Only after it is determined that it is not appropriate for any client should an employee consider it for a personal account.

**Summary**

All Access Persons are subject to the restrictions contained in this Personal Trading Policy (the Policy) with respect to their securities transactions. The following serves as a summary of the most common restrictions. Please refer to specific sections that follow this summary for more detail, including definitions of persons covered by this Policy, accounts covered by this Policy (Covered Accounts), securities covered by this Policy (Covered Securities), reports required by this Policy (Reports) and the procedures for compliance with this Policy.

****All purchases or sales of equity securities and securities convertible into equity securities (generally, stocks, convertible bonds and their equivalents) by Access Persons, and certain of their family members, must be precleared, except as noted below.

****All Access Persons must execute their transactions in Covered Securities through an approved broker which is: (i) capable of feeding transaction and holding information to ClearBridge via Protegent PTA® or (ii) send duplicate confirmations and periodic statements to the Legal, Risk & Compliance team (Approved Brokers).

****Portfolio Managers and Portfolio Analysts are prohibited from purchasing or selling a Covered Security within seven calendar days before or after an account managed by them has traded in the same (or a related) security, unless a de minimis exception applies.

****All other Access Persons are prohibited from transacting in a Covered Security on any day a client is trading in such security, unless a de minimis exception applies.

****De Minimis exception: Transactions involving shares in certain companies will be approved regardless of whether there are outstanding client orders. The exception applies to transactions in securities involving no more than AUD50,000 in exposure during any 7-calendar day period, per issuer in companies with market capitalizations of AUD5billion or more.

****Access Persons are prohibited from profiting from the purchase and sale of a Covered Security, or a related security, within 60 calendar days.

****Portfolio Managers are prohibited from buying securities, directly or indirectly, in a US initial public offering, other than an offering in closed ended funds (with the prior permission of the Chief Investment Officer (CIO) and the Head of Legal, Risk & Compliance). Portfolio Managers may participate in non-US initial public offerings with the prior permission of the CIO and the Head of Legal, Risk & Compliance. Any other Access Person wishing to buy securities, directly or indirectly, in an initial public offering must receive prior permission from his/her immediate supervisor and the Head of Legal, Risk & Compliance (or her designee).

****Portfolio Managers wishing to buy securities, directly or indirectly, in a private placement must receive prior permission from the CIO and the Head of Legal, Risk & Compliance. Any other Access Person wishing to buy securities, directly or indirectly, in a private placement must receive prior permission from his/her immediate supervisor and the Head of Legal, Risk & Compliance (See Exhibit D).

****All Access Persons must report all trades in Reportable Funds, as defined, below.

****Funds managed, advised or sub-advised by ClearBridge (Managed Funds): i) Units and Shares must be held in an Approved Brokerage Account, or other account as authorised by the Head of Legal, Risk & Compliance in accordance with this Code. Legal, Risk & Compliance must be notified of directly held proprietary funds.

**4**

![](clearbridge-coeoct20215x1.jpg)

**Definitions**

**Access Person -** means all employees, directors or officers of ClearBridge or a consultant designated as Access Person from time to time.

Notwithstanding anything herein to the contrary, this Code does not cover any individual already covered under the applicable Code of Ethics of their employing entity or the Franklin Resources, Inc.'s 17j-1/Personal Trading Policy (the Franklin Access Persons), including, without limitation any other employee of Franklin who may be considered an "Access Person" to ClearBridge (as such term is defined in Rule 204A-1 under the Advisers Act), unless such person has been designated as an Access Person subject to this Code by the Head of Legal, Risk & Compliance.

ClearBridge hereby confirms that the Franklin Regulatory Compliance Department (or their authorised delegate) is responsible for monitoring the Franklin Access Persons' compliance with the Franklin 17j-1/Personal Trading Policy and for enforcing the provisions of such policy against such persons.

**Portfolio Analyst -** means any research analyst who supports one or more specific investment management teams.

**Covered Securities -** means stocks, notes, bonds, closed-end funds, exchange- traded funds, offshore funds, hedge funds, debentures, and other evidences of indebtedness, including senior debt, subordinated debt, investment contracts, commodity contracts and futures. Managed Funds and Reportable Funds, as defined herein, are also Covered Securities. The same limitations of this Code pertain to transactions in a security related to a Covered Security, such as an option to purchase or sell a Covered Security and any security convertible into or exchangeable for a Covered Security.

**Covered Accounts -** means an account in which Covered Securities are owned by you or an account in which you have a Beneficial Interest, as defined below. A Covered Account includes all accounts that could hold Covered Securities in which the Access Person has a Beneficial Interest regardless of what, if any, securities are maintained in such accounts (thus, even if an account does not hold Covered Securities, if it has the capability of holding Covered Securities, the account must be disclosed). Funds held directly with fund companies do not need to be disclosed if no Managed Funds (as defined below) or Reportable Funds (as defined below) are held in such accounts.

**Securities and Transactions <u>not</u> covered by this policy include:**

****shares in any open-end US registered investment company (mutual fund), which is not managed, advised or sub-advised by ClearBridge or a Franklin affiliate

****shares issued by money market funds, including Reportable Funds

****shares issued by US unit investment trusts that are invested exclusively in one or more open-ended funds other than Reportable Funds

****shares/units issued by entities that are neither Managed Funds nor Reportable Funds, including all non-discretionary components of superannuation funds and units in funds managed by non-Franklin /affiliate entities

****securities which are direct obligations of the U.S. or other Government (i.e., Treasuries)

****bankers' acceptances, bank certificates of deposit, commercial paper, repurchase agreements and other high-quality short-term debt instruments<sup>1</sup>

**IF A SECURITY IS NOT COVERED BY THIS POLICY, YOU MAY PURCHASE OR SELL IT WITHOUT OBTAINING PRECLEARANCE AND YOU DO NOT HAVE TO REPORT IT.**

**Approved Broker -** means any broker/dealer who feeds transaction and holding information to ClearBridge through FIS Protegent PTA®, or other reliable methodology as approved by the Head of Legal, Risk & Compliance.

**Managed Funds –** means any funds managed, advised or sub-advised by ClearBridge such as (i) US registered investment companies (ii) Australian registered schemes (iii) proprietary as well as non-proprietary funds, open-end, closed-end and exchange-traded funds (ETFs). Access Persons are prohibited from engaging in short sales of ETFs managed by ClearBridge, except short sales against the box.

**1High quality short-term debt instruments means any instrument having a maturity at issuance of less than 366 days and which is rated in one of the highest two rating categories by a Nationally Recognized Statistical Rating Organization, or which is unrated but is of comparable quality.**

**5**

**Reportable Funds -** means any fund registered under the Investment Company Act advised or sub-advised by ClearBridge and its affiliates. A list of Reportable Funds is provided by Franklin to its affiliates on a quarterly basis. They can include proprietary and non-proprietary funds.

**Beneficial interest -** means the opportunity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, to share at any time in any profit derived from a transaction in a Covered Security.

You are deemed to have a Beneficial Interest in the following:

(1)any Security owned individually by you;

(2)any Security owned jointly by you with others (for example, joint accounts, spousal accounts, partnerships, trusts and controlling interests in corporations); and

(3)any Security in which a member of your immediate family has a Beneficial Interest if the Security is held in an account over which you have decision making authority (for example, you act as trustee, executor, or guardian).

You are deemed to have a Beneficial Interest in accounts held by your spouse, minor children and other members of your immediate family (children, stepchildren, grandchildren, parents, stepparents, grandparents, siblings, in-laws and adoptive relationships) who share your household. In addition, you are deemed to have a Beneficial Interest in accounts maintained by your domestic partner (an unrelated adult with whom you share your home and contribute to each other's support). This presumption may be rebutted by convincing evidence that the profits derived from transactions in the Covered Securities will not provide you with any economic benefit.

You have a Beneficial Interest in the following:

****Your interest as a general partner in Covered Securities held by a general or limited partnership;

****Your interest as a manager-member in the Covered Securities held by a limited liability company;

****Your interest as a member of an "investment club" or an organization that is formed for the purpose of investing a pool of monies in Covered Securities;

****Your ownership of Covered Securities as trustee where either you or members of your immediate family have a vested interest in the principal or income of the trust;

****Your ownership of a vested interest in a trust;

****Your status as a settlor of a trust, unless the consent of all of the beneficiaries is required in order for you to revoke the trust.

You do not have a Beneficial Interest in Covered Securities held by a corporation, partnership, limited liability company or other entity in which you hold an equity interest unless you are a controlling equity holder or you have or share investment control over the Covered Securities held by the entity.

IF YOU ARE IN ANY DOUBT AS TO WHETHER AN ACCOUNT FALLS WITHIN THE DEFINITION OF COVERED ACCOUNT OR WHETHER YOU WOULD BE DEEMED TO HAVE A BENEFICIAL INTEREST IN AN ACCOUNT, PLEASE SEE LEGAL, RISK &COMPLIANCE.

**BLACK-OUT PERIODS**

**Portfolio Managers and Portfolio Analysts**

In order to prevent buying or selling securities in competition with orders for clients, or from taking advantage of knowledge of securities being considered for purchase or sale for clients, all Portfolio Managers and Portfolio Analysts will not be able to execute a trade in a Covered Security within seven calendar days before or after an account managed by ClearBridge has traded in the same (or a related) security (the Blackout Period).

A security is "being considered for purchase or sale" when a recommendation to purchase or sell a security has been made or communicated and, with respect to the person making the recommendation, when such person seriously considers making such a recommendation.

**6**

**All Other Access Persons**

All Other Access Persons are precluded from executing a trade in a Covered Security on the same day that there is a client order for the same (or a related) security, unless a de minimis exception applies.

**De Minimis Exception**

Transactions involving shares in certain companies will be approved regardless of whether there are outstanding client orders. The exception applies to transactions in securities involving no more than AUD50,000 in exposure during any 7-calendar day period, per issuer in companies with market capitalizations of AUD5billion or more.

Preclearance is required for all de minimis transactions.

**60 DAY HOLDING PERIOD**

Access Persons cannot purchase or sell the same Covered Security within 60 calendar days if such transactions will result in a profit, without the prior written permission of the Head of Legal, Risk & Compliance.

Exceptions to the Holding Period

The 60 Day Holding Period does not pertain to individual stock options that are part of a hedged position where the underlying stock has been held for more than 60 calendar days and the entire position (including the underlying security) is closed out.

ETFs not managed by ClearBridge are also not subject to the 60 Day Holding Period.

**GENERAL PRECLEARANCE**

****Preclearance is obtained through the Personal Trading Assistant found under "Compliance" on the ClearBridge Investments intranet site or via the PTA application through ClearBridge Okta.

****Preclearance is valid until close of business <u>on the business day</u> during which preclearance was obtained. If the transaction has not been executed within that timeframe, a new preclearance must be obtained.

**PRECLEARANCE FOR IPOS**

****If you are a Portfolio Manager and you wish to purchase an initial public offering, you must obtain permission from the CIO and the Head of Legal, Risk & Compliance through emailing aucompliance@clearbridge.com.

****Portfolio Managers cannot participate in US IPOs for their personal accounts except for offerings of closed endfunds.

****In a pre-IPO situation involving material non-public information (MNPI), you must immediately consult with the Head of Legal, Risk & Compliance prior to referring further for approval.

****All other Access Persons must obtain the pre-approval of the Head of Legal, Risk & Compliance and theirsupervisor.

**PRECLEARANCE FOR PRIVATE PLACEMENTS**

****If you are a Portfolio Manager and you wish to purchase securities in a private placement, you must obtain permission from the CIO and the Head of Legal, Risk & Compliance through emailing aucompliance@clearbridge.com.

****All other Access Persons must obtain the pre-approval of the Head of Legal, Risk & Compliance and theirsupervisor.

****If the private placement involves MNPI, you must immediately consult with the Head of Legal, Risk & Compliance prior to referring further for approval.

**The following transactions do not require pre-clearance (but must still be reported quarterly):**

****Transactions involving Covered Securities in a Covered Account over which an Access Person has no direct or indirect influence or control such as where investment discretion is delegated in writing to an independent fiduciary/adviser. Fully discretionary accounts managed by either an internal or external investment adviser are permitted and may be custodied away from an Approved Broker if there is no communication between the investment adviser/manager and the Access

**7**

Person with regard to investment decisions prior to execution. The Access Person must designate copies of periodic statements that contain transaction information as detailed under Reporting Requirements be sent to the Legal, Risk & Compliance team.

****Transactions in ETFs or exchange-traded notes (ETNs); however, they must be reported. Transactions in ETFs and ETNs which occur in a Covered Account do not need to be separately reported.

****Transactions in estate or trust accounts of which an Access Person or related person has a beneficial ownership, but no power to affect investment decisions. There must be no communication between the account(s) and the Access Person with regard to investment decisions prior to execution. The Access Person must direct the trustee/bank to furnish copies of statements that contain transaction information as detailed under Reporting Requirements to the Legal, Risk & Compliance Department.

****Transactions which are non-volitional on the part of an Access Person (i.e., the receipt of securities pursuant to a stock dividend or merger, a gift or inheritance). However, the sale of securities acquired in a non-volitional manner is treated as any other transaction and subject to pre-clearance.

****Sales pursuant to a bona fide tender offer.

****Purchases of the stock of a company pursuant to an automatic investment plan which is a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An automatic investment plan includes a dividend reinvestment plan. Payroll deduction contributions to managed funds are deemed to be pursuant to automatic investment plans. (Preclearance and reporting of particular instances of dividend reinvestment is not required; annual reporting of holdings isrequired).

****The receipt or exercise of rights issued by a company on a pro rata basis to all holders of a class of security and the sale of such rights. However, if you purchase the rights from a third-party, the transaction must be pre-cleared. Likewise, the sale of such rights must be pre-cleared.

****Purchases and sales of Franklin's publicly traded securities or the receipt or exercise of an employee stock option under any of Franklin's employee stock plans. See below.

****Purchases of an employer's securities done under a bona fide employee benefit plan or the receipt or exercise of options in an employer's securities done under a bona fide employee stock option plan of a company not affiliated with Franklin by an employee of that company who is a member of an Access Person's immediate family do not require preclearance. However, sales of the employer's stock, whether part of the employee benefit or stock option plans, do require preclearance and reporting. Furthermore, employee benefit plans that allow the employee to buy or sell Covered Securities other than those of the employer are subject to the requirements of the Code, including preclearance, reporting and holding periods.

****Any transaction involving non-financial commodities, futures (including currency futures and futures on securities comprising part of a broad-based, publicly traded market-based index of stocks) and options on futures.

****Any acquisition or disposition of a security in connection with an option-related transaction that has been previously approved. For example, if you received clearance to buy a call and then decide to exercise it, you are not required to obtain preclearance in order to exercise the call.

****Transactions involving options on broad-based indices, including, but not limited to, the S&P/ASX 200 and related indices, S&P Midcap 50, All Ordinaries Index, Accumulation Indices.

****Access Persons desiring to make a bona fide gift or charitable contribution of Covered Securities or who receive a bona fide gift of Covered Securities, including an inheritance, do not need to preclear the transactions. However, such gift or contribution must be reported in the next quarterly report (See "Reporting Requirements").

****Fixed income investments other than fixed income securities convertible into equity securities.

****Transactions in open-end Managed Funds and Reportable Funds (including ETFs). Note: transactions in all closed end funds do require preclearance.

**SHORTING TRANSACTIONS IN FRANKLIN RESOURCES INC. SECURITIES AND CLOSED-END FUNDS**

Access Persons are prohibited from effecting short sales, including "short sales against the box" of securities issued by Franklin and securities issued by any closed-end fund sponsored or advised by any Franklin adviser. Also prohibited are economically equivalent transactions, whether in the form of call or put options, swap transactions or other derivative transactions, that would result in an Access Person having a net short exposure to Franklin or any closed-end fund sponsored or advised by the Franklin's subsidiaries. The list of closed end funds sponsored or advised by such subsidiaries is contained in the list of Reportable Funds available in PTA.

**8**

**REPORTING REQUIREMENTS**

All Access Persons are required to report the establishment of any new Covered Accounts established during the quarter to the Legal, Risk & Compliance, even if the Covered Account is with an Approved Broker. Access Persons are also required to report to the Legal, Risk & Compliance team the establishment of any account in a Managed Fund directly with the Funds' transfer agent.

The Approved Brokers provide the Legal, Risk & Compliance team with a daily report of all transactions executed by personnel. The Funds' transfer agent provides the Legal, Risk & Compliance team with transactions in the Managed Funds. If you have received permission to maintain a Covered Account at other than an Approved Broker, including spousal accounts for which you received a waiver from the requirement to preclear, you must arrange for the broker to provide Legal, Risk & Compliance with the following information.

**Reports of Each Transaction in a Covered Security**

**<u>Trade Reports</u>**

No later than at the opening of business on the business day following the day of execution of a trade for a Covered Account, the Legal, Risk & Compliance must be provided with the following information:

name of security

exchange ticker symbol or CUSIP

nature of transaction (purchase, sale, etc.) number of shares/units or principal amount price of transaction

date of trade name of broker

the date the Access Person submits the report

**<u>Quarterly Reports</u>**

If you have engaged in a transaction that did not require preclearance but did require reporting, please confirm that Legal, Risk & Compliance has received the required information, as follows:

No later than 30 days after the end of each calendar quarter, each Access Person who maintains a Covered Account at other than an Approved Broker will provide Legal, Risk & Compliance with a report of all transactions in Covered Securities in the quarter, including the following information:

name of the Covered Security exchange ticker symbol or CUSIP nature of transaction (purchase, sale, etc.) number of shares/units or principal amount price of transaction

name of broker

**<u>Annual Reports</u>**

Within 30 days after the end of the calendar year, each Access Person must report all his/her holdings in Covered Securities as at December 31, including the title, exchange ticker symbol or CUSIP, number of shares and principal amount of each Covered Security the Access Person owns (as defined above) and the names of all Covered Accounts. The report will be made through certification on the Personal Trading Assistant. Any holdings that do not appear should be provided to Legal, Risk & Compliance for entry in the system prior to certification. Any Access Person failing to certify within the required time period will not be allowed to engage in any personal securities transactions.

**Other Reports**

**Initial Employment**

No later than 10 days after initial employment with ClearBridge, or notification of coverage under this Code, each Access Person must provide Legal, Risk & Compliance with a list of each Covered Security s/he owns (as defined above). The information provided,

**9**

which must be current as of a date no more than 45 days prior to the date such person became an employee (or subject to this Code), must include the title of the security, the exchange ticker symbol or CUSIP, the number of shares owned (for equities) and principal amount (for debt securities), The Access Person must also provide information, which must include the name of the broker, dealer or bank with whom the Access Person maintains an account in which any securities are held for the direct or indirect benefit of the Access Person. This information will be entered into the designated access portal by Legal, Risk & Compliance staff and must be certified to, electronically, by the Access Person before they can undertake any transactions. If the Access Person does not maintain a Covered Account with an Approved Broker, then the prior approval to trade under alternative arrangements must be pre-approved by the Head of Legal, Risk & Compliance.

**Reportable Funds**

No later than 30 days after the end of each calendar quarter, TRANSACTIONS IN REPORTABLE FUNDS MUST BE REPORTED.

The information on personal securities transactions received and recorded will be deemed to satisfy the obligations contained in Rule 204A-1 under the Advisers Act and Rule 17j-1 under the Investment Company Act. Such reports may, where appropriate, contain a statement to the effect that the reporting of the transaction is not to be construed as an admission that the person has any direct or indirect beneficial interest or ownership in the security.

**Administration of the Code**

At least annually, the Head of Legal, Risk & Compliance, on behalf of ClearBridge, will furnish to the boards or to the Chief Compliance Officer of any US registered investment company to which ClearBridge acts as adviser or subadviser, a written report that:

(i)Describes any issues arising under the Code or this Policy since the last report to the board, including, but not limited to, information about material violations of the Code or this Policy and sanctions imposed in response to the material violations; and

(ii)Certifies that the ClearBridge has adopted procedures reasonably necessary to prevent Access Persons from violating the Code or this Policy.

**10**

![](clearbridge-coeoct202111x1.jpg)

**<u>EXHIBIT A</u>**

**<u>SIGN AND RETURN TO CLEARBRIDGE LEGAL, RISK & COMPLIANCE TEAM IF YOU ARE A CLEARBRIDGE</u>**

**<u>ACCESS PERSON</u>**

**Acknowledgement of Code of Ethics Form**

I acknowledge that I have received and read the Code of Ethics for ClearBridge Investments Limited, dated """""""""

Access Person Name (Print)""""""""""""""""""""""""".

Signature:""""""""""""""""""""""""""""""".

Date: """"""""""""""""""""""""""""""""".

Date of Hire:

Job Title:

Supervisor:

Location:

Telephone Number

Email

This Acknowledgement Form must be completed and returned within 10 days of commencing employment or as otherwise required from time to time to the Legal, Risk & Compliance team in person or via email at aucompliance@clearbridge.com.

**11**

**<u>EXHIBIT B</u>**

**<u>OUTSIDE BUSINESS AFFILATION FORM</u>**

Private or non-listed Public Companies

Employees must obtain written approval from the Head of Legal, Risk & Compliance and the CIO prior to serving as a Director on any private or non-listed public company.

Listed Public Companies

Access Persons must obtain prior written approval from the Head of Legal, Risk & Compliance, the General Counsel of

ClearBridge Investments and the CIO to serve as a <u>director of any listed public company or any company whose securities</u>

<u>are held by clients</u>. Access Persons serving as outside directors are not entitled to indemnification or insurance coverage by ClearBridge or Franklin, unless service on the board is at the specific written request of ClearBridge and its affiliates.

COMPLETE ONE COPY OF THIS FORM FOR EACH APPLICABLE ENTITY

Access Person Name """""""""""""""""................................................

Access Person Title Office Phone Number """""""..."..."................. <br> """"""""""""""""""""""""""""" <br> OUTSIDE BUSINESS ENTITY

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.**Name of Entity """""""""""""""""""""""""""""""""""""""

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Type of Entity (e.g. private, unlisted public, listed public, trust or other) """"""""""""""""""""""""""

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Main Activity of the Entity """"""""""""""""""""""""""""""

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Your Proposed Title or Function""""""""""""""""""""""""""""""

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; Proposed Start Date | Proposed End Date / Ongoing | Proposed End Date / Ongoing |  | Annual Compensation (if applicable) |
| &nbsp;&nbsp;&nbsp; """"""""".. | """"""""".. |  |  | $"""""""""."". |
| PLEASE COMPLETE THE BELOW QUESTIONS FOR ANY OUTSIDE DIRECTORSHIP: | PLEASE COMPLETE THE BELOW QUESTIONS FOR ANY OUTSIDE DIRECTORSHIP: | PLEASE COMPLETE THE BELOW QUESTIONS FOR ANY OUTSIDE DIRECTORSHIP: |  |  |
| a. Is the Directorship requested by ClearBridge or its | a. Is the Directorship requested by ClearBridge or its | No | Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If YES, attach copy of Request |
| affiliates? |  |  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Letter and other details. |
| b. Do you know of any significant adverse information about | b. Do you know of any significant adverse information about | No | Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If YES, attach details. |
| the entity or any actual or potential conflict of interest | the entity or any actual or potential conflict of interest |  |  |  |
| between the entity and ClearBridge or its affiliates? | between the entity and ClearBridge or its affiliates? |  |  |  |
| c. For LISTED AND UNLISTED PUBLIC COMPANIES, please attach the most recent Annual Report Attached | c. For LISTED AND UNLISTED PUBLIC COMPANIES, please attach the most recent Annual Report Attached | c. For LISTED AND UNLISTED PUBLIC COMPANIES, please attach the most recent Annual Report Attached | c. For LISTED AND UNLISTED PUBLIC COMPANIES, please attach the most recent Annual Report Attached | c. For LISTED AND UNLISTED PUBLIC COMPANIES, please attach the most recent Annual Report Attached |
| d. For PRIVATE COMPANIES, please attach the most recent Audit Financial Statement | d. For PRIVATE COMPANIES, please attach the most recent Audit Financial Statement | d. For PRIVATE COMPANIES, please attach the most recent Audit Financial Statement | d. For PRIVATE COMPANIES, please attach the most recent Audit Financial Statement | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Attached |
| e. Does the entity or any principal have an account or other | e. Does the entity or any principal have an account or other | No | Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If YES, specify Account No. or |
| business relationship with ClearBridge or its affiliates? | business relationship with ClearBridge or its affiliates? |  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; describe relationship. |

---

**12**

![](clearbridge-coeoct202113x1.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.**Additional Remarks """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""

"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""".

Access Person Representations:

I will not use any material non-public information gleaned through my directorship for my own benefit nor share any such information with others.

Access Person Signature Date

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Upon completion of this form, return to** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Upon completion of this form, return to** |  |
|  | **aucompliance@clearbridge.com.** |  |
| APPROVALS FOR OUTSIDE BUINESS AFFILATION (OTHER THANDIRECTORSHIP): | APPROVALS FOR OUTSIDE BUINESS AFFILATION (OTHER THANDIRECTORSHIP): |  |
| &nbsp;&nbsp; Manager Signature | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name | Date |
| &nbsp;&nbsp; Head of Legal, Risk & Compliance Signature | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name | Date |
| ADDITIONAL APPROVALS FOR PRIVATE OR NON-LISTED PUBLIC COMPANY: | ADDITIONAL APPROVALS FOR PRIVATE OR NON-LISTED PUBLIC COMPANY: |  |
| &nbsp;&nbsp; CIO Signature | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name | Date |
| ADDITIONAL APPROVALS FOR LISTED PUBLIC COMPANY: | ADDITIONAL APPROVALS FOR LISTED PUBLIC COMPANY: |  |
| &nbsp;&nbsp;&nbsp; General Counsel of ClearBridge Investments | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name | Date |
| &nbsp;&nbsp; **Signature** |  |  |

---

**13**

![](clearbridge-coeoct202114x1.jpg)

**<u>EXHIBIT C</u>**

**<u>OUTSIDE BROKERAGE ACCOUNT APPROVAL REQUEST FORM</u>**

Access Person name:""""""""""""""""""""""""

The following information is provided in order to obtain Legal, Risk & Compliance approval to open and/or maintain a brokerage account outside the approved list of brokers.

Outside Brokerage Firmname:""""""""""""""""""""""""""""

Brokerage Firm EmailAddress:""""""""""""""""""""""""""""

Account Number:"""""""""""""""""""""""""""""""""".

Full Name of Account:"""""""""""""""""""""""""""""""".

Please indicate the reason why you are requesting to open and/or maintain a brokerage account outside the approved list of brokers:

""""""""""""""""""""""""""""""""."""""""""""""""

""""""""""""""""""""""""""""""""."""""""""""""""

""""""""""""""""""""""""""""""""."""""""""""""""

""""""""""""""""""""""""""""""""."""""""""""""""

Upon completion of this form, return to aucompliance@clearbridge.com.

Access Person Signature Date

Head of Legal, Risk & Compliance Signature Date

![](clearbridge-coeoct202115x1.jpg)

**<u>EXHIBIT D</u>**

**<u>OUTSIDE INVESTMENT APPROVAL REQUEST FORM</u>**

ClearBridge Code of Ethics requires Access Persons to obtain the prior written approval of their immediate supervisor (or the CIO where the Access Person is a Portfolio Manager) and the Head of Legal, Risk & Compliance before making an outside investment. Examples of "outside investments" include, but are not limited to, private placements and any investments in securities that cannot be made through an Approved Brokerage account. If the investment is a private placement, you must provide a copy of the offering document, e.g., prospectus, offering memorandum or statement or other similar document.

Access Persons must not make an outside investment if such investment may present a potential conflict of interest. Approval of such investment reflects a determination that it does not pose a conflict of interest with clients.

Name

Title/Position

Department Name

Name of Investment

Type of Investment Private placement

Date

Office Telephone Number

Location

---

| | |
|:---|:---|
| Anticipated Date of | Amount of Investment |
| Investment |  |

---

Other investment which cannot be

made through an approved brokerage account (specify)

Is your participation Yes No (If No, please explain any other <br> exclusively as a passive investor? involvement)

Additional Remarks:

"""""""""""""""""""""""""""""""".""""""""""""

Access Person Representations: I certify that this investment does not take an investment opportunity from a client.

Upon completion of this form, return to aucompliance@clearbridge.com.

---

| | | |
|:---|:---|:---|
| Access Person Signature |  | Date |
| Supervisor Signature | Name and Title of Supervisor | Date |
| Head of Legal, Risk & Compliance | Name of Head of Legal, Risk & Compliance | Date |
| Signature |  |  |

---

**15**

![](clearbridge-coeoct202116x1.jpg)

**<u>EXHIBIT E</u>**

**<u>INITIAL REPORT OF SECURITIES HOLDINGS FORM</u>**

This report must be signed, dated and returned within 10 days of employment and the holdings report must be current as of a date not more than 45 days prior to the person becoming an Access Person.

Upon completion of this form, return to aucompliance@clearbridge.com.

Access Person Name Date of Employment

Brokerage Accounts:

I do not have a beneficial ownership of any account(s) with any financial services firm.

Please refer to Exhibit A for definition of beneficial ownership.

I maintain or have a beneficial ownership in the following account(s) with the financial services

firm(s) listed below (attach additional information if necessary-e.g., a brokerage statement). Please include the information required below for any broker, dealer or bank where an account is maintained which holds securities for your direct or indirect benefit as of the date you began your employment.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp; Name of Financial Service(s) Firm and Address | Account Title | &nbsp;&nbsp; Account Number |

---

Securities Holdings:

Complete the following (or attach a copy of your most recent statement(s)) listing all of the securities holdings in which you have

abeneficial ownership, if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•you own securities that are held by financial services firm(s) as described above. If you submit a copy of a statement, it must include all of the information set forth below. Please be sure to include any additional securities purchased since the date of the brokerage statement that is attached. Use additional sheets if necessary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Your securities are not held with a financial service(s) firm (e.g., stock and dividend reinvestment programs and private placements, shares held in certificate form by you or for you or shares held at a transfer agent).

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp; Title of Security | &nbsp;&nbsp; Ticker Symbol | &nbsp;&nbsp; Number of Shares | &nbsp;&nbsp; Principal Amount | &nbsp;&nbsp; Financial Services Firm |

---

I, ......................................................................... have no securities holdings to report <br> Date: Signature

**16**

![](clearbridge-coeoct202117x1.jpg)

**<u>EXHIBIT F</u>**

**<u>INITIAL PUBLIC OFFERING REQUEST FORM</u>**

ClearBridge's Code of Ethics requires Access Persons to obtain the prior written approval of their immediate supervisor (or CIO where the employee is a Portfolio Manager) and the Head of Legal, Risk & Compliance before buying an initial public offering. An IPO is an offering of securities in regard to which a disclosure document is available and has been filed with the appropriate regulator with the intention to list on a recognized exchange or other authorised trading venue. Kindly provide any such supporting documentation together with this form.

Please note that Portfolio Managers are prohibited from participating in a US IPO in their personal accounts except for offerings of closed end funds.

Access Persons must not make an investment in an initial public offering if such investment may present a potential conflict of interest.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp; Name | &nbsp;&nbsp; Date |  |
| &nbsp;&nbsp; Title/Position |  |  |
| &nbsp;&nbsp; Name of Security | &nbsp;&nbsp; Anticipated Date of | Number of Shares |
|  | &nbsp;&nbsp; Offering |  |

---

Access Person Representation: I certify that this investment does not take an investment opportunity from a client.

Upon completion of this form, return to aucompliance@clearbridge.com.

Access Person Signature Date

Supervisor Signature Name and Title of Supervisor Date

Head of Legal, Risk & Compliance Name of Head of Legal, Risk & Compliance Date <br> Signature

## Ex-99.(P)(11)

![](g202302241054166290.jpg)

## Gotham Asset Management, LLC

## Code of Ethics January 2022

#### GOTHAM ASSET MANAGEMENT, LLC – CODE OF ETHICS

#### **TABLE OF CONTENTS**
A. Standards of Business Conduct A-2

B. Business Gifts and Entertainment ................................................................................A-4

C. Political Contributions ................................................................................................A-8

D. Conflicts of Interest Policy; Outside Business Activities .........................................A-11

E. Personal Trading Policy ............................................................................................A-12

### Gotham Asset Management, LLC
Code of Ethics January 2022

This Code of Ethics (the "**Code**") has been adopted by Gotham Asset Management, LLC ("**Gotham** or the "**Firm**"). Gotham requires full compliance with all applicable laws and regulations governing the provision of investment management services to clients. Registered investment advisers are required by Rule 204A-1 under the Advisers Act to adopt a Code of Ethics which, among other things, sets forth the standards of business conduct required of Gotham's Supervised Persons. Similarly, advisers to a registered investment company (*e.g.,* mutual fund) such as Gotham must adopt a code of ethics pursuant to Rule 17j-1 under the Investment Company Act of 1940, as amended.

This Code applies to all of Gotham's members, directors, officers and employees ("**Supervised Persons**"). Short-term employees, consultants, interns or contractors are not subject to this Code unless deemed appropriate by the GC/CCO. In such instances when the GC/CCO deems appropriate to subject such person to certain or all of the provisions of the Manual or the Code, such person shall execute a written agreement in a form as determined by the GC/CCO.

Legal & Compliance (or, in their absence, the CFO) may make exceptions to the policies and procedures herein. Any such exception must be in writing (which may be e-mail). Exceptions will not be permitted if they would violate any applicable law.

#### If you have any questions about this Code, please ask Legal & Compliance.
<u>Receipt of Code of Ethics and Acknowledgement</u>

Each Supervised Person will be provided with a copy of the Code upon becoming associated with the Firm and with a copy of any amendments to the Code. Supervised Persons will be required to acknowledge receipt of the Code and any amendments to the Code.

Within 10 days of becoming associated with Gotham, each Supervised Person, on behalf of the Supervised Person and the Supervised Person's: (i) spouse; (ii) minor children (under the age of 18); and (iii) any relative residing in the same household as the Supervised Person (collectively, an "**Immediate Family Member**") will be required to submit to an initial Code acknowledgement.

Within 30 days of the end of each calendar year, or otherwise upon request of the GC/CCO, Supervised Persons, on behalf of the Supervised Person and any Immediate Family Members, will be required to submit to the GC/CCO an annual recertification of the Code.

A.  **<u>Standards of Business</u> <u>Conduct</u>** 

Gotham requires full compliance with all applicable laws and regulations governing the provision of investment management services to clients, including the Federal Securities Laws.

"**Federal Securities Laws**" means, as amended, the Securities Act of 1933, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, the Advisers Act, the Investment Company Act of 1940, Title V of the Gramm-Leach-Bliley Act, and any rules adopted by the SEC under these statutes, the Bank Secrecy Act of 1970 as it applies to funds and investment advisers, and any rules adopted thereunder by the SEC or by the Department of Treasury and the Commodities Exchange Act and applicable rules adopted by the U.S. Commodity Futures Trading Commission.

The Firm expects each of its Supervised Persons to act with integrity, competence, dignity, and in an ethical manner when dealing with the public, clients, investors and prospective investors, service providers and other Supervised Persons. **The standard of business conduct is for the Firm and all Supervised Persons to act as a fiduciary to our clients.** As a fiduciary, the Firm owes its Clients a duty of care and duty of loyalty, must serve the best interest of its clients and may not subordinate its clients' interests to its own.

Gotham considers its reputation to be of the utmost importance and places a strong emphasis on maintaining a culture of honesty, integrity and professionalism. Gotham expects all Supervised Persons to comply with the applicable rules contained in this Code as well as the spirit of this Code and to act in a professional and ethical manner. For example, the Firm and its Supervised Persons have the following duties, among others:

· To have a reasonable belief that its investment advice to the funds and the accounts it manages ()"**Clients**") is in the Clients' best interests based on their investment objectives;

· Not to employ any device, scheme or artifice to defraud a Client;

· To fully disclose all material facts to Clients;

· To employ reasonable care to avoid misleading Clients;

· To make full and fair disclosure of or eliminate conflicts of interest and obtain a Client's informed consent, which may vary between institutional and retail Clients; and

· Not to otherwise engage in any act, practice or course of business which would violate this Code.

<u>Reporting of Violations and Penalties/Consequences of Non-Compliance</u>

Gotham seeks to foster a culture of ethical and professional conduct and to provide an environment in which Supervised Persons feel comfortable reporting actual or suspected violations of applicable laws, regulations, policies, or procedures. **All Supervised Persons are required to promptly contact Legal & Compliance regarding any actual or suspected violation of this Code.** If you are unsure whether a violation has occurred, you should discuss the matter with Legal & Compliance.

Gotham treats violations of this Code very seriously. Supervised Persons who fail to comply with the requirements of this Code may be subject to disciplinary action by Gotham. Different violations may be handled differently based on such factors as severity, whether it was intentional and/or whether it has happened previously. Disciplinary action by Gotham may include:

· reprimand (either verbally or in writing);

· restricting or prohibiting trading;

· imposing penalties or fines;

· reducing compensation;

· demotion;

· requiring unwinding of any trade in violation of the Code;

· requiring disgorgement of trading gains;

· suspending or terminating employment; or

· any combination of the foregoing.

Any non-compliance or violations of law may also result in severe civil and criminal penalties.

Gotham has a strict non-retaliation policy that applies to Supervised Persons who report such matters in good faith. To the extent practicable, the Firm shall attempt to maintain the confidentiality of such communications.

The GC/CCO or his designee will investigate each reported or suspected violation of the Code. The GC/CCO may consult with other members of senior management, including the

Managing Principals and Chief Financial Officer, as appropriate, in order to develop an appropriate response to any material violations of applicable securities laws or this Code. The GC/CCO is not the supervisor of Supervised Persons and only the Managing Principals have the authority to terminate or take similar disciplinary action against a Supervised Person. Supervised Persons are required to cooperate in any investigation.

#### If you have any questions regarding the Code, please contact Legal & Compliance.
B.  **<u>Business Gifts and</u> <u>Entertainment</u> <u>1. Policy</u>** 

It is the policy of Gotham to limit business gifts and business entertainment received by Supervised Persons to a reasonable and appropriate level and to prohibit acceptance by Supervised Persons of any gifts or entertainment that would violate any law, rules, regulations or the procedures below.

Gotham also limits business gifts it makes and entertainment that it provides to a level that is appropriate under applicable laws, rules, regulations and the policies of the recipient's employer.

2.  **<u>Procedures for the Receipt of Business Gifts and Business</u> <u>Entertainment</u>** 

A business gift is defined as any item provided at no expense (or at a steep discount) to the recipient relating to the business of Gotham. Gifts include items such as tickets to an event if the person providing the tickets is not present at the event. Business entertainment is defined as any entertainment, such as dinners and sporting events provided by or to a counterparty in which both the provider and recipient are present.

Promotional items of nominal value that display a product's or firm's logo, such as golf balls, fleeces, hats, shirts and pens are not reportable. Personal gifts where there is a pre-existing family or personal relationship between the person giving the gift and the recipient are also not covered under this policy.

· <u>Business Gifts</u>: Any business gift with a value that **exceeds $100** is required to be disclosed to the GC/CCO. If the value of any gift is uncertain, then the Supervised Person receiving such gift should estimate its value in good faith. You should notify the GC/CCO if you are unsure if a gift exceeds the $100 limit. The GC/CCO, or his designee, will log reported gifts and assess whether the gift may be accepted if it is over the $100 limit. For purposes of the $100 limit, gifts from a single individual will be aggregated over the calendar year.

· <u>Business Entertainment</u>: Meals and other business entertainment in which **the provider is present are not subject to the $100 limit**, so long as they are not

unusually generous or are likely to create a conflict of interest. Any meals or other business entertainment that is unusually generous, frequent or otherwise not customary to the Firm's normal conduct of business must be approved in advance by the GC/CCO. If you have any question on whether entertainment should be reported, you should discuss with the GC/CCO or the Director of Compliance.

· <u>Reporting</u>: Upon receipt of a business gift with a value that exceeds $100 or entertainment that requires pre-clearance based on this policy, the Supervised Person must inform the GC/CCO and such gift or entertainment will be logged.

· <u>Corrective Action</u>. The Firm may require a gift to be returned or the Supervised Person to reimburse the provider. In addition, the Firm may require the gift to be shared generally with office personnel, donated to charity or require such other remedial measures it may deem appropriate.

This policy applies equally to gifts and entertainment received by Immediate Family Members in connection with Gotham's business.

3.  **<u>Procedures for Providing Business Gifts and Business</u> <u>Entertainment</u>** 

#### A Supervised Person may give a customary business gift or provide customary business entertainment, provided, however, a Supervised Person may not:
· Provide cash as a gift;

· Give a business gift or provide business entertainment that is inconsistent with the policies of the recipient's employer. Supervised Persons must be especially cognizant of this when dealing with public entities and pensions;

· Provide a business gift or provide business entertainment to:

i. any employee, candidate or elected official of a state, federal, or foreign government or "government instrumentality," including representatives of a sovereign wealth fund (See also Section on Political Contributions);

ii. any fiduciary or representative to a Plan that is subject to ERISA;

iii. a trustee or representative of a union pension benefits plan; or

iv. any foreign government officials.

· <u>Pre-Clearance of Gifts and Entertainment.</u> Prior to giving a business gift that exceeds **$250** or entertainment that is unusually generous or otherwise not

customary, the Supervised Person must obtain approval from the GC/CCO or Director of Compliance and such gift or entertainment will be logged. Please note that Registered Representatives are subject to a $100 limit and must get pre- approval for all gifts, as described below.

4.  **<u>Registered Representatives of</u> <u>Foreside</u>** 

Registered Representatives are also responsible for complying with Foreside's policies and procedures and FINRA rules. These require that any business gift provided by a Registered Representative must be pre-approved by the Supervising Principal and **Registered Representatives may not give or receive business gifts with a value in excess of $100 to or from another individual.** Note that gifts to or from the same individual will be aggregated over the course of each calendar year and subject to the $100 limit. Business Gifts received by a Registered Representative, of any amount, must be disclosed to the Director of Compliance and will be documented.

Business entertainment provided by a Registered Representative (such as dinners and lunches where the Registered Representative is present) must be documented, such as through an expense report. When providing entertainment, the name, employer of the recipient and all attendees must be included in such documentation. The Supervising Principal distributes a gift and entertainment log to Registered Representatives, generally on a quarterly basis, that requests the required information.

5.  **<u>Foreign Corrupt Practices Act and Gifts and Entertainment Foreign</u> <u>Officials</u>** 

As noted above, gifts may not be given to foreign governments and "government instrumentalities." Pursuant to the Foreign Corrupt Practices Act ("**FCPA**") a Supervised Person is prohibited from the direct or indirect giving of, or a promise to give, "things of value" in order to corruptly obtain a business benefit from an officer, employee, or other "instrumentality" of a foreign government. Companies that are owned, even partly, by a foreign government may be considered an "instrumentality" of that government. In particular, government investments in foreign financial institutions may make the FCPA applicable to those institutions. Individuals acting in an official capacity on behalf of a foreign government or a foreign political party may also be "instrumentalities" of a foreign government.

The anti-bribery provisions of the FCPA specifically prohibit:

· the giving or payment of, or any offer (including an offer that is never consummated by an actual payment), promise or authorization to give or pay, **anything of value** to a "Foreign Official" to assist in obtaining, retaining, or directing business. "Anything of value" is broad and includes: money (in any form); gifts; entertainment or hospitality; offers or promises of employment; promises to pay anything of value; payment or reimbursement of travel expenses; and personal favors; and

· any payment to an agent, consultant, intermediary, representative or any other third party (each, a "**Third Party**") **while knowing** that all or a portion of the payment will be transmitted to a Foreign Official to assist in obtaining, retaining, or directing business. The knowledge requirement of the FCPA includes not only "actual knowledge" that a bribe was paid to a Foreign Official, but also awareness of a "high probability" of such bribery. Therefore, a Supervised Person may have sufficient "knowledge" for a violation if he or she deliberately turns a blind eye or consciously disregards red flags suggesting a possible bribery or corruption scheme, even if the employee does not actually know that a bribe has been paid.

*<u>"Foreign Official"</u>* 

The definition of "Foreign Official" under the FCPA is also very broad. It includes a government official in the classic sense, such as the head of a government ministry or agency, but also encompasses any officer or employee of any foreign government department, agency, or instrumentality, such as an employee of a state-owned business enterprise. For example, an employee of any entity that is owned or controlled by a foreign government may qualify as a Foreign Official under the FCPA.

A Foreign Official may serve in any branch of government (executive, legislative, judicial) and at any level of government (national, regional, local). The term "Foreign Official" also includes (i) any person acting in an official capacity for or on behalf of a foreign government, whether or not that person may be employed by the government, (ii) any employee or representative of a public international organization, or any department, agency, or instrumentality thereof (such as an employee of the World Bank), (iii) any foreign political party or official thereof, and (iv) any candidate for foreign political office.

A "Foreign Official" could include, for example, any of the following:

· an employee of a government owned or controlled enterprise (*e.g.*, a sovereign wealth fund or state-run pension plan or a purchasing manager of a government-owned producer);

· a regulatory agency official;

· a customs or tax official;

· a local police officer;

· a member of the military;

· a member of Parliament;

· a judge, prosecutor or court clerk; or

· an employee of an international organization (*e.g.*, EU entities, U.N. bodies, the World Bank, the Asian and African Development Banks, and similar institutions).

The FCPA includes provisions that may permit the giving of gifts and entertainment under certain circumstances, including certain gifts and entertainment that are lawful under the written

laws and regulations of the recipient's country, as well as bona-fide travel costs for certain legitimate business purposes. However the availability of these exceptions is limited and is dependent on the relevant facts and circumstances.

<u>Additional Prohibitions</u>

In addition to the above, the Firm prohibits the following:

· any contributions or donations to **non-US** charities without the prior written approval of the GC/CCO;

· any contributions or donations to **non-US** politicians, candidates, political parties, political organizations or officials thereof without the prior written approval of the GC/CCO; and

· the payment of bribes, kickbacks, or similar improper payments of money or anything of value, whether in the United States or abroad, to any persons or entities who are not Foreign Officials, including, but not limited to, officers or employees of counterparties or potential investors of the Firm or our Clients.

Civil and criminal penalties for violating the FCPA can be severe. Supervised Persons must comply with the spirit and the letter of the FCPA at all times. Because of the complexities of the FCPA, Supervised Persons must obtain written pre-clearance from the GC/CCO prior to giving anything of value that might be subject to the FCPA as set forth above.

A.  **<u>Political</u> <u>Contributions 1. SEC</u> <u>Rule</u>** 

Rule 206(4)-5 under the Investment Advisers Act requires investment advisory firms who may solicit business from certain Government Entities (as defined below) to adopt policies and procedures to curtail "pay-to-play" practices. The rule prohibits an adviser from providing advisory services for compensation to a Government Entity for two years after the adviser or certain of its executives or employees make a contribution or payment to certain elected officials or candidates. A contribution includes providing anything of value and can be monetary (*e.g.*, checks, tickets) or in-kind (*e.g.*, incurring expenses for a fundraiser).

While Supervised Person are encouraged to participate and vote in all federal, state and local elections, contributions to officials or candidates for office by any Supervised Person are prohibited if those contributions are intended to influence the award or retention of advisory or any other business. In addition, Supervised Persons are subject to pre-clearance of political contributions to state or local officials (including state or local officials who are candidates for federal offices), candidates for state or local office or state or local political parties, and pre-

clearance of any soliciting from others, or coordinating, contributions to state or local officials or candidates for those offices, and to state or local political parties.

You may not circumvent these rules or the guidelines below by having your spouse or other member of your household make a contribution on your behalf.

The rule also prohibits an adviser from providing or agreeing to provide, directly or indirectly, payment to any third party for a solicitation of advisory business from any Government Entity, unless such third party is a registered broker-dealer or registered investment adviser, in each case itself subject to pay-to-play restrictions. Additionally, the rule prevents an adviser from soliciting from others, or coordinating, contributions to certain elected officials or candidates or payments to political parties where the adviser is providing or seeking to provide advisory services to a Government Entity. The rule contains "look-back" provisions that require advisory firms to consider prior political contributions made by newly employed or promoted executives or employees.

A "**<u>Government Entity</u>**" is defined as any state or political subdivision of a state, including:

· Any agency, authority, or instrumentality of the state or political subdivision;

· A pool of assets sponsored or established by the state or political subdivision or any agency, authority or instrumentality thereof, including, but not limited to a "defined benefit plan" as defined in section 414(j) of the Internal Revenue Code (26 U.S.C. 414(j)), or a state general fund;

· A plan or program of a Government Entity; and

· Officers, agents, or employees of the state or political subdivision or any agency, authority or instrumentality thereof, acting in their official capacity.

An "**<u>official</u>**" is defined as any person (including any election committee for the person) who was, at the time of the contribution, an incumbent, candidate or successful candidate for elective office of a Government Entity, if the office:

· Is directly or indirectly responsible for, or can influence the outcome of, the hiring of an investment adviser by a Government Entity; or

· Has authority to appoint any person who is directly or indirectly responsible for, or can influence the outcome of, the hiring of an investment adviser by a Government Entity.

6.  **<u>State and Local</u> <u>Laws</u>** 

State and municipalities, such as New York City, also have rules regarding political contributions.

7.  **<u>Pre-clearance</u> <u>Procedures</u>** 

Due to the complexity of the rules and the severe penalties that may be imposed upon Gotham for a violation of the above laws, all Supervised Persons must obtain pre-clearance from the GC/CCO for any political contributions (monetary or in-kind) made by them or an Immediate Family Member to any candidate for elected office (including incumbents), to any federal, state or local political party, or to any political action committee.

In the case of contributions by the GC/CCO, any request for pre-clearance will be considered by the Chief Financial Officer and/or Associate General Counsel.

8.  **<u>Recordkeeping</u> <u>Requirements</u>** 

Gotham, generally working with Fairview, one of the Firm's compliance consultants, will maintain the following records:

· All pre-clearance requests;

· A list of all direct or indirect contributions made by any Covered Associates as defined in Rule 206(4)-5 to an official of a Government Entity, in chronological order, identifying each Covered Associate (as defined by the Advisers Act) and recipient, the amounts and dates of each contribution, and whether the contribution or payment was subject to the exemption for certain returned contributions;

· A list of the names, titles and business and residential addresses of all Covered Associates as defined in Rule 206(4)-5;

· A list of all Government Entities to which Gotham provides or has provided investment advisory services, or which are or were, investors in any covered investment pool to which Gotham provides or has provided investment advisory services, as applicable, in the past five years;

· All direct or indirect contributions made by Gotham or any Covered Associates to an official of a Government Entity, or direct or indirect payments to a political party of a state or political subdivision thereof, or to a political action committee, and

· The name and business address of each regulated person, if any, to whom Gotham provides or agrees to provide, directly or indirectly, payment to solicit a Government Entity for investment advisory services, on its behalf.

9.  **<u>Reporting Procedures for New</u> <u>Employees</u>** 

New Supervised Persons will be required to meet with the GC/CCO to discuss any political contributions they have made within the past two years and such contributions. Each Supervised Person will also be required to submit an Initial Political Activities Report within 10 days of becoming associated with the Firm.

A.  **<u>Conflicts of Interest Policy; Outside Business</u> <u>Activities</u>** 

Supervised Persons are prohibited from entering into any activity that creates a conflict of interest between the Firm or the Supervised Person, on the one hand, and a Client on the other hand, without the prior written approval from the GC/CCO. Supervised Persons must seek to avoid situations that compromise their duties to Gotham or restrict Gotham's activities.

In instances where the conflict of interest exists, Gotham will seek to mitigate the conflict of interest, including, but not limited to, through disclosure of the general nature or source of the conflict and/or ongoing monitoring of such conflict.

**Many different activities can cause a conflict of interest. In order to identify any conflicts of interest the Firm has adopted the following reporting requirements.** 

<u>Initial</u> <u>and</u> <u>Annual</u> <u>Reporting</u> <u>of</u> <u>Potential</u> <u>Conflicts</u> <u>of</u> <u>Interest</u>. Within 10 days of becoming associated with the Firm, and on an annual basis thereafter, a Supervised Person is required to submit to the GC/CCO a Conflict of Interest Questionnaire.

<u>Pre-Approval of Potentially Conflicting Activities</u>. In the event that a Supervised Person or any of his or her Immediate Family Members engages or intends to engage in any of the following, the prior written approval of the GC/CCO is required:

· Serving as an officer of, or board member to, a public or private entity (other than an affiliate of Gotham), except with respect to religious groups, charitable organizations or local community activities;

· Serving as a trustee to a trust, other than a trust established solely for the Supervised Person's or an Immediate Family Member's personal or estate planning purposes;

· Serving as a committee member for, or an adviser to, an official or ad hoc committee formed as the result of a corporate bankruptcy that represents the

interests of unsecured creditors or equity holders;

· Serving as an elected or appointed official in a state or local governmental office or governmental position;

· Obtaining a financial interest in a provider of goods or services to the Firm;

· Are an employee for a publicly traded company or governmental entity; or

· Are employed at a bank, broker-dealer, credit rating agency, or registered or unregistered investment adviser in a role that requires investment research, portfolio management, or trading.

If you have any question about whether an activity requires approval, please discuss the matter with Legal & Compliance. Approval will be granted on a case-by-case basis, subject to careful consideration of potential conflicts of interest, disclosure obligations, and any other relevant regulatory issues.

A Supervised Person who is granted approval to engage in an outside business activity must not transmit Material Non-Public Information (as defined in the Manual) in connection with the outside business activity. If participation in the outside business activity results in the Supervised Person's receipt of Material Non-Public Information, the Supervised Person must discuss the scope and nature of the information with Legal & Compliance. A Supervised Person who is granted approval to engage in an outside business activity must always follow the Firm's Insider Trading Policy as set forth in the Manual. Similarly, if a Supervised Person receives approval to engage in an outside business activity and subsequently becomes aware of a material conflict of interest that was not disclosed when the approval was granted, the conflict must be promptly brought to the attention of Legal & Compliance.

Any personal or family interest in any of Gotham's business activities or transactions, or proposed business activities or transactions, must be disclosed to Legal & Compliance. For example, if a Supervised Person proposes to enter into a transaction or business relationship on behalf of Gotham that may benefit the Supervised Person or a family member, either directly or indirectly, then the employee must disclose this possibility to Legal & Compliance prior to entering into the transaction or relationship.

B.  **<u>Personal Trading</u> <u>Policy</u>** 

Gotham has adopted a personal trading policy which addresses personal securities trading by all Supervised Persons. Gotham's policies are intended to facilitate compliance with applicable laws, rules and regulations and to mitigate any conflicts of interests with respect to our Clients. Supervised Persons should conduct all personal securities transactions in such a manner as to avoid or mitigate any actual or potential conflict of interest and avoid any abuse of an individual's position of trust and responsibility.

No Supervised Person may take inappropriate advantage of his or her position to the detriment of a Client. Supervised Persons are required to comply with both the express provisions of this policy as well as the spirit of this policy. Specifically, a Supervised Person must not trade in a security if he or she knows, or has reason to believe, that the Firm may transact in such security in the near term in a way that would benefit the Supervised Person. For example, a Supervised Person must not engage in "front-running" Clients by buying a security before the Firm does so on behalf of a Client if such purchases by the Firm are likely to increase the value of the security purchased by the Supervised Person.

In addition to the policies and procedures below, Supervised Persons are reminded that the procedures on Material Non-Public Information set forth in the Manual apply to personal securities transactions and that no Supervised Person may transact in a security for which they have Material Non-Public Information.

As described in the Manual, the Firm maintains the Restricted List. The Restricted List is confidential and its contents should not be shared without the approval of the Co-CIOs, GC/CCO or the CFO. Neither Gotham nor any Supervised Person is allowed to trade or invest in any securities on the Restricted List without prior approval of the GC/CCO.

**Below are the Firm's personal trading policies. The GC/CCO, the Director of Compliance (or, in their absence, the CFO) may make exceptions to the policies and procedures herein. Any such exception must be in writing (which may be e-mail). Exceptions will not be permitted if they would violate any applicable law.** 

1.  **<u>Procedures for Personal Trading and Pre-Approval</u>** 

The following procedures apply to all personal trading by Supervised Persons and their Immediate Family Members. Supervised Persons (and their Immediate Family Members) may only purchase or sell securities in which they have "**Beneficial Ownership**" in accordance with the procedures below. "**Beneficial Ownership**" means an interest where a person, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has a direct or indirect pecuniary interest.

a.  **<u>Securities Requiring</u> <u>Pre-Approval</u>** 

Pre-approval is required for transactions in "**Covered Securities**", which is defined as:

· Any publicly traded equity security (including common stock, preferred stock and securities convertible into an equity security) of a single public issuer (including any security issued in an initial public offering); and

· Derivatives on the equity of a public issuer. Derivatives, include, but are not limited to, options, swaps, and futures.

In addition, any purchase of a private placement (other than those managed by Gotham) requires pre-approval. A private placement is an offering that is exempt from registration under the Securities Act of 1933 pursuant to Section 4(a)(2) or Section 4(a)(5) or pursuant to Rules 504, 505, or 506 of Regulation D and **includes hedge funds and private equity funds**.

In the event a Supervised Person (or one of his or her Immediate Family Members) requests a redemption from a private fund managed by Gotham, he or she must notify the Chief Financial Officer, who may prevent or delay such redemption in his discretion.

Pre-approval is <u>not required</u> for mutual funds (closed-end or open-end), ETFs, debt securities or commodities.

b.  **<u>Pre-Approval Process</u>** 

With respect to transactions which require pre-approval, Supervised Persons (or their Immediate Family Members) must notify and obtain the written approval of the GC/CCO or the Director of Compliance, or in their absence, the Chief Financial Officer (the "**Pre-Approval Personnel**"). Determinations to pre-approve transactions will be made based upon factors deemed relevant by the Pre-Approval Personnel, including an analysis of whether the proposed trade is likely to have an adverse impact on Clients or provide an unfair advantage to the Supervised Person or his or her Immediate Family Member. Generally, the Pre-Approval Personnel will assess if there are any conflicts with trading for Clients, based on the security, timing and size of the proposed transaction and the Firm's trading. The Pre-Approval Personnel will generally consult with one of the Trader(s) before approving a personal securities transaction. Approvals of trades of a Restricted Investment may be conditioned on compliance with certain factors identified by the Pre-Approval Personnel, such as the timing of the trade or the method of trade completion (*e.g.*, VWAP).

No individual may approve his or her own trades. Supervised Persons and their Immediate Family Members may seek approval from the Pre-Approval Personnel by e-mailing <u>traderequest@gotham.com</u>. They may also contact one of the Pre-Approval Personnel directly.

**When requesting pre-approval, please provide the name of the issuer (or the ticker symbol), the amount of shares to be purchased or sold, the last 4 digits of the account number, and whether you have transacted in the security in the opposite direction within the 30 day holding period.** 

The Firm reserves the right to limit, delay, or refuse a Supervised Person's pre-approval request for any reason, including, but not limited to, a potential conflict of interest with a Client in appearance or fact, a violation of law, or any other reason. A Supervised Person's pre-approval request may also be subject to consultation with the Firm's outside counsel and/or regulatory consultants. The GC/CCO or Director of Compliance (or their designees, including ACA and/or Fairview) may periodically review personal securities transactions by all Supervised Persons and Immediate Family Members to identify any trading patterns that raise concerns for Gotham.

If a Supervised Person or his or her Immediate Family Member is granted approval for a transaction it should be executed no later than the end of the trading day for which trading is approved, unless otherwise determined by the Pre-Approval Personnel.

c.  **<u>Thirty-Day Holding</u> <u>Period</u>** 

Generally, trades in Covered Securities will not be approved if the trade is opposite a trade made in the same security within the past 30 days by the Supervised Person. The holding period applies to trades in the same security and not related securities (or derivatives thereof).

When requesting to transact in a Covered Security, Supervised Persons must state in their request the information noted above, including if they (or an Immediate Family Member) have transacted in the security within the thirty-day holding period.

If you are requesting an exception to this policy, please notify the Pre-Approval Personnel when making the request to transact in the applicable security.

d.  **<u>Discretionary</u> <u>Accounts</u>** 

Pre-approval is not required for transactions in Covered Securities which are made in an account in which a Supervised Person or his or her Immediate Family Members has given the authority to make investment decisions to a third-party (a "**Discretionary Account**"). Any investment plans or accounts that may be eligible for either of these exceptions should be brought to the attention of the GC/CCO who will, on a case-by-case basis, determine whether the plan or account qualifies for an exception. In making this determination, the GC/CCO may ask for supporting documentation, such as a copy of the Automatic Investment Plan or a copy of the discretionary account management agreement. Supervised Persons who claim they have no direct or indirect influence or control over an account may also be required to complete additional documentation. **Please note that if you or an Immediate Family Member has any influence over the trades in the Discretionary Account, you must obtain pre-approval for trades in the Discretionary Account in accordance with the Personal Trading Policy.** 

e.  **<u>Records and</u> <u>Statements</u>** 

Records of all pre-approved transactions will be maintained and periodically monitored by Legal & Compliance, including Fairview.

2.  **<u>Additional Personal Trading Procedures Related to Administrative Services Provided to Other</u> <u>Managers</u>** 

The Firm provides certain back-office services, such as accounting, to several third-party investment managers ("**Other Managers**").

To provide such services, certain of the Firm's Supervised Persons have access to confidential information regarding the funds advised by the Other Managers, such as position and trade-level information of such funds. This creates a potential conflict of interest for the Firm and certain Firm personnel.

In order to mitigate this potential conflict, the Firm has adopted the following additional policies and procedures with respect to personal trading:

5. All Supervised Persons with access to non-public portfolio positions or trading information of any of the Other Managers ()"**Confidential Trading Information**") are required to keep such information confidential and only share it in furtherance of providing back-office services to the Other Managers. For the avoidance of doubt, holdings that have been disclosed in regulatory filings or that are otherwise publicly known do not constitute Confidential Trading Information. The Supervised Persons covered under this policy are currently: Paul Gallegra, David Marks and Kate Kahn (each a "**Covered Persons** "). The GC/CCO or Director of Compliance may update the list of Covered Persons from time to time, with notice to such person(s).

6. In the event that a Covered Person (or one of his or her Immediate Family Members) requests to trade an equity security of a single public issuer (or a derivative thereof, each a "security") that is held by any of the funds advised by the Other Managers, he or she must obtain the approval of Pre-Approval Personnel. Such request must include a disclosure that the security is held by a fund advised by one of the Other Manager(s).

7. Covered Persons should note the following: (i) it is the responsibility of the Covered Person to ascertain in advance if a security that is proposed to be traded is held by a fund advised by an Other Manager (*e.g.*, checking in the Firm's accounting system); and (ii) there should be no expectation that such a transaction will be approved as a matter of course.

8. Prior to approving such trade request, Pre-Approval Personnel will obtain the consent of the applicable Other Manager (the "**Required Consent** ").

9. Trades requested by a Covered Person (or his or her Immediate Family Members) in a security held by a fund advised by one of the Other Manager(s) will be approved by the Pre-Approval Personnel only if: (i) the Required Consent is obtained and; (ii) the Pre-Approval Personnel determines that there is no trading conflict (*e.g.*, "front- running") with the trading of the Other Manager. In making such a determination, Pre- Approval Personnel may consider various factors, including whether such information is public, the market capitalization and trading volume of the security and the size of the proposed transaction.

10. If a Supervised Person other than a Covered Person becomes aware of Confidential Trading Information, the various obligations of this policy will apply to such Supervised Person, including, for the sake of clarity, the disclosure and pre-approval requirements.

11.  **<u>Reporting</u> <u>Requirements</u>** 

In order to provide the Firm with information to enable it to monitor compliance with the Personal Trading Policy and to comply with the Advisers Act, each Supervised Person must submit periodic reports to the Firm that list all their accounts (and those in which their Immediate Family Members have a Beneficial Ownership interest), along with the applicable brokerage statements. Legal & Compliance or their designees (including outside service providers) will review such statements and reports.

a.  **<u>Initial and Annual Holdings</u> <u>Report</u>** 

**New Supervised Persons are required to report all accounts within 10 days of becoming a Supervised Person in an initial holdings report. The initial holdings report must be current as of a date not more than 45 days prior to the date the person becomes Supervised Person. New Supervised Persons must list their accounts and provide statements, which must include: the title and type of security; the symbol or CUSIP; the number of shares; the principal amount of each security; the name of the broker; and the date the report is submitted.** 

Each Supervised Person must submit a holdings report/statement every 12-months. The Firm will generally require this at the end of each calendar year.

Currently Fairview will send an email form to each Supervised Person regarding his or her holdings report. Account statements detailing all holdings in securities may be provided for in lieu of listing all holdings provided all the required information is included. Please note that private placements held outside a brokerage account must also be reported.

b.  **<u>Quarterly Transaction and Account</u> <u>Reports</u>** 

Supervised Persons must submit, within (30) thirty calendar days after the end of each quarter, a report to the GC/CCO or his designee covering securities transactions made by them or their Immediate Family Members. The report must include: the date of each transaction; the title and ticker symbol of the security; the nature of the transaction; the price of the security at which the transaction was made; the name of the broker; and the date of the report.

Currently Fairview will send an email form to each Supervised Person. Supervised Persons may list their accounts and have statements sent to the Firm or Fairview in lieu of listing all transactions, provided all the required information is included. In addition, account statements detailing all holdings and transactions in securities must also be provided for the Gotham mutual funds on a quarterly basis. Please note that private placements held outside a brokerage account must also be reported.

Supervised Persons must promptly notify the Legal & Compliance Group upon opening any new accounts. In addition, Registered Representatives must get pre-approval from Foreside prior to opening a new brokerage account.

January 2022

## Ex-99.((P)(20)

nonhesmow1868Nuveen Compliance \| 3 January 2022

![](g202302241131549020.jpg)

## Code of Ethics

### SUMMARY AND SCOPE

#### What the Code is about
Helping to ensure that Nuveen personnel place the interests of Nuveen clients ahead of their own personal interests.

#### Who the Code applies to and what the implications are
This Code applies to individuals in the following categories:

• Nuveen Employees based in the US or Canada (except employees of Nuveen Natural Capital, unless the Nuveen Ethics Office determines otherwise).

• Employees of any US-registered investment adviser who are based outside the US.

• Consultants, interns, and temporary workers based in the US or Canada whose contract length is 90 days or more, unless the Nuveen Ethics Office determines otherwise.

TIAA employees designated as Access Persons by the TIAA- CREF Funds Chief Compliance Officer or the Nuveen Ethics Office are subject to the TIAA Corporate Code of Ethics with the same restrictions and requirements as this Code.

Independent directors and trustees of the TIAA-CREF Funds Complex and Nuveen sponsored or branded funds have their own Code of Ethics and are not subject to this one.

For individuals who are subject to the Code, there are two designations with different implications: Access Person and Investment Person.

#### ACCESS PERSON
All Nuveen Employees who are subject to the Code are considered Access Persons, since they have, or could have, access to non-public information about securities transactions and other investments, holdings, or recommendations for Affiliate-Advised Accounts or Portfolios.

**Key characteristics of this designation. An individual may be considered an Access Person of multiple advisers affiliated with Nuveen, or of only one. If your regular duties give you access to non-public information, or you are an officer of a Nuveen or TIAA-CREF sponsored or branded fund, your personal trading is generally monitored only against the trading activity of the specific adviser(s) or Affiliated Funds with which you are involved. For other employees, personal trading is typically monitored against the trading activities** 

of all advisers affiliated with Nuveen. You will generally not be permitted to execute transactions in a security on any day when an Affiliate-Advised Account or Portfolio managed by the adviser(s) that you are monitored against has a pending buy or sell order for that security.

#### INVESTMENT PERSON
An Access Person who meets any of the following criteria will in addition be considered an Investment Person:

• The Access Person is a Portfolio Manager, Research Analyst or Research Assistant, or they otherwise participate in making recommendations or decisions concerning the purchase or sale of securities in any Affiliate-Advised Account or Portfolio.

• The Access Person has been designated an Investment Person by the affiliate Chief Compliance Officer or the Nuveen Ethics Office.

#### Key characteristics of this designation. The vast majority of Investment Persons are employees of Nuveen's affiliated investment advisers.
An Investment Person is prohibited from transacting in securities during the period starting 7 calendar days

before, and ending 7 calendar days after, any trade in an Affiliate-Advised Account or Portfolio for which he/she has responsibility. In addition, an Investment Person's personal transactions will be reviewed for conflicts in the period starting 7 calendar days before, and ending 7 calendar days after, all trades by their associated investment adviser(s). In some cases, the Investment Person may be required to reverse a trade and/or forfeit an appropriate portion of any profit as determined by the Nuveen Ethics Office. These consequences can apply whether or not the trade was pre-cleared.

The personal trading of Investment Persons is generally only monitored against the trading activity of the specific adviser(s) for which they have been designated an Investment Person.

---

| |
|:---|
| **WHO TO CONTACT**  |
| &nbsp;&nbsp;&nbsp;&nbsp; **Nuveen Ethics Office (Americas)** <br> Hotline: 1 800 842 2733 extension 22-5599 <br> nuveenethicsoffice@nuveen.com  |

---

#### Important to understand

#### Some of our affiliated investment advisers may have supplemental policies of their own that impose additional rules on the same topics covered in this Code. Check with your manager or local/designated Chief Compliance Officer if you have questions.
**Personal trading is a privilege, not a right. Nuveen Employees are expected to follow the law and adhere to the highest standards of behavior—including with respect to personal trading. Any violation of the Code could have severe adverse effects on you, your co-workers, and Nuveen. You may be held personally liable for your conduct and be subject to fines, regulatory sanctions, and even criminal penalties.** 

Because Nuveen can restrict your trading or take actions such as forcing you to hold a position or to disgorge profits, personal trading carries risks beyond normal market risks.

#### Some requirements in this Code apply to Household Members. Each Household Member (see "Terms with Special Meanings" at right) is subject to the same personal trading restrictions and requirements that apply to his/her related Nuveen Employee.

#### The Code does not address every ethical issue that might arise. If you have any doubt at all after consulting the Code, contact the Nuveen Ethics Office for direction.

#### The Code applies to appearance as well as substance. Always consider how any action might appear to an outside observer (such as a client or regulator).

#### You are expected to follow the Code both in letter and in spirit. Literal compliance, such as pre-clearing a transaction, does not necessarily protect you from liability for conduct that violates the spirit of the Code. If you have questions about how to comply with this Code, consult the Nuveen Ethics Office.

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; **TERMS WITH SPECIAL MEANINGS**  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Within this policy, these terms are defined as follows: <br> **Affiliate-Advised Account or Portfolio Any Affiliated Fund, or any portfolio or client account advised or sub- advised by Nuveen.** <br> **Affiliated Fund Any TIAA-CREF or Nuveen branded or sponsored open-end fund, closed-end fund, or Exchange Traded Fund (ETF), and any third-party fund advised or sub-advised by Nuveen.** <br> **Automatic Investment Plan Any program, such as a dividend reinvestment plan (DRIP), under which investment account purchases or withdrawals occur according to a predetermined schedule and allocation.** <br> **Beneficial Ownership Any interest by which you or any Household Member—directly or indirectly—derives a monetary benefit from purchasing, selling, or owning a security or account, or exercises investment discretion.** <br> You have Beneficial Ownership of securities held in accounts in your own name, or any Household Member's name, and in all other accounts over which you or any Household Member exercises or may exercise investment decision- making powers, or other influence or control, including trust, partnership, estate, and corporate accounts or other joint ownership or pooling arrangements. <br> **Code This Code of Ethics.** <br> **Domestic Partner An individual who is neither a relative of or legally married to a Nuveen Employee, but shares** <br> a residence and is in a mutual commitment similar to marriage with such Nuveen Employee. <br> **Federal Securities Laws The applicable portions of any of the following laws, as amended, and of any rules adopted under them by the Securities and Exchange Commission or the Department of the Treasury:** <br> &nbsp;&nbsp;&nbsp;&nbsp;•Securities Act of 1933. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Securities Exchange Act of 1934. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Investment Company Act of 1940. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Investment Advisers Act of 1940.  | &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;•Sarbanes-Oxley Act of 2002. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Title V of the Gramm-Leach-Bliley Act. <br> &nbsp;&nbsp;&nbsp;&nbsp;•The Bank Secrecy Act. <br> **Household Member Any of the following who reside, or are expected to reside for at least 90 days a year, in the same household as a Nuveen Employee:** <br> &nbsp;&nbsp;&nbsp;&nbsp;•Spouse or Domestic Partner. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Sibling. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Child, stepchild, grandchild. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Parent, stepparent, grandparent. <br> &nbsp;&nbsp;&nbsp;&nbsp;•In-laws (mother, father, son, daughter, brother, sister). <br> **Independent Director Any director or trustee of an Affiliated Fund who is not an "interested person" within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended.** <br> **Managed Account Any account, including robo-advised accounts, in which you or a Household Member has Beneficial Ownership and for which you have delegated full investment discretion in writing to a third- party broker or investment manager.** <br> **Nuveen Nuveen, LLC and all of its direct or indirect subsidiaries worldwide.** <br> **Nuveen Employee Any full- or part-time employee of Nuveen, and any consultants, interns or temporary workers designated by the Nuveen Ethics Office.** <br> **Private Placement Any offering exempt from registration under the Securities Act of 1933, such as a private equity investment, hedge fund, or limited partnership. A private investment in public equity (PIPE) is also considered a Private Placement.** <br> **Reportable Account Any account for which you or a Household Member has Beneficial Ownership AND in which securities can be bought, sold or held. This includes, among others:** <br> &nbsp;&nbsp;&nbsp;&nbsp;•All brokerage, IRA, custodial and trust accounts. <br> &nbsp;&nbsp;&nbsp;&nbsp;•All Managed Accounts.  |

---

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; **TERMS WITH SPECIAL MEANINGS (continued)**  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;•All 529 College Savings Plan accounts. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Any TIAA 401(k) plan account. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Any 401(k) plan account from a previous employer that <br> permits transactions in any Reportable Security. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Any direct holding in an Affiliated Fund. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Any health savings account (HSA) that permits the <br> purchase of any security. <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any employee stock purchase plan (ESPP) or employee stock ownership plan (ESOP). <br> The following are NOT considered Reportable Accounts: <br> &nbsp;&nbsp;&nbsp;&nbsp;•Charitable giving accounts. <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any 401(k) plan account or any other account held directly with a mutual fund complex or mutual fund-only platform in which open-end, non-Affiliated Funds are the only possible investment. <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any cash management account with a broker in which a security cannot be purchased or sold. <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any accounts that can invest only in cryptocurrency such as Bitcoin or Ethereum. <br> **Reportable Security Any security EXCEPT:** <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Direct obligations of the US government (indirect obligations, such as Fannie Mae and Freddie Mac securities, are reportable). <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Certificates of deposit, bankers' acceptances, commercial paper, and high quality short-term debt (including repurchase agreements). <br> &nbsp;&nbsp;&nbsp;&nbsp;•Money market funds.  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;•Open-end funds that are not Affiliated Funds. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Note that closed-end funds are Reportable Securities. <br> **Reportable Transaction Any transaction involving a Reportable Security EXCEPT:** <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Transactions in Managed Accounts. Section 16 Persons: Transactions involving Nuveen closed-end funds in any of your Managed Accounts are reportable. <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Transactions under an Automatic Investment Plan; note that transactions that override the pre-set schedule or allocation are reportable. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Dividends. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Interest Accrued. <br> **Section 16 Person Section 16 of the Exchange Act and the rules thereunder impose certain obligations on persons specified in section 30(h) of the Investment Company Act of 1940, as well as insiders of any public company that trades on a national stock exchange (such as a Nuveen closed-end fund). For purposes of Section 16, an "insider" is:** <br> &nbsp;&nbsp;&nbsp;&nbsp;•A director of a public company. <br> &nbsp;&nbsp;&nbsp;&nbsp;•A designated officer of a public company. <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•A person who beneficially owns 10% or more of any class of equity security that is registered under Section 12 of the Exchange Act. <br> &nbsp;&nbsp;&nbsp;&nbsp;•A portfolio manager of a Nuveen closed-end fund. <br> Persons subject to Section 16 include portfolio managers of <br> the Nuveen closed-end funds.  |

---

### GENERAL RESTRICTIONS AND REQUIREMENTS

#### BASIC PRINCIPLES
1. **Never abuse a client's trust, rights, or interests.** 

This means you must never do any of the following:

• Engage in any plan or action, or use any device, that would defraud or deceive a client.

• Make any material statements of fact that are incorrect or misleading, either as to what they include or omit.

• Engage in any manipulative practice.

• Use your position (including any knowledge or access to opportunities you have gained by virtue of your position) to personal advantage or to a client's disadvantage. This would include, for example, front- running or tailgating (trading directly before or after the execution of a large client trade order), or any attempt to influence a client's trading to enhance the value of your personal holdings.

• Conduct personal trading in any way that could be inconsistent with your fiduciary duties to a client (even if it does not technically violate the Code).

**2.** Handle conflicts of interest appropriately. This applies not only to actual conflicts of interest, but also to any situation that might appear to an outside observer to be improper or a breach of fiduciary duty.

3. **Keep confidential information confidential. Always properly safeguard any confidential information you obtain in the course of your work. This includes confidential information related to any of the following:** 

• Any Affiliate-Advised Account or Portfolio and any other financial product offered or serviced by Nuveen.

• New products, product changes, or business initiatives.

• Past, current, and prospective clients, including their identities, investments, and account activity.

"Keeping information confidential" means using discretion in disclosing information as well as guarding against unlawful or inappropriate access by others.

This includes:

• Making sure no confidential information is visible on

your computer screen and desk when you are not there.

• Not sharing passwords with others.

• Using caution when discussing business in any location where your conversation could be overheard.

Confidential information may be released only as required by law or as permitted under the applicable privacy policy(ies). Consult the Nuveen Ethics Office or your local/designated CCO before releasing any confidential information.

4. **Handle Material Non-Public Information properly. Follow all of the terms described in "Material Non-Public Information" below. Be aware that any failure to handle such information properly is a serious offense and may lead to disciplinary action from Nuveen as well as serious civil or criminal liability.** 

5. **Comply with Federal Securities Laws. Any violation of these laws is punishable as a violation of the Code.** 

6. **Never do anything indirectly that, if done directly, would violate the Code. Such actions will be considered the equivalent of direct Code violations.** 

7. **Promptly alert the Nuveen Ethics Office or your local/designated CCO of any actual or suspected wrongdoing. Examples of wrongdoing include violations of the Federal Securities Laws, misuse of corporate assets, misuse of confidential information, or other violations of the Code. If you prefer to report confidentially, call the TIAA Confidential Helpline at 1-877-774-6492. Note that failure to report suspected wrongdoing in a timely fashion is itself a violation of the Code.** 

#### PRE-CLEARANCE AND HOLDING REQUIREMENTS
8. **Pre-clear any trade in Reportable Securities, including certain Affiliated Funds (see box on next page for additional information).** 

If your trade requires pre-clearance, request approval through the Protegent PTA system (PTA) before you or any Household Member places an order to buy or sell any Reportable Security. Any approval you receive expires at the end of the day it was granted; however, you may place after-hours trades in international markets until 11:59 PM local time on that day. When requesting pre-clearance, follow this process:

• Request pre-clearance on the same day you want to trade, during standard US trading hours (9:30 AM to 4:00 PM ET). Be sure your pre-clearance request is accurate as to security and direction of trade.

• Wait for approval to be displayed before trading. If you receive approval, you may only trade that same day, and only within the scope of approval. If you do not receive approval, do not trade.

• Place day orders only. Do not place good-till-canceled orders or limit orders that expire beyond the day of pre-clearance approval. You may place orders for an after-hours trading session or in foreign markets using

that day's pre-clearance approval, but you must not place any order that could remain open into the next day's trading session.

9. **Hold positions in securities that are subject to pre- clearance for 60 calendar days, or be prepared to forfeit any gains. Several things to note:** 

• You may be required to surrender any gains realized (net of commissions) through a violation of this rule.

• The 60-day holding requirement is tested on a last- in-first-out basis, across all of your holdings (not just within individual accounts).

• The 60-day holding requirement extends to any options or other transactions that may have the same effect as a purchase or sale, and to all Reportable Securities except Exchange Traded Funds (ETFs), Exchange Traded Notes (ETNs), Unit Investment Trusts (UITs), and open-end Affiliated Funds.

• Closed-end funds, including Nuveen branded or sponsored closed-end funds, are subject to the 60-day holding requirement.

• You may sell the security on the 60th day after purchase, provided you obtain pre-clearance or an approved exemption applies.

• You may re-purchase a security immediately after executing a sale of that same security, which will trigger a new 60 calendar day holding period.

• You may close a position at a loss at any time provided pre-clearance approval has been obtained, or an approved exemption applies. If your pre-clearance has been denied, it is advisable that you contact the Nuveen Ethics Office if you are seeking to sell at a loss within 60 days of your purchase.

10. **Comply with trading restrictions described in the prospectuses for all Affiliated Funds. This includes restrictions on frequent trading in shares of any open-end Affiliated Fund.** 

11. **Pre-clear any transaction in a Managed Account that involves your influence. You must also immediately consult with the Nuveen Ethics Office to discuss whether the account in question can properly remain classified as a Managed Account.** 

12. **Obtain the required approvals before any transaction in a Private Placement, including PIPEs. Participation and approval for all transactions in Private Placements advised or sub-advised by Nuveen, is facilitated by the Nuveen Employee Investment Program (NuveenEIP@nuveen.com).** 

For all other Private Placements, you must obtain approval for initial and subsequent commitments to invest but not sales/redemptions. Be aware that sales/redemptions are Reportable Transactions. Approval is required even if the investment is made in a Managed Account.

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; **WHAT NEEDS TO BE PRE-CLEARED**  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; **Pre-clearance required** <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•All actively initiated trades in Reportable Securities, except those listed here under "No pre- clearance required." <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The sale of restricted stock or employee stock options accrued during prior employment or a Household Member's employment require pre-clearance. If pre- clearance is denied, you may contact the Nuveen Ethics Office to request reconsideration. <br> Be aware that pre-clearance can be withdrawn even after it has been granted, and even after you have traded, if Nuveen later becomes aware of Affiliate-Advised Account or Portfolio trades whose existence would have resulted in <br> denial of pre-clearance. In these cases you may be required to reverse a trade and/or forfeit an appropriate portion of any profit, as determined by the Nuveen Ethics Office. <br> Be aware that trades initiated by a broker to address the financial standing of an account can result in violations and will generally not be protected by the Code's "actively initiated trade" language for trades requiring pre- clearances. Example include, but are not limited to, brokers initiating trades in margin accounts, brokers initiating trades to cover account fees, and brokers initiating <br> trades to remediate a minimum or negative cash balance in an account.  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Pre-clearance not required** <br> &nbsp;&nbsp;&nbsp;&nbsp;•Shares of any open-end mutual fund (including Affiliated Funds). Note that closed-end funds, including Nuveen branded or sponsored closed-end funds, require <br> pre-clearance. <br> &nbsp;&nbsp;&nbsp;&nbsp;•ETFs, ETNs, UITs (including options on ETFs and ETNs). <br> &nbsp;&nbsp;&nbsp;&nbsp;•CDs and commercial paper. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Securities acquired or disposed of through actions outside your control or issued pro rata to all holders of the same class of investment, such as automatic dividend reinvestments, stock splits, mergers, spin-offs, or rights subscriptions. <br> &nbsp;&nbsp;&nbsp;&nbsp;•The automatic exercise or liquidation by an exchange of a derivative instrument upon expiration or the delivery of securities pursuant to a written option that is exercised against you, and the assignment of options. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Sales pursuant to a bona fide tender offer. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Trades made through an Automatic Investment Plan that have been disclosed to the Nuveen Ethics Office in advance. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Trades in a Managed Account (except that you must pre-clear any trades that involve your influence, any initial purchases of Private Placements, purchases in any equity IPO, and any sales or redemptions of Private <br> Placements that are branded, sponsored, advised or sub- <br> advised by Nuveen). <br> &nbsp;&nbsp;&nbsp;&nbsp;•Foreign currencies, including futures. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Commodity instruments. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Index options and index futures. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Direct investments in cryptocurrencies. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Crypto instruments that are comprised of and invest solely in cryptocurrencies.  |

---

#### OTHER RESTRICTIONS
13. **Never knowingly trade any security being traded or considered for trade by any Affiliate-Advised Account or Portfolio. This applies to employee transactions in securities that are exempt from pre- clearance, and includes equivalent or related securities.** 

For example, if a company's common stock is being traded, you may face restrictions on trading any of the company's debt, preferred, or foreign equivalent securities, and from trading or exercising any options based on the company's securities.

14. **Always prioritize client trades over personal trades. Your fiduciary duties to the client are far more important than your personal trading, which is a privilege and not a right. Never delay or in any** 

way alter the timing or terms of a client trade for your

personal benefit.

15. **Do not engage in trading that involves single stock futures.** 

16. **Do not engage in uncovered short sales of individual securities.** 

17. **You may trade options on individual securities, subject to the 60-day holding period. Options traded must have an expiration of at least 60 days from the date that you enter into the contract. You are not permitted to close an option at a profit within 60 days of having entered into the contract. The option contract can be closed in less than 60 days at a loss, provided pre- clearance approval has been obtained.** 

18. **Never participate in an investment club or similar entity.** 

19. **Do not engage in excessive or inappropriate trading activity. Never let personal trading interfere with your professional duties. The Nuveen Ethics Office and/or your local/designated CCO, in consultation with your manager, will determine what constitutes excessive or inappropriate trading.** 

20. **Pre-clear the sale of securities in a margin account. Margin accounts are permitted, however you must obtain pre-clearance when selling to meet a margin call, even if the transaction is initiated by a broker.** 

21. **Never purchase an IPO without advance approval. This includes Managed Accounts. Equity IPO participation is generally prohibited but approval may be granted in special circumstances, such as when:** 

• You already have equity in the company and are offered shares.

• You are a policy holder or depositor in a company that is demutualizing.

• A Household Member has been offered shares

as an employee.

Purchases of initial offerings of SPACs, fixed income securities, convertible securities, preferred securities, open- and closed-end funds, commodity pools, and secondary equity offerings are generally permitted subject to prior approval from the Nuveen Ethics Office.

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; **MATERIAL NON-PUBLIC INFORMATION**  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **What is Material Non-Public Information?** <br> Material Non-Public Information is defined as information regarding any security, securities-based derivatives or issuer of a security that is both material and non-public. <br> Information is material if both of the following are true: <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•A reasonable investor would likely consider it important when making an investment decision. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Public release of the information would likely affect the <br> price of a security. <br> Information is generally non-public if it has not been distributed through a widely used public medium, such as a press release or a report, filing or other periodic communication. <br> **Restrictions and requirements** <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any time you think you might have, or may be about to, come into possession of Material Non-Public Information (whether in connection with your position at Nuveen or not), alert the Nuveen Ethics Office. Alternatively, you may alert your local/designated CCO or Legal office, who in turn must promptly notify the Nuveen Ethics Office. Follow the instructions you are given.  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Until you receive further instructions from the Nuveen Ethics Office, your local/designated CCO, or Legal, do not take any action in relation to the information, including trading or recommending the relevant securities or communicating the information to anyone else. <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Never make decisions on your own regarding potential Material Non-Public Information, including whether such information is actually Material Non-Public Information or what steps should be taken. <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If the Nuveen Ethics Office, your local/designated CCO and/or Legal determine that you have Material Non- Public Information: <br> –Do not buy, sell, gift, or otherwise dispose of the issuer's securities, whether on behalf of an Affiliate-Advised Account or Portfolio, yourself, or anyone else. <br> –Do not in any way recommend, encourage, or influence others to transact in the issuer's securities, even if you do not specifically disclose or reference the Material Non- Public Information. <br> –Do not communicate the Material Non-Public Information to anyone, whether inside or outside Nuveen, except in discussions with the Nuveen Ethics Office and Legal and as expressly permitted by any confidentiality agreement or supplemental policies and procedures of your business unit. <br> &nbsp;&nbsp;&nbsp;&nbsp;•Please refer to Nuveen's Material Non-Public Information <br> and Insider Trading Policy for detailed information.  |

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### REPORTING REQUIREMENTS

#### UPON BECOMING A NUVEEN EMPLOYEE
22. **Within 10 calendar days of starting at Nuveen, acknowledge receipt of the Code. This includes certifying that you have read the Code, understand it, recognize that you are subject to it, have complied with all of its applicable requirements, and have submitted all Code-required reports.** 

23. **Within 10 calendar days of starting at Nuveen, use PTA to report all of your Reportable Accounts and holdings in Reportable Securities.** 

For each Reportable Account that permits the purchase of Reportable Securities, upload the most recent statement, making sure that it includes information about the broker,

dealer, or bank through which the account is held and the type of account. For each Reportable Security, provide the security name and type, a ticker symbol or CUSIP, the number of shares or units held, and the principal amount (dollar value).

This information must be no older than 45 calendar days

before your first day of employment.

Note that there are separate procedures for Managed Accounts, as described below in item 25.

24. **Within 10 calendar days of starting at Nuveen, report all current investments in Private Placements (limited offerings). Limited offerings are Reportable Securities.** 

25. **Within 30 calendar days of starting at Nuveen, move or close any Reportable Account that is not at an approved firm. This does not include Reportable Accounts that are 401(k), HSA, ESPP/ESOP, or 529 plans. Accounts held directly with a mutual fund** 

complex or mutual fund only platform in which open-end non- Affiliated Funds are the only possible investment are not reportable. Contact the Nuveen Ethics Office

if you are unsure whether your account must be held with an approved firm. The list of approved firms is maintained by the Nuveen Ethics Office and may be accessed on PTA.

Under very limited circumstances, it may be possible to obtain a waiver to keep a Reportable Account at a non- approved firm. Examples include:

• An account owned by a Household Member who works

at another financial firm with comparable restrictions.

• An account that holds securities that cannot be transferred.

• An account that cannot be moved because of a trust agreement.

To apply for an exception, contact the Nuveen Ethics Office. For any account granted an exception, you are required to upload statements for the account in PTA based on the frequency with which a statement is generated for the account (e.g. monthly, quarterly). In all cases, if your accounts are not held at an approved firm, you must manually enter all Reportable Transactions in PTA within 5 days of execution.

Consultants and temporary workers are generally not required to move or close Reportable Accounts.

26. **Within 30 calendar days of starting at Nuveen, seek approval to liquidate any securities held prior to starting at Nuveen that you do not wish to continue to hold. If you wish to liquidate securities that you held prior to joining Nuveen, seek approval by contacting the Nuveen Ethics Office within 30 calendar days of starting at Nuveen. If you do not liquidate securities during this time, you will generally forfeit this consideration for liquidation.** 

#### WHEN OPENING ANY MANAGED ACCOUNT
27. **Get pre-approval for any new Managed Account before any trading activity commences and report the account within 10 calendar days of the date you or** 

a Household Member opens the account or an account becomes a Reportable Account through marriage, cohabitation, divorce, death, or another event. Using the appropriate form which may be accessed in PTA,

provide representations that support the classification of the account as a Managed Account. For an account to be classified as a Managed Account, the account owner must have no direct or indirect influence or control over the

securities in the account. The form must be signed by the account's broker or investment manager and by all account owners. You may be asked periodically to confirm these representations or submit an updated form to confirm such.

Note that upon request, you are also responsible for providing duplicate statements for the Managed Account to the Ethics Office

#### WHEN OPENING ANY NEW REPORTABLE ACCOUNT
28. **Report any new Reportable Account, including Managed Accounts. Do this in PTA within 10 calendar days of the date you or a Household member opens the account or an account becomes a Reportable Account through marriage, cohabitation, divorce, death, or another event.** 

#### EVERY QUARTER
29. **Within 30 calendar days of the end of each calendar quarter, verify in PTA that all Reportable Transactions made during that quarter have been reported. PTA will display all transactions of yours for which it has received** 

notice (except transactions in your TIAA pension and retirement plan accounts, which you are not required to report because the firm accesses this information directly). For any other Reportable Transactions not

displayed, or displayed inaccurately, you are responsible for making any necessary revisions in PTA prior to completing your certification.

30. For each Reportable Transaction, you must provide, as applicable, the transaction date, security name and type, ticker symbol or CUSIP, interest rate (coupon)

and maturity date, number of shares, price at which the transaction was effected, principal amount (dollar value), the nature of the trade (buy or sell), and the name of the broker, dealer, or bank that effected the transaction. It

is very important that you carefully review and verify the transactions and related details displayed on PTA, checking for accuracy and completeness. Once again, if you find any errors or omissions, correct or add to your list of transactions in PTA.

#### EVERY YEAR
31. **Within 45 calendar days of the end of each calendar year, acknowledge receipt of the most recent version of the Code and certify in PTA as to your annual Reportable Security holdings and Reportable Accounts.** 

The reporting must contain the information described in item 23 above, and include your certification that you have reported all Reportable Accounts, and all holdings in Reportable Securities at year end. You are responsible for ensuring that all of your Reportable Accounts have

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|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; **CODEADMINISTRATION** |
| &nbsp;&nbsp;&nbsp;&nbsp; <br> **Training**<br> You will be required to participate in training on the Code when joining Nuveen as well as periodically during the time you are subject to the Code.<br> **Exceptions**<br> The Code exists to prevent violations of law. The Nuveen Ethics Office may, under certain circumstances, grant waivers from a Code requirement. No waivers or exceptions that would violate any law will be granted.<br> **Monitoring**<br> The Nuveen Ethics Office is responsible for monitoring accounts, transactions, holdings and certifications for any violations of this Code.<br> **Consequences of violation**<br> Any individual who violates the Code is subject to penalty. Penalties could include, among other possibilities, a written warning, restriction of trading privileges, unwinding or reversing trades, disgorgement of trading profits, fines, and suspension or termination of employment.<br> **Applicable rules**<br> The Code has been adopted in recognition of Nuveen's fiduciary obligations to clients and in accordance with various provisions of Rule 204A-1 under the Investment Advisers Act of 1940 and Rule 17j-1 under the Investment Company Act of 1940. This Code is also adopted by the Affiliated Funds advised by Nuveen Fund Advisors, LLC, TIAA-CREF Investment Management, LLC and Teachers Advisors, LLC under Rule 17j-1.<br> Some elements of the Code also constitute part of Nuveen's response to Financial Industry Regulatory Authority (FINRA) requirements that apply to registered personnel of Nuveen Securities, LLC.<br>|

---

In addition, you must affirm each year through PTA that each Managed Account is properly classified as a Managed Account, for yourself and on behalf of any Household Member. This separate certification does not require broker or investment manager involvement.

You also must acknowledge any amendments to the Code

that occur during the course of the year.

---

| |
|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; **ADDITIONAL RULES FOR SECTION 16 PERSONS**  |
| &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Pre-clear transactions in all closed-end funds through PTA. Any requests involving Nuveen closed-end funds will be reviewed by Legal. <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Pre-clear buy/sell transactions involving any Nuveen closed-end funds within your Managed Account(s). <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•When selling for a gain any securities you buy that are issued by the entity of which you are a Section 16 Person, make sure it is at least 6 months after your most recent purchase of that security. This rule extends to any options or other transactions that may have the same effect as a purchase or sale, and is tested on a last-in- first-out basis. You may be required to surrender any gains realized through a violation of this rule. Note that for any fund of which you are a Section 16 Person, no exception from pre-clearance is available. <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Promptly email to the appropriate contact in Legal the details of all executed transactions in Nuveen closed-end funds of which you are a Section 16 Person. <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•See the Nuveen Funds Section 16 Policy and Procedures for additional information. <br> If you are unsure whether you are a Section 16 Person, <br> contact Legal or the Nuveen Ethics Office.  |

---

## Ex-99.(P)(21)

**Origin Asset Management LLP**

**('Origin' or the 'Firm')**

**Code of Ethics and Personal Account Dealing Rules – December 2021**

#### Fiduciary responsibility of the Firm, and its Partners and Employees
Origin has a fiduciary responsibility to place the interests of the Firm's clients before its interests or those of its partners and employees. The Firm has therefore adopted the following general principles which all its partners and employees are expected to uphold:

· The interests of the Firm's clients must always be placed first.

· All Personal Account Dealing ("PAD") must be conducted in a manner consistent with the Code of Ethics (the "Code") (see Appendix One) and must avoid any actual or potential conflicts of interest or any abuse of a position of trust and responsibility.

· Partners and employees must not take any inappropriate advantage of their positions at the Firm.

· Information on the securities held by and the financial circumstances of clients must be kept confidential.

· The investment decision making process must be independent at all times.

#### Personal account transactions
With effect from 1st August 2017 all personnel are prohibited from purchasing any common stock securities or other equity-linked instruments in the firm's investible universe to prevent any potential conflicts of interest that may arise from personal account trading in such securities that are held in, or may be considered for client portfolios. "Personal account" means any securities account in which personnel have any direct or indirect "beneficial ownership", including any personal account of that person's immediate family, and is further defined below.

Existing partners and staff who hold any common stock securities in the firm's investible universe acquired prior to the policy effective date of 1st August 2017 will be permitted to sell them in accordance with the firm's current personal account dealing rules and procedures.

New partners and new employees who hold any common stock securities in the firm's investible universe acquired prior to joining the firm will be permitted to sell them in accordance with the firm's current personal account dealing rules and procedures.

In order to comply with FCA and SEC rules on personal account transactions you are required to comply with the provisions within this Code.

#### Permission to deal
For the investments detailed under 'General exemptions' below, partners and employees of the Firm may not deal in any investments without obtaining the prior written consent of any Authorised Partner and the Compliance Officer.

Each investment or divestment will be considered on a case by case basis by an Authorised Partner (see Appendix Two) and the Compliance Officer and if approved by the Compliance Officer, the dealing should comply with the general rules and procedures set out below.

The PAD Form is required to be used for prior written consent to deal. The prior written consent will be valid for 48 hours, if the approved deal has not been executed within 48 hours from approval, a new PAD Form will be required.

When making purchases or sales the transactions will only e approved if the partner or employee agrees to be bound by the following:

· Any purchases of permitted securities outside the firm's investible universe are held for *<u>a minimum period of</u>*  ***<u>thirty</u>*** *<u>days</u>* <u>.</u> 

· No dealing can take place ahead of the Investment Manager on days when the Investment Manager has made the decision to or is doing the same action for the Funds.

· No dealing can take place in any placements that have been offered to the Firm's clients.

· Partners and employees must continue to adhere to the rules as laid out in the PAD Rules.

Note that where a general or specific permission is given for a transaction, the other requirements set out below in this notice (e.g. reporting) still need to e complied with. You will need to ensure that you do not contravene the dealing or disclosure restrictions in the insider dealing provisions of the Criminal Justice Act 1993.

#### Rights issues and takeovers
Please note that the restrictions in this notice extend to making any formal offer to buy or sell, taking up rights on a rights issue and exercising conversion or subscription rights and exercising an option.

The restrictions also extend to buying or selling an investment under any offer, including a takeover or tender offer that is made to the public, or all (or substantially all) of the investment concerned.

#### Trustees, personal representatives and agents
The restrictions also extend to dealings y you:

· As a trustee of a trust or as a personal representative of an estate in which you or an associate<sup>1</sup>of yours has a significant beneficial interest.

· As a trustee of any other trust or a personal representative of any other estate, unless you are relying entirely on the advice of another person (such as another broker, accountant or a solicitor).

· For the account of an associate¹.

#### General exemptions
The restrictions do not extend to:

1. Any transaction y you in an authorised unit trust, a regulated collective investment scheme or a life assurance policy (including a pension).

2. Any transaction entered into, without consultation with you, through a discretionary account.

3. Listed instruments based on indices including equities, fixed interest, and currency indices, and Exchange Traded Funds (ETFs).

#### Selling to or buying from a Client
You may not sell to or buy from any client of the Firm for your own account.

#### Reporting transactions
It is a requirement to forward a copy of the contract note to the Compliance Officer for all transactions that

i) you have received approval for; and

ii) have been executed for you within a discretionary account that you do not take decisions for but have appointed a discretionary investment manager.

*Covered Accounts and Securities* 

*Personal accounts*

The term "personal account" means any securities account in which personnel have any direct or indirect "beneficial ownership" and includes any personal account of that person's immediate family (including any relative by blood or marriage either living in the person's household or dependant on that person).

*Covered Securities*

The term "covered securities" includes all securities defined as such under the Investment Advisers Act of 1940 (the "Advisers Act") and includes:

· Debt and equity securities;

· Options on securities, on indices and on currencies;

· All forms of limited partnerships and limited liability company interests, including interests in private investment funds (such as hedge funds) and interests in investment clubs; and

· Foreign unit trusts and foreign mutual funds.

¹ "Associate" includes any person (including members of your family, companies or Partnerships) whose business or domestic relationship with you would give rise to a community of interest between you.

The term "covered securities" however does <u>not</u> include the following:

· Direct obligations of the US government (e.g. treasury securities);

· Bankers' acceptances, bank certificates of deposit, commercial paper and high quality short term debt obligations, including repurchase agreements;

· Shares issued by money market funds;

· Shares of open-end mutual funds that are not advised or sub-advised by the Firm (or the Firm's affiliates); and

· Shares issued by unit investment trusts that are invested exclusively in one or more open-end mutual funds, none of which are funds advised or sub-advised by the Firm (or the Firm's affiliates).

*Initial and Annual Holdings Reports* 

*Contents of holdings reports*

All personnel are required by the Advisers Act to submit to the Firm both initial and annual holdings reports that disclose all covered securities held in any personal account. In lieu of a holdings report and at the discretion of the Compliance Officer, personnel may submit to the Compliance Officer or arrange to have sent to the Compliance Officer brokerage statements for every personal account. The brokerage statements, however, must be received within the time frame specified below and contain at least the following information:

· The title and type of covered security, the exchange ticker symbol or CUSIP number (as applicable), number of shares and principal amount of each covered security in any personal account;

· The name of any broker, dealer or bank with which the person maintains any personal account; and

· The date on which the person submits the report.

If covered securities are held in a personal account that are not disclosed in the brokerage statements submitted to the Compliance Officer they must be disclosed in a separate holdings report and submitted to the Compliance Officer. In connection with this process all personnel will be required to certify that all covered securities in all personal accounts have been disclosed to the Compliance Officer.

*Timing of holdings reports*

All personnel must submit holdings reports (and any substitute brokerage statements) to the Compliance Officer within the following time frames:

· No later than 10 days after joining and the information contained in the report must be current as of a date no more than 45 days prior to joining; and

· No later than 30 days after the end of each calendar year, the information contained in the report must be current as of a date no more than 45 days prior to the date the report is submitted.

*Quarterly securities transaction reports or substitute brokerage statements* 

All personnel are required by the Advisers Act to submit at least quarterly securities transaction reports to the Compliance Officer for each covered securities transaction in any personal account. As an alternative, submitting brokerage statements to the Compliance Officer at least quarterly meets this requirement. The brokerage statements, however, must contain at least the following information:

· The date of the transaction, the title and type of covered security, the exchange ticker symbol or CUSIP number (as applicable), interest rate and maturity date, number of shares and principal amount of each covered security involved;

· The nature of the transaction (i.e. purchase, sale or any other type of acquisition or disposition);

· The price of the covered security at which the transaction was effected;

· The name of any broker, dealer or bank with or through which the transaction was effected; and

· The date on which the person submits the report.

If any transaction involving a covered security in a personal account does not appear in the brokerage statement (such as a private placement) they must be disclosed in a separate holdings report and submitted to the Compliance Officer on a "Quarterly Securities Transaction Report".

*Timing of quarterly securities transaction reports or brokerage statements* 

All personnel must submit a quarterly securities transaction report (or substitute brokerage statement) no later than 30 days after the end of each calendar quarter.

*Exceptions to the reporting requirements* 

No personnel are required to submit:

· Any initial or annual holding report or quarterly securities transaction report (or substitute brokerage statement) with respect to covered securities held in a personal account over which they had no direct or indirect influence or control (e.g." blind trusts"); or

· A quarterly securities transaction report (or substitute brokerage statement) with respect to transactions effected pursuant to an automatic investment plan (i.e. a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation, including any dividend reinvestment plans.

#### Dealing ahead of a research recommendation
This restriction applies when you know that the Firm intends to publish a research recommendation and you know, or should know, that the recommendation is likely to cause a price change in the investment to which it relates. In that situation, you must not deal the same way as the research recommendation until the recommendation has been published and the clients for whom it was principally intended have had a reasonable opportunity to react to it. Dealing before a research recommendation has become public may also reach insider dealing legislation.

#### Dealing ahead of a client order
If you know that the Firm has accepted a client's order, or have made a decision to deal for a discretionary client, you must not deal the same way in advance of that client's order.

#### Dealing contrary to a client's interest
You must not deal in an investment at a time, or in a manner, which you know is likely to have a direct adverse effect on the particular interests of one of our clients. However, you do not reach this restriction merely y entering into a transaction in an investment, which you know will probably cause a fall in the price of an investment owned y a client or y a rise in the price of an investment in which a client has a short position.

#### Personal benefit
If your functions involve giving investment advice, including the preparation of research material, or entering into transactions in investments for the Firm's own account, or the account of those for whom it deals, you must not accept from any person any benefit or inducement² which is likely to conflict with your duties to the Firm or any of the Firm's clients. If in any doubt you should consult with the Compliance Officer.

²"benefit or inducement" means credit or any other financial advantage or opportunity to make, receive or increase any gain or revenue, or to avoid or reduce any loss or expense, money or other property or gift, and any service, facility, system or information.

#### Counselling and procuring
If the above provisions preclude you from entering into any transaction and if you know, or have reason to believe, that the other person will, as a result, enter into such a transaction or cause or advise someone else to do so, you cannot:

· Advise or cause any other person to enter into such a transaction

· Communicate any information or opinion to any other person.

This does not apply to actions, which you take in the course of your employment with the Firm. For example, the fact that you are prohibited from dealing in a certain stock as a result of one of the provisions above does not mean that you are precluded from giving bona fide advice to a client to deal.

#### Summary of insider dealing legislation
The insider dealing provisions contained in Part V of the Criminal Justice Act 1993 ("the Act") are complex. If you would like fuller details or are in any doubt whether a particular transaction would e prohibited, you should consult the compliance department.

The Act applies to all securities traded on a regulated market (which currently includes all EC stock exchanges, LIFFE, OMLX and NSDQ) and to warrants and derivatives (including index options and futures) relating to these securities even if these warrants and derivatives are only "over the counter" traded.

In road terms, and subject to the exemptions provided by the Act, the Act makes it a criminal offence, with a maximum penalty of seven years imprisonment and an unlimited fine:

· For an individual who has non-public information to deal in price affected securities (including warrants or derivatives relating to them) on a regulated market;

· For an individual to deal through a professional intermediary;

· By acting his/her self as a professional intermediary.

Securities are "price affected" if the inside information if made public, is likely to have a significant effect on the price of the securities. This applies to all companies' securities affected y the information, whether directly or indirectly (for example, competitors of a company about to launch a new product).

The Act applies whether you deal as part of your employment, or on your own account. It also covers information obtained directly or indirectly from an insider, whether or not in the course of your employment (for example, through social contacts).

If you are precluded from dealing, normally you are also precluded from:

· Dealing on behalf of the Firm or a Client (except perhaps on an unsolicited basis);

· Procuring or encouraging another person to deal in the price affected securities (whether or not the other person knows they are price affected);

· Passing the inside information to another person, other than in the proper performance of your employment.

It is possible for a transaction which involves insider dealing to constitute an offence otherwise than under the ct. In particular, under section 47 (1) of the Financial Services Act 1986, a person who "dishonestly conceals any material facts" is guilty of an offence if he does so for the purpose of inducing, or is reckless as to whether it may induce, another person (whether or not the person from whom the facts are concealed) to buy or sell an investment, or to refrain from buying or selling an investment. person, who conceals price sensitive information from a counterparty to induce him to deal, if that concealment is dishonest, could well commit this offence.

#### Compliance with applicable US Federal Securities Laws
In addition to the general principles of conduct stated in the Code and the specific trading restrictions and reporting requirements described above, the Code requires all personnel to comply with the applicable US federal securities laws. These laws include the Securities Act of 1933 (the "Securities Act"), the Exchange Act, the Sanes-Oxley Act of 2002, the Investment Company Act of 1940, the Advisers Act, any rules adopted by the SEC under any of these statutes, the Bank Secrecy Act as it applies to private investment funds and investment advisers and any rules adopted thereunder by the SEC or the Department of the Treasury. If you have any questions regarding your obligations under these statutes, you should consult the Compliance Officer.

#### Reporting violations
All personnel must immediately report any violation of the Code to the Compliance Officer, or in the Compliance Officer's absence an Executive Partner. All reports will be treated confidentially and investigated promptly and appropriately. The Firm will not retaliate against any personnel who report a violation of the Code in good faith and any retaliation constitutes a further violation of the Code. The Compliance Officer will keep records of any violation of the Code and of any action taken as a result of the violation.

#### Administration of the Code
The Compliance Officer will receive and review all reports submitted pursuant to the Code. The Compliance Officer will review the reports to determine that all personal trades are consistent with requirements and restrictions set forth in the Code and do not otherwise indicate any improper trading activities. The Compliance Officer will also ensure that all books and records relating to the Code are properly maintained. The books and records required to be maintained include a record of the following:

· Any violation of the Code and of any action taken as a result of the violation;

· All written acknowledgements of receipt, review and understanding of the Code from all current personnel and any from within the last five years;

· Each report made by personnel, including brokerage confirmations and brokerage account statements obtained from access persons;

· The names of persons who are currently, or within the last five years were, access persons;

· Any decision, and the reasons supporting the decision, to approve the acquisition of an IPO or limited offering; and

· Any exception from the Code granted by the Compliance Officer, all related documentation supplied by the person seeking the exception and the reasons supporting the decision to grant the exception.

The books and records must be maintained by the Firm in an easily accessible place for at least five years from the end of the fiscal year in which the records was created, the first two years in an appropriate office of the Firm.

In Part II of the Firm's Form ADV a description of this Code has been provided and that a copy will be provided on request. The Compliance Officer is responsible for providing such copy to any Fund investor who may request it.

#### Sanctions
Any violation of any provision of the Code may result in disciplinary action. The Compliance Officer will determine an appropriate sanction. Disciplinary action may include, among other sanctions, a letter of reprimand, disgorgement, suspension, demotion or termination of employment.

#### Acknowledgement of receipt, training and compliance
The Firm will provide all personnel with a copy of the Code and any amendments thereto, together with appropriate and adequate training on the principals and procedures of the Code. Any questions regarding any provisions of the Code or its application should be directed to the Compliance Officer. All personnel must provide the Firm with a written acknowledgement evidencing the fact that they have received and reviewed and understood the Code.

#### APPENDIX ONE
Origin has adopted a formal compliance policy and code of ethics for its partners and employees. Origin is registered with the SEC and authorised and regulated by the FCA in the United Kingdom. Origin is required to carry on its business by adhering to the following Principles:

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| | |
|:---|:---|
|  1 Integrity  | &nbsp;&nbsp; A firm must conduct its business with integrity.  |
|  2 Skill, care and diligence  | &nbsp;&nbsp; A firm must conduct its business with due skill, care and diligence.  |
|  3 Management and control  | &nbsp;&nbsp; A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.  |
|  4 Financial prudence  | &nbsp;&nbsp; A firm must maintain adequate financial resources.  |
|  5 Market conduct  | &nbsp;&nbsp; A firm must observe proper standards of market conduct.  |
|  6 Customers' interests  | &nbsp;&nbsp; A firm must pay due regard to the interests of its clients and treat them fairly.  |
|  7 Communications with clients  | &nbsp;&nbsp; A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading.  |
|  8 Conflicts of interest  | &nbsp;&nbsp; A firm must manage conflicts of interest fairly, both between itself and its clients and between a client and another client.  |
|  9 Clients: Relationships of trust  | &nbsp;&nbsp; A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any client who is entitled to rely upon its judgment.  |
|  10 Clients' assets  | &nbsp;&nbsp; A firm must arrange adequate protection for clients' assets when it is responsible for them.  |
|  11 Relations with regulators  | &nbsp;&nbsp; A firm must deal with its regulators in an open and cooperative way, and must disclose to the FCA and the SEC appropriately anything relating to the firm of which the FCA or SEC would reasonably expect notice.  |

---

As a member of the FCA we are required to monitor on a regular basis our business practices. This will include detailed reviews of our trading, fund management and research functions. We check client portfolios against their guidelines on a monthly basis to ensure that we are in compliance.

We have strict Personal Account Dealing Rules which require pre-clearance of any personal or connected party transactions.

#### APPENDIX TWO

#### AUTHORISED PARTNERS
The following Partners are authorised to provide written approval prior to dealing:

#### Chris Carter

#### Nigel Dutson

#### Tarlock Randhawa

#### Nishil Patel

Code of Ethics and Personal Account Dealing Rules – December 2021

## Ex-99.(P)(29)

**CODE OF ETHICS AND CONDUCT**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

T. ROWE PRICE GROUP, INC.

**AND ITS AFFILIATES**

**Effective March 7, 2022**

**CODE OF ETHICS AND CONDUCT**

**OF**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;T. ROWE PRICE GROUP, INC.

**AND ITS AFFILIATES**

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **TABLE OF CONTENTS** |  |
| **GENERAL POLICY STATEMENT...........................................................................................** | **1-1** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Purpose of Code of Ethics and Conduct...................................................................................** | **1-1** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Persons and Entities Subject to the Code.................................................................................** | **1-2** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Definition of Supervised Persons.............................................................................................** | **1-2** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Status as a Fiduciary.................................................................................................................** | **1-2** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Adviser Act Requirements for Supervised Persons .................................................................** | **1-3** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **NASDAQ Requirements ..........................................................................................................** | **1-3** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **What the Code Does Not Cover...............................................................................................** | **1-3** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Sarbanes-Oxley Codes .............................................................................................................** | **1-4** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Compliance Procedures for Funds and Federal Advisers ........................................................** | **1-4** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Compliance with the Code .......................................................................................................** | **1-4** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Questions Regarding the Code.................................................................................................** | **1-4** |
| **STANDARDS OF CONDUCT OF PRICE GROUP AND ITS PERSONNEL .........................** | **2-1** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Allocation of Brokerage Policy................................................................................................** | **2-1** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Annual Compliance Certification.............................................................................................** | **2-1** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Anti-Bribery Laws and Prohibitions Against Illegal Payments...............................................** | **2-1** |
| &nbsp;&nbsp;&nbsp;&nbsp; **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Antitrust..............................................................................................................................** | **2-27-1** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Anti-Money Laundering...........................................................................................................** | **2-2** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Appropriate Conduct ................................................................................................................** | **2-2** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Charitable Contributions ..........................................................................................................** | **2-2** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Conflicts of Interest..................................................................................................................** | **2-4** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Relationships with Profitmaking Enterprises .......................................................................** | **2-4** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Service with Nonprofitmaking Organizations......................................................................** | **2-5** |
| **Relationships with Financial Service Firms .........................................................................** | **2-5** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Relationships with a Bank ....................................................................................................** | **2-6** |
| **Existing Relationships with Potential Vendors ....................................................................** | **2-6** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **i-1** |  |

---

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Investment in Client/Vendor Company Stock......................................................................** | **2-6** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Confidentiality..........................................................................................................................** | **2-7** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Expense Payments and Reimbursements .................................................................................** | **2-7** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Financial Reporting ..................................................................................................................** | **2-8** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Gifts and Business Entertainment ............................................................................................** | **2-8** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Human Resources.....................................................................................................................** | **2-8** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Equal Opportunity ................................................................................................................** | **2-8** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Drug and Alcohol Policy ......................................................................................................** | **2-8** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Policy Against Harassment and Discrimination ...................................................................** | **2-9** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Health and Safety in the Workplace .....................................................................................** | **2-9** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Use of Employee Likenesses and Information .....................................................................** | **2-9** |
| **Employment of Former Government and Self-Regulatory Organization Employees..........** | **2-9** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Inside Information ..............................................................................................................** | **2-94-1** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Investment Clubs......................................................................................................................** | **2-9** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Marketing and Sales Activities ..............................................................................................** | **2-10** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Outside Business Activities....................................................................................................** | **2-10** |

---

**Past and Current Litigation and Inquiries from Regulators or Governmental Organizations 2-10**

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Political Activities and Contributions ....................................................................................** | **2-10** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lobbying......**.......................................................................................................................** | **2-12** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Professional Designations ......................................................................................................** | **2-12** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Protection of Corporate Assets...............................................................................................** | **2-12** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Quality of Services .................................................................................................................** | **2-13** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Record Retention and Destruction .........................................................................................** | **2-13** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Referral Fees ..........................................................................................................................** | **2-13** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Release of Information to the Press........................................................................................** | **2-13** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Responsibility to Report Violations .......................................................................................** | **2-14** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General Obligation ....**.........................................................................................................** | **2-14** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Global Whistleblower Procedures ......................................................................................** | **2-14** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Sarbanes-Oxley Whistleblower Procedures .......................................................................** | **2-14** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Sarbanes-Oxley Attorney Reporting Requirements ...........................................................** | **2-15** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Circulation of Rumors............................................................................................................** | **2-15** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Service as Trustee, Executor or Personal Representative ......................................................** | **2-15** |
| **i-2** |  |

---

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Speaking Engagements and Publications...............................................................................** | **2-15** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Social Media...........................................................................................................................** | **2-16** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Systems Security ..............................................................................................................** | **2-166-1** |
| **STATEMENT OF POLICY ON GIFTS AND BUSINESS ENTERTAINMENT .....................** | **3-1** |
| **STATEMENT OF POLICY ON MATERIAL, INSIDE (NON-PUBLIC) INFORMATION.... 4-1** | **STATEMENT OF POLICY ON MATERIAL, INSIDE (NON-PUBLIC) INFORMATION.... 4-1** |
| **STATEMENT OF POLICY ON SECURITIES TRANSACTIONS ..........................................** | **5-1** |
| **STATEMENT OF POLICY ON SYSTEMS SECURITY AND RELATED ISSUES...............** | **6-1** |
| **STATEMENT OF POLICY ON COMPLIANCE WITH ANTITRUST LAWS........................** | **7-1** |
| **STATEMENT OF POLICY ON PRIVACY ...............................................................................** | **8-1** |

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**i-3**

**CODE OF ETHICS AND CONDUCT**

**OF**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;T. ROWE PRICE GROUP, INC.

**AND ITS AFFILIATES**

**GENERAL POLICY STATEMENT**

Purpose of Code of Ethics and Conduct. As a global investment management firm, we are considered a fiduciary to many of our clients and owe them a duty of undivided loyalty. Our clients entrust us with their financial well-being and expect us to always act in their best interests. Over the course of our Company's history, we have earned a reputation for fair dealing, honesty, candor, objectivity and unbending integrity. This has been possible by conducting our business on a set of shared values and principles of trust.

In order to educate our personnel, protect our reputation, and ensure that our tradition of integrity remains as a principle by which we conduct business, T. Rowe Price Group, Inc. ("T. Rowe Price," "TRP", "Price Group" or "Group") has adopted this Code of Ethics and Conduct ("Code"). Our Code establishes standards of conduct that we expect each associate to fully understand and agree to adopt. As we are in a highly regulated industry, we are governed by an ever-increasing body of federal, state, and international laws as well as countless rules and regulations which, if not observed, can subject the firm and its employees to regulatory sanctions. All associates are expected to comply with all laws and regulations applicable to T. Rowe Price business. Our Code contains 31 separate Standards of Conduct as well as the following six separate Statements of Policy:

&nbsp;&nbsp;&nbsp;&nbsp;1.Statement of Policy on Gifts and Business Entertainment

&nbsp;&nbsp;&nbsp;&nbsp;2.Statement of Policy on Material, Inside (Non-Public) Information

&nbsp;&nbsp;&nbsp;&nbsp;3.Statement of Policy on Securities Transactions

&nbsp;&nbsp;&nbsp;&nbsp;4.Statement of Policy on Systems Security and Related Issues

&nbsp;&nbsp;&nbsp;&nbsp;5.Statement of Policy on Compliance with Antitrust Laws

&nbsp;&nbsp;&nbsp;&nbsp;6.Statement of Policy on Privacy

A copy of this Code will be retained by the Legal Department for five years from the date it is last in effect. While the Code is intended to provide you with guidance and certainty as to whether or not certain actions or practices are permissible, it does not cover every issue that you may face. The firm maintains other compliance-oriented manuals and handbooks that may be directly applicable to your specific responsibilities and duties. Nevertheless, the Code should be viewed as a guide for you and the firm as to how we jointly must conduct our business to live up to our guiding tenet that the interests of our clients and customers must always come first.

Each new employee will be provided with the current Code and must acknowledge their understanding of the Code. All employees have access to the current Code on the intranet. Each employee will be required to provide Price Group with an acknowledgement of their understanding of the current Code on at least an annual basis. All acknowledgements will be retained as required by the Investment Advisers Act of 1940 (the "Advisers Act").

Please read the Code carefully and observe and adhere to its guidance. 1-1

Persons and Entities Subject to the Code. Unless otherwise determined by the Chairperson of the Ethics Committee, the following entities and individuals are subject to the Code:

• Price Group

• The subsidiaries and affiliates of Price Group

• The officers, directors and employees of Price Group and its affiliates and subsidiaries

Unless the context otherwise requires, the terms "T. Rowe Price", "Price Group" and "Group" refer to Price Group and all its affiliates and subsidiaries.

In addition, the following persons are subject to the Code:

1. Any contingent worker (independent or agency-provided contract worker) whose assignments exceed four weeks or whose cumulative assignments exceed eight weeks over a twelve-month period <u>and</u> whose work is closely related to the ongoing work of Price Group employees (versus project work that stands apart from ongoing work); and

2. Any contingent worker whose assignment is more than casual in nature or who will be exposed to the kinds of information (via systems access or otherwise) and situations that would create conflicts on matters covered in the Code.

The independent directors of Price Group, T. Rowe Price Mutual Funds ("Price Funds"), andthe T. Rowe Price Exchange-Traded Funds ("Price ETFs") are subject to the principles of the Code generally and to specific provisions of the Code as noted. "Price ETFs" includes the T. Rowe Price semi-transparent actively-managed ETFs ("STA ETFs") that operate pursuant to SEC exemptive relief dated December 2019 (the "STA ETF Exemptive Relief") unless expressly noted otherwise.

Definition of Supervised Persons. Under the Advisers Act, the officers, directors (or other persons occupying a similar status or performing similar functions) and employees of the Price Advisers, as well as any other persons who provide advice on behalf of a Price Adviser and are subject to the Price Adviser's supervision and control are "Supervised Persons".

Status as a Fiduciary. Several of Price Group's subsidiaries are investment advisers registered with the U.S. Securities and Exchange Commission ("SEC"). These include T. Rowe Price Associates, Inc. ("TRPA"), T. Rowe Price Investment Management, Inc. ("TRPIM"), T. Rowe Price International Ltd ("TRPIL"), T. Rowe Price Advisory Services, Inc. ("TRPAS"), T. Rowe Price (Canada), Inc. ("TRP Canada"), T. Rowe Price Singapore Private Ltd. ("TRPSING"), T. Rowe Price Japan, Inc. ("TRPJ"), T. Rowe Price Australia Limited ("TRPAU"), and T. Rowe Price Hong Kong Limited ("TRPHK").

TRPIL is also authorized and regulated by the UK Financial Conduct Authority ("FCA"). TRPIL is also subject to regulation by the Dubai Financial Services Authority (in respect of its DFIC Representative Office).

TRPHK is also authorized and regulated by the Securities and Futures Commission ("SFC") of Hong Kong.

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TRPSING is also authorized and regulated by the Monetary Authority of Singapore ("MAS").

TRP Canada is also registered with the Ontario Securities Commission, the Manitoba Securities Commission, the British Columbia Securities Commission, the Saskatchewan Financial Services Commission, the Nova Scotia Securities Commission, the New Brunswick Securities Commission, the Financial Markets Authority (Quebec), and the Alberta Securities Commission.

TRPJ is licensed by the Japan Financial Services Authority ("FSA").

TRPAU also holds an Australian Financial Services License issued by the Australian Securities & Investments Commission ("ASIC").

All advisers affiliated with Price Group will be referred to collectively as the "Price Advisers" unless the context otherwise requires. The Price Advisers will register with additional securities regulators as required by their respective businesses. The primary responsibility of the Price Advisers is to render to their advisory clients on a professional basis unbiased advice regarding their clients' investments. As investment advisers, the Price Advisers have a fiduciary relationship with all of their clients, which means that they have an absolute duty of undivided loyalty, fairness and good faith toward their clients and mutual fund shareholders and a corresponding obligation to refrain from taking any action or seeking any benefit for themselves which would, or which would appear to, prejudice the rights of any client or shareholder or conflict with his or her best interests.

Adviser Act Requirements for Supervised Persons. The Advisers Act requires investment advisers to adopt Codes that:

&nbsp;&nbsp;&nbsp;&nbsp;•Establish a standard of business conduct, applicable to Supervised Persons, reflecting the fiduciary obligations of the adviser and its Supervised Persons;

&nbsp;&nbsp;&nbsp;&nbsp;•Require Supervised Persons to comply with all applicable laws;

&nbsp;&nbsp;&nbsp;&nbsp;•Require Supervised Persons to report violations of the Code promptly to the adviser's Chief Compliance Officer; and

&nbsp;&nbsp;&nbsp;&nbsp;•Require the adviser to provide each Supervised Person with a copy of the Code and any amendments and requiring Supervised Persons to provide the adviser with an acknowledgement of receipt of the Code and any amendments.

Price Group applies these requirements to all persons subject to the Code, including all Supervised Persons.

NASDAQ Requirements. Nasdaq Stock Market, Inc. ("NASDAQ") rules require listed companies to adopt a Code of Conduct for all directors, officers, and employees. Price Group is listed on NASDAQ. This Code is designed to fulfill this NASDAQ requirement. A waiver of this Code for an executive officer or director of T. Rowe Price Group, Inc. must be granted by Price Group's Board of Directors and reported as required by the pertinent NASDAQ rule.

Additional Regulatory Requirements Beyond the Code. The Code was not written for the purpose of covering all policies, rules and regulations to which personnel may be subject. For example, T. Rowe Price Investment Services, Inc. ("Investment Services") is regulated by the Financial Industry Regulatory Authority ("FINRA") and, as such, is required to maintain written

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supervisory procedures to enable it to supervise the activities of its registered representatives and associated persons to ensure compliance with applicable securities laws and regulations and with the applicable rules of FINRA. In addition, TRPIL, TRP Canada, and other TRP entities are subject to several non-U.S. regulatory authorities.

Sarbanes-Oxley Codes. The principal Executive and Senior Financial Officers of Price Group, Price Funds, and the Price ETFs are also subject to codes (collectively the "S-O Codes") adopted to bring these entities into compliance with the applicable requirements of the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley Act"). These S-O Codes, which are available along with this Code on the firm's intranet site, are supplementary to this Code, but administered separately from it and each other.

Compliance Procedures for Funds and Federal Advisers. Under rule 38a-1 of the Investment Company Act of 1940, each fund board is required to adopt written policies and procedures reasonably designed to prevent the fund from violating federal securities laws. These procedures must provide for the oversight of compliance by the fund's advisers, principal underwriters, administrators and transfer agents. Under Rule 206(4)-7 of the Investment Advisers Act of 1940, it is unlawful for an investment adviser to provide investment advice unless it has adopted and implemented policies and procedures reasonably designed to prevent violations of federal securities laws by the adviser and its supervised persons.

Compliance with the Code. Strict compliance with the provisions of this Code is considered a basic condition of employment or association with the firm. An employee may be subject to disciplinary action, up to and including termination, for refusing to cooperate with an internal or external investigation. An employee may be required to surrender any profit realized from a transaction that is deemed to be in violation of the Code. In addition, a breach of the Code may constitute grounds for disciplinary action, including fines and dismissal from employment. Employees may appeal to the Management Committee any ruling or decision rendered with respect to the Code.

Questions regarding the Code should be referred to <u>Code_of_Ethics@TRowePrice.com</u>

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STANDARDS OF CONDUCT OF PRICE GROUP AND ITS PERSONNEL

Allocation of Brokerage Policy. The policies of each of the Price Advisers with respect to the allocation of client brokerage are set forth in Part 2A of Form ADV of each of the Price Advisers. The Form ADV is each Price Adviser's registration statement filed with the SEC. It is imperative that all employees, especially those who are in a position to make recommendations regarding brokerage allocation or who are authorized to select brokers that will execute securities transactions on behalf of our clients, read and become fully knowledgeable concerning our policies in this regard. Any questions regarding any of the Price Advisers' allocation policies for client brokerage should be addressed to the respective Equity Best Execution or Fixed Income Best Execution Committee.

Annual Compliance Certification. Annually each person subject to the Code is required to complete an Annual Compliance Certification ("ACC") regarding his or her compliance with various provisions of the Code. Associates must notify Code Compliance (via the Code of Ethics mailbox) should any responses to these questions change during the subsequent calendar year. Each Access Person (defined on page 5-3), except the independent directors of the Price Funds and Price ETFs, must file an Initial Holdings Report as well as complete the ACC which will include a reporting and certification of securities accounts and holdings.

Anti-Bribery Laws and Prohibitions Against Illegal Payments. State, U.S., and international laws prohibit the payment of bribes, kickbacks, inducements or other illegal gratuities or payments by or on behalf of Price Group. Price Group, through its policies and practices, is committed to comply fully with these laws. T. Rowe Price prohibits its employees as well as anyone acting on its behalf from making any type of illegal payment. The U.S. Foreign Corrupt Practices Act ("FCPA") makes it a crime to directly or indirectly pay, promise to pay, offer to pay or authorize the payment of any money or anything of value to any government official in connection with obtaining or retaining business or influencing such official in order to secure an improper advantage. The term "government official" is broadly defined to include any officer or employee of a government or any department, agency, or instrumentality thereof, or of a public international organization, or any person acting in an official capacity for or on behalf of any such government or department, agency, or instrumentality thereof, or for or on behalf of any such public international organization, and any political party, party official or candidate for public office.

Additionally, the UK Bribery Act 2010 ("Bribery Act") contains wide prohibitions on illegal payments and specifically prohibits bribery between private parties. Also, the Bribery Act provides for severe civil and criminal penalties against individuals and corporations.

Under these Anti-bribery laws, actions constituting a bribe or illegal payment are interpreted broadly and could include excessive, repeated or lavish entertainment and/or gifts. Associates must adhere to the guidelines of gift and business entertainment policy and procedures and, if required by the applicable procedure, indicate in the reporting process whether a recipient of a gift or business entertainment is a government official.

If you are solicited to make or receive an illegal payment or have any questions about this section of the Code, you should contact the Legal Department. Also, an anonymous Hotline (888-651- 6223) has been established for employees to report any concerns they have regarding illegal payments, including potential violations of the FCPA and the Bribery Act.

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Antitrust. The U.S. antitrust laws are designed to ensure fair competition and preserve the free enterprise system. Other jurisdictions have requirements based on similar principals. Some of the most common antitrust issues with which an employee may be confronted are in the areas of pricing (adviser fees) and trade association activity. To ensure its employees' understanding of these laws, Price Group has adopted a Statement of Policy on Compliance with Antitrust Laws (page 7-1).

Anti-Money Laundering. T. Rowe Price has a legal and fiduciary duty to help guard against accounts under management from being used for fraudulent activities, money laundering, or the financing of terrorist activities. T. Rowe Price will not knowingly engage in any activity that facilitates money laundering or the funding of terrorist or criminal activities. The firm has developed procedures to help detect and prevent such activity from occurring and will comply with all laws and regulations to which T. Rowe Price is subject including those rules and regulations requiring the reporting of suspicious activity. It is each associate's responsibility to protect the firm from exploitation by money launderers. Refer to the Global Financial Crimes Prevention web-based training in myLearning for more information on money laundering and the relevant laws and regulations.

Appropriate Conduct. Associates are expected to conduct themselves in an appropriate and responsible manner in the workplace, when on company business outside the office, and at company-sponsored events. Inappropriate behavior reflects poorly on the associate and may impact T. Rowe Price. Managers should be especially mindful that they should set the standard for appropriate behavior.

Charitable Contributions. Employees should be sensitive to a possible perception of undue influence before making or requesting charitable contributions to or from a client, prospect, vendor, or other business contact. Under certain Anti-bribery laws, regulators may consider charitable contributions to be improper payments, even when the person who has requested that the contribution be made receives no direct monetary benefit. Accordingly, when making charitable contributions in response to requests from business contacts, associates must be mindful of how Anti-bribery laws could be implicated. In no case should charitable contributions be made on a quid pro quo basis.

Supervision of Charitable Contribution Requests. Managers and Division Heads are responsible for ensuring that responses to requests from clients, vendors, and other business contact and our requests to clients, vendors, and other business contacts for charitable contributions comply with these guidelines as well as respective departmental policies. Charitable contributions should be considered as separate and distinct from marketingand advertising expenditures. If you have any questions about a proposed charitable contribution, you should contact the Chairperson of the Ethics Committee, or their designee, before proceeding.

Requests Received from Clients, Vendors or Other Business Contacts for Corporate Charitable Contributions. On occasion, a T. Rowe Price entity may be asked by an employee of a client, vendor, or other business contact to make a charitable donation. In those instances where the T. Rowe Price Foundation does not make the contribution, the decision about the charitable contribution is made by the T. Rowe Price entity, subject to the following conditions:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The amount of charitable contribution may not be linked to the actual or anticipated level of business with the client, vendor or other business contact whose employee is soliciting the charitable contribution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•There is no reason to believe that the employee requesting the contribution will derive an improper economic or pecuniary benefit as a result of the proposed contribution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If the T. Rowe Price entity considering the contribution is unfamiliar with the charity, its personnel should confirm with the Central Control Group that the charity does not appear on the Office of Foreign Assets Control's Specially Designated Nationals List;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The contribution should be made payable directly to the charity; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Associates of the T. Rowe Price entity considering the contribution should check with Finance to determine the appropriate T. Rowe Price entity to make the contribution.

In addition, if the requested amount exceeds $1,000 the request must be referred to the Chairperson of the Ethics Committee for prior approval.

Some broker-dealer's sponsor days, often referred to as "miracle" days, where they pledge that proceeds received on that day will be donated to a specific charity. Because of fiduciary and best execution obligations, the Price Advisers cannot agree to direct trades to a broker-dealer in support of such an event at either a client's or the broker-dealer's request. The Price Advisers are not prohibited, however, from placing trades for best execution that happen to occur on a "miracle" day or similar time and thus benefit a charity.

Requests Received from Clients, Vendors or Other Business Contacts for Personal Charitable Contributions. On occasion, a T. Rowe Price employee may be asked by an employee of a client, vendor or other business contact to make a charitable contribution. If the employee makes a contribution directly to the charity and the contribution is not made in the name of or for the benefit of the business contact, no Code of Ethics or FINRA issues arise. For example, a plan fiduciary might mention that her husband has recently recovered from a heart problem and that she is raising funds for a charity that supports cardiac research. The T. Rowe Price employee can make a personal contribution to that charity and if the contribution is not tied to the name of the business contact and does not create a benefit for her, the employee does not need to request prior clearance of or notify T. Rowe Price about the contribution.

However, personal charitable contributions made in the name of and for the benefit of a business contact should be treated as "gifts" to the business contact. For example, if the business contact raises a certain amount of money, he or she gets a tangible award or opportunity like the chance to participate in a marathon. For business contacts related to T. Rowe Price fund business or other broker-dealer related business, contributions of the latter type are subject to FINRA's $100 limit. For other business activities not regulated by FINRA, contributions in excess of $100 must be prior approved by the Chairperson of the Ethics Committee, or their designee.

Requests to Clients, Vendors, or Other Business Contacts for Charitable Contributions. Employees should be sensitive to a possible perception of undue influence

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before requesting a client, vendor, business contact or an employee of such an entity to make a charitable contribution. In no case should such a request be made on a quid pro quo basis. If you have any questions about requesting a charitable contribution youshould contact the Chairperson of the Ethics Committee, or their designee, before proceeding.

NASDAQ Listing Rules. Under the NASDAQ listing rules, specific restrictions may apply to contributions to a charitable organization for which an independent director of T. Rowe Price Group, Inc. serves as an officer. Specifically, contributions to such organizations during a fiscal year may not exceed the higher of five percent of the organizations revenues or $200,000. Contributions in excess of these thresholds may invalidate a director's "independent" classification.

Conflicts of Interest. All employees must avoid placing themselves in a "compromising position" where their interests may be in conflict with those of Price Group or its clients. In addition, employees are legally required to perform their job duties in the best interests of the firm; referred to as a duty of loyalty. This means that employees cannot enrich themselves at the expense of T. Rowe Price, actively compete with the firm, divert business to a competitor, and must always seek to protect the assets of the T. Rowe Price.

Relationships with Profitmaking Enterprises. Depending upon the circumstances, an employee may be prohibited from creating or maintaining a relationship with a profitmaking enterprise. In all cases, written approval must be obtained as described below.

General Prohibitions. Employees are generally prohibited from serving as officers or directors of any issuer (company) that is approved or likely to be approved for purchase in our firm's client accounts. In addition, an employee may not accept or continue outside employment that will require him or her to become registered (or duly registered) as a representative of an unaffiliated broker-dealer, investment adviser or insurance broker or company unless approval to do so is first obtained in writing from the Chief Compliance Officer ("CCO") of the broker- dealer. An employee also may not become independently registered as an investment adviser.

Approval Process. Any outside business activity, which may include a second job, appointment as an officer or director of or a member of an advisory board to a for-profit enterprise, or self-employment, must be approved in writing by the employee's supervisor. If the employee is a registered representative of T. Rowe Price Investment Services, he or she must provide the Legal Registration Group with prior written notice. Any reported outside business activity of a registered representative is reviewed by Investment Services' CCO, or designee, in order to determine if disclosure to FINRA is required.

Review by Ethics Committee. If an employee contemplates obtaining an interest or relationship that might conflict or appear to conflict with the interest of Price Group, he or she must also receive the prior written approval of the Chairperson of the Ethics Committee or his or her designee and, as appropriate, the Ethics Committee itself. Examples of relationships that might create a conflict or appear to create a conflict of interest may include appointment as a director, officer or partner of or member of an advisory board to an outside profitmaking enterprise,

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employment by another firm in the securities industry, or self-employment in an investment capacity. Decisions by the Ethics Committee regarding such positions in outside profitmaking enterprises may be reviewed by the Management Committee before becoming final.

Approved Service as Director or Similar Position. Certain employees may serve as directors or as members of creditor committees or in similar positions for non- public, for-profit entities in connection with their professional activities at the firm. An employee must receive the written permission of the Management Committee before accepting such a position and must relinquish the position if the entity becomes publicly held, unless otherwise determined by the Management Committee.

Service with Nonprofitmaking Organizations. Price Group encourages its employeesto become involved in community programs and civic affairs. However, employees should not permit such activities to affect the performance of their job responsibilities.

Approval Process. The approval process for service with a non-profitmaking organization varies depending upon the activity undertaken.

By Supervisor. An employee must receive the approval of his or her supervisor in writing before accepting a position as an officer, trustee, or member of the Board of Directors of any nonprofit organization.

By Ethics Committee Chairperson. If there is any possibility that the organization will issue and/or sell securities, the employee must also receive the written approval of the Chairperson of the Ethics Committee or his or her designee and, as appropriate, the Chief Compliance Officer of the broker-dealer before accepting the position.

Although individuals serving as officers, Board members or trustees for nonprofitmaking entities that will not issue or sell securities do not need to receive this additional approval, they must be sensitive to potential conflict of interest situations (e.g., the entity is considering entering a business relationship with a T. Rowe Price entity) and must contact the Chairperson of the Ethics Committee, or their designee, for guidance if such a situation arises.

Relationships with Financial Services Firms. In order to avoid any actual or apparent conflicts of interest, employees are prohibited from investing in or entering into any relationship, either directly or indirectly, with corporations, partnerships, or other entities that are engaged in business as a broker, a dealer, an underwriter, and/or an investment adviser. As described above, this prohibition generally extends to registration and/or licensure with an unaffiliated firm. This prohibition, however, is not meant to prevent employees from purchasing publicly traded securities of broker-dealers, investment advisers or other companies engaged in the mutual fund industry. All such purchases are subject to prior transaction clearance and reporting procedures, as applicable. This policy also does not preclude an employee from engaging an outside investment adviser to manage his or her assets.

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If any member of employee's immediate family is employed by or has a partnership interest in a broker-dealer, investment adviser, or other entity engaged in the mutual fund industry, the relationship must be reported to the Code Compliance Team.

An ownership interest of 0.5% or more in any entity, including a broker-dealer, investment adviser or other company engaged in the mutual fund industry, must be reported to the Code Compliance Team.

Relationships with a Bank. In order to avoid any regulatory conflicts of interests associated with an outside business activity associated with a bank, employees are required to obtain prior written approval before engaging in any outside business activity with a bank.

Approval Process. Any outside business activity with a bank, such as a second job, must be approved in writing by the employee's supervisor and by the Chairperson of the Ethics Committee, or their designee.

Existing Relationships with Potential Vendors. If an employee is going to be involved in the selection of a vendor to supply goods or services to the firm, he or she must disclose the existence of any ongoing personal or family relationship with any principal of the vendor to the Chairperson of the Ethics Committee, or their designee, in writing before becoming involved in the selection process.

Investment in Client/Vendor Company Stock. In some instances, existing or prospective clients (e.g., clients with full-service relationships with T. Rowe Price Retirement Plan Services, Inc.) or vendors ask to speak to our portfolio managers and/or analysts who have responsibility for a Price Fund or Price ETF or other managed account in an effort to promote investment in their securities. While these meetings present an opportunity to learn more about the client/vendor and may therefore be helpful to T. Rowe Price, employees must be aware of the potential conflicts presented by such meetings. In order to avoid any actual or apparent conflicts of interest:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Employees are prohibited from providing any internal information (e.g., internal ratings or plans for future Price Fund, Price ETF, or other client account purchases) to the client or vendor regarding the securities, except to the extent specifically authorized by the Legal Department, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Investment decisions of employees regarding a client's or vendor's securities must be made independently of the client or vendor relationship and cannot be based on any express or implied quid pro quo. If a situation arises where a client has suggested that it is considering either expanding or eliminating its relationship with T. Rowe Price (or, in the case of a vendor, offering a more or less favorable pricing structure) based upon whether Price increases purchases of the client's or vendor's securities, the Chairperson of the Ethics Committee should be consulted immediately for guidance.

In addition, the use of information derived from such meetings with existing or prospective clients or vendors must conform to the Statement of Policy on Material, Inside (Non- Public) Information.

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Conflicts in Connection with Proxy Voting. If a portfolio manager or analyst with the authority to vote a proxy or recommend a proxy vote for a security owned by a Price Fund, Price ETF, or a client of a Price Adviser has an immediate family member who is an officer or director or has a material business relationship with the issuer of the security, the portfolio manager or analyst should inform the Proxy Committee of the relationship so that the Proxy Committee can assess any conflict of interest that may affect whether the proxy should or should not be voted in accordance with the firm's proxy voting policies.

Confidentiality. The exercise of confidentiality extends to all areas of our operations, including internal operating procedures and planning; current, prospective and former clients; investment advice; investment research; employee information and contractual obligations to protect third party confidential information. The duty to exercise confidentiality applies not only while associates and others are with the firm, but also after a person leaves the firm. Following are examples of the type of confidential information with which associates may come into contact:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Internal operating procedures and planning, including methods of operation and portfolio management, corporate financial information, and future initiatives the firm is considering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Client information, including the identity of current, prospective, or former clients of any type (e.g., mutual fund shareholder, separate account client, etc.), agents of clients, and related data concerning clients (e.g., government-issued numbers, account numbers, addresses, investments, etc.).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Confidential information of third parties with whom we deal, such as the business operations of a vendor we use.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Investment research, including what securities we are considering for purchase or sale on behalf of our commingled investment vehicles or clients.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Information about our associates and contractors, such as name, government-issued numbers, health conditions, and financial or performance information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Portfolio holdings for a commingled investment vehicle or separate account. (See "T. Rowe Price Mutual Funds and Exchange-Traded Funds Information Release Policy")

In addition to laws that can apply to the collection and use of such information, Price Group also may be subject to contractual commitments. It is important to remember that your role is to use confidential information of others, such as information of clients or other associates, only as needed to perform your job; to handle such information in a secure manner; to not use or share such data for your own or other non-business purposes; and to promptly report any potential issues about the security, availability, or integrity of such information to the Help Desk. You are prohibited from using or bringing physical or electronic business records of other businesses or employers to T. Rowe Price.

Expense Payments and Reimbursements. As a general rule, T. Rowe Price will not pay or reimburse expenses, such as travel, accommodation and meals, to a business contact and will not accept payment or reimbursement from a business contact for those types of expenses. Exceptions may only be granted with approval of the employee's supervisor and Division Head and the Chairperson of the Ethics Committee. Business units may adopt policies and procedures that permit T. Rowe Price to pay or reimburse expenses incurred by business contacts for attendance at certain T. Rowe Price sponsored events. Such policies and procedures must contain provisions

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that describe the circumstances in which such payments are allowed and the controls and conditions that will apply. Additionally, the policies and procedures must be approved by the Division Head and the Chairperson of the Ethics Committee. This general rule does not apply to "business entertainment" which is covered in the Statement of Policy on Gifts and Business Entertainment.

Financial Reporting. Price Group's records are maintained in a manner that provides for an accurate record of all financial transactions in conformity with generally accepted accounting principles. No false or deceptive entries may be made, and all entries must contain an appropriate description of the underlying transaction. All reports, vouchers, bills, invoices, payroll and service records and other essential data must be accurate, honest and timely and should provide an accurate and complete representation of the facts. The Audit Committee of Price Group has adopted specific procedures regarding the receipt, retention and treatment of certain auditing and accounting complaints. Price ETFs, as publicly traded companies, must comply with these requirements related to complaints. The Price Funds voluntarily comply with these requirements. As such, the Audit Committee of the Price ETFs and Price Funds has adopted policies and procedures regarding the receipt, retention and treatment of certain auditing and accounting complaints for ETFs and Price Funds. Refer to <u>Responsibility to Report Violations</u> on page 2-14.

Gifts and Business Entertainment. The firm has adopted a comprehensive policy on providing and receiving gifts and business entertainment, which is found in the Code in the Statement of Policy on Gifts and Business Entertainment (page 3-1).

Human Resources. Associates should refer to the appropriate Associate Handbook for more information on the policies referenced in this section as well as other Human Resources policies.

Equal Opportunity. Price Group is committed to the principles of equal employment opportunity ("EEO") and the maximum optimization of our associates' abilities. We believe our continued success depends on the equal treatment of all employees and applicants without regard to race, religion, creed, color, national origin, sex, gender, age, physical and mental disability, marital status, sexual orientation, gender identity or expression, citizenship status, military and veteran status, pregnancy, or any other classification protected by federal, state or local laws.

This commitment to EEO covers all aspects of the employment relationship including recruitment, application and initial employment, promotion, transfer, training and development, compensation, and benefits. All associates of T. Rowe Price are expected to comply with the spirit and intent of our EEO Policy. If you feel you have not been treated in accordance with this policy, contact your immediate supervisor, the appropriate Price Group manager or a Human Resources representative. No retaliation will be taken against you if you report an incident of alleged discrimination in good faith.

Drug and Alcohol Policy. Price Group is committed to providing a drug-free workplace and preventing alcohol abuse in the workplace. Drug and alcohol misuse and abuse affect the health, safety, and well-being of all Price Group associates and customers and restrict the firm's ability to carry out its mission. Associates must perform job duties unimpaired by illegal drugs or the improper use of legal drugs or alcohol.

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Policy Against Harassment and Discrimination. Price Group is committed to providing a safe working environment in which all individuals are treated with respect and dignity. Associates have the right to enjoy a workplace that is conducive to high performance, promotes equal opportunity, and prohibits discrimination including harassment.

Price Group will not tolerate harassment, discrimination, or other types of inappropriate behavior directed by or toward an associate, supervisor/manager, contractor, vendor, customer, visitor, or other business partner. Accordingly, the firm will not tolerate harassment or intimidation of any associate based on race, religion, creed, color, national origin, sex, gender, age, disability, marital status, sexual orientation, gender identity or expression, citizenship status, veteran status, pregnancy discrimination, or any other classification protected by country, federal, state, or local law. In addition, Price Group does not tolerate slurs, threats, intimidation, or any similar written, verbal, physical, or computer-related conduct that denigrates or shows hostility or aversion toward any individual. Harassment will not be tolerated on our property or in any other work-related setting such as business-sponsored social events or business trips. If you are found to have engaged in conduct inconsistent with this policy, you will be subject to appropriate disciplinary action, up to and including, termination of employment.

Health and Safety in the Workplace. Price Group recognizes its responsibility to provide personnel a safe and healthful workplace and proper facilities to help them perform their jobs effectively.

Use of Employee Likenesses and Information. Price Group is permitted to use employees' names, biographical information, images, job descriptions, and other relevant business data for purposes of complying with legal requirements and/or as part of its legitimate interests in managing its business, including any T. Rowe Price sponsored community or charitable event. Price Group will seek an employee's explicit consent for a proposed use of the employee's likeness or other information when required to do so under applicable law.

Employment of Former Government and Self-Regulatory Organization Employees. U.S. laws and regulations govern the employment of former employees of the U.S. Government and its agencies, including the SEC. In addition, certain states have adopted similar statutory restrictions. Finally, certain states and municipalities that are clients of the Price Advisers have imposed contractual restrictions in this regard. Before any action is taken to discuss employment by Price Group of a former government or regulatory or self-regulatory organization employee, whether in the U.S. or internationally, guidance must be obtained from the Legal Department.

Inside Information. The purchase or sale of securities while in possession of material, inside information is prohibited by U.S., UK, and other international, state and other governmental laws and regulations. Information is considered inside and material if it has not been publicly disclosed and is sufficiently important that it would affect the decision of a reasonable person to buy, sell or hold securities in an issuer, including Price Group. Under no circumstances may you transmit such information to any other person, except to Price Group personnel who are required to be kept informed on the subject. You should read and understand the Statement of Policy on Material, Inside (Non-Public) Information.

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Investment Clubs. Access Persons must receive the prior clearance of the Chairperson of the Ethics Committee or their designee before forming or participating in a stock or investment club. Transactions in which Access Persons have beneficial ownership or control (defined on page 5-4) through investment clubs are subject to the firm's Statement of Policy on Securities Transactions. Approval to form or participate in a stock or investment club may permit the execution of securities transactions without prior transaction clearance by the Access Person, except transactions in Price Group stock, if the Access Person has beneficial ownership solely by virtue of his or her spouse's participation in the club and has no investment control or input into decisions regarding the club's securities transactions. Non-Access Persons (defined on page 5-4) do not have to receive prior clearance to form or participate in a stock or investment club and need only obtain prior clearance of transactions in Price Group stock.

Marketing and Sales Activities. All written and oral sales and marketing materials and presentations must be in compliance with applicable SEC, FINRA, Global Investment Performance Standards ("GIPS"), FCA, and other applicable international requirements. All such materials (whether for the Price Funds, Price ETFs, other commingled investment vehicles, non- Price funds, or various advisory or Brokerage services) must be reviewed and approved by the Legal Department's Global Communications Compliance Team, as appropriate, prior to use. All performance data distributed outside the firm, including total return and yield information, must be obtained from databases sponsored by the Performance Group.

Outside Business Activities. Please refer to <u>Conflicts of Interest</u> (page 2-4).

Past and Current Litigation and Inquiries from Regulators or Governmental Organizations. As a condition of employment, each new employee is required to provide information regarding past and current civil (including arbitrations) and criminal actions and certain regulatory matters. Price Group uses the information obtained to respond to questions asked on governmental, regulatory, and self-regulatory registration forms and for insurance and bonding purposes.

Each employee is responsible for keeping responses pertaining to past and current civil (including arbitrations) and criminal actions and certain regulatory matters updated (notify Code Compliance). An employee should notify Human Resources and either the Legal Department or the International Compliance Team promptly if he or she:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Becomes the subject of any proceeding or is convicted of or pleads guilty or no contest to or agrees to enter a pretrial diversion program relating to any felony or misdemeanor or similar criminal charge in a U.S. (federal, state, or local), foreign or military court,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Becomes the subject of a Regulatory Action, which includes any action initiated by a securities regulator (e.g. Securities and Exchange Commission (U.S.), Financial Conduct Authority (UK), Securities and Futures Commission of Hong Kong, etc.), or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Receives an inquiry from any regulator or governmental authority.

Political Activities and Contributions. Price Group and its subsidiaries as well as their employees are subject to various federal, state and local laws regarding political contributions. These regulations can restrict the ability of the firm and its employees to make political contributions. In particular, the SEC has adopted Rule 206(4)-5 of the Advisers Act, known as the "Pay-To-Play" rule. The rule was adopted to address pay-to-play practices under which direct or indirect payments by investment advisers, and certain of their executive or employees, to state and

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local government officials in the U.S. may be perceived to improperly influence the award of government investment business. Generally, the rule prohibits an investment adviser from providing advisory services for compensation to a government entity client for two years afterthe adviser or certain of its executives or employees make a contribution over a de minimis amount to certain elected officials or candidates. The rule affects T. Rowe Price and its employees because government entities use the firm's advisory services and also invest in T. Rowe Price mutual funds.

The firm has adopted a "Statement of Policy Regarding Political Contributions" ("Political Contributions Policy" or "Policy") to comply with the SEC rule and other applicable laws and requirements. Under the Policy, all T. Rowe Price employees globally are required to prior clear proposed political contributions, as defined in the Policy, to any candidate, officeholder, political party, Political Action Committee ("PAC"), political organization, or bond ballot campaign in the U.S. Note that employees must separately ensure that they are eligible by applicable law to make the contribution at issue; for example, U.S. law generally permits only U.S. citizens and "green card" holders to contribute to federal, state, and local elections. Employees are generally prohibited from coordinating, or soliciting third parties to make, a contribution or payment to any candidate, officeholder, political party, PAC, political organization, or bond ballot campaign in the U.S. Additionally, employees are prohibited from doing anything indirectly that, if done directly, would violate this Policy. Any questions about the Political Contributions Policy should be directed to the "Political Contribution Requests" mailbox.

In addition to the requirements imposed by the SEC rule, all U.S.-based officers and directors of Price Group and its subsidiaries are required to disclose certain Maryland local and state political contributions on a semi-annual basis and certain Pennsylvania political contributions on an annual basis. Certain employees associated with Investment Services are subject to limitations on and additional reporting requirements about their political contributions under Rule G-37 of the U.S. Municipal Securities Rulemaking Board ("MSRB"). Furthermore, the firm and/or some employees are subject to additional restrictions because of client contractual stipulations.

U.S. law prohibits corporate contributions to campaign elections for federal office (e.g., U.S. Senate and House of Representatives). The SEC rule effectively prohibits corporate contributions by the firm to state and local elections.

No political contribution of corporate funds, direct or indirect, to any political candidate or party, or to any other program that might use the contribution for a political candidate or party, or use of corporate property, services or other assets may be made without the written prior approval of the Legal Department. These prohibitions cover not only direct contributions, but also indirect assistance or support of candidates or political parties through purchase of tickets to special dinners or other fundraising events, or the furnishing of any other goods, services or equipment to political parties or committees. Neither Price Group nor its employees or independent directors may make a political contribution for the purpose of obtaining or retaining business with government entities.

T. Rowe Price does not reimburse employees for making contributions to individual candidates or committees. Additionally, the firm cannot provide paid leave time to employees for political campaign activity. However, employees may use personal time or paid vacation or may request unpaid leave to participate in political campaigning.

T. Rowe Price does not have a PAC. However, T. Rowe Price has granted permission to the Investment Company Institute's PAC ("ICI PAC"), which serves the interests of the Investment

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company industry, to solicit T. Rowe Price's senior management on an annual basis to make contributions to ICI PAC or candidates designated by ICI PAC. Contributions to ICI PAC are entirely voluntary. Additionally, proposed contributions to the ICI PAC must go through the prior clearance process.

As noted above, the SEC rule prohibits most solicitation activities. To the extent the Legal Department approves solicitation activities in accordance with applicable rules or other requirements employees, officers, and directors of T. Rowe Price may not solicit campaign contributions from employees without adhering to T. Rowe Price's policies regarding solicitation. These include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•It must be clear that the solicitation is personal and is not being made on behalf of T. Rowe Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•It must be clear that any contribution is entirely voluntary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•T. Rowe Price's stationery and email system may not be used.

An employee who wants to participate in political campaigns or run for political office should consult with his or her immediate supervisor to make sure that this activity does not conflict with his or her job responsibilities. Also, the employee should contact the Legal Department to discuss any activities which may be prohibited.

Lobbying. It is important to realize that under some state laws, even limited contact, either in person or by other means, with public officials in that state may trigger that state's lobbying laws. For example, in Maryland, if $2,500 of a person's compensation can be attributed to face-to-face contact with legislative or executive officials in a six-month reporting period, he or she may be required to register as a Maryland lobbyist subject to a variety of restrictions and requirements. Therefore, it is imperative that you avoid any lobbying on behalf of the firm, whether in-person or by other means (e.g., telephone, letter) unless the activity is cleared first by the Legal Department, so that you do not inadvertently become subject to regulation as a lobbyist. If you have any question whether your contact with a state's officials may trigger lobbying laws in that state, please contact the Legal Department before proceeding.

Professional Designations. It is the supervisor's responsibility to confirm that any designation (CFA, CFP, etc.) used by his or her direct reports in connection with T. Rowe Price business, including its use, is a valid designation issued by a reputable credentialing organization. In addition, the supervisor must take reasonable steps to confirm that the associate has earned the designation; it is relevant to his or her job and is authorized to use it. It is the responsibility of the associate to comply with the professional standards and reporting obligations of the organization that administers and authorizes the use of the professional designation. Any questions should be directed to the Legal Department.

Protection of Corporate Assets. All personnel are responsible for taking measures to ensurethat Price Group's assets are properly protected. This responsibility not only applies to our business facilities, equipment and supplies, but also to intangible assets such as proprietary research or marketing information, corporate trademarks and service marks, copyrights, client relationships, and business opportunities. Accordingly, you may not solicit for your personal benefit clients or utilize client relationships to the detriment of the firm. Similarly, you may not solicit co-workers

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to act in any manner detrimental to the firm's interests.

Quality of Services. It is a continuing policy of Price Group to provide investment products and services that meet applicable laws, regulations and industry standards, are offered to the public in a manner that ensures that each client/shareholder understands the objectives of each investment product selected, and are properly advertised and sold in accordance with all applicable SEC, FCA, FINRA, and other international, state and self-regulatory rules and regulations.

The quality of Price Group's investment products and services and operations affects our reputation, productivity, profitability, and market position. Price Group's goal is to be a quality leader and to create conditions that allow and encourage all employees to perform their duties in an efficient, effective manner.

Record Retention and Destruction. Under various U.S., UK, other international, state, and other governmental laws and regulations, certain of Price Group's subsidiaries are required to produce, maintain and retain various records, documents and other written (including electronic) communications. Different requirements can apply depending on the type of records, for example client-related records as opposed to HR-related records or general business records. Any questions regarding retention requirements should be addressed to the Legal Department or the TRP International Compliance Team.

You must use care in disposing of any confidential records or correspondence. Confidential material that is to be discarded should be placed in designated bins or should be shredded, as your department requires. If a quantity of material is involved, you should contact Document Management for instructions regarding proper disposal. Documents stored off-site are destroyed on a regular basis if the destruction is approved by the appropriate business contact.

Generally, there can be legal prohibitions from destroying any existing records that may be relevant to any current, pending or threatened litigation, or regulatory investigation or audit. These records would include emails, calendars, memoranda, board agendas, recorded conversations, studies, work papers, computer notes, handwritten notes, telephone records, expense reports, or similar material. If your business area is affected by litigation or an investigation or audit, you can expect to receive instructions from the Legal Department on how to proceed. Regardless of whether you receive such instructions, you should be prepared to secure relevant records once you become aware that they are subject to litigation or regulatory investigations or audits.

All personnel are responsible for adhering to the firm's record maintenance, retention, and destruction policies.

Referral Fees. U.S. securities laws strictly prohibit the payment of any type of referral fee unless certain conditions are met. This would include any compensation to persons who refer clients or shareholders to T. Rowe Price (e.g., brokers, registered representatives, consultants, or any other persons) either directly in cash, by fee splitting, or indirectly by the providing of gifts or services (including the allocation of brokerage). The FCA also prohibits the offering of any inducement likely to conflict with the duties of the recipient. No arrangements should be entered into obligating Price Group or any employee to pay a referral fee unless approved first by the Legal Department.

Release of Information to the Press. All requests for information from the media concerning T.

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Rowe Price Group's corporate affairs, mutual funds, Price ETFs, investment services, investment philosophy and policies, and related subjects should be referred to the appropriate Corporate Communications/Public Relations contact for reply. Investment professionals who are contacted directly by the press concerning a particular fund's investment strategy or market outlook may use their own discretion but are advised to check with the appropriate Corporate Communications/Public Relations contact if they do not know the reporter or feel it may be inappropriate to comment on a particular matter. Please refer to the Global Media Engagement Guidelines located on the Exchange for additional information.

Responsibility to Report Violations. The following is a description of reporting requirements and procedures that may or do arise if an officer or employee becomes aware of material violations of the Code or applicable laws or regulations.

General Obligation. If an officer or employee becomes aware of a material violation of the Code or any applicable law or regulation, he or she must report it to the Chief Compliance Officer of the applicable Price Adviser ("Chief Compliance Officer") or his or her designee, provided the designee provides a copy of all reports of violations to the Chief Compliance Officer. Reports submitted in paper form should be sent in a confidential envelope. Any report may be submitted anonymously; anonymous complaints must be in writing and sent in a confidential envelope to the Chief Compliance Officer. Officers and employees may also contact any governmental and/or regulatory authority (e.g. SEC and FINRA in the U.S., FCA in the UK, SFC in Hong Kong, etc.).

Global Whistleblower Procedures. Price Group has adopted procedures for associates to report potential or actual violations of laws and regulations in each of the jurisdictions in which it operates. The procedures outline steps associates can take to report matters internally to the Legal & Compliance Department, or on an anonymous basis through the Whistleblower Hotline, or externally to a regulatory authority. The procedures are located in the firm's policy and procedures repository.

It is Price Group's policy that no adverse action will be taken against any person as a result of that person becoming aware of a violation of the Code and reporting the violation in good faith.

Sarbanes-Oxley Whistleblower Procedures for Price Group. Pursuant to the Sarbanes- Oxley Act, the Audit Committee of Price Group has adopted procedures ("Procedures") regarding the receipt, retention and treatment of complaints received by Price Group regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by employees of Price Group or any of its affiliates of concerns regarding questionable accounting or auditing matters. All employees should familiarize themselves with these Procedures, which are posted in the firm's policies and procedures repository.

Under the Procedures, complaints regarding certain auditing and accounting matters should be sent to the General Counsel, T. Rowe Price Group, Inc., The Legal Department either through interoffice mail in a confidential envelope or by mail marked confidential to P.O. Box 37283, Baltimore, Maryland 21297-3283, or a report may be made by calling the toll- free hotline at 888-651-6223.

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Sarbanes-Oxley Whistleblower Procedures for Price ETFs and Price Funds. Pursuant to NYSE Arca Rule and the Sarbanes-Oxley Act, the Audit Committee of Price ETFs and Price Funds has adopted procedures regarding the receipt, retention and treatment of complaints received by Price ETFs and Price Funds regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by employees of Price ETFs or Price Funds of concerns regarding questionable accounting or auditing matters. See "Policy on Complaints Related to ETFs and Mutual Fund Accounting Matters". All employees should familiarize themselves with these Procedures, which are posted in the firm's policies and procedures repository.

Under the Procedures, complaints regarding certain auditing and accounting matters should be sent to Chief Compliance Officer of the Price Funds and Price ETFs. The Legal Department either through interoffice mail in a confidential envelope or by mail marked confidential to P.O. Box 37283, Baltimore, Maryland 21297-3283, or a report may be made by calling the toll-free hotline at 888-651-6223.

Sarbanes-Oxley Attorney Reporting Requirements. Attorneys employed or retained by Price Group or any of the Price Funds or Price ETFs are also subject to certain reporting requirements under the Sarbanes-Oxley Act. The relevant procedures are posted in the firm's policies and procedures repository.

Circulation of Rumors. Individuals subject to the Code shall not originate or circulate in any manner a rumor concerning any security which the individual knows or has reasonable grounds for believing is false or misleading or would improperly influence the market price of that security. You must promptly report to the Legal Department any circumstance which would reasonably lead you to believe that such a rumor might have been originated or circulated.

Speaking Engagements and Publications. Employees are often asked to accept speaking engagements on the subject of investments, finance, or their own particular specialty with our organization. This is encouraged by the firm as it enhances our public relations. You should obtain approval from your supervisor and Division Head before you accept such requests. You may also accept an offer to teach a course or seminar on investments or related topics (for example, at a local college) in your individual capacity with the approval of your supervisor and Division Head, provided the course is in compliance with the Guidelines found in T. Rowe Price Investment Services' Compliance Manual. Before making any commitment to write or publish any article or

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book on a subject related to investments or your work at Price Group, approval should be obtained from your supervisor and Division Head.

Social Media. As T. Rowe Price associates, anything we say or do in our personal communications, including on social media, can reflect on T. Rowe Price's brand and reputation. We should be aware of this when making personal posts and remember that nothing we say in the social media space is totally private and, in fact, may be available indefinitely.

While T. Rowe Price does not discourage associates from using social media to maintain personal connections, it is important to understand what is acceptable and prohibited when using social media. The T. Rowe Price Policy for Associate Use of Social Media, available on the Exchange, sets forth the permissible use of social media, whether for personal or business use, by T. Rowe Price associates. Examples of permissible and impermissible actions include:

&nbsp;&nbsp;&nbsp;&nbsp;•Do not discuss work or specific projects or products on any social network account;

&nbsp;&nbsp;&nbsp;&nbsp;•Do not post any information about T. Rowe Price products, services, competitors, business contacts, or other associates without prior authorization and training;

&nbsp;&nbsp;&nbsp;&nbsp;•Do not respond to questions or comments about T, Rowe Price products or services without prior authorization and training;

&nbsp;&nbsp;&nbsp;&nbsp;•Do not comment on any individual posts;

&nbsp;&nbsp;&nbsp;&nbsp;•Associates can share any T. Rowe Price job vacancy listed on the T. Rowe Price Careers site or LinkedIn Jobs page on the network of their choice;

&nbsp;&nbsp;&nbsp;&nbsp;•Associates can "like" or "follow" T. Rowe Price social media pages; and

&nbsp;&nbsp;&nbsp;&nbsp;•Associates can only "like" and share individuals posts that have been identified as approved for associate interaction.

The policy applies whether or not associates are on company premises and whether or not associates are using a T. Rowe Price system, T. Rowe Price-issued device, or personal device. The policy is designed to provide associates with clear direction when using social media to ensure the firm's compliance with applicable regulations when engaging in social media channels, and to protect our associates, our clients, and the company.

Systems Security. Computer systems and programs play a central role in Price Group's operations. To establish appropriate systems security to minimize potential for loss or disruptions to our computer operations, Price Group has adopted a Statement of Policy on Systems Security and Related Issues (page 6-1).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;T. ROWE PRICE GROUP, INC.

STATEMENT OF POLICY

ON

GIFTS AND BUSINESS ENTERTAINMENT

T. Rowe Price adopted this policy to govern the receipt and giving of gifts and business entertainment by all employees of T. Rowe Price globally ("Associates"). The giving and receiving of gifts and business entertainment must be carefully considered by Associates to avoid even the appearance of conflicts of interest.

Associates are encouraged to ask for guidance about how to apply this policy in advance of giving or receiving a gift or business entertainment. Questions can be directed to your manager or to the Legal Department.

The Code and laws in numerous jurisdictions regulate gifts and entertainment to ensure that such practices do not constitute the direct or indirect provision or receipt of bribes, kickbacks, quid pro quos, or other corrupt practices. Please refer to the "Foreign Corrupt Practices Act and Other Illegal Payments" section of the Code and the firm's "Compliance Policy and Program Statement Relating to Anti-Bribery Laws and Prohibitions Against Illegal Payments."

Specific controls are applicable to ERISA plans and certain other regulatory regimes – see "Jurisdictions and Specific Requirements" section.

<u>Gifts</u>

The term "gift" has a broad meaning, including merchandise, gratuities and the use of property or facilities for weekends, vacations, and trips, including transportation and lodging costs, but does not include items of nominal value (defined later in this policy).

General rules for all Associates:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•You may not give gifts in excess of US$100 (aggregate annual limit per business contact). You may not receive gifts in excess of US$100 (aggregate annual limit per organization). Please note that gifts given to a business contact's family member (e.g., spouse or children) will count towards the US$100 annual gift limit for that business contact.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•You may not accept gifts from broker-dealers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•You may not give gifts to or receive gifts from a vendor, client, prospect, or a lead manager of a consultant who has active negotiations or Requests for Proposals ("RFPs") for services or products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any gift, given or received, must be reported.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Gifts may never be given or received in consideration of any business or transaction, or in connection with the purchase or sale of client securities or other investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Gifts of cash or cash equivalents may not be given or received.

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Items of Nominal Value

Other than as noted in the Jurisdictions and Specific Requirements section of this policy, the term "gift" as described in this policy does not include an item of nominal value. Items with a value of US$50 or less are regarded as nominal items. For example, items such as pens, notepads, modest desk ornaments, or items that display the giving firm's logo, which are typically given out at conferences or elsewhere, would generally fall within this exclusion. If an item is to be given in connection with the broker-dealer's business, its value must not exceed US$50 <u>and</u> the item must have the TRP corporate logo permanently affixed to be exempt from the definition of "gift."

Personal Gift Exclusion

A personal gift given or received in recognition of a "life event" such as a baby or wedding gift, does not fall within this policy provided the gift is not "in relation to the business of the employer of the recipient." There should be a pre-existing personal or family relationship between the giver and the recipient. The giver, not the firm, should pay for the gift. In addition, if an Associate is giving a gift in recognition of a life event, the giver must obtain prior approval from his/her supervisor, Business Unit Head if different, and the Chairperson of the Ethics Committee, or their designee. If these conditions are met, the recordkeeping requirements and the US$100 limit do not apply.

Gifts Received by Attendees at an Event

Any gift or gifts received by Associates at an event (e.g., industry conference, vendor user conference, investor relations event, etc.), other than nominal gifts (see above), must be reported and the total value cannot exceed the US$100 gift limit. If an event provides a gift or gifts with a value greater than US$100, Associates may decline to accept the gift, donate it to charity or, with the approval of the Chairperson of the Ethics Committee, or their designee, present the gift to the Associate's Business Unit for a random draw of an identified group of associates of an appropriate size.

Group Gifts

When a group gift valued at up to US$100 (e.g., chocolate assortment) is sent by a T. Rowe Price Associate, the gift report must identify the name of at least one business contact at the receiving organization. If an Associate or a T. Rowe Price department receives a gift that is valued in excess of the US$100 limit, it can be shared amongst Associates provided no single Associate's share of the gift exceeds the US$100 limit. Alternatively, with the approval of the Chairperson of the Ethics Committee, or their designee, the gift can be awarded to the winner of a random draw of an identified group of associates of an appropriate size or donate it to charity.

Recurring Gifts

Tickets or other gifts (including nominal value items) may not be given nor accepted from a business contact or firm on a standing, recurring, or ongoing basis. Supervisors are responsible for monitoring how frequently their Associates receive and give gifts to/from specific business contacts to avoid potential conflicts of interest.

Calculation of Value

Gifts should be valued at the cost paid by the giver. Associates and Managers should be mindful that if the market value of a gift is materially greater than the cost, consultation with the Legal Department may be appropriate to determine if another value should be used.

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<u>Business Entertainment</u>

Entertainment must serve a legitimate and appropriate business purpose ("Business Entertainment"). Generally, business entertainment includes meals and sporting events with business contacts (e.g., clients or vendors). Associates should be mindful that business entertainment should generally not be solicited and only accepted after an invitation from your host. Both the Associate and the business contact must be in attendance for an event to be classified as business entertainment. Business entertainment should not be so frequent or so lavish with the same business contact or client, that when viewed in its entirety, it could be viewed as a potential conflict of interest. See "Jurisdictions and Specific Requirements" for additional restrictions on Business Entertainment.

Reporting and Prior Clearance

1. Business entertainment valued above US$100 per person must be reported.

2. Business entertainment that exceeds US$250 per person requires prior approval by the Associate's Manager and either the Business Unit Head or Region/Segment Head (as determined by the Business Unit).

3.<u>Broker-dealer</u> <u>provision</u>: All meal business entertainment received from broker-dealers above US$100 per person requires prior approval by the Associate's Manager and must be reported. All non-meal business entertainment received from broker-dealers, regardless of value, requires prior approval by the Associate's Manager and must be reported. T. Rowe Price (or in some cases, the Associate) will pay or reimburse the broker-dealer for such reported business entertainment.

4. Business entertainment that includes a guest (e.g., spouse or child) requires prior approval by the Associate's Manager and either the Business Unit Head or Region/Segment Head (as determined by the Business Unit). Keep in mind that the Associate may need to pay for the cost of the guest.

5. Business entertainment that does not occur in the normal course of business or is an event of national prominence requires prior approval by the Associate's Manager and either the Business Unit Head or Region/Segment Head (as determined by the Business Unit).

6. Business entertainment may never be given or received in consideration of any business or transaction, or in connection with the purchase or sale of client securities or other investments.

Each Business Unit will implement procedures to assess and consider relevant factors when determining if approval should be granted in the circumstances requiring prior approval. For example, factors may include the purpose of the meeting, the nature of the event being conducive to conversation, the exclusivity of the event, the frequency of interaction with the business contact and whether T. Rowe Price or the Associate should be bearing some portion or all of the associated cost.

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Post-Event Approval

In certain situations, an Associate may not be able to ascertain the cost of an event until after its conclusion, such as business dinners. In the event the business entertainment was expected to be within these reporting thresholds (e.g., less than US$250 per person) but unexpectedly exceeds them, the Associate must promptly report such entertainment to his/her Manager for further discussion. In these limited circumstances and after review by the Associate's Manager, "post- event" approval by a Region/Segment Head or Business Unit Head (as determined by the Business Unit) will be considered to be in compliance with this policy.

Transportation and Lodging

Generally, the cost of transportation and lodging expenses associated with business entertainment should be borne by the party using the transportation or lodging. Ordinary ground transportation such as a taxi ride or a courtesy shuttle is not subject to this restriction.

Active RFPs/Business Transactions

Associates may not entertain key decision makers of a vendor, prospect or current client (or their lead manager consultant) with an active RFP or where material negotiations of specific business or transactions are taking place. Key decision makers are those individuals who have significant influence on the decision related to the RFP or transaction which would include an ERISA plan fiduciary representative. However, meals closely associated with substantive business meetings (i.e., plan reviews, due diligence visits, investment reviews, educational sessions) are permitted.

Large-Scale Events

The cost-per-individual at an event (e.g., industry conference, vendor user conference, investor relations event) is not counted towards US$250 prior approval threshold provided that the conference has a reasonable relationship to the duties of the attending Associate(s) and the expenses for attendance are reasonable in light of the benefits afforded to the firm by such attendance. Associates should keep in mind that if there are separate excursions or other entertainment connected with the large-scale event (e.g., golf outings, boating trips, etc.) then the reporting and prior clearance requirements will apply to these separate events.

Calculation of Value

Business entertainment should be valued at the cost paid by the giver. Associates and Managers should be mindful that if the market value of an event is materially greater than the cost, consultation with the Legal Department may be appropriate to determine if another value should be used.

<u>Jurisdictions and Specific Requirements</u>

In addition to the general gift and entertainment rules in this policy, certain jurisdictions or regulators may impose restrictions that are more stringent than the general provisions of this policy. Associates that work in a jurisdiction outside of their primary office jurisdiction are subject to the rules of the jurisdiction with the higher standards. The following sets forth a summary of those restrictions.

TRPIL and Its European Subsidiaries Associates: UK FCA Inducements Rules and Guidance

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The FCA Conduct of Business rules requires that gifts and entertainment provided or received must not impair our ability to act in the best interests of our clients. Guidance issued by the FCA notes that business entertainment in the form of sporting events or other social events may not be considered as capable of enhancing the quality of service to clients as they may either not be conducive to business discussions or the discussions could better take place without these activities. The following additional policy requirements apply to T. Rowe Price International Ltd ("TRPIL") and its European subsidiaries:

Business Entertainment: All non-meal business entertainment provided or received, regardless of value, and regardless of whether it is provided by a broker-dealer or to or from other third-party business contacts, requires prior approval by the associate's manager and must be reported. T. Rowe Price (or in some cases, the associate) will pay or reimburse the donor for such reported business entertainment.

In determining approval, the associates' manager must consider whether the non-meal entertainment is capable of enhancing the quality of service to the client. Spectating at a sporting event or attending a concert or the theatre will not generally be considered to enhance the quality of service to the client and cannot generally therefore be accepted from or given to a third party. Participatory events such as a round of golf may be acceptable upon demonstration by the associate that the event is both conducive to business discussions and ultimately benefits our client. The approval must be clearly documented.

While the reimbursement to the business contact (by T. Rowe Price or the associate) removes the key inducement, there is possibly an intrinsic value in the invitation to an event in that it may not be available to the general public due to its popularity, the associate must be able to clearly demonstrate that the full market value is reimbursed to the business contact in order for their manager to approve.

U.S. - ERISA Covered Plans: US$250 Annual Limit

In accordance with guidance from the U.S. Department of Labor, the annual limit in this policy on gifts and business entertainment provided to an ERISA plan fiduciary representative (including plan advisers serving in a fiduciary capacity) is US$250. All gifts and business entertainment provided to a fiduciary business contact count towards this US$250 annual limit and must be prior approved by the Associate's Manager or Region/Segment Head (as determined by the Business Unit) to help ensure the annual limit is not exceeded, except as provided below. Note that all gifts and business entertainment provided to a fiduciary business contact are subject to this policy's reporting and prior clearance rules, even if not counted towards the US$250 annual limit.

1. Meals provided by Associates to fiduciary business contacts at educational conferences, including T. Rowe Price hosted conferences; do not count towards the US$250 annual limit.

2. Meals and entertainment provided at educational conferences hosted by T. Rowe Price do not count towards the US$250 annual unit. Note that fiduciary business contacts may be subject to rules pertaining to their acceptance of meals and entertainment at such events. Consult with the Compliance Manager/SME within your business unit to determine your business unit guidelines for reminding recipients of these rules.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

3. Meals provided to fiduciary business contacts and closely associated with substantive business meetings (e.g., plan reviews, due diligence visits, investment reviews, educational sessions) do not count towards the US$250 annual limit.

4. Expenses for ordinary ground transportation such as taxi ride or courtesy shuttle that are closely associated with a substantive business meeting or an educational conference do not count towards the US$250 annual limit. Transportation expenses associated withrelationship- building and other forms of entertainment would count towards the US$250 annual limit.

5. Items of nominal value given to fiduciary business contacts are not subject to this policy's reporting requirements and do not count towards the US$250 annual limit. Generally, items that are less than US$10 are deemed to have nominal value. For the avoidance of doubt, any item that has a value greater than US$10, including items with a corporate logo permanently affixed, count towards the US$250 annual limit and must be reported.

6. Meals and entertainment provided by a Business Unit Head to a fiduciary business contactfor purposes of obtaining market intelligence (and not to support sales activity) do not count towards the US$250 annual limit.

Note that all gifts, business entertainment, and meals given to or attended by guests of the fiduciary business contact(s) (including in the context of an educational conference) count towards the US$250 annual limit for the fiduciary and are subject to this policy's reporting and prior clearance rules.

Providing services or support (including some types of marketing support) to an ERISA plan fiduciary may be considered a gift. Consult with the Compliance Manager/SME within your business unit for assistance in evaluating whether such services or support would be subject to this policy.

Country and U.S. State Specific Requirements

Countries and U.S. states may adopt rules that govern the provision of gifts and business entertainment. Such rules may impose strict dollar limits or prohibitions on providing gifts and business entertainment which may be more restrictive than this policy. Additionally, these rules may impose increased reporting requirements on Associates. The Legal Department will work with business units to inform them of these jurisdictions' specific rules.

<u>Reporting</u>

It is ultimately the Associate's responsibility to properly report gifts and business entertainment, whether given or received, in accordance with each business unit's reporting procedures. Allgifts must be reported within ten business days. All business entertainment must be reported promptly.

All gifts and business entertainment reports will be available for review by Legal & Compliance, including International Compliance, in conjunction with their responsibility to oversee our firm- wide compliance.

The U.S. Department of Labor has established strict gift and entertainment reporting rules relative to ERISA clients. All gifts and business entertainment of US$10 or more accepted from, provided to, or in relation to ERISA clients should be reported under the Associate's business unit's procedures.

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<u>Chair of the Ethics Committee</u>

Special circumstances may arise that would require the review of the Chair of the Ethics Committee and may result in exceptions being granted to part or all of this policy.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;T. ROWE PRICE GROUP, INC.

STATEMENT OF POLICY

ON

MATERIAL, INSIDE (NON-PUBLIC) INFORMATION

Policy of Price Group on Insider Trading. It is the policy of Price Group and its affiliates to forbid any of their officers, directors, employees, or other personnel (e.g., consultants) while in possession of material, non-public information, from trading securities or recommending transactions, either personally or in their proprietary accounts or on behalf of others (including mutual funds and private accounts) or communicating material, non-public information to others in violation of securities laws of the U.S., the UK, or any other country that has jurisdiction over its activities. Material, non-public information includes not only certain information about issuers, but also certain information about T. Rowe Price Group, Inc. and its operating subsidiaries as well as information pertaining to Price Funds, Price ETFs, and other clients.

Purpose of Statement of Policy. As a global firm, Price Group is subject to a wide array of laws and regulations that prohibit the misuse of inside information. The purpose of this Statement of Policy ("Statement") is to describe and explain: (i) the general legal prohibitions and sanctions regarding insider trading under U.S. and global regulations and how they are applicable across the firm globally; (ii) the meaning of the key concepts underlying the prohibitions; (iii) your obligations in the event you come into possession of material, non-public information; and (iv) the firm's educational program regarding insider trading. Additionally, the U.S. Insider Trading and Securities Fraud Enforcement Act ("Act") requires Price Group to establish, maintain, and enforce written procedures designed to prevent insider trading.

Many jurisdictions, including Hong Kong, Singapore, Japan, Australia and most European countries, have laws and regulations prohibiting the misuse of inside information. While this Statement does not make specific reference to these laws and regulations, the Statement provides general guidance regarding appropriate activities that is applicable to all employees globally. There is, however, no substitute for knowledge of local laws and regulations. Employees are expected to understand the relevant local requirements where they work and comply with them. Any questions regarding the laws or regulations of any jurisdiction should be directed to the Legal & Compliance Department or the TRP International Compliance Team.

The Basic Insider Trading Prohibition. The "insider trading" doctrine under U.S. securities laws generally prohibits any person (including investment advisers) from:

&nbsp;&nbsp;&nbsp;&nbsp;•Trading in a security while in possession of material, non-public information regarding the issuer of the security;

&nbsp;&nbsp;&nbsp;&nbsp;•Tipping such information to others;

&nbsp;&nbsp;&nbsp;&nbsp;•Recommending the purchase or sale of securities while in possession of such information;

&nbsp;&nbsp;&nbsp;&nbsp;•Assisting someone who is engaged in any of the above activities.

Thus, "insider trading" is not limited to insiders of the issuer whose securities are being traded. It can also apply to non-insiders, such as investment analysts, portfolio managers, consultants and stockbrokers. In addition, it is not limited to persons who trade. It also covers persons who tip material, non-public information or recommend transactions in securities while in possession of such information. A "security" includes not just equity securities, but any security (e.g., corporate

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and municipal debt securities, including securities issued by the federal government).

"Need to Know" Policy. All information regarding planned, prospective or ongoing securities transactions must be treated as confidential. Such information must be confined, even within the firm, to only those individuals and departments that must have such information in order for the respective entity to carry out its engagement properly and effectively. Ordinarily, these prohibitions will restrict information to only those persons who are involved in the matter.

Transactions Involving Price Group Stock. You are reminded that you are an "insider" with respect to Price Group since Price Group is a public company and its stock is traded on the NASDAQ Stock market. It is therefore important that you not discuss with family, friends or other persons any matter concerning Price Group that might involve material, non-public information, whether favorable or unfavorable. You are prohibited from trading Price Group stock (TROW) if you are privy to material, non-public information.

Sanctions. Penalties for trading on material, non-public information are severe, both for the individuals involved in such unlawful conduct and for their firms. A person or entity that violates the insider trading laws can be subject to some or all of the penalties described below, even if he/she/it does not personally benefit from the violation:

&nbsp;&nbsp;&nbsp;&nbsp;•Injunctions;

&nbsp;&nbsp;&nbsp;&nbsp;•Treble damages;

&nbsp;&nbsp;&nbsp;&nbsp;•Disgorgement of profits;

&nbsp;&nbsp;&nbsp;&nbsp;•Criminal fines;

&nbsp;&nbsp;&nbsp;&nbsp;•Jail sentences;

&nbsp;&nbsp;&nbsp;&nbsp;•Civil penalties for the person who committed the violation (which would, under normal circumstances, be the employee and not the firm); and

&nbsp;&nbsp;&nbsp;&nbsp;•Civil penalties for the controlling entity (e.g., Price Associates) and other persons, such as managers and supervisors, who are deemed to be controlling persons.

In addition, any violation of this Statement can be expected to result in serious sanctions being imposed by Price Group, including dismissal of the person(s) involved. The provisions of U.S. and UK law discussed below, and the laws of other jurisdictions are complex and wide ranging. If you are in any doubt about how they affect you, you must consult the Legal & Compliance Department or the TRP International Compliance Team, as appropriate.

U.S LAW AND REGULATION REGARDING INSIDER TRADING PROHIBITIONS

Introduction. "Insider trading" is a top enforcement priority of the U.S. Securities and Exchange Commission. The Insider Trading and Securities Fraud Enforcement Act has far-reaching impact on all public companies and especially those engaged in the securities brokerage or investment advisory industries, including directors, executive officers and other controlling persons of such companies. Specifically, the Insider Trading and Securities Fraud Enforcement Act:

Written Procedures. Requires SEC-registered brokers, dealers and investment advisers to establish, maintain and enforce written policies and procedures reasonably designed to prevent the misuse of material, non-public information by such persons.

Penalties. Imposes severe civil penalties on brokerage firms, investment advisers, their

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management and advisory personnel, and other "controlling persons" who fail to take adequate steps to prevent insider trading and illegal tipping by employees and other "controlled persons." Additionally, the Act contains substantial criminal penalties, including monetary fines and jail sentences.

Private Right of Action. Establishes a statutory private right of action on behalf of contemporaneous traders against insider traders and their controlling persons.

Bounty Payments. Authorizes the SEC to award bounty payments to persons who provide information leading to the successful prosecution of insider trading violations. Bounty payments are at the discretion of the SEC but may not exceed 10 – 30% of the penalty imposed.

The Act has been supplemented by three SEC rules, 10b5-1, 10b5-2 and Fair Disclosure, which are discussed later in this Statement.

Basic Concepts of Insider Trading. The four critical concepts under U.S. law in insider trading cases are: (1) fiduciary duty/misappropriation, (2) materiality, (3) non-public and (4) use/possession. Each concept is discussed below.

Fiduciary Duty/Misappropriation. In two decisions, the U.S. Supreme Court outlined when insider trading and tipping violate the federal securities law if the trading or tipping of the information results in a breach of duty of trust or confidence.

The concept of who constitutes an "insider" is broad. It includes officers, directors, and employees of an issuer. In addition, a person can be a "temporary insider" if he or she enters into a confidential relationship in the conduct of an issuer's affairs and, as a result, is given access to information solely for the issuer's purpose. A temporary insider can include, among others, an issuer's attorneys, accountants, consultants, and bank lending officers, as well as the employees of such organizations. In addition, any person may become a temporary insider of an issuer if he or she advises the issuer or provides other services, provided the issuer expects such person to keep any material, non-public information confidential.

A typical breach of duty arises when an insider purchases securities of his or her corporation on the basis of material, non-public information. Such conduct breaches a duty owed to the corporation's shareholders. The duty breached, however, need not be to shareholders to support liability for insider trading; it could also involve a breach of duty to a client, an employer, employees, or even a personal acquaintance. For example, courts have held that if the insider receives a personal benefit (either direct or indirect) from the disclosure, such as a pecuniary gain or reputational benefit; that would be enough to find a fiduciary breach.

Court decisions have held that under a "misappropriation" theory, an outsider (such as an investment analyst) may be liable if he or she breaches a duty to anyone by: (1) obtaining information improperly, or (2) using information that was obtained properly for an improper purpose. For example, if information is given to an analyst on a confidential basis and the analyst uses that information for trading purposes, liability could arise under the misappropriation theory. Similarly, an analyst who trades in breach of a duty owed either to his or her employer or client may be liable under the misappropriation theory. For example, the Supreme Court upheld the misappropriation theory when a lawyer received material, non-public information from a law

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partner who represented a client contemplating a tender offer, where that lawyer used the information to trade in the securities of the target company.

SEC Rule 10b5-2 provides a non-exclusive definition of circumstances in which a person has a duty of trust or confidence for purposes of the "misappropriation" theory of insider trading. It states that a "duty of trust or confidence" exists in the following circumstances, among others:

&nbsp;&nbsp;&nbsp;&nbsp;(1)Whenever a person agrees to maintain information in confidence;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Whenever the person communicating the material, nonpublic information and the person to whom it is communicated have a history, pattern, or practice of sharing confidences, that resulted in a reasonable expectation of confidentiality; or

&nbsp;&nbsp;&nbsp;&nbsp;(3)Whenever a person receives or obtains material, non-public information from his or her spouse, parent, child, or sibling unless it is shown affirmatively, based on the facts and circumstances of that family relationship, that there was no reasonable expectation of confidentiality.

The situations in which a person can trade while in possession of material, non-public information without breaching a duty are so complex and uncertain that the only safe course is not to trade, tip or recommend securities while in possession of material, non-public information.

Materiality. Insider trading restrictions arise only when the information that is used for trading, tipping or recommendations is "material." The information need not be so important that it would have changed an investor's decision to buy or sell; rather, it is enough that it is the type of information on which reasonable investors rely in making purchase, sale, or hold decisions.

Resolving Close Cases. The U.S. Supreme Court has held that, in close cases, doubts about whether or not information is material should be resolved in favor of a finding of materiality. You should also be aware that your judgment regarding materiality may be reviewed by a court or the SEC with the 20-20 vision of hindsight.

Effect on Market Price. Any information that, upon disclosure, is likely to have a significant impact on the market price of a security should be considered material. Future Events. The materiality of facts relating to the possible occurrence of future events depends on the likelihood that the event will occur and the significance of the event if it does occur.

Illustrations. The following list, though not exhaustive, illustrates the types of matters that might be considered material: a joint venture, merger or acquisition; the declaration or omission of dividends; the acquisition or loss of a significant contract; a change in control or a significant change in management; a call of securities for redemption; the borrowing of a significant amount of funds; the purchase or sale of a significant asset; a significant change in capital investment plans; a significant labor dispute or disputes with subcontractors or suppliers; an event requiring an issuer to file a current report on Form 8- K with the SEC; establishment of a program to make purchases of the issuer's own shares; a tender offer for another issuer's securities; an event of technical default or default on interest and/or principal payments; advance knowledge of an upcoming publication that is expected to affect the market price of the stock.

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Illustrations for the STA ETFs. The STA ETF Exemptive Relief provides that, because (unlike traditional ETFs) the STA ETFs do not disclose portfolio holdings daily, the selective disclosure of material nonpublic information, including information other than portfolio information, would be more likely to provide an unfair advantage to the recipient than in other ETFs. Non-public information that could be material to the STA ETFs includes, but is not limited to, current holdings information, investment decisions, and any potential arbitrage deficiencies that could necessitate Board-directed corrective action. This is not an exhaustive list.

Non-Public vs. Public Information. Any information that is not "public" is deemed to be "non- public." Just as an investor is permitted to trade on the basis of information that is not material, he or she may also trade on the basis of information that is public. Information is considered public if it has been disseminated in a manner making it available to investors generally. An example of non-public information would include information provided to a select group of analysts but not made available to the investment community at large. Set forth below are a number of ways in which non-public information may be made public.

Disclosure to News Services and National Papers. The U.S. stock exchanges require exchange-traded issuers to disseminate material, non-public information about their company to: (1) the national business and financial newswire services (e.g. Bloomberg, Thomson Reuters, etc.); (2) the national service (Associated Press); and (3) The New York Times and The Wall Street Journal.

Local Disclosure. An announcement by an issuer in a local newspaper might be sufficient for an issuer that is only locally traded but might not be sufficient for an issuer that has a national market.

Information in SEC Reports. Information contained in reports filed with the SEC will be deemed to be public.

If Price Group is in possession of material, non-public information with respect to a security before such information is disseminated to the public (i.e., such as being disclosed in one of the public media described above), Price Group and its personnel must wait a sufficient period of time after the information is first publicly released before trading or initiating transactions to allow the information to be fully disseminated. Price Group may also follow Information Barrier procedures, as described on page 4-9 of this Statement.

First, if the investment committee to a Price mutual fund were to obtain material, non- public information about one of its portfolio companies from a Price equity research analyst, that fund would be prohibited from trading in the securities to which that information relates. The prohibition would last until the information is no longer material or non-public.

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Second, if the investment committee to a Price mutual fund obtained material, non-public information about a particular portfolio security but continued to trade in that security, then the committee members, the applicable Price Adviser, and possibly management personnel might be liable for insider trading violations.

Third, even if the investment committee to the Fund does not come into possession of the material, non-public information known to the equity research analyst, if it trades in the security, it may have a difficult burden of proving to the SEC or to a court that it was not in possession of such information.

The SEC has expressed its view about the concept of trading "on the basis of" material, non-public information in Rule 10b5-1. Under Rule 10b5-1, and subject to the affirmative defenses contained in the rule, a purchase or sale of a security of an issuer is "on the basis" material non-public information about that security or issuer if the person making the purchase or sale was aware of the material, non-public information when the person made the purchase or sale.

A person's purchase or sale is not "on the basis of" material, non-public information if he or she demonstrates that:

&nbsp;&nbsp;&nbsp;&nbsp;(A)Before becoming aware of the information, the person had:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Entered into a binding contract to purchase or sell the security;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Instructed another person to purchase or sell the security for the instructing person's account, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Adopted a written plan for trading securities.

When a contract, instruction or plan is relied upon under this rule, it must meet detailed criteria set forth in Rule 10b5-1(c)(1)(i)(B) and (C).

Under Rule 10b5-1, a person other than a natural person (e.g., one of the Price Advisers) may also demonstrate that a purchase or sale of securities is not "on the basis of" material, non-public information if it demonstrates that:

&nbsp;&nbsp;&nbsp;&nbsp;•The individual making the investment decision on behalf of the person to purchase or sell the securities was not aware of the information; and

&nbsp;&nbsp;&nbsp;&nbsp;•The person had implemented reasonable policies and procedures, taking into consideration the nature of the person's business, to ensure that individuals making investment decisions would not violate the laws prohibiting trading on the basis of material, non-public information. These policies and procedures may include those that restrict any purchase, sale, and causing any purchase or sale of any security as to which the person has material, non-public information, or those that prevent such individuals from becoming aware of such information.

Tender Offers. Tender offers are subject to particularly strict regulation under the securities laws. Specifically, trading in securities that are the subject of an actual or impending tender offer by a person who is in possession of material, non-public information relating to the offer is illegal, regardless of whether there was a breach of fiduciary duty. Under no circumstances should you 4-6

trade in securities while in possession of material, non-public information regarding a potential tender offer.

Selective Disclosure of Material, Non-Public Information by Public Companies. The SEC has adopted Regulation FD to prohibit certain issuers from selectively disclosing material,non-public information to certain persons who would be expected to trade on it. The rule applies only to publicly traded domestic (U.S.) companies, not to foreign government or foreign private issuers.

Under this rule, whenever:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•An issuer, or person acting on its behalf,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Discloses material, non-public information,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•To securities professionals, institutional investors, broker-dealers, and holders of the issuer's securities,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The issuer must make public disclosure of that same information,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Simultaneously (for intentional disclosures), or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Promptly within 24 hours after knowledge of the disclosure by a senior official (for non-intentional disclosures)

Regulation FD does not apply to all of the issuer's employees; rather only communication by an issuer's senior management (executive officers and directors), its investor relations professionals, and others who regularly communicate with market professionals and security holders are covered. Certain recipients of information are also excluded from the rule's coverage, including persons who are subject to a confidentiality agreement, credit rating agencies, and "temporary insiders," such as the issuer's lawyers, investment bankers, or accountants.

Selective Disclosure of Material, Non-Public Information Related to the STA ETFs. While Regulation Fair Disclosure ("Regulation FD") does not directly apply to registered open- end funds, it is applicable to the STA ETFs pursuant to the STA ETF Exemptive Relief. The STA ETF Exemptive Relief requires each STA ETF and each person acting on behalf of an STA ETF to comply with and agree to be subject to the requirements of Regulation FD as if it applied to them. In order to align with these requirements, the STA ETFs will comply with the Policy and Procedure for Release of Material Non-Pubic Information Related to the Semi-Transparent ETFs, as well as the T. Rowe Price Mutual Funds and Exchange-Traded Funds Portfolio Information Release Policy with respect to the frequency and timing of dissemination of information to the T. Rowe Price website. If T. Rowe Price employees acting on behalf of the STA ETFs selectively disclose MNPI related to a STA ETF to an external party (other than a service provider subject to confidentiality agreement as described below), the STA ETF must comply with Regulation FD by promptly issuing a press release or otherwise publicly releasing the information just disclosed on a selective basis through a "recognized channel of distribution".

Expert Network Services. Expert networks may be used by approved investment staff to supplement the investment process. Expert networks provide investors with access to individuals having a particular expertise or specialization, such as industry consultants, vendors, doctors, attorneys, suppliers, or past executives of particular companies. Expert network services can be an important component of the investment research process, and Price Group has implemented various controls to govern these interactions. A strict approval process is in place for utilizing a

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new expert network service. Also, a reporting and oversight process exists in the Equity Division to ensure that the services are being used properly by only appropriate investment staff.

Information Regarding Price Group.

The illustrations of material information found on page 4-4 of this Statement are equally applicable to Price Group as a public company and should serve as examples of the types of matters that you should not discuss with persons outside the firm. Remember, even though you may have not intent to violate any federal securities law, an offhand comment to a friend might be used unbeknownst to you by such friend to effect purchases or sales of Price Group stock. If such transactions were discovered and your friend was prosecuted, your status as an informant or "tipper" would directly involve you in the case. If you have concerns or questions about whether certain information constitutes material, non-public information pertaining to Price Group you should contact the Legal & Compliance Department.

Information Regarding T. Rowe Price Funds, Price ETFs, and Subadvised Funds.

Employees who possess material, non-public information pertaining to a Price Fund, Price ETF, or subadvised fund are prohibited from trading in the shares of the fund. Associates may obtain or possess information about significant portfolio activity of a fund, such as an unscheduled disbursement or receipt that is not reflected in the fund's NAV, which could be regarded as material. For example, an associate may learn of a significant tax refund or litigation recovery that a fund is entitled to but has not been entered as a receivable because the amount and timing are unknown. Such information could constitute material, non-public information. Information regarding future events that would not be expected to have a known impact on the fund's NAV, such as a large subscription by an institutional shareholder or a change in the fund's portfolio manager, while considered highly sensitive information (not to be shared with others outside of T. Rowe Price), would not typically constitute material, non-public information for these purposes. If you have concerns or questions about whether certain information constitutes material, non- public information pertaining to a Price Fund, Price ETF, or subadvised fund you should contact the Legal & Compliance Department.

LAWS AND REGULATIONS REGARDING INSIDER TRADING PROHIBITIONS OUTSIDE THE U.S.

The jurisdictions outside the U.S. that regulate some T. Rowe Price entities have laws in this area that are based on principles similar to those of the U.S. described in this Statement. If you comply with the Code, then you will comply with the requirements of these jurisdictions. If you have any concerns about local requirements, please contact the TRP International Compliance Team or the Legal & Compliance Department.

PROCEDURES TO BE FOLLOWED WHEN RECEIVING MATERIAL, NON-PUBLIC INFORMATION

Whenever you believe that you have or may have come into possession of material, non-public information, you should immediately contact the appropriate Legal & Compliance Department person or group and refrain from disclosing the information to anyone else, including persons within Price Group, unless specifically advised to the contrary. The individual may not disclose the information or trade in the security until a determination is made by Legal & Compliance.

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U.S.-based personnel should contact the Legal & Compliance Department and international personnel should contact the International Compliance Team.

Specifically, you may not:

&nbsp;&nbsp;&nbsp;&nbsp;•Trade in securities to which the material, non-public information relates;

&nbsp;&nbsp;&nbsp;&nbsp;•Disclose the information to others;

&nbsp;&nbsp;&nbsp;&nbsp;•Recommend purchases or sales of the securities to which the information relates.

If it is determined that the information is material and non-public, the issuer will be placed on either:

&nbsp;&nbsp;&nbsp;&nbsp;•A Restricted List ("Restricted List") in order to prohibit trading in the security by both clients and Access Persons; or&

&nbsp;&nbsp;&nbsp;&nbsp;•A Watch List ("Watch List"), which restricts the flow of the information to others within Price Group in order to allow the Price Advisers investment personnel to continue their ordinary investment activities. This procedure is commonly referred to as an Information Barrier.

The Watch List is highly confidential and should, under no circumstances, be disseminated to anyone except authorized personnel in the Legal & Compliance Department and Code Compliance who are responsible for placing issuers on and monitoring trades in securities of issuers included on the Watch List. As described below, if an individual on the TRP International Compliance Team believes that an issuer should be placed on the Watch List, he or she will contact Code Compliance. Code Compliance will coordinate review of trading in the securities of that issuer with the TRP International Compliance Team as appropriate.

The person whose possession of or access to inside information has caused the inclusion of an issuer on the Watch List may never trade or recommend the trade of the securities of that issuer without the specific prior approval of the Legal & Compliance Department.

Price Group will maintain two separate Restricted Lists (effective July 1, 2022), one for TRPIM and one for all other T. Rowe Price advisers . There is an information barrier between TRPIM and all other advisers, so in certain instances, the lists may differ based on the information received by each respective adviser. All Access Person personal trading will be subject to the Restricted Lists of all T. Rowe Price advisers. The Restricted Lists are also highly confidential and should, under no circumstances, be disseminated to anyone outside Price Group. Individuals with access to the Restricted Lists should not disclose its contents to anyone within Price Group who does not have a legitimate business need to know this information, including to Restricted Investment Personnel of the other T. Rowe Price Adviser.

Code Compliance will remove the issuer from the Watch List or relevant Restricted List when the information is no longer material or non-public.

Specific Procedures Relating to the Safeguarding of Inside Information.

To ensure the integrity of the Information Barrier, and the confidentiality of the Restricted Lists, it is important that you take the following steps to safeguard the confidentiality of material, non- public information:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;•Do not discuss confidential information in public places such as elevators, hallways or social gatherings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•To the extent practical, limit access to the areas of the firm where confidential information could be observed or overheard to employees with a business need for being in the area;

&nbsp;&nbsp;&nbsp;&nbsp;•Avoid using speaker phones in areas where unauthorized persons may overhear conversations;

&nbsp;&nbsp;&nbsp;&nbsp;•Where appropriate, maintain the confidentiality of client identities by using code names or numbers for confidential projects;

&nbsp;&nbsp;&nbsp;&nbsp;•Exercise care to avoid placing documents containing confidential information in areas where they may be read by unauthorized persons and store such documents in secure locations when they are not in use;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Destroy copies of confidential documents no longer needed for a project. However, Record Retention and Destruction guidelines should be reviewed before taking any action; and

&nbsp;&nbsp;&nbsp;&nbsp;•Comply with the Price ETFs Information Barrier policy to safeguard non-public information.

ADDITIONAL PROCEDURES

Education Program. While the probability of research analysts and portfolio managers being exposed to material, non-public information with respect to issuers considered for investment by clients is greater than that of other personnel, it is imperative that all personnel understand this Statement, particularly since the insider trading restrictions also apply to transactions in the stock of Price Group.

To ensure that all appropriate personnel are properly informed of and understand Price Group's policy with respect to insider trading, the following program has been adopted.

Initial Review and Training for New Personnel. All new persons subject to the Code, which includes this Statement, will be given the Code at the time of their association and will be required to certify that they have read it. In addition, each new employee is required to take web-based training promptly after his or her start date.

Revision of Statement. All persons subject to the Code will be informed whenever this Statement is materially revised.

Annual Review. All persons subject to the Code receive training on the Code annually.

Acknowledgement of Compliance. All persons subject to the Code will be asked to acknowledge their understanding of an adherence to the Code, including this Statement, on at least an annual basis.

Questions. If you have any questions with respect to the interpretation or application of this Statement, you are encouraged to discuss them with your immediate supervisor, the Legal e Department, or the TRP International Compliance Team as appropriate.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;T. ROWE PRICE GROUP, INC.

STATEMENT OF POLICY

ON

SECURITIES TRANSACTIONS

BACKGROUND INFORMATION.

Legal Requirement. In accordance with the requirements of the Securities Exchange Act of 1934 (the "Exchange Act"), the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Insider Trading and Securities Fraud Enforcement Act of 1988, and the various UK and other jurisdictions' laws and regulations, Price Group, the mutual funds ("Price Funds"), and the exchange-traded funds ("Price ETFs") which its affiliates manage, have adopted this Statement of Policy on Securities Transactions ("Statement").

Price Advisers' Fiduciary Position. As investment advisers, the Price Advisers are in a fiduciary position which requires them to act with an eye only to the benefit of their clients, avoiding those situations which might place, or appear to place, the interests of the Price Advisers or their officers, directors and employees in conflict with the interests of clients.

Purpose of Statement of Policy. The Statement was developed to help guide Price Group's employees and independent directors and the independent directors of the Price Funds and Price ETFs in the conduct of their personal investments and to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Eliminate the possibility of a transaction occurring that the SEC or other regulatory bodies would view as inconsistent with our role as a fiduciary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Avoid situations where it might appear that Price Group, Price Funds, or the Price ETFs or any of their officers, directors, employees, or other personnel had personally benefited at the expense of a client or fund shareholder or taken inappropriate advantage of their fiduciary positions; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Prevent, as well as detect, the misuse of material, non-public information.

Price Group's, Price Funds', and the Price ETFs' reputations could be adversely affected as the result of even a single transaction considered questionable in light of the fiduciary duties of the Price Advisers and the independent directors of the Price Funds and Price ETFs.

QUESTIONS ABOUT THE STATEMENT. Questions regarding the policy can be directed to Code Compliance (<u>Code_of_Ethics@TRowePrice.com</u>).

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EXCESSIVE TRADING AND MARKET TIMING OF MUTUAL FUND SHARES. The issue of excessive trading and market timing by mutual fund shareholders is a serious one and is not unique to T. Rowe Price. Employees may not engage in trading of shares of a Price Fund that is inconsistent with the prospectus of that Fund.

Excessive or short-term trading in fund shares may disrupt management of a fund and raise its costs. The Board of Directors/Trustees of the Price Funds have adopted a policy to deter excessive and short-term trading (the "Policy"), which applies to persons trading directly with T. Rowe Price and indirectly through intermediaries. Under this Policy, T. Rowe Price may bar excessive and short-term traders from purchasing shares.

This Policy is set forth in each Fund's prospectus, which governs all trading activity in the Fund regardless of whether you are holding T. Rowe Price Fund shares as a retail investor or through your T. Rowe Price U.S. Retirement Program account.

Although the Fund may issue a warning letter regarding excessive trading or market timing, any trade activity in violation of the Policy will also be reviewed by the Chief Compliance Officer, who will refer instances to the Ethics Committee as he or she feels appropriate. The Ethics Committee, based on its review, may take disciplinary action, including suspension of trading privileges, forfeiture of profits or the amount of losses avoided, and termination of employment, as it deems appropriate.

Employees are also expected to abide by trading restrictions imposed by other funds as described in their prospectuses. If you violate the trading restrictions of a non-Price Fund, the Ethics Committee may impose the same penalties available for violation of the Price Funds excessive trading Policy.

FRONT RUNNING. Front Running is inconsistent with our responsibility to serve the interests of clients. It is generally defined as the purchase or sale of a security by an officer, director or employee of an investment adviser or mutual fund in anticipation of and prior to the adviser effecting similar transactions for its clients in order to take advantage of or avoid changes in market prices affected by client transactions.

PERSONS SUBJECT TO STATEMENT. The provisions of this Statement apply as described below to the following persons and entities. Each person and entity (except the independent directors of Price Group) is classified as either an Access Person or a Non-Access Person as described below. The provisions of this Statement may also apply to an Access Person's or Non- Access Person's spouse, minor children, and certain other relatives, as further described on page 5-4 of this Statement. All Access Persons except the independent directors of the Price Funds and Price ETFs are subject to all provisions of this Statement except certain restrictions on purchases in initial public offerings that apply only to Investment Personnel. The independent directors of the Price Funds and Price ETFs are not subject to prior transaction clearance requirements and are subject to modified reporting as described on page 5-19. Non-Access Persons are subject to the general principles of the Statement and its reporting requirements but are only required to receive prior transaction clearance for transactions in Price Group stock. The persons and entities covered by this Statement are:

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Price Group. Price Group, each of its subsidiaries and affiliates, and their retirement plans.

Employee Partnerships. Partnerships such as Pratt Street Ventures.

Personnel. Each officer, inside director and employee of Price Group and its subsidiaries and its affiliates.

Certain Contingent Workers. These workers include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•All contingent workers whose assignments exceed four weeks or whose cumulative assignments exceed eight weeks over a twelve-month period and whose work is closely related to the ongoing work of Price Group's employees (versus project work that stands apart from ongoing work); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any contingent worker whose assignment is more than casual in nature or who willbe exposed to the kinds of information and situations that would create conflicts on matters covered in the Code.

Exceptions must be approved by Code Compliance (<u>Code_of_Ethics@TRowePrice.com</u>)

Independent Directors of Price Group, Price Funds, and the Price ETFs. The independent directors of Price Group include those directors of Price Group who are neither officers nor employees of Price Group or any of its subsidiaries or affiliates. The independent directors of the Price Funds and Price ETFs include those directors of the Price Funds and Price ETFs who are not deemed to be "interested persons" of Price Group.

Although subject to the general principles of this Statement, including the definition of "beneficial ownership," independent directors are subject only to modified reporting requirements (pages 5-20 to 5-22). The trades of the independent directors of the Price Funds and Price ETFs are not subject to prior transaction clearance requirements. The trades of the independent directors of Price Group are not subject to prior transaction clearance requirements except for transactions in Price Group stock.

ACCESS PERSONS. Certain persons and entities are classified as "Access Persons" under the Code. The term "Access Persons" means:

&nbsp;&nbsp;&nbsp;&nbsp;•The Price Advisers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any officer or director of any of the Price Advisers or the Price Funds, including the Price ETFs (except the independent directors of the Price Funds and Price ETFs);

&nbsp;&nbsp;&nbsp;&nbsp;•Any person associated with any of the Price Advisers, Price Funds, or the Price ETFs who, in connection with his or her regular functions or duties, makes, participates in, obtains or has access to non-public information regarding the purchase or sale of securities by a Price Fund, Price ETF, or other advisory client, or to non-public information regarding any securities holdings of any client of a Price Adviser, including the Price Funds and Price ETFs, or whose functions relate to the making of any recommendations with respect to the purchases or sales.

All Access Persons are notified of their status under the Code.

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Investment Personnel. An Access Person is further identified as "Investment Personnel"if, in connection with his or her regular functions or duties, he or she "makes or participates in making, or is closely associated with personnel who make recommendations regarding the purchase or sale of securities" by a Price Fund, Price ETF, or other advisory client.

The term "Investment Personnel" includes, but is not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;•Those employees who are authorized to make investment decisions or to recommend securities transactions on behalf of the firm's clients (investment counselors and members of the mutual fund advisory committees);

&nbsp;&nbsp;&nbsp;&nbsp;•Research and credit analysts;

&nbsp;&nbsp;&nbsp;&nbsp;•Traders who assist in the investment process; and

&nbsp;&nbsp;&nbsp;&nbsp;•Support staff who assist in the investment process.

All Investment Personnel are deemed Access Persons under the Code.

NON-ACCESS PERSONS. Persons who do not fall within the definition of Access Persons are deemed "Non-Access Persons." If a Non-Access Person is married to an Access Person, then the non-Access Person is deemed to be an Access Person.

TRANSACTIONS SUBJECT TO STATEMENT. Except as provided below, the provisions of this Statement apply to transactions that fall under either one of the following two conditions:

First, you are a "beneficial owner" of the security under the Rule 16a-1 of the Exchange Act, defined as follows; or

Second, if you control or direct securities trading for another person or entity, those trades are subject to this Statement even if you are not a beneficial owner of the securities. For example, if you have an exercisable trading authorization (e.g., a power of attorney to direct transactions in another person's account) of an unrelated person's or entity's brokerage account, or are directing another person's or entity's trades, those transactions will usually be subject to this Statement to the same extent your personal trades would be as described below.

Definition of Beneficial Owner. A "beneficial owner" is any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, has or shares in the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in the security. Being the beneficiary of an account, such as a 401(k) or securities account, does not necessarily mean a person is a "beneficial owner" unless one of the following conditions exists.

A person has beneficial ownership in:

&nbsp;&nbsp;&nbsp;&nbsp;•Securities held by members of the person's immediate family (e.g. spouse, child, etc.) sharing the same household, although the presumption of beneficial ownership may be rebutted;

&nbsp;&nbsp;&nbsp;&nbsp;•A person's interest in securities held by a trust, which may include both trustees with investment control and, in some instances, trust beneficiaries;

&nbsp;&nbsp;&nbsp;&nbsp;•A person's right to acquire securities through the exercise or conversion of any derivative security, whether or not presently exercisable;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;•A general partner's proportionate interest in the portfolio securities held by either a general or limited partnership;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Certain performance-related fees other than an asset-based fee, received by any broker, dealer, bank, insurance company, investment company, investment adviser, investment manager, trustee or person or entity performing a similar function; and

&nbsp;&nbsp;&nbsp;&nbsp;•A person's right to dividends that are separated or separable from the underlying securities. Otherwise, right to dividends alone shall not represent beneficial ownership in the securities.

A shareholder shall not be deemed to have beneficial ownership in the portfolio securities held by a corporation or similar entity in which the person owns securities if the shareholder is not a controlling shareholder of the entity and does not have or share investment control over the entity's portfolio. If you become the beneficial owner of another's securities (e.g., by marriage to the owner of the securities) or begin to direct trading of another's securities, then the associated securities accounts become subject to the account reporting requirements outlined on page 5-16.

Requests for Clarifications or Interpretations Regarding Beneficial Ownership or Control. If you have beneficial ownership of a security, any transaction involving that security is presumed to be subject to the relevant requirements of this Statement, unless you have no direct or indirect influence or control over the transaction. Such a situation may arise, for example, if you have delegated investment authority to an independent investment adviser or your spouse or family member (residing with you) has an independent trading program in which you have no input or control. Similarly, if your spouse or family member has investment control over, but not beneficial ownership in, an unrelated account, the Statement may not apply to those securities and you may wish to seek clarification or an interpretation.

If you are involved in an investment account for a family situation, trust, partnership, corporation, etc., which you feel should not be subject to the Statement's relevant prior transaction clearance and/or reporting requirements, you should submit a written request for clarification or interpretation to either Code Compliance (<u>Code_of_Ethics@TRowePrice.com</u>) or the TRP International Compliance Team. Any such request for clarification or interpretations shouldname the account, your interest in the account, the persons or firms responsible for its management, and the specific facts of the situation. Do not assume that the Statement is not applicable; you must receive a clarification or interpretation about the applicability of the Statement. Clarifications and interpretations are not self-executing; you must receive a response to a request for clarification or interpretation directly from the Code Compliance Team or the TRP International Compliance Team before proceeding with the transaction or other action covered by this Statement.

PRIOR TRANSACTION CLEARANCE REQUIREMENTS GENERALLY. As described, certain transactions require prior clearance before execution. Receiving prior transaction clearance does not relieve you from conducting your personal securities transactions in full compliance with the Code, including its prohibition on trading while in possession of material, inside information, and the 60-Day Rule, and with applicable law, including the prohibition on Front Running.

TRANSACTIONS IN STOCK OF PRICE GROUP. Because Price Group is a public company, ownership of its stock subjects its officers, inside and independent directors, employees and all others subject to the Code to special legal requirements under the U.S. securities laws. You are

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responsible for your own compliance with these requirements. In connection with these legal requirements, Price Group has adopted the following rules and procedures:

Independent Directors of Price Funds or Price ETFs. The independent directors of the Price Funds or Price ETFs are prohibited from owning the stock or other securities of Price Group.

Quarterly Earnings Report. Generally, all Access Persons and Non-Access Persons and the independent directors of Price Group must refrain from initiating transactions in Price Group stock in which they have a beneficial interest from the second trading day after quarter end (or such other date as management shall from time to time determine) through the day of filing the firm's earnings release with the SEC. You will be notified quarterly in regards to the controlling (blackout) dates.

Prior Transaction Clearance of Price Group Stock Transactions Generally. Access Persons and Non-Access Persons and the independent directors of Price Group are required to obtain clearance prior to effecting any proposed transaction involving shares of Price Group stock owned beneficially, including any Price Group stock owned in the Employee Stock Purchase Plan ("ESPP"). Moving shares of Price Group stock (held outside of the ESPP) between securities firms or to/from individual or joint brokerage accounts does not have to receive prior clearance. Prior clearance is required to transfer shares to another person, entity, or trust account.

Prior Transaction Clearance Procedures for Price Group Stock. Requests for prior transaction clearance must be submitted to the myTRPcompliance system.

Gifts. The giving of or receipt of Price Group stock (TROW) must be prior cleared. This includes donation transactions into donor-advised funds such as T. Rowe Price Charitable, as well as any other charitable gifting.

Prohibition Regarding Transactions in Price Group Options. Transactions in options (other than stock options granted to T. Rowe Price associates) on Price Group stock are not permitted.

Prohibition Regarding Short Sales of Price Group Stock. Short sales of Price Group stock are not permitted.

Hedging Transactions in Price Group Stock. Entering into any contract or purchasing any instrument designed to hedge or offset any decrease in the market value of Price Group stock is not permitted.

Applicability of 60-Day Rule to Price Group Stock Transactions. Transactions in Price Group stock are subject to the 60-Day Rule except for transactions effected through the ESPP, the exercise of employee stock options granted by Price Group and the subsequent sale of the derivative shares, and shares obtained through an established dividend reinvestment program. Refer to page 5-26 for a full description of the 60-Day Rule.

Only Price Group stock that has been held for at least 60 days may be gifted. You must receive prior clearance before gifting shares of Price Group stock. Purchases of Price

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![](t-rowecoe48x1.jpg)

Group stock in the ESPP through payroll deduction are not considered in determining the applicability of the 60-Day Rule to market transactions in Price Group stock. To avoid issues with the 60-day rule, shares may not be transferred out of or otherwise removed from the ESPP if the shares have been held for less than 60 days.

Access Persons and Non-Access Persons and the independent directors of Price Group must obtain prior transaction clearance of any transaction involving Price Group stock, (unless specifically exempted, such as transfers of form of ownership).

Initial Disclosure of Holdings of Price Group Stock. Each new employee must report any shares of Price Group stock of which he or she has beneficial ownership no later than ten business days after his or her starting date.

Dividend Reinvestment Plans for Price Group Stock. Purchases of Price Group stock owned outside of the ESPP and effected through a dividend reinvestment plan need not receive prior transaction clearance. Reporting of transactions effected through that plan need only be made quarterly through statements provided to the Code Compliance Team or by the financial institution (e.g. broker-dealer) where the account is maintained, except in the case of employees who are subject to Section 16 of the Exchange Act, who must report such transactions immediately.

Effectiveness of Prior Clearance. Prior transaction clearance of transactions in Price Group stock is effective for three business days from and including the date the clearance is granted (taking into consideration the time zone), unless (i) advised to the contrary by the Payroll and Stock Transaction Group prior to the proposed transaction, or (ii) the person receiving the clearance comes into possession of material, non-public information concerning the firm. If the proposed transaction in Price Group stock is not executed within this time period, a new clearance must be obtained before the individual can execute the proposed transaction.

Reporting of Disposition of Proposed Transaction. If the transaction request was executed, the Payroll & Stock Transaction Team will receive an electronic or paper confirmation of the transaction and your records will be updated accordingly.

Insider Reporting and Liability. Under current SEC rules, certain officers, directors and 10% stockholders of a publicly traded company ("Insiders") are subject to the requirements of Section 16. Insiders include the directors and certain executive officers of Price Group. The Payroll and Stock Transaction Group informs all those who are Insiders of their obligations under Section 16.

SEC Reporting. There are three reporting forms which Insiders are required to file with the SEC to report their purchase, sale and transfer transactions in, and holdings of, Price Group stock. Although the Payroll and Stock Transaction Group will provide assistance in complying with these requirements as an accommodation to Insiders, it remains the legal responsibility of each Insider to ensure that the applicable reports are filed in a timely manner.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Form 3. The initial ownership report by an Insider is required to be filed on Form 3. This report must be filed within ten days after a person becomes an Insider (i.e., is elected as a director or appointed as an executive officer) to report all current holdings of Price Group stock. Following the election or appointment of an Insider, the Payroll and Stock Transaction Group will deliver to the Insider a Form 3 for appropriate signatures and will file the form electronically with the SEC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Form 4. Any change in the Insider's ownership of Price Group stock must be reported on a Form 4 unless eligible for deferred reporting on year-end Form 5. The Form 4 must be filed electronically before the end of the second business day following the day on which a transaction resulting in a change in beneficial ownership has been executed. Following receipt of the Notice of Disposition of the proposed transaction, the Payroll and Stock Transaction Group will deliver to the Insider a Form 4, as applicable, for appropriate signatures and will file the form electronically with the SEC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Form 5. Any transaction or holding that is exempt from reporting on Form 4, such as small purchases of stock, gifts, etc. may be reported electronically on a deferred basis on Form 5 within 45 calendar days after the end of the calendar year in which the transaction occurred. No Form 5 is necessary if all transactions and holdings were previously reported on Form 4.

Liability for Short-Swing Profits. Under the U.S. securities laws, profit realized by certain officers, as well as directors and 10% stockholders of a company (including Price Group) as a result of a purchase and sale (or sale and purchase) of stock of the company within a period of less than six months must be returned to the firm or its designated payee upon request.

PRIOR TRANSACTION CLEARANCE REQUIREMENTS - ACCESS PERSONS.

Access Persons must obtain prior transaction clearance (approval) before directly or indirectly initiating the purchase or sale of a security in an account in which the Access Person is a beneficial owner (page 5-4). This includes the writing of an option to purchase or sell a security and the acquisition of any shares in an Automatic Investment Plan through a non-systematic investment. Following are exceptions to the prior transaction clearance requirement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The independent directors of the Price Funds and Price ETFs are generally not required to receive prior transaction clearance so long as they have no knowledge of trades being transacted for the Price Funds or Price ETFs; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any Price Adviser is not required to receive prior transaction clearance when T. Rowe Price seed money is deployed to establish a client/product strategy.

Non-Access Persons are not required to obtain prior clearance before engaging in any securities transactions, except for transactions in Price Group stock.

Where required, prior transaction clearance must be obtained regardless of whether the transaction is affected through TRP Brokerage (generally available only to U.S. residents) or through an unaffiliated broker-dealer or other entity. Please note that the prior clearance

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procedures do not check compliance with the 60-Day Rule (page 5-266); you are responsible for ensuring your compliance with this rule.

TRANSACTIONS (OTHER THAN IN PRICE GROUP STOCK) THAT DO NOT REQUIRE EITHER PRIOR TRANSACTION CLEARANCE OR REPORTING UNLESS THEY OCCUR IN A "REPORTABLE FUND." The following transactions do not require either prior transaction clearance or reporting:

Mutual Funds and Variable Insurance Products. The purchase or redemption of shares of any open-end investment companies and variable insurance products, except that Access Persons must report transactions in Reportable Funds (page 5- 11).

Undertakings for Collective Investments in Transferrable Securities (UCITS). The purchase or redemption of shares in an open-ended European investment fund established in accordance with the UCITS Directive provided that a Price Adviser does not serve as an adviser to the fund.

Automatic Investment Plans. Transactions through a program in which regular periodic purchases or withdrawals are made automatically in or from investment accounts in accordance with a predetermined schedule and allocation. <u>However, the initial automatic investment does require prior clearance.</u> An Access Person must report any securities owned as a result of transactions in an Automatic Investment Plan on his or her Annual Report. Any transaction that overrides the pre-set schedule or allocations of an automatic investment plan (a "non-systematic transaction") must be reported by both Access Persons and non-Access Persons and Access Persons must also receive prior transaction clearance for such a transaction if the transaction would otherwise require prior transaction clearance.

Donor-Advised Funds. Transactions <u>within</u> donor-advised funds, such as

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;T. Rowe Price Charitable, do not require prior clearance or reporting. However, a gift of Price Group stock into a donor-advised fund is required to be prior cleared and reported.

U.S Government Obligations. Purchases or sales of direct obligations of the U.S Government.

Commercial Paper and Similar Instruments. Bankers' acceptances, bank certificates of deposit, commercial paper and high-quality, short-term debt instruments, including repurchase agreements.

Certain Unit Investment Trusts. Shares issued by unit investment trusts that are invested exclusively in one or more open-end funds, if none of the underlying funds is a Reportable Fund.

Currency. Direct foreign currency transactions (spot and forward trades) in the Japanese Yen or British Pound, for example. However, securitized or financial instruments used for currency exposure (e.g. ProShares Ultra Yen ETF), must be reported.

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Cryptocurrency. Transactions in cryptocurrency, such as Bitcoin, Ethereum, etc., do not require prior clearance or reporting. However, transactions in any publicly traded cryptocurrency tracker instrument would require prior clearance and reporting. Participation in Initial Coin Offerings (ICOs) is prohibited.

TRANSACTIONS (OTHER THAN PRICE GROUP STOCK) THAT DO NOT REQUIRE PRIOR TRANSACTION CLEARANCE BUT MUST BE REPORTED BY BOTH ACCESS PERSONS AND NON-ACCESS PERSONS. The following transactions do not require prior transaction clearance but must be reported:

Non-T. Rowe Price Exchange-Traded Funds ("ETFs"). Transactions in non-T. Rowe Price ETFs, including non-T. Rowe Price ETFs authorized as UCITS, do not require prior clearance but must be reported. Access Persons are prohibited to transact in inverse/short and narrow ETFs. Short sale transactions in long and narrow ETFs is also prohibited. Access Persons are responsible for their compliance to these two prohibitions. Contact the Code Compliance Team regarding any uncertainty in contemplated ETF transactions. Narrow ETFs include, but are not limited to, those focused on specific industries (e.g. energy, healthcare, financial services, etc.), commodities, currencies, and specific geographical markets (e.g. countries or regions).

Unit Investment Trusts. Purchases or sales of shares in unit investment trusts registered under the Investment Company Act of 1940, unless the unit investment trust is an ETF, in which case the ETF protocols apply.

National Government Obligations (other than U.S.). Purchases or sales of direct obligations of national (non-U.S.) governments.

Variable Rate Demand Notes. This financial instrument is an unsecured debt obligation of a corporate entity. These instruments generally pay a floating interest rate slightly above the prevailing money market rates and include check-writing capabilities. It is not a money market fund nor is it equivalent to a bank deposit or bank account, therefore the instrument is not protected by the Securities Investor Protection Corporation or Federal Deposit Insurance Corporation.

Pro Rata Distributions. Purchases effected by the exercise of rights issued pro-rata to all holders of a class of securities or the sale of rights so received.

Tender Offers. Purchases and sales of securities pursuant to a mandatory (e.g., the holder has no choice or elections regarding the offer) tender offer. Merger elections, however, that presents holders of acquired securities, with exchange options that typically include cash or securities of the acquiring company and/or a combination thereof, must be prior cleared.

Exercise of Stock Option of Corporate Employer by Spouse. Transactions involving the exercise by an Access Person's spouse of a stock option issued by the corporation employing the spouse. However, a subsequent sale of the stock obtained by means of the exercise, including sales effected by a "cash-less" transactions, must receive prior transaction clearance.

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Restricted Stock Plan Automatic Sales for Tax Purposes by Spouse. Transactions commonly called "net sales" whereby upon vesting of restricted shares, a portion of the shares are automatically sold in order to cover the tax obligation.

Inheritances. The acquisition of securities through inheritance.

Gifts. The giving of or receipt of a security as a gift. However, a gift of or receipt of Price Group stock must be prior cleared.

Stock Splits, Reverse Stock Splits, and Similar Acquisitions and Dispositions. The mandatory acquisition of additional shares or the disposition of existing corporate holdings through stock splits, reverse stock splits, stock dividends, exercise of rights, exchange or conversion. Reporting of such transactions must be made within 30 days of the end of the quarter in which they occurred. Reporting is deemed to have been made if the acquisition or disposition is reported on a confirmation, statement or similar document sent to Code Compliance.

Spousal Employee-Sponsored Payroll Deduction Plans. Purchases, but not sales, by an Access Person's spouse pursuant to an employee-sponsored payroll deduction plan (e.g., a 401(k) plan or employee stock purchase plan), provided the Code Compliance Section has been previously notified by the Access Person that the spouse will be participating in the payroll deduction plan. Reporting of such transactions must be made within 30 days of the end of the quarter in which they occurred. A sale or exchange of stock held in such aplan is subject to the prior transaction clearance requirements for Access Persons.

Partial Shares Sold. Partial shares held in an account that are sold when the account is transferred to another broker-dealer or to new owner or partial shares sold automatically by the broker-dealer.

TRANSACTIONS (OTHER THAN PRICE GROUP STOCK) THAT DO NOT REQUIRE PRIOR TRANSACTION CLEARANCE BUT MUST BE REPORTED BY ACCESS PERSONS ONLY.

Reportable TRP-Advised Funds ("Reportable Funds") Not Held On A T. Rowe Price Platform. Access Persons must report the purchases and sales of shares of Reportable Funds. A Reportable Fund is any open-end investment company, including money market funds and UCITS, for which any of the Price Advisers serves as an investment adviser. This includes not only the Price Funds, non-Price ETFs, SICAVs, OEICs, ITMs, AUTs, and any Price-advised investment products, but also any fund managed by any of the Price Advisers either through subadvised relationships, including any fund holdings offered through retirement plans (e.g., 401(k) plans) other than the T. Rowe Price U.S. Retirement Plan, or as an investment option offered as part of a variable annuity. Legal& Compliance maintains a listing of subadvised Reportable Funds on the TRP Exchange.

Access Persons must inform the Code Compliance Team about ownership of shares of Price Funds. Once this notification has been given, if the Price Fund is held on the T. Rowe Price platform, or in the T. Rowe Price U.S. Retirement Plan, or the T. Rowe Price UK Retirement Schema, the Access Person need not report these transactions directly. In

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instances where Price Funds are held through an intermediary, transactions in shares of those Price Funds must be reported as described on page 5-18.

Interests in Section 529 College Savings Plans not held on the T. Rowe Price Platform. Access Persons must report the purchase and sale of interests in any Section 529 College Savings Plan for which any Price Adviser serves as an adviser or sub-adviser to the plan. Access Persons must inform the Code Compliance Team about ownership of interests in the Maryland College Investment Plan, the T. Rowe Price College Savings Plan and the University of Alaska College Savings Plan. For these specific plans only, once this notification has been given, an Access Person need not report transactions directly (page 5-18). In instances where ownership interests in 529 College Savings Plans that are advised or sub-advised by a Price Adviser are held through an intermediary, transactions must be reported as described on page 5-18.

The Chief Compliance Officer or his or her designee reviews at a minimum the transaction reports for all securities required to be reported under the Advisers Act or the Investment Company Act for all employees, officers, and inside directors of Price Group and its affiliates and for the independent directors of the Price Funds.

TRANSACTIONS THAT REQUIRE PRIOR TRANSACTION CLEARANCE BY ACCESS PERSONS. Generally, Access Persons are required to obtain prior clearance for all buy and sell transactions in individual stocks, bonds, closed-end funds, private investments, and derivatives (e.g. options, swaps, futures, etc.) of these securities, as well as T. Rowe Price ETFs that you are considered to be the beneficial owner. If the transaction or security is not subject to prior transaction clearance, as outlined in this policy, you should assume that it is subject to the prior clearance requirement unless specifically informed otherwise by the Code Compliance Team or the TRP International Compliance Team.

Among the transactions for which Access Persons must receive prior transaction clearance are:

&nbsp;&nbsp;&nbsp;&nbsp;•Non-systematic transactions in a security that is not exempt from prior transaction clearance;

&nbsp;&nbsp;&nbsp;&nbsp;•Close-end fund transactions, including U.K, Canadian, and other non-U.S. investment trusts.

&nbsp;&nbsp;&nbsp;&nbsp;•Price ETFs (See the chart in the "TRANSACTIONS IN PRICE ETFs."

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![](t-rowecoe54x1.jpg)

TRANSACTIONS IN PRICE ETFs. Guidelines specific to the Price ETFs are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | Access Person | Non-Access Persons | Independent Directors |
| &nbsp;&nbsp; Must Pre-clear | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; YES | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NO | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NO |
| &nbsp;&nbsp; Trades in Price ETFs | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; YES | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NO | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NO |
| &nbsp;&nbsp; Trades in Price ETFs |  |  |  |
| &nbsp;&nbsp; Must Post-report | YES | YES | YES |
| &nbsp;&nbsp; Trades in Price ETFs | YES | YES | YES |
| &nbsp;&nbsp; Trades in Price ETFs |  |  |  |
| &nbsp;&nbsp; Subject to 60-day | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; YES | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NO | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NO |
| &nbsp;&nbsp; Rule | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; YES | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NO | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NO |
| &nbsp;&nbsp; Rule |  |  |  |
| &nbsp;&nbsp; Subject to Ad hoc | YES | NO | YES |
| &nbsp;&nbsp; Trading Restrictions | YES | NO | YES |
| &nbsp;&nbsp; Ability to Buy/Sell | NO | NO | NO |
| &nbsp;&nbsp; Price ETFs in the | NO | NO | NO |
| &nbsp;&nbsp; Primary Market |  |  |  |
| &nbsp;&nbsp; Ability to Sell Short | NO | NO | NO |
| &nbsp;&nbsp; the Price ETFs | NO | NO | NO |
| &nbsp;&nbsp; the Price ETFs |  |  |  |
| &nbsp;&nbsp; Ability to Transact in | NO | NO | NO |
| &nbsp;&nbsp; Options of the Price | NO | NO | NO |
| &nbsp;&nbsp; ETFs |  |  |  |

---

OTHER TRANSACTION REPORTING REQUIREMENTS. Any transaction that is subject to the prior transaction clearance requirements on behalf of an Access Person (except the independent directors of the Price Funds and Price ETFs), including purchases in initial public offerings and private placement transactions, must be reported. Although Non-Access Persons are not required to receive prior transaction clearance for securities transactions (other than Price Group stock), they must report any transaction that would require prior transaction clearance by an Access Person. The independent directors of Price Group, the Price Funds, and Price ETFs are subject to modified reporting requirements.

PROCEDURES FOR OBTAINING PRIOR TRANSACTION CLEARANCE (OTHER THAN PRICE GROUP STOCK) FOR ACCESS PERSONS. Unless prior transaction clearance is not required as described in this policy or determined by the Chairperson of the Ethics Committee, or their designee, Access Persons must receive prior transaction clearance for all securities transactions.

Access Persons should follow the procedures before engaging in the transactions described. If an Access Person is not certain whether a proposed transaction is subject to the prior transaction clearance requirements, he or she should contact the Code Compliance Team before proceeding.

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Procedures for Obtaining Prior Transaction Clearance for Initial Public Offerings ("IPOs"):

Non-Investment Personnel. Access Persons who are not Investment Personnel ("Non- Investment Personnel") may purchase securities that are the subject of an IPO only after receiving prior transaction clearance in writing from the Chairperson of the Ethics Committee or their designee. An IPO would include, for example, an offering of securities registered under the Securities Act of 1933 when the issuer of the securities, immediately before the registration, was not subject to certain reporting requirements of the Exchange Act. This requirement applies to all IPOs regardless of market.

In considering such a request for prior transaction clearance, the Chairperson or their designee will determine whether the proposed transaction presents a conflict of interest with any of the firm's clients or otherwise violates the Code. The Chairperson or his or her designee will also consider whether:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.The purchase is made through the Non-Investment Personnel's regular broker;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.The number of shares to be purchased is commensurate with the normal size and activity of the Non-Investment Personnel's account; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.The transaction otherwise meets the requirements of the FINRA restrictions, as applicable, regarding the sale of a new issue to an account in which a "restricted person," as defined in FINRA Rule 5130, has a beneficial interest.

Non-Investment Personnel will not be permitted to purchase shares in an IPO if any of the firm's clients are prohibited from doing so because of affiliated transaction restrictions. This prohibition will remain in effect until the firm's clients have had the opportunity to purchase in the secondary market once the underwriting is completed – commonly referred to as the aftermarket. The 60-Day Rule applies to transactions in securities purchased in an IPO.

Investment Personnel. Investment Personnel may not purchase securities in an IPO.

Non-Access Persons. Although Non-Access Persons are not required to receive prior transaction clearance before purchasing shares in an IPO, any Non-Access Person who is a registered representative or associated person of Investment Services is reminded that FINRA Rule 5130 may restrict his or her ability to buy shares in a new issue in any market.

Procedures for Obtaining Prior Transaction Clearance for Private Placements:

Access Persons may not invest in a private placement of securities, including thepurchase of limited partnership interests, unless prior transaction clearance in writing has been obtained from the Chairperson of the Ethics Committee or their designee. This prior clearance provision includes situations involving investment transactions made in small businesses typically sourced through family or friends as well as any other referral source.

A private placement is generally defined as an offering that is exempt from registrationby a regulatory authority and sold through a private offering. Private placement investments generally require the investor to complete a written questionnaire or subscription agreement and be regarded as a professional or accredited investor.

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Crowdfunding. Investments made through crowdfunding sites that serve to match entrepreneurs with investors, through which investors receive an equity stake in the business, are generally considered to be private placements and would require prior clearance. In contrast, providing funding through crowdfunding sites that serve to fund projects or philanthropic ventures are not considered private placements and therefore would not require prior clearance.

If an Access Person has any questions about whether a transaction is, in fact, a private placement, he or she should contact the Chairperson of the Ethics Committee or their designee.

In considering a request for prior transaction clearance for a private placement, the Chairperson will determine whether the investment opportunity (private placement) should be reserved for the firm's clients, and whether the opportunity is being offered to the Access Person by virtue of his or her position with the firm. The Chairperson will also secure, if appropriate, the approval of the proposed transaction from the chairperson of the applicable investment steering committee.

Continuing Obligation. An Access Person who has received prior transaction clearance to invest and does invest in a private placement of securities and who, at a later date, anticipates participating in the firm's investment decision process regarding the purchase or sale of securities of the issuer of that private placement on behalf of any client, must immediately disclose his or her prior investment in the private placement to the Chairperson of the Ethics Committee, or their designee, and to the chairperson of the appropriate investment steering committee.

Registered representatives of Investment Services are reminded that FINRA rules may restrict investment in a private placement in certain circumstances.

Procedures for Obtaining Prior Transaction Clearance for All Other Securities Transactions:

Requests for prior transaction clearance by Access Persons for all other securities transactions requiring prior transaction clearance should generally be made via myTRPcompliance on the firm's intranet. The myTRPcompliance system automatically sends any request for prior transaction approval that requires manual intervention to the Code Compliance Team. If you cannot access myTRPcompliance, requests may be made by email to the Legal Compliance Employee Trading mailbox. All requests must include the name of the security, a definitive security identifier (e.g., CUSIP, ticker, or Sedol), the number of shares or amount of bond involved, and the nature of the transaction, i.e., whether the transaction is a purchase, sale, short sale, or buy to cover, as well as the intended account in which to transact. Responses to all requests will be made by myTRPcompliance or the Code Compliance Team, documenting the request and whether or not prior transaction clearance has been granted. The myTRPcompliance system maintains the record of all approval and denials, whether automatic or manual.

Effectiveness of Prior Transaction Clearance. Prior transaction clearance of a securities transaction is effective for three business days from and including the date the clearance is

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granted (taking into consideration the time zone), regardless of the time of day when clearance is granted. If the proposed securities transaction is not executed within this time, a new clearance must be obtained. For example, if prior transaction clearance is granted at 2:00 pm Monday, the trade must be executed by Wednesday. In situations where it appears that the trade will not be executed within three business days even if the order is entered in that time period (e.g., certain transactions through transfer agents or spousal employee-sponsored payroll deduction plans), please notify the Code Compliance Team after prior clearance has been granted, but before entering the order with the executing agent.

Reminder. If you are an Access Person and become the beneficial owner of another's securities (e.g., by marriage to the owner of the securities) or begin to direct trading of another's securities, then transactions in those securities also become subject to the prior transaction clearance requirements. You must also report acquisition of beneficial ownership or control of these securities within ten business days of your knowledge of their existence.

REASONS FOR DISALLOWING ANY REQUESTED TRANSACTION. Prior transaction clearance will usually not be granted if:

Pending Client Orders. Orders have been placed by any of the Price Advisers to purchase or sell the security unless certain size or volume parameters as described (on page 5-24) under "Large Issuer/Volume Transactions" are met.

Purchases and Sales within Seven Calendar Days. The security has been purchased or sold by any client of a Price Adviser within seven calendar days immediately prior to the date of the proposed transaction, unless certain size or volume parameters as described (on page 5-24) under "Large Issuer/Volume Transactions" are met.

For example, if a client transaction occurs on Monday, prior transaction clearance is not generally granted to An Access Person to purchase or sell that security until Tuesday of the following week. Transactions in securities in pure, as opposed to enhanced, index funds are not considered for this purpose. If all clients have eliminated their holdings in a particular security, the seven-calendar day restriction is not applicable to an Access Person's transactions in that security.

Company Rating Changes. A change in the rating of a company has occurred within seven calendar days immediately prior to the date of the proposed transaction. Accordingly, trading would not be permitted until the eighth calendar day.

Securities Subject to Internal Trading Restrictions. Thesecurity is limited or restricted by any of the Price Advisers as to purchase or sale by Access Persons.

STA ETF Trading Restrictions. In general, Access Persons and Independent Directors will be restricted/prohibited from transacting in any STA ETF upon notification that it surpasses one of the Corrective Action Thresholds triggering the requirement for an ad hoc ETF Board meeting to evaluate the possible need for corrective measures. Additional situations or events could trigger ad hoc trading restrictions for Access Persons and/or Independent Directors.

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Requests for Reconsideration of Prior Transaction Clearance Denials. If an Access Person has not been granted a requested prior transaction clearance, he or she may apply to the Chairperson of the Ethics Committee or their designee for reconsideration. Such a request must be in writing and must fully describe the basis upon which the reconsideration is being requested. As part of the reconsideration process, the Chairperson or their designee will determine if any client of any of the Price Advisers may be disadvantaged by the proposed transaction by the Access Person. The factors the Chairperson or their designee may consider in making this determination include:

&nbsp;&nbsp;&nbsp;&nbsp;•The size of the proposed transaction;

&nbsp;&nbsp;&nbsp;&nbsp;•The nature of the proposed transaction (i.e., buy or sell) and of any recent, current or pending client transactions;

&nbsp;&nbsp;&nbsp;&nbsp;•The trading volume of the security that is the subject of the proposed Access Person transaction;

&nbsp;&nbsp;&nbsp;&nbsp;•The existence of any current or pending order in the security for any client of a Price Adviser;

&nbsp;&nbsp;&nbsp;&nbsp;•The reason the Access Person wants to trade (e.g., to provide funds for the purchase of a home); and

&nbsp;&nbsp;&nbsp;&nbsp;•The number of times the Access Person has requested prior transaction clearance for the proposed trade and the amount of time elapsed between each prior transaction clearance request.

TRANSACTION CONFIRMATIONS AND PERIODIC ACCOUNT STATEMENTS. All Access Persons (except the independent directors of the Price Funds and Price ETFs) and Non- Access Persons must request broker-dealers, investment advisers, banks, or other financial institutions executing their transactions to send a duplicate confirmation or contract note with respect to each and every reportable transaction, including Price Group stock, and a copy of all periodic statements for all securities accounts in which the Access Person or Non-Access Person is considered to have beneficial ownership and/or control (see discussion of beneficial ownership and control concepts on page 5-4) to the following address:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;T. Rowe Price

Legal & Compliance Department

Mailcode: OM-2455

P.O. Box 17218

Baltimore, Maryland 21297-1218

T. Rowe Price has established relationships and electronic data feeds with many broker-dealers for purposes of obtaining duplicate confirmations and contract notes as well as periodic statements. Certain broker-dealers require employee consent before sending such confirmations, contract notes, and statements to T. Rowe Price. In those cases, Code Compliance will contact the employee and obtain the required authorization.

The independent directors of Price Group, the Price Funds, and Price ETFs are subject to modified reporting requirements described at pages 5-20 to 5-22.

If transaction or statement information is provided in a language other than English, the employee should provide an English translation.

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NOTIFICATION OF SECURITIES ACCOUNTS. All persons and all entities subject to this Statement must report their securities accounts upon joining the firm as well as obtain prior approval for all new accounts opened while employed by T. Rowe Price. New T. Rowe Price brokerage accounts do not require prior approval but must be reported. Prior approval is obtained through myTRPcompliance and an instruction for obtaining such approval is located on the Compliance & Ethics page on the Exchange

The independent directors of Price Group, Price Funds, and the Price ETFs are not subject to this requirement.

New Personnel Subject to the Code. A person subject to the Code must report in myTRPcompliance, all existing securities accounts maintained with any broker, dealer, investment adviser, bank or other financial institution within ten business days of association with the firm.

Associates do not have to report accounts at transfer agents or similar entities if the only securities in those accounts are variable insurance products or open-end mutual funds if these are the only types of securities that can be held or traded in the accounts. If other securities can be held or traded, the accounts must be reported. For example, if you have an account at a transfer agent that can only hold shares of a mutual fund; that account does not have to be reported. If, however, you have a brokerage account it must be reported even if the only securities currently held or traded in it are mutual funds.

Officers, Directors and Registered Representatives of TRP Investment Services. FINRA requires each associated person of T. Rowe Price Investment Services to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Obtain prior approval for a new securities account; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If the securities account is with a broker-dealer, provide the broker-dealer with written notice of his or her association with TRP Investment Services.

Annual Statement by Access Persons. Every January each Access Person, except an Access Person who is an independent director of the Price Funds or Price ETFs, must file with the firm a list of their accounts as of year-end.

PROCEDURES FOR REPORTING TRANSACTIONS. The following requirements apply both to Access Persons and Non-Access Persons except the independent directors of Price Group and the Price Funds or Price ETFs, who are subject to modified reporting requirements:

Report Form. If the executing firm provides a confirmation, contract note or similar document directly to the firm, you do not need to make a further report. The date this document is received by the Code Compliance Team will be deemed the date the report is submitted for purposes of SEC compliance. The Code Compliance Team must receive the confirmation or similar document no later than 30 days after the end of the calendar quarter in which the transaction occurred.

What Information Is Required. Each transaction report must contain, at a minimum,the following information about each transaction involving a reportable security in which you had, or as a result of the transaction acquired, any direct or indirect beneficial ownership:

5-18

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;•The date of the transaction

&nbsp;&nbsp;&nbsp;&nbsp;•The title of the security

&nbsp;&nbsp;&nbsp;&nbsp;•The ticker symbol or CUSIP number, as applicable

&nbsp;&nbsp;&nbsp;&nbsp;•The interest rate and maturity date, as applicable

&nbsp;&nbsp;&nbsp;&nbsp;•The number of shares, as applicable

&nbsp;&nbsp;&nbsp;&nbsp;•The principal amount of each reportable security involved, as applicable

&nbsp;&nbsp;&nbsp;&nbsp;•The nature of the transaction (i.e. purchase, sale or any other type of acquisition or disposition)

&nbsp;&nbsp;&nbsp;&nbsp;•The price of the security at which the transaction was affected

&nbsp;&nbsp;&nbsp;&nbsp;•The name of the broker, dealer or bank with or through which the transaction was affected

When Reports are Due. You must report a securities transaction within ten business days after the trade date or within ten business days after the date on which you first gain knowledge of the transaction (for example, a bequest) if this is later. A transaction in a Reportable Fund, a spousal payroll deduction plan or a stock split or similar acquisition or disposition must be reported within 30 days of the end of the quarter in which it occurred.

Access Person Reporting of Reportable Funds and T. Rowe Price-Advised Section 529 College Savings Plan Interests HELD on the T. Rowe Price Platform or HELD by the TRP UK Retirement Schema. You are required to inform Code Compliance about Reportable Funds and/or T. Rowe Price-advised Section 529 College Savings Plan interests (i.e., the Maryland College Investment Plan, the T. Rowe Price College Savings Plan and the University of Alaska College Savings Plan) held on the T. Rowe Price Platform or held by the TRP UK Retirement Schema. Once you have done this, you do not have to report any transactions in those securities. Your transactions and holdings will be updated and reported automatically to Code Compliance on a periodic basis. You should report your new account via myTRPcompliance (located on the Exchange) when you first establish an account in a Reportable Fund or invest in a T. Rowe Price-advised Section 529 College Savings Plan held on a T. Rowe Price Platform or held by the TRP UK Retirement Plan.

Access Person Reporting of Reportable Funds and T. Rowe Price-Advised Section 529 College Savings Plan Interests NOT HELD on the T. Rowe Price Platform. You must notify Code Compliance of any Reportable Fund or T. Rowe Price-advised Section 529 College Savings Plan interests that you beneficially own or control that are held at any intermediary. This would include, for example, a Price Fund held in your spouse's retirement plan, even if T. Rowe Price Retirement Plan Services acts as the administrator or record-keeper of that plan. Any transaction in a Reportable Fund or in interests in a T. Rowe Price-advised Section 529 College Savings Plan must be reported by duplicate transaction confirmations and statements sent directly by the intermediary to the Code Compliance Team or by the Access Person directly using the "Securities Transactions" form (located in myTRPcompliance) within 30 days of the end of the quarter in which the transaction occurred.

Reporting Certain Private Placement Transactions. If your investment requires periodic capital calls (e.g., in a limited partnership) you must report each capital call. This is required even if you are an Access Person and you received prior transaction clearance

5-19

for a total cumulative investment. In addition, you must report any distributions you receive in the form of securities.

Reminder. If you become the beneficial owner of another's securities (e.g., by marriage to the owner of the securities) or begin to direct trading of another's securities, the transactions in these securities become subject to the transaction reporting requirements.

REPORTING REQUIREMENTS FOR THE INDEPENDENT DIRECTORS OF THE PRICE FUNDS AND PRICE ETFs.

Transactions in Publicly Traded Securities. An independent director of the Price Funds and Price ETFs must report transactions in publicly traded securities where the independent director controls or directs such transactions. These reporting requirements apply to transactions the independent director effects for his or her own beneficial ownership as well as the beneficial ownership of others, such as a spouse or other family member. An independent director does not have to report securities transactions in accounts over which the independent director has no direct or indirect influence such as an account over which the independent director has granted full investment discretion to a financial adviser. The independent director should contact the Legal & Compliance Department to request approval to exempt any such accounts from this reporting requirement.

Transactions in Non-Publicly Traded Securities. An independent director does not have to report transactions in securities which are not traded on an exchange (i.e., non-publicly traded securities), unless the independent director knew, or in the ordinary course of fulfilling his or her official duties as an independent director of the Price Funds or Price ETFs, should have known that during the 15-day period immediately before or after the independent director's transaction in such non-publicly traded security, a Price Adviser purchased, sold or considered purchasing or selling such security for a Price Fund, Price ETF, or Price advisory client.

Methods of Reporting. An independent director has the option to satisfy his or her obligation to report transactions in securities via a Quarterly Report or by arranging for the executing brokers of such transactions to provide duplicate transaction confirmations directly to the Code Compliance Team.

Quarterly Reports. If a Price Fund or Price ETF independent director elects to report his or her transactions quarterly: (1) a report for each securities transaction must be filed with the Code Compliance Team no later than thirty days after the end of the calendar quarter in which the transaction was effected; and (2) a report must be filed for each quarter, regardless of whether there have been any reportable transactions.

Duplicate Confirmation Reporting. An independent director of the Price Funds or Price ETFs may also instruct his or her broker to send duplicate transaction confirmations directly to the Code Compliance Team.

Among the types of transactions that are commonly not reported through a broker confirmation and may therefore have to be reported directly to T. Rowe Price are:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Exercise of Stock Options of a Corporate Employer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Inheritance of a Security;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Gift of a Security; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Transactions in Certain Commodity Futures Contracts (e.g., financial indices).

An independent director of the Price Funds or Price ETFs must include any transactions listed above, as applicable, in his or her Quarterly Reports if not otherwise contained in a duplicate broker confirmation.

Reporting of Officership, Directorship, General Partnership or Other Managerial Positions Apart from the Price Funds or Price ETFs. An independent director of the Price Funds or Price ETFs shall report to the Code Compliance Team any officership, directorship, general partnership, or other managerial position which he or she holds with any public, private, or governmental issuer other than the Price Funds or Price ETFs.

Reporting of Significant Ownership.

Issuers (Other than Non-Public Investment partnerships, Pools or Funds). If an independent director of the Price Funds or Price ETFs owns more than ½ of1% of the total outstanding shares of a public or private issuer (other than anon-public investment partnership, pool or fund), he or she must immediately report this ownership in writing to the Code Compliance Team, providing the name of the issuer and the total number of the issuer's shares beneficially owned.

Non-Public Investment Partnerships, Pools or Funds. If an independent director of the Price Funds or Price ETFs owns more than ½ of 1% of the total outstanding shares or units of a non-public investment partnership, pool or fund over which the independent director exercises control or influence, the independent director must report such ownership in writing to the Code Compliance Team. For non-public investment partnerships, pools or funds where the independent director does not exercise control or influence, the independent director need not report such ownership to the Code Compliance Section unless and until such ownership exceeds 4% of the total outstanding shares or units of the entity.

Investments in Price Group. An independent director of the Price Funds or Price ETFs is prohibited from owning the common stock or other securities of Price Group.

Investments in Non-Listed Securities Firms. An independent director of the Price Funds or Price ETFs may not purchase or sell the shares of a broker-dealer, underwriter or federally registered investment adviser unless that entity is traded on an exchange or the purchase or sale has otherwise been approved by the Price Fund or Price ETF Boards.

Dealing with Clients. Aside from market transactions effected through securities exchanges, an independent director of the Price Funds or Price ETFs may not knowingly transact with a Price Fund or Price ETF. This prohibition does not preclude the purchase

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or redemption of shares of any open-end mutual fund or purchase or sale of any shares of a Price ETF that is a client of any Price Advisers.

Prior Transaction Clearance Requirements. The independent directors of the Price Funds and Price ETFs are generally not required to receive prior transaction clearance so long as they have no knowledge of trades being transacted for the Price Funds or Price ETFs.

REPORTING REQUIREMENTS FOR THE INDEPENDENT DIRECTORS OF PRICE GROUP OR ITS SUBSIDIARIES.

Reporting of Personal Securities Transactions. An independent director is not required to report his or her personal securities transactions, including Price ETFs, (other than transactions in Price Group stock) as long as the independent director does not obtain information about the Price Advisers' investment research, recommendations, or transactions. However, each independent director is reminded that changes to certain information reported by the respective independent director in the Annual Questionnaire for Independent Directors are required to be reported to Corporate Records (e.g., changes in holdings of stock of financial institutions or financial institution holding companies).

Reporting of Officership, Directorship, General Partnership or Other Managerial Positions Apart from Price Group. An independent director shall report to the Code Compliance Team any officership, directorship, general partnership or other managerial position which he or she holds with any public, private, or governmental issuer other than Price Group or any of its subsidiaries.

Reporting of Significant Ownership.

Issuers (Other than Non-Public Investment Partnerships, Pools or Funds). If an independent director owns more than ½ of 1% of the total outstanding shares of a public or private issuer (other than a non-public investment partnership, pool or fund), he or she must report this ownership in writing to the Code Compliance Team, providing the name of the issuer and the total number of the issuer's shares beneficially owned.

Non-Public Investment Partnerships, Pools or Funds. If an independent director owns more than ½ of 1% of the total outstanding shares or units of a non-public investment partnership, pool or fund over which the independent director exercises control or influence, the independent director must report such ownership in writing to the Code Compliance Team. For non-public investment partnerships, pools or funds where the independent director does not exercise control or influence, the independent director need not report such ownership to the Code Compliance Team unless and until such ownership exceeds 4% of the total outstanding shares or units of the entity.

Investments in Non-Listed Securities Firms. An independent director should be mindful of potential conflicts of interest associated with transactions and/or ownership of a broker-dealer, underwriter or federally registered investment adviser that is not publicly traded. Directorsshould consult with the T. Rowe Price Chief Legal Counsel regarding such matters.

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MISCELLANEOUSRULESREGARDINGPERSONALSECURITIESTRANSACTIONS.These rules vary in their applicability depending upon whether you are an Access Person.

The following rules apply to all Access Persons, except the independent directors of the Price Funds or Price ETFs, and to all Non-Access Persons:

Dealing with Clients. Access Persons and Non-Access Persons may not, directly or indirectly, sell to or purchase from a client any security. Market transactions are not subject to this restriction. This prohibition does not preclude the purchase or redemption of shares of any open-end mutual fund that is a client of any of the Price Advisers and does not apply to transactions in a spousal employer-sponsored payroll deduction plan or spousal employer-sponsored stock option plan.

Investment Clubs. These restrictions vary depending upon the person's status, as follows:

Non-Access Persons. A Non-Access Person may form or participate in a stock or investment club without prior clearance from the Chairperson of the Ethics Committee (U.S.-based personnel) or the TRP International Compliance Team (international personnel). Only transactions in Price Group stock are subjectto prior transaction clearance. Club transactions must be reported just as the Non- Access Person's individual trades are reported.

Access Persons. An Access Person may not form or participate in a stock or investment club unless prior written clearance has been obtained from the Chairperson of the Ethics Committee (U.S.-based personnel) or the TRP International Compliance Team (international personnel). Generally, transactions by such a stock or investment club in which an Access Person has beneficial ownership or control are subject to the same prior transaction clearance and reporting requirements applicable to an individual Access Person's trades. If, however, the Access Person has beneficial ownership solely by virtue of his or her spouse's participation in the club and has no investment control or input into decisions regarding the club's securities transactions, the Chairperson of the Ethics Committee or the TRP International Compliance Team may, as appropriate as part of the prior clearance process, require the prior transaction clearance of Price Group stock transactions only.

Margin Accounts. While margin accounts are discouraged, you may open and maintain margin accounts for the purchase of securities provided such accounts are with firms with which you maintain a regular securities account relationship.

Limit Orders. While limit orders are permitted, Access Persons must be careful using "good until cancelled" orders keeping in mind that prior clearance is valid for three business days. Use of "day" limit orders are encouraged.

Trading Activity. You are discouraged from engaging in a pattern of securities transactions that either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Is so excessively frequent as to potentially impact your ability to carry out your assigned responsibilities, or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Involves securities positions that are disproportionate to your net assets.

At the discretion of the Chairperson of the Ethics Committee, or their designee, written notification of excessive trading may be sent to you and/or the appropriate supervisor if ten or more reportable trades occur in your account or accounts in a month.

The following rules apply only to Access Persons other than the independent directors of the Price Funds or Price ETFs:

Large Issuer/Volume Transactions. Although subject to prior transaction clearance, transactions involving securities of certain large issuers or of issuers with high trading volumes, within the parameters set by the Ethics Committee (the "Large Issuer/Volume List"), will be permitted under normal circumstances, as follows:

Transactions involving no more than U.S $50,000 (all amounts are in U.S. dollars) or the nearest round lot (even if the amount of the transaction marginally exceeds $50,000) per security per seven (7) calendar-day period in securities of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Issuers with market capitalizations of $7.5 billion or more, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•U.S. issuers with an average daily trading volume in excess of 750,000 shares over the preceding 90 trading days in the U.S.

are usually permitted, unless the rating on the security has been changed within the seven calendar days immediately prior to the date of the proposed transaction. These parameters are subject to change by the Ethics Committee. An Access Person should be aware that if prior transaction clearance is granted for a specific number of shares lower than the number requested, the individual may not be able to receive permission to buy or sell additional shares of the issuer for the next seven calendar days.

Small Cap Issuer Transactions. Although subject to prior transaction clearance, transactions involving securities of certain small cap issuers may not be approved if there was a ratings change or ratings initiation in the previous 14 calendar days. Small cap issuers are defined as issuers with a market capitalization of $2.0 billion or less.

Transactions Involving Options on Large Issuer/Volume List Securities. Access Persons may not purchase uncovered put options or sell uncovered call options unless otherwise permitted under the "Options and Futures" discussion that follows. Otherwise, in the case of options on an individual security on the Large Issuer/Volume List (if it has not had a rating change), an Access Person may trade the greater of five contracts or sufficient option contracts to control $50,000 in the underlying security; thus an Access Person may trade five contracts even if this permits the Access Person to control more than $50,000 in the underlying security. Similarly, the Access Person may trade more than five contracts as long as the number of contracts does not permit him or her to control more than $50,000 in the underlying security.

Client Limit Orders. Although subject to prior transaction clearance, an Access Person's proposed trade in a security is usually permitted even if a limit order has been entered for a client for the same security, if:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

![](t-rowecoe66x1.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Access Person's trade will be entered as a market order; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The client's limit order is 10% or more away from the market price at the time the Access Person requests prior transaction clearance.

General Information on Options and Futures. If a transaction in the underlying instrument does not require prior transaction clearance (e.g., National Government Obligations, Unit Investment Trusts), then an options or futures transaction on the underlying instrument does not require prior transaction clearance. However, all options and futures transactions, including options on future contracts, must be reported even if a transaction in the underlying instrument would not have to be reported (e.g., U.S. Government Obligations). Similarly, all "over the counter" derivatives transactions (i.e., swaps traded pursuant to an ISDA agreement) must be reported even if the transaction in the underlying instrument would not have to be reported. Transactions in publicly traded options on Price Group stock are not permitted. Please note that Contracts for Difference are treated under this Statement in the same manner as call options, and, as a result, are subject to the 60-Day Rule.

Before engaging in options and futures transactions, Access Persons should understand the impact that the 60-Day Rule and intervening client transactions may have upon their ability to close out a position with a profit (see "Closing or Exercising Options Positions").

Options and Futures on Securities and Indices Not Held by Clients of the Price Advisers. There are no specific restrictions with respect to the purchase, sale or writingof put or call options or any other option or futures activity, such as multiple writings, spreads and straddles, on a security (and options or futures on such security) or index that is not held by any of the Price Advisers' clients.

Options on Securities Held by Clients of the Price Advisers. With respect to options on securities of companies which are held by any of Price Advisers' clients, it is the firm's policy that an Access Person should not profit from a price decline of a security owned by a client (other than a "pure" Index account). Therefore, an Access Person may: (i) purchase call options and sell covered call options and (ii) purchase covered put options and sell put options. An Access Person may not purchase uncovered put options or sell uncovered call options, even if the issuer of the underlying securities is included on the Large Issuer/Volume List, unless purchased in connection with other options on the same security as part of a straddle, combination or spread strategy which is designed to result in a profit to the Access Person if the underlying security rises in or does not change in value. The purchase, sale and exercise of options are subject to the same restrictions as those set forth with respect to securities, i.e., the option should be treated as if it were the common stock itself.

Other Options and Futures Held by Clients of the Price Advisers. Any other option or futures transaction with respect to domestic or foreign securities held by any of the Price Advisers' clients will receive prior transaction clearance if appropriate after due consideration is given, based on the particular facts presented, as to whether the proposed transaction or series of transactions might appear to or actually create a conflict with the interests of any of the Price Advisers' clients. Such transactions include transactions in futures and options on futures involving financial instruments regulated solely by the U. S. Commodity Futures Trading Commission.

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Closing or Exercising Option Positions. If you are the holder of an option and you intend to close (sell) the option or exercise the option, prior transaction clearance is required. However, if you have written (sold) an option and the option is exercised against you, without any action on your part, no prior transaction clearance is required. A client transaction in the underlying security or any restriction associated with the underlying security may prevent any option transaction from being closed or exercised, therefore Access Persons should be cautious when transacting in options.

Short Sales. Short sales by Access Persons are subject to prior clearance unless the security itself does not otherwise require prior clearance. Short sale transactions in long and narrow ETFs, as well as the Price ETFs are prohibited. In addition, Access Persons may not sell any security short which is owned by any client of one of the Price Advisers unless a transaction in that security would not require prior clearance. Short sales of Price Group stock are not permitted. All short sales are subject to the 60-Day Rule.

The 60-Day Rule. Access Persons are prohibited from profiting from the purchase and sale or sale and purchase (e.g., short sales, sell to open, and other similar transactions) of the same (or equivalent) securities within 60 calendar days. An "equivalent" security means any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege at a price related to the subject security, or similar securities with a value derived from the value of the subject security. Thus, for example, the rule prohibits options transactions on or short sales of a security that may result in a gain within 60 days of the purchase of the underlying security. Any series of transactions made which violate (or are counter to) the spirit of the 60-Day Rule, such as the establishment of a long position and subsequent establishment of a short position (or vice versa), in the same (or equivalent) security, may be deemed a violation by the Ethics Committee. This prohibition is not intended to include legitimate hedging transactions. If you have questions about whether a contemplated transaction would violate the 60-Day Rule or the spirit of the Rule, you should seek an interpretation from Code Compliance prior to initiating the transaction. Violations of the 60-Day Rule will be subject to a disgorgement of profit and any other applicable sanctions. The disgorgement of profit does not take into consideration any tax lot accounting associated with the security. It is simply the calculated gain as a result of the buy and sale (or sale and purchase) within the 60-day period.

In addition, the rule applies regardless of the Access Person's other holdings of the same security or whether the Access person has split his or her holdings into tax lots. For example, if an Access Person buys 100 shares of XYZ stock on March 1 and another 100 shares of XYZ stock on November 27, he or she may not sell any shares of XYZ stock at a profit for 60 days following November 27. Similarly, an Access Person must own the underlying security for more than 60 days before entering into any options transaction on that security.

The 60-Day Rule "clock" restarts each time the Access person trades in that security.

The closing of a position in an option or Contract for Difference on any security other than an index will result in a 60-Day Rule violation if the position was opened within the 60- day window and the closing transaction results in a gain. Multiple positions will not be

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netted to determine an overall gain or loss in options on the same underlying security expiring on the same day unless the offsetting option positions were clearly part of an options strategy. Contact the Legal Compliance Employee Trading mailbox regarding the applicability of the contemplated strategy with the 60-Day Rule.

The 60-Day Rule does not apply to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any transaction by a Non-Access Person other than transactions in Price Group stock not excluded below;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any transaction which because of its nature or the nature of the security involved does not require prior transaction clearance (e.g., if an Access Person inherits a security, a transaction that did not require prior transaction clearance, then he or she may sell the security inherited at a profit within 60 calendar days of its acquisition; other examples include the purchase or sale of a unit investment trust, the exercise of a corporate stock option by an Access Person's spouse, or pro-rata distributions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any transaction in Price Group stock effected through the ESPP (note that the 60-Day rule does apply to shares transferred out of the ESPP to a securities account; generally, however, an employee remaining in the ESPP may not transfer shares held less than 60 days out of the ESPP);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The exercise of "company-granted" Price Group stock options or receiptof Price Group shares through Company-based awards and the subsequent sale of the derivative shares; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any purchase of Price Group stock through an established dividend reinvestment plan.

Access Persons are responsible for checking their compliance with this rule before entering a trade. If you have any questions about whether this rule will be triggered by a proposed transaction, you should contact Code Compliance or International Compliance before requesting prior transaction clearance for the proposed trade. Access Persons may request in writing an interpretation from the Chairperson of the Ethics Committee, or their designee, that the 60-Day Rule should not apply to a specific transaction or transactions.

Expanded Holding Period Requirement for Employees in Japan. Securities owned by staff employed by TRPJ may be subject to a longer holding period than 60 days. If you have any questions about this restriction, you should contact International Compliance.

Investments in Non-Listed Securities Firms. Access Persons may not purchase or sell the shares of a broker-dealer, underwriter or federally registered investment adviser unless that entity is traded on an exchange or listed as a NASDAQ stock or prior transaction clearance is given under the private placement procedures.

REPORTING OF ONE – HALF OF ONE PERCENT OWNERSHIP. If an employee owns more than ½ of 1% of the total outstanding shares of a public or private company, he or she must immediately report this in writing to Code Compliance (via the Code of Ethics mailbox), providing the name of the company and the total number of such company's shares beneficially owned.

GAMBLING RELATED TO THE SECURITIES MARKETS. All associates subject to the Code are prohibited from wagering, betting or gambling related to individual securities,securities

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indices, currency spreads, or other similar financial indices or instruments. This prohibition applies to wagers placed through casinos, betting parlors or internet gambling sites and is applicable regardless of where the activity is initiated (e.g., home or firm computer or telephone). This specific prohibition does not restrict the purchase or sale of securities through a securities account reported to Code Compliance even if these transactions are effected with a speculative investment objective.

INITIAL DISCLOSURE OF PERSONAL SECURITIES HOLDINGS BY ACCESS PERSONS. Upon commencement of employment, appointment or promotion (no later than 10 calendar days after the starting date), each Access Person, except an independent director of the Price Funds or Price ETFs, is required by U.S. securities laws to disclose all current securities holdings in which he or she is considered to have beneficial ownership or control ("Initial Holdings Report") (see page 5-4 for definition of the term Beneficial Owner) and provide or reconfirm the information regarding all of his or her securities accounts. Access Persons should use myTRPcompliance, located on the Exchange, to disclose and certify their Initial Holdings Report. SEC Rules require that each Initial Holding Report contain, at a minimum, the following information:

&nbsp;&nbsp;&nbsp;&nbsp;•Securities title;

&nbsp;&nbsp;&nbsp;&nbsp;•Securities type;

&nbsp;&nbsp;&nbsp;&nbsp;•Exchange ticker number or CUSIP number, as applicable;

&nbsp;&nbsp;&nbsp;&nbsp;•Number of shares or principal amount of each reportable securities in which the Access Person has any direct or indirect beneficial ownership;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The name of any broker, dealer or both with which the Access Person maintains an account in which any securities are held for the Access Person's direct or indirect benefit; and

&nbsp;&nbsp;&nbsp;&nbsp;•The date the Access Person submits the Initial Holding Report.

The information provided must be current as of a date no more than 45 days prior to the date the person becomes an Access Person.

ANNUAL DISCLOSURE OF PERSONAL SECURITIES HOLDINGS BY ACCESS PERSONS. Each Access Person, except an independent director of the Price Funds or Price ETFs, is also required to file an Annual Compliance Certification as of December 31 of each year. This report can be completed by using myTRPcompliance located on the Exchange. This report is due by no later than January 31. The Chief Compliance Officer or their designee reviews all Annual Compliance Certifications.

SANCTIONS. Strict compliance with the provisions of this Statement is considered a basic provision of employment or other association with Price Group, Price Funds, and the Price ETFs. The Ethics Committee, the Code Compliance Team, and the TRP International Compliance Team are primarily responsible for administering this Statement. In fulfilling this function, the Ethics Committee will institute such procedures as it deems reasonably necessary to monitor each person's and entity's compliance with this Statement and to otherwise prevent and detect violations.

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![](t-rowecoe70x1.jpg)

Violations by Access Persons, Non-Access Persons and Independent Directors of Price Group. Upon discovering a material violation of this Statement by any person or entity other than an independent director of a Price Fund, the Ethics Committee will impose such sanctions as it deems appropriate and as are approved by the Management Committee or the Board of Directors including, inter alia, a letter of censure or suspension, a fine, a suspension of trading privileges or termination of employment and/or officership of the violator. In addition, the violator may be required to forfeit any profit realized from any transaction that is in violation of this Statement to the T. Rowe Price Foundation or an approved international non-profit organization. All material violations of this Statement shall be reported to the Board of Directors of Price Group and to the Board of Directors of any Price Fund or Price ETF with respect to whose securities such violations may have been involved.

Following are sanctions guidelines associated with violations of this Statement. These guidelines are supplemental to the forfeiture of profit associated with certain violations where an associate economically benefited. Code Compliance will utilize a rolling two- year, look-back period in the administration of the sanctions guidelines.

<u>First Violation</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Associate and manager notification, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Associate required to complete online remedial training course.

<u>Second Violation</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Associate and escalated manager notifications up to, and including, applicable Management Committee ("MC") member,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Associate required to complete online remedial training course,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Associate required to meet with applicable Chief Compliance Officer and Senior Compliance Manager, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Associate fined according to officer or role guidelines.

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp; Associate | VP TRP Group | Investment | Portfolio Manager, |
|  |  | Personnel | Business Unit Leader, |
|  |  |  | MC Member |
| &nbsp;&nbsp; $250 | $750 | $750 | $1500 |

---

<u>Third Violation</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Associate and escalated manager notifications up to, and including, applicable Management Committee ("MC") member,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Chief Executive Officer notified,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Associate required to complete online remedial training course,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Associate subject to three-month trading prohibition, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Associate fined according to officer or role guidelines.

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp; Associate | VP TRP Group | Investment | Portfolio Manager, |
|  |  | Personnel | Business Unit Leader, |
|  |  |  | MC Member |
| &nbsp;&nbsp; $500 | $2000 | $2000 | $5000 |
|  |  | 5-29 |  |

---

<u>Fourth Violation</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Sanctions to be determined by Ethics Committee.

Violations by Independent Directors of Price Funds or Price ETFs. Upon discovering a material violation of this Statement by an independent director of a Price Fund, the Ethics Committee shall report such violation to the Board on which the director serves. The Price Fund or Price ETF Board will impose such sanctions as it deems appropriate.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;T. ROWE PRICE GROUP, INC.

STATEMENT OF POLICY

ON

SYSTEMS SECURITY AND RELATED ISSUES

Purpose of Statement of Policy ("Statement"). The central and critical role of computer systems in our firm's operations underscores the importance of ensuring their confidentiality, availability, and integrity. Our data is an extremely valuable asset and should be protected by all systemusers. Data within the T. Rowe Price Group network should be considered proprietary and confidential and should be protected as such. This Statement should be read in conjunction with the Statement of Policy on Privacy (page 8-1).

Systems activities and information will be referred to collectively in this Statement as the "Systems". The Systems include all hardware, software, operating systems, and wired and wireless network resources involved in the business of T. Rowe Price; all information transmitted, received, logged or stored through the Systems including email, voice mail, messaging, printers, and online facsimiles; and all back-ups and records retained for regulatory or other purposes including all portable and fixed storage media and locations for storage. Information also includes any work products that are created while working at or on behalf of T. Rowe Price and are the exclusive property of T. Rowe Price unless otherwise stipulated.

The Systems also include the use of computer access, data, services and equipment provided by T. Rowe Price including any access to the Internet or via Internet; access to and use of commercial and specialized software programs and systems licensed or developed for the firm's use; access to and use of customer and T. Rowe Price business data; use of and data on T. Rowe Price desktop and portable computers, and other mobile devices such as smart phones and tablets. The use, access, or storage of data on non-T. Rowe Price equipment (including but not limited to personally owned or "home" equipment, hotel or business center-supplied devices, web and/or cloud services, and conference supplied or internet café terminals) used for T. Rowe Price business purposes is included in the definition of systems, as appropriate.

Any new device, application or methodology offered by T. Rowe Price subsequent to the date of this version of this Statement, or that comes into common use for business purposes, is also covered under this definition of T. Rowe Price Systems and information.

This Statement establishes an acceptable use policy for all Price Group Associates and all other individuals, including vendors, cloud services, service providers and contractors, with Price Group systems access.

The Statement has been designed to give associates guidelines to:

• Maintain and protect the integrity of customer, corporate, and employee confidential information;

• Prevent the unauthorized use of or access to our firm's computer Systems;

• Prevent breaches and the introduction of malicious software; and

• Respond to incidents and alert management in accordance with defined practices.

Any material violation of this Statement may lead to disciplinary sanctions, up to and including

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dismissal of individuals involved. Additionally, actions in violation of this Statement may constitute a crime under applicable laws.

By using the firm's Systems, you agree to be bound by this Statement and consent to the access to and disclosure of all information by the firm and do not have any expectation of privacy in connection with the use of the Systems.

SECURITY PRINCIPLES. T. Rowe Price maintains a security organization, with supporting policies, to provide guidance and direction on appropriate security controls to all associates and users. Key principles for end users or associate behavior include:

&nbsp;&nbsp;&nbsp;&nbsp;•Security Responsibility. Security is everyone's responsibility at T. Rowe Price.

&nbsp;&nbsp;&nbsp;&nbsp;•Suspicious Activity. Report all suspicious activity to the Help Desk immediately.

&nbsp;&nbsp;&nbsp;&nbsp;•Authorized System Users. Access to systems is restricted to authorized users who need access in order to support their business activities. This includes systems that are External to the T. Rowe Price environment.

&nbsp;&nbsp;&nbsp;&nbsp;•User-IDs and Passwords. Every user is assigned a unique User-ID. Each User-ID has a password that must be kept confidential by the users. Employee IDs and easily deducible information should not be used for passwords. Users will be held accountable for work performed with their User-IDs.

&nbsp;&nbsp;&nbsp;&nbsp;•Secure Desk / Asset. Sensitive information must be secured and/or locked appropriately when unattended. This includes electronic and physical information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Mobile Assets. All portable computer equipment (e.g., laptops, smart phones, flash drives) containing information that is sensitive must be encrypted and password protected where possible. In the event of loss or theft, contact the Help Desk immediately.

&nbsp;&nbsp;&nbsp;&nbsp;•Incident Response. T. Rowe Price has the authority, at its own discretion, to disable any ID or activity as needed to respond to a security issue. Efforts will be made to contact presumed owners of these IDs as appropriate; however, IDs may be disabled as part of system or vulnerability management processes.

INTERNET ACCESS AND OTHER ONLINE SERVICES. Accessing the Internet and accessing T. Rowe Price systems from the Internet presents special security considerations due to the nature of the connection and the security concerns present in Internet services. When using Internet access or other online services, the following policies apply:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The use of firm Systems is intended for legitimate business purposes and individuals should limit personal use. You may not use the firm's Systems in any way that might pose a business risk or data privacy risk or in a manner that violates laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Do not use firm's Systems to access or send inappropriate content, including, but not limited to adult or gambling internet sites or to create or forward communications that could be offensive to others or embarrassing to you or T. Rowe Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•T. Rowe Price may block access to internet sites or emails without prior notice based on potential risk to the firm or for other business reasons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•You may not access or download anything for installation or storage onto the firm's computers for personal use including, but not limited to, streaming media, videos, music, games, or messaging and mail applications.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•T. Rowe Price Systems may not be used to remotely control, maintain, or service unauthorized computers or systems. T. Rowe Price systems may not be connected to

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non-T. Rowe Price networks, as this could lead to system attack/compromise and data loss. Wireless routers and/or hotspots may not be connected to the T. Rowe Price network.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•No person or entity may contract for domain names for use by Price Group or for the benefit of Price Group without express authority from the Legal & Compliance Department. Internet domain names are assets of the firm and are purchased and maintained centrally. This also includes free account registrations such as those on social networking sites and web email.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Only approved Systems and solutions may be used to conduct T. Rowe Price business. The independent use of other technologies, including peer-to-peer file sharing networks or software, web file storage, removeable storage devices (e.g. USB and hard drives), and Instant Messaging, are prohibited as they may not meet regulatory requirements to transfer, monitor and archive electronic communications. No personal email accounts may ever be used to send or receive business or client related communications.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Associates are prohibited from attempting to circumvent security and monitoringtools used by T. Rowe Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Associates are prohibited from using personal mobile devices to conduct Price Group business activities except as defined in the Mobile Device Policy or as authorized by management. Non-public customer information may not be stored on personal mobile devices. If personal devices are used to conduct business activities, personal devices and/or content could be requested as part of an investigation or subpoena.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Technology and Recovery Centers are considered sensitive locations and their location should not be publicly disclosed. If asked for their location by clients or others, please direct the inquiry to your manager or the Help Desk for evaluation.

Guidelines for Installing Software. Only approved software is authorized to be installed on Price Group systems. Any software program that is used by Price Group personnel in connection with the business of the firm must be ordered through the Help Desk. T. Rowe Price has the authority, at its own discretion; to remove any installed software, downloaded software, or any other application or executable that is not authorized for use by Price Group or may pose a security risk.

Downloading or Copying and Remote Printing. Downloading or copying software using T. Rowe Price Systems, including documents, graphics, programs and other computer-based materials, from any outside source is not permitted unless it is authorized. Downloads and copies may introduce viruses and malicious code into Systems. Downloading or uploading copyrighted materials may violate the rights of the authors of the materials, may create a liability, privacy or security breach, or cause embarrassment to the firm. Downloading or copying T. Rowe Pricedata or source code to an unapproved removable storage device is prohibited. Remotely printing T. Rowe Price data from any outside printer (e.g. hotel, home, etc.) is not permitted unless authorized.

PROTECTION FROM MALICOUS CODE. "Malicious code" is computer code that is designed to damage or access software or data on a computer system. T. Rowe Price manages a comprehensive malicious code prevention and control program to protect Systems and data. Introducing a virus or similar malicious code into the Price Group Systems by engaging in prohibited actions or by failing to implement recommended precautions may lead to disciplinary actions. Pranks, jokes, or other actions that simulate or trigger a system security event such as, but not limited to, a computer virus are prohibited. Users must comply with the following security practices:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Contact the Help Desk. Immediately contact the Help Desk for anything that appears suspicious or is identified as malicious. The Help Desk will determine whether the device is infected, the severity of the infection, and the appropriate remedial actions.

&nbsp;&nbsp;&nbsp;&nbsp;•Be Careful when Opening Emails. Carefully review emails, attachments, or links prior to opening or accessing them, as they may contain malicious code or viruses. Report suspicious emails as soon as feasible.

&nbsp;&nbsp;&nbsp;&nbsp;•Maintain Security Settings. Users should not disable virus scanning features, password settings, or other security features for any reason. Failure to maintain updated scanning files is also prohibited.

&nbsp;&nbsp;&nbsp;&nbsp;•Keep T. Rowe Price Mobile Assets Updated. Users who receive a Price Group technology asset must install updates as instructed by the Help Desk and/or connect the asset to the Price Group network on a regular basis to receive software, application, and operating system security updates.

&nbsp;&nbsp;&nbsp;&nbsp;•Keep Personal Computer Assets Updated. Users must maintain anti-virus software, application, and operating system security updates on all non-T. Rowe Price or personally owned assets that are used to access the T. Rowe Price network. Remote devices that do not meet these requirements may be prevented from connecting to the T. Rowe Price network.

&nbsp;&nbsp;&nbsp;&nbsp;•Report Unauthorized Network Connections. Report any attempts to create an unauthorized or foreign connection to the network to the Help Desk.

CONFIDENTIALITY OF SYSTEM ACTIVITIES AND INFORMATION. System activities and access on Price Group computers is subject to monitoring by firm personnel or others. All such information are records of the firm and the sole property of the firm. The firm reserves the right to monitor, access, and disclose for any purpose all information, including all messages sent, received, transmitted, or stored through the Systems.

Certain departments at T. Rowe Price record telephone conversations placed to and from the department (this includes but is not limited to the Call Centers and Corporate Actions Department). These recordings are made for various purposes, such as for quality review, when required by law, recording of instructions, as well as for other business reasons. Any telephone conversations placed to and from these departments (including internal calls) will be recorded and subject to monitoring.

Information, including electronic communications, entered into our firm's computers but later deleted from the Systems may continue to be maintained for applicable periods on our firm's back- up repositories or in records retained for regulatory or other purposes.

PARTICIPATION ON SOCIAL MEDIA SITES. Associates are directed to the Social Media Policy located on the Exchange to understand their responsibilities with respect to social media.

QUESTIONS REGARDING THIS STATEMENT. Please contact the Legal & Compliance Department if you have any questions regarding this Statement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;T. ROWE PRICE GROUP, INC.

STATEMENT OF POLICY

ON

COMPLIANCE WITH ANTITRUST LAWS

Purpose of Statement of Policy. To protect the interests of Price Group and its personnel, Price Group has adopted this Statement of Policy on Compliance with Antitrust Laws ("Statement") to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Describe the legal principles governing prohibited anticompetitive activity in the conduct of Price Group's business; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Establish guidelines for contacts with other members of the investment management industry to avoid violations of the antitrust laws.

The Basic U.S. Anticompetitive Activity Prohibition. Section 1 of the U.S. Sherman Antitrust Act (the "Act") prohibits agreements, understandings, or joint actions between companies that constitute a "restraint of trade", i.e., that reduce or eliminate competition.

This prohibition is triggered only by an agreement or action among two or more companies; unilateral action never violates the Act. To constitute an illegal agreement, however, an understanding does not need to be formal or written. Comments made in conversations, casual comments at meetings, or even as little as "a knowing wink," as one case says, may be sufficient to establish an illegal agreement under the Act.

The agreed-upon action must be anticompetitive. Some actions are "per se" anticompetitive, while others are judged according to a "rule of reason."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Some activities have been found to be so inherently anticompetitive that a court will not even permit the argument that they have a pro-competitive component. Examples of such per se illegal activities are bid-rigging; agreements between competitors to fix prices or terms of doing business; to divide up markets in any way, such as exclusive territories; or to jointly boycott a competitor or service provider.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Other joint agreements or activities will be examined by a court using the rule of reason approach to see if the pro-competitive results of the arrangement outweigh the anticompetitive effects. Under certain circumstances, permissible agreements among competitors may include a buyers' cooperative, or a syndicate of buyers for an initial public offering of securities. The rule of reason analysis requires a detailed inquiry into market power and market conditions.

There is also an exception for joint activity designed to influence government action. Such activity is protected by the First Amendment to the U.S. Constitution. For example, members of an industry may agree to lobby Congress jointly to enact legislation that may be manifestly anticompetitive.

Penalties for Violating the Sherman Act. A charge that the Act has been violated can be brought as a civil or a criminal action. Civil damages can include treble damages, plus attorney's fees. Criminal penalties for individuals can include fines of up to $1,000,000 and ten years in jail, and $100 million or more for corporations. The maximum fine may be increased to twice the amount

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conspirators gained from the illegal acts or twice the money lost by the victims of the crime, if either of those amounts is over $100 million.

Situations in Which Antitrust Issues May Arise. To avoid violating the Act, any discussion with other members of the investment management industry regarding which securities to buy or sell and under what circumstances we buy or sell them, or about the manner in which we market our mutual funds, other commingled vehicles, and investment and retirement services, must be made with the prohibitions of the Act in mind. In addition, any discussion with our competitors about the use of particular vendors or service providers may implicate the Sherman Act.

Trade Association Meetings and Activities. A trade association is a group of competitors who join together to share common interests and seek common solutions to common problems. Such associations are at a high risk for anticompetitive activity and are closely scrutinized by regulators. Attorneys for trade associations, such as the Investment Company Institute, are typically present at meetings of members to assist in avoiding violations.

<u>Permissible Activities:</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Discussion of how to make the industry more competitive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•An exchange of information or ideas that have pro-competitive or competitively neutral effects, such as: methods of protecting the health or safety of workers; methods of educating customers and preventing abuses; and information regarding how to design and operate training programs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Collective action to petition government entities.

<u>Activities to Avoid:</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any discussion or direct exchange of current information about prices, salaries, fees, or terms and conditions of sales. Even if such information is publicly available, problems can arise if the information available to the public is difficult to compile or not as current as that being exchanged.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Discussion of specific customers, markets, or territories.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Negative discussions of service providers that could give rise to an inference of a joint refusal to deal with the provider (a "boycott").

Investment-Related Discussions

<u>Permissible Activities:</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Buyers or sellers with a common economic interest may join together to facilitate securities transactions that might otherwise not occur, such as the formation of a syndicate to buy in a private placement or initial public offering of an issuer's stock, or negotiations among creditors of an insolvent or bankrupt company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Competing investment managers are permitted to serve on creditors' committees and engage in other similar activities in connection with bankruptcies and other judicial proceedings so long as they act independently of each other.

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<u>Activities to Avoid:</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•It is important to avoid anything that suggests involvement with any other firm in any threats to "boycott" or "blackball" new offerings, including making any ambiguous statement that, taken out of context, might be misunderstood to imply such joint action. Avoid careless or unguarded comments that a hostile or suspicious listener might interpret as suggesting prohibited coordinated behavior between Price Group and any other potential buyer.

Example: After an Illinois municipal bond default where the state legislature retroactively abrogated some of the bondholders' rights, several investment management complexes organized to protest the state's action. In doing so, there was arguably an implied threat that members of the group would boycott future Illinois municipal bond offerings. Such a boycott would be a violation of the Act. The investment management firms' action led to an 18-month U.S. Department of Justice investigation. Although the investigation did not lead to any legal action, it was extremely expensive and time consuming for the firms and individual managers involved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If you are present when anyone outside of Price Group suggests that two or more investors with a grievance against an issuer coordinate future purchasing decisions, you should immediately reject any such suggestion. As soon as possible thereafter, notify the Legal Department, which will take whatever further steps are necessary.

Benchmarking. Benchmarking is the process of measuring and comparing an organization's processes, products and services to those of industry leaders for the purpose of adopting innovative practices for improvement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Because benchmarking usually involves the direct exchange of information with competitors, it is particularly subject to the risk of violating the antitrust laws.

&nbsp;&nbsp;&nbsp;&nbsp;•The list of issues that may and should not be discussed in the context of a trade association also applies in the benchmarking process.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•All proposed benchmarking agreements must be reviewed by the Legal & Compliance Department before the firm agrees to participate in such a survey.

Discussions with Companies

It is acceptable for Price Group personnel to have individual discussions with executives of companies whether or not Price Group advisers have invested in those companies on behalf of investment advisory clients. However, caution should be exercised when having discussions with multiple companies that are in the same industry; particularly companies in concentrated industries. It could create legal issues if an individual or entity that speaks with competing companies passes confidential or sensitive business information between or among those companies. Such indirect exchanges of information could be evidence of collusion among the competing firms and the individual or entity passing the information could be the subject of litigation alleging industry collusion. For the same reason, you should avoid discussions with executives of companies that suggest a common industry

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position on a competitive issue such as prices, supply, capacity, market entry, or product development, especially that you or Price Group is suggesting or endorsing such a common position. If you have questions about the acceptable scope of discussions with companies, contact the Legal & Compliance Department.

Antitrust Restrictions Related to Acquisitions, Mergers and Other Transactions

Basic Restrictions. The U.S. Clayton Act bars any corporate transaction that is likely to substantially lessen competition in a particular market. This law applies not just to mergers, but to any acquisition of stock or assets, regardless of whether it transfers ownership or control. Generally, acquisitions by Price Group and similar entities do not raise issues under the Clayton Act. However, acquisitions of shares in competing companies by active investors who may seek to alter the competitive behavior of the companies they hold can be subject to challenge underthe Clayton Act.

Reporting Requirements. Acquisitions of any significant size may be reportable to government antitrust authorities. In general, acquisitions by Price Group advisers on behalf of investment advisory clients are exempt from such requirements so long as the acquisitions are made solely for investment purposes. However, if any Price Group entity or employee seeks to influence the regular business decisions of a company in which Price Group advisers have holdings, the exemption from reporting may not apply. Contact the Legal & Compliance Department if you have any questions.

International Requirements. The UK, European Union ("E.U."), and several countries in the Asia-Pacific ("APAC") region have requirements based on principles similar to those of U.S. law. In many cases, the laws of the E.U. are stricter than the laws of the U.S. If you have specific questions about UK, E.U., or APAC requirements, contact the Legal & Compliance Department.

Antitrust Laws Relating to Employment

The U.S. antitrust laws apply to competition among firms to hire employees. An agreement among competing employers to fix the terms of employment for potential hires or to limit employment of another's employees can subject the firm or individual to civil or criminal enforcement action.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;T. ROWE PRICE GROUP, INC.

STATEMENT OF POLICY

ON

PRIVACY

Scope and Enforcement

This Policy applies to all T. Rowe Price associates, contractors and directors with respect to all operations carried out globally by T. Rowe Price which involve the processing of personal data.

It is the responsibility of every associate, contractor and director throughout T. Rowe Price to comply with this Policy. Understanding of this Policy is supported through mandatory training for associates and contractors. The principles behind the Policy also are reflected in T. Rowe Price's Code of Ethics and Conduct, acknowledgement of which is required on an annual basis. Violations of this Policy may constitute grounds for disciplinary actions, up to and including, termination of employment or removal from your position.

T. Rowe Price senior management ultimately is responsible for promoting compliance to this Policy.

Definitions

Data Security Incident means an event that impacts the security (confidentiality, integrity, or availability) of personal data, institutional client data, and/or T. Rowe Price confidential data by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Ending up in an unexpected place, either internal or external to T. Rowe Price,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Being accessible in a way that is broader than intended,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Being lost or stolen,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Being altered in an unexpected or unauthorized way, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.Being unavailable in an unexpected or unauthorized way.

Personal Data means any information relating to an individual that identifies the individual or could reasonably be used to identify the individual regardless of the medium involved (e.g., paper, electronic, video or audio) or how it was obtained (e.g., from an application form or through a cookie on a website that can identify an individual). Examples of personal data include contact details, identification numbers, financial data, passwords, IP addresses, pictures, online search history, and geolocation information. As required by applicable law, it also includes sensitive personal data, such as health or medical information, government-issued identification numbers, racial or ethnic origin, political opinions, religious or similar beliefs, trade union memberships, criminal offenses, sexual life information and genetic or biometric data.

The most common sources of personal data relates to clients and associates. While the privacy/data protection laws of countries typically do not extend to entities or non-personal data, we apply appropriate security safeguards to protect information related to clients and other confidential data as defined in this Code.

Processing means any operation or set of operations which is performed on personal data or on sets of personal data, whether by automated means, such as collection, recording, organization, structuring, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination,restriction, erasure or destruction.

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Privacy Principles

T. Rowe Price's business operations shall be consistent with the following Privacy Principles. These principles are binding across our business.

&nbsp;&nbsp;&nbsp;&nbsp;1.Lawful Processing and Transparency. T. Rowe Price collects, uses, and shares personal data where we have lawful grounds and legitimate business reasons for doing so. We are subject to data protection and privacy laws within each of the jurisdictions in which we operate and we undertake to conduct our business in compliance with these laws. We also are committed to helping individuals understand what information we collect, how we use it, the circumstances under which we share it with third parties, and, as applicable, what choices they have. We explain this to clients, associates and business contacts in our privacy notices as required by applicable law. We review our privacy notices regularly to keep them up to date and to ensure they match our internal practices. In the event of material updates, we communicate with relevant internal and external stakeholders in a timely manner.

&nbsp;&nbsp;&nbsp;&nbsp;2.Purposes. We collect personal data for legitimate purposes We employ data minimization practices to ensure that we collect data consistent with what we need to achieve those purposes. Though personal data can help us improve the services we provide, we should leverage it in a manner that is compliant with applicable regulation and consistent with and proportionate to our corporate policies and goals.

&nbsp;&nbsp;&nbsp;&nbsp;3.Data Accuracy. The firm take steps to ensure that the personal data we hold is accurate, relevant, and, where necessary, kept up to date.

&nbsp;&nbsp;&nbsp;&nbsp;4.Data Retention and Disposal. We keep personal data to comply with applicable laws and obligations and take steps to ensure the safe destruction or de-identification of personal data when it is no longer required by law to be retained or it is no longer necessary for a legitimate business purpose.

&nbsp;&nbsp;&nbsp;&nbsp;5.Rights of Individuals. T. Rowe Price is committed to addressing the privacy rights of individuals, as set forth in applicable laws, with respect to our processing of their personal data.

&nbsp;&nbsp;&nbsp;&nbsp;6.Information Security. We use appropriate technical and organizational measures to keep personal data secure and ensure its integrity, confidentiality and availability across our systems. We regularly evaluate changes in technology and changes in risk and respond as appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;7.International Transfers of Personal Data. T. Rowe Price is a global business and as such we transfer personal data internationally in the normal course of business. We are committed to maintaining adequate safeguards, as required by applicable laws, to protect the personal data we transfer to a country that is not regarded as having fully equivalent data protection laws.

&nbsp;&nbsp;&nbsp;&nbsp;8.Accountability. We are all responsible for upholding the Privacy Principles and respecting individuals' privacy rights. We have a collective and individual duty to protect our clients', associates', and business partners' personal data. To create an environment of trust and to

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comply with applicable laws, all individuals operating within or on behalf of T. Rowe Price are required to comply with our Privacy Principles, including proactively applying Privacy by Design to help us uphold our commitments to the protection of personal data. We have procedures established to ensure individuals and regulators are informed timely of data security incidents when required. Through audits and internal reviews, we regularly assess the effectiveness of controls to mitigate privacy risk.

Roles and Responsibilities

While the Privacy Principles apply to all of us at T. Rowe Price, stakeholders at different corporate levels within T. Rowe Price play a role in ensuring overall privacy risk management and data protection compliance. We maintain a network of privacy resources as part of our privacy governance framework and have identified clear lines of privacy responsibilities.

Every business unit is responsible for:

&nbsp;&nbsp;&nbsp;&nbsp;•Understanding and implementing this Policy and other applicable internal policies and procedures.

&nbsp;&nbsp;&nbsp;&nbsp;•Ensuring compliance with the applicable public facing privacy notices, and other privacy commitments.

&nbsp;&nbsp;&nbsp;&nbsp;•Ensuring the security of the personal data it maintains, including

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Allowing access to personal data only to those who require access for their job functions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Reporting any known or suspected data security incidents promptly to the Help Desk, option 2 (see Legal & Compliance widget on the TRP Exchange for current international toll-free numbers).

Every associate and contingent worker is responsible for:

&nbsp;&nbsp;&nbsp;&nbsp;•Applying the Privacy Principles to the collection, use, and sharing of personal data and following our policies, procedures and standards regarding privacy.

Learn how to identify personal data and report any questions to the Global Privacy Office.

Use and share personal data consistent with the purpose(s) for which it was collected.

Ensure that personal data is accurate, relevant, and, where necessary, kept up to date.

Secure personal data (paper and electronic) through appropriate security safeguards against risks such as loss, unauthorized access or use, destruction, modification, or unintended or inappropriate disclosure.

Avoid accessing, collecting or storing personal data that is not necessary for your current job responsibilities.

Dispose of personal data securely. For example; by using shredders or secured shred/recycle bins provided in offices or appropriate electronic erasure.

Remember that personal data belongs to T. Rowe Price and may not be copied, transferred or otherwise removed without permission.

&nbsp;&nbsp;&nbsp;&nbsp;•Using T. Rowe Price data and equipment appropriately and securely.

Use T. Rowe Price data, systems and equipment for legitimate business purposes only and in accordance with applicable policies, guidelines and instructions.

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Use secure transmission protocols when sending personal data outside of T. Rowe Price (e.g., encrypted file transfers and not unencrypted emails or attachments).

Limit internal access to personal data to those with a genuine "need to know," and limit the amount of personal data to that which is necessary to accomplish the business purpose.

Do not install or use any unapproved software.

Manage business applications on TRP computers and telecommunications devices in accordance with this Global Privacy Policy and any separate policies of Global Technology for a particular type of device or system.

• Reporting known or suspected data security incidents.

Report known or suspected data security incidents without delay to the Help Desk (Select option 2 on Help Desk menu) and also follow any internal reporting required within your business unit. Be alert for:

oSuspicious activity related to a computer, network, or software application.

oPotential or actual loss, misuse, improper access or modification of personal data.

oThe security of any system or device containing personal data has been compromised.

oAn incident in which personal data has been accessed, used or disclosed in violation of any applicable policy.

oOnce submitted, the incident will be investigated, and corrective actions implemented, as necessary or as appropriate.

• Completing required training.

Complete all required privacy and information security training.

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## Ex-99.(P)(30)

### Vaughan Nelson Investment Management, L.P.

### Code of Ethics
(Amended as of September 9, 2022)

This is the Code of Ethics of Vaughan Nelson Investment Management, L.P. (the "Firm").

### Things You Need to Know to Use This Code
1. Terms in **boldface type** have special meanings as used in this Code. To understand the Code, you need to read the definitions of these terms. <u>The</u> <u>definitions</u> <u>are</u> <u>at</u> <u>the</u> <u>end</u> <u>of</u> <u>the</u> <u>Code.</u> 

2. The Firm considers <u>all</u> employees to be **Access Persons** under this Code.

There are Reporting Forms that **Access Persons** have to fill out under this Code. You can access the Reporting Forms by logging in to the Firm's automated compliance solution.

Board members who are not employees of the Firm, do not have to comply with the trading restrictions and blackout provisions in Section B of part II.

Further, certain members of the Firm's board may be classified as "**Non-Access Directors.**" See the "Definitions" section of this Code. **Non- Access Directors** are subject to Parts I.A. and I.B. of this Code, but not to Parts I.C., I.D. or Part II of the Code.

### PART I--Applies to All Personnel
A.  **<u>General</u> <u>Principles--These</u> <u>Apply to All</u> <u>Personnel</u> <u>(including All Board Members)</u>** 

The Firm is a fiduciary for its investment advisory and sub-advisory clients. Fiduciaries owe their clients a duty of honesty, good faith and fair dealing. As a fiduciary, an adviser must act at all times in the client's best interests and must avoid or disclose conflicts of interest. Because of this fiduciary relationship, it is generally improper for the Firm or its personnel to:

· use for their own benefit (or the benefit of anyone other than the client) information about the Firm's trading or recommendations for client accounts; or

· take advantage of investment opportunities that would otherwise be available for the Firm's clients.

As a matter of business policy, the Firm wants to avoid even the appearance that the Firm, its personnel or others receive any improper benefit from information about client trading or accounts, from our positions, or from relationships with our clients or with the brokerage community.

*Privacy and Confidentiality* 

All personnel are required to keep any nonpublic information about clients (including former clients), the Firm or vendors in strict confidence. Employees should treat the following with confidentiality and discretion:

· A client's identity (unless the client consents), the client's financial circumstances, the securities investments made by the Firm on behalf of a client, information about contemplated securities transactions, or information regarding the firm's trading strategies (except as required to effectuate securities transactions on behalf of a client or for other legitimate business purposes).

· Non-public information regarding the Firm including but not limited to trading intentions, business plans and strategies, technology, business processes, customer relationships, and financial results

Whenever dealing with confidential information personnel should:

· Assume client or Firm information is confidential unless evidence exists to the contrary

· Only use it for the purposes for which it was gathered

· Not make disclosure to anyone outside of the Firm unless authorized to do so and only share information internally on a need-to-know basis

· Not disclose information related to a former employer to anyone within the Firm

Nothing in this Policy prohibits you from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. You do not need the prior authorization of the Firm to make any such reports or disclosures and you are not required to notify the Firm that you have made such reports or disclosures.

Personnel should stay informed and comply with Firm policies dealing with data access, information security, encryption standards, and other initiatives designed to protect the integrity and confidentiality of information.

Please refer also to the Firm's Privacy Policies under Regulation S-P and S- AM.

*Books and Records* 

All personnel are required to keep accurate and truthful books and records which is critical for our business operations, compliance with legal requirements and the preparation of the Firm's financial statements. In this pursuit, personnel should:

· Recognize their role and personal responsibility for the integrity of records, reports and information that they prepare or control

· Comply with internal accounting and recordkeeping policies. Falsification of any books, records or accounts is prohibited

· Provide complete and accurate information in connection with any regulatory filings or inquiries

· Follow all record retention and destruction policies of the Firm

*Computers and Communications* 

All personnel are to use the Firm's computer and communications systems ("Systems") solely for business purposes. Unauthorized access to, use of, interception or distribution of the Firm's Systems is prohibited. Such conduct may also be a violation of law.

However, the Firm realizes that some personal use of these Systems is inevitable. Any personal use should be kept to a minimum. Excessive or inappropriate use of such Systems for personal use (e.g. time spent or content) as determined by the Firm in its sole discretion may be grounds for sanctions or termination.

· Any personal use must be lawful and not violate any Firm policy. As an example, an email communication or, accessing an internet site, with inappropriate content or material would violate Firm policy and is prohibited.

· Personal use of the Firm's Systems must not impose any incremental cost to the Firm, interfere with normal business operations, or

otherwise adversely affect the interests of the Firm or an employee's work.

· Employee's use of the Firm's Systems, for either business or personal use, should have no expectation of privacy.

*Insider Trading* 

All personnel are prohibited from trading, either personally or on behalf of others, while in possession of material, nonpublic information about issuers and are also prohibited from communicating material, nonpublic information about issuers to others (other than for legitimate legal or business purposes such as informing the **Chief Compliance Officer** that they, or the firm, is in possession of such information). Vaughan Nelson will consider restricting employee trades in funds managed by our firm that are closing which primarily hold securities that make the funds susceptible to price impacts due to outflows (i.e., micro-caps) or have seed capital.

Please refer to the Firm's Insider Trading Policy for more detail.

*Political Contributions* 

All personnel are required to obtain preclearance approval for any direct or indirect political contributions or payments to an Official or

Political Action Committee (PAC) in order to evaluate and monitor any potential or ongoing impact to the firm. Additional restrictions and prohibitions apply to employees identified as Covered Associates involving monetary limitations and the coordination / solicitation of other individuals to make political contributions.

Please refer to the Firm's policy regarding Political Contributions by Certain Investment Advisers (Pay-to-Play) for more detail.

The Firm expects all personnel to comply with the spirit of the Code, as well as the applicable specific rules contained in the Code. **You must promptly report any violations (not just of personal trading but of the overall requirements of this Code) to the Chief Compliance Officer.**

The Firm treats violations of this Code (including violations of the spirit of the Code) very seriously. If you violate either the letter or the spirit of this Code, the Firm might impose penalties or fines, cut your compensation, demote you, require disgorgement of trading gains, suspend or terminate your employment, or any combination of the foregoing.

Improper trading activity can constitute a violation of this Code. But you can also violate this Code by failing to file required reports, or by making inaccurate or misleading reports or statements concerning trading activity or securities accounts. Your conduct can violate this Code, even if no clients are harmed by your conduct.

If you have any doubt or uncertainty about what this Code requires or permits, you should ask the **Chief Compliance Officer**. Don't just guess at the answer. Ignorance or lack of understanding is no excuse for a violation.

B.  **<u>Compliance</u> <u>with</u> <u>the</u> <u>Federal</u> <u>Securities</u> <u>Laws</u>** 

More generally, Firm personnel (including members of the Firm's boards) are required to comply with applicable federal securities laws at all times. Examples of applicable federal securities laws include:

· the **Securities Act of 1933**, the **Securities Exchange Act of 1934**, the **Sarbanes-Oxley Act of 2002** and the SEC rules thereunder;

· the **Investment Advisers Act of 1940** and the SEC rules thereunder;

· the **Investment Company Act of 1940** and the SEC rules thereunder;

· title V of the **Gramm-Leach-Bliley Act of 1999** (privacy and security of client non-public information); and

· the **Bank Secrecy Act**, as it applies to mutual funds and investment advisers, and the SEC and Department of the Treasury rules thereunder.

All firm personnel are reminded that under these laws, all oral and written statements, including those made to clients, prospective clients, or their representatives must be professional, accurate, balanced, and not misleading in any way.

C.  **<u>Gifts</u> <u>to or from</u> <u>Brokers, Clients</u> <u>or Others--This</u> <u>Applies</u> <u>to All Access Persons</u>** 

No personnel may accept or receive on their own behalf or on behalf of the Firm any gift or other accommodations from a vendor, broker, securities salesman, client or prospective client (a "business contact") that might create a conflict of interest or interfere with the impartial discharge of such personnel's responsibilities to the Firm or its clients or place the recipient or the Firm in a difficult or embarrassing position. This prohibition applies equally to gifts to members of the **Family/Household** of firm personnel.

No personnel may give on their own behalf or on behalf of the Firm any gift or other accommodation to a business contact that may be construed as an improper attempt to influence the recipient.

In no event should gifts to or from any one business contact have a value that exceeds the annual limitation on the dollar value of gifts (currently $200).

These policies are not intended to prohibit **normal** business entertainment (e.g. dinner, sporting event tickets, etc. all of a **reasonable** value). Any questions as to whether a particular gift or entertainment activity constitutes **normal** business entertainment should be directed to the **Chief Compliance Officer**.

Please refer to the Firm's Gift & Entertainment policy for a more detailed discussion and quarterly reporting requirements.

D.  **<u>Outside Business Activities</u> <u>for Another Organization</u> <u>/</u> <u>Company--This Applies to All Personnel, Except</u> <u>Members</u> <u>of the</u> <u>Firm's</u> <u>Board</u> <u>Who Are Not Employees</u> <u>of</u> <u>the Firm</u>** 

To avoid conflicts of interest, insider information and other compliance and business issues, the Firm requires all its employees who are involved with an Outside Organization / Company (e.g. employee, consultant, officer, member of the board, investment committee, etc.) of any for-profit, not-for-profit or otherentity to disclose and obtain written approval of the Firm to do so. Approval must be obtained through the **Chief Compliance Officer**, and will ordinarily require consideration by the CEO or the Board of the Firm. The Firm can deny approval for any reason. This prohibition does not apply to service as an officer or board member of any parent or subsidiary of the Firm, nor does it apply to members of the Firm's board who are not employees of the Firm.

### PART II--Applies to Access Persons
A.  **<u>Reporting Requirements--These</u> <u>Apply to All</u> <u>Access</u> <u>Persons</u>** 

NOTE: One of the most complicated parts of complying with this Code is understanding what holdings, transactions and accounts you must report and what accounts are subject to trading restrictions. For example, accounts of certain members of your family and household are covered, as are certain categories of trust accounts, certain investment pools in which you might participate, and certain accounts that others may be managing for you. To be sure you understand what holdings, transactions and accounts are covered, it is essential that you carefully review the definitions of **Covered Security**, **Reportable Funds**, **Family/Household** and **Beneficial Ownership** in the "Definitions" section at the end of this Code.

ALSO: <u>You must</u> <u>file</u> <u>the</u> <u>reports</u> <u>described</u> <u>below,</u> <u>even if</u> <u>you have</u> <u>no</u> <u>holdings,</u> <u>transactions</u> <u>or</u> <u>accounts</u> <u>to</u> <u>list</u> <u>in</u> <u>the</u> <u>reports</u>. Absent extenuating circumstances, only those involved with the internal review of personal transactions (i.e., the **Chief Compliance Officer**, those assisting the **Chief Compliance Officer** and the CEO) will have access to submitted reports.

The reports are also required to be made available for certain other purposes, such as SEC inspections.

1.  **<u>Initial Holdings Reports.</u> No later than ten (10) days after you become an Access Person , you must file with the Chief Compliance Officer a Holdings Report within the Firm's automated compliance system.** 

This report requires you to list all **Covered Securities** in which you (or members of your **Family/Household**) have **Beneficial Ownership**. It also requires you to list all brokers, dealers and banks where you maintain an account in which **<u>any</u>** securities (not just Covered Securities) are held for the direct or indirect benefit of you or a member of your **Family/Household** on the date you became an **Access Person**. The information contained in the report must be current as of a date no more than forty-five (45) days prior to the date you became an **Access Person**.

You will also be required to confirm that you have read and understand this Code, that you understand that it applies to you and members of your **Family/Household** and that you understand that you are an **Access Person** under the Code.

2.  **<u>Quarterly Transaction Reports.</u> No later than thirty (30) days after the end of March, June, September and December each year, you must file with the Chief Compliance Officer a Quarterly Transactions Report within the Firm's automated compliance system.** 

This report requires you to list all transactions during the most recent calendar quarter in **Covered Securities,** in which transactions you (or a member of your **Family/Household**) had **Beneficial Ownership**. It also requires you to list all brokers, dealers, investment managers and banks where you or a member of your **Family/Household** established, or closed an account in which <u>any</u> securities (not just **Covered Securities**) were held during the quarter for the direct or indirect benefit of you or a member of your **Family/Household.**

3. **Annual Holdings Reports.** By January 31st of each year, you must file with the **Chief Compliance Officer** an Annual Holdings Report within the Firm's automated compliance system.

This report requires you to list all **Covered Securities** in which you (or a member of your **Family/Household**) had **Beneficial Ownership** as of December 31<sup>st</sup> of the prior year. It also requires you to list all brokers, dealers and banks where you or a member of your **Family/Household** maintained an account in which <u>any</u> securities (not just **Covered Securities**) were held for the direct or indirect benefit of you or a member of your **Family/Household** on December 31 of the prior year.

You will be required to confirm that you have read and understand this Code, that you understand that it applies to you and members of your **Family/Household** and that you understand that you are an **Access Person** under the Code.

4.  **<u>Duplicate</u> <u>Confirmations</u> <u>and</u> <u>Periodic</u> <u>Statements/</u> <u>Electronic</u> <u>Data</u> <u>Feed</u> <u>to the</u> <u>Firm's</u> <u>Automated</u> <u>Compliance</u> <u>System.</u> If you or any member of your Family/Household has a securities account that <u>holds</u> <u>or</u> <u>will hold</u> Covered Securities with any broker, dealer, investment manager or bank, you or your Family/Household member will need to coordinate with the compliance department for the broker, dealer, investment manager or bank to provide an electronic datafeed of the account and its activity into the Firm's automated compliance system.** 

Should an electronic data feed not be available, the account will need to be closed, you must select a broker from the Firm's list of firms that have electronic feed capability with the Firm's automated compliance system and after opening an account(s), transfer all **Covered Securities** from the account to be closed into the new account(s). For new employees, <u>this</u> <u>must</u> <u>be completed</u> <u>within</u> <u>60</u> <u>days</u> <u>of hire.</u> Hard copy statements and confirmations will need to be forwarded to the compliance department for 1) the new account(s) until the data feed is active, and 2) the old account(s) until such time as they are closed. Current employees with accounts existing prior to November 23, 2021, that do not have datafeed capability are grandfathered.

5. **Outside Business Activities Pre-Approval and Annual Certification**. By January 31<sup>st</sup> of each year, you must file with the **Chief Compliance Officer** an Outside Business Activity Annual Affirmation within the Firm's automated compliance system.

The Affirmation requires that you list <u>all entities</u> (for-profit, not-for-profit or other) with which you are involved (e.g. employee, consultant, officer, member of board, investment committee, etc.) as of the previous year-end with an indication as to whether the entity is publicly traded or private and whether it maintains investments.

The Outside Business Activity electronic form is also to be used in requesting pre-approval to serve as an Officer or member of the Board of Directors for <u>any</u> <u>entity</u> ***prior*** to accepting such a position.

B.  **<u>Transaction</u> <u>Restrictions--These</u> <u>Apply to All</u> <u>Access</u> <u>Persons.</u>** 

1.  **<u>Preclearance.</u> You and members of your Family/Household are prohibited from engaging in any transaction in a Covered Security for any account in which you or a member of your Family/Household has any Beneficial Ownership , unless you obtain, in advance of the transaction, *preclearance for that transaction through the automated compliance system*.** 

Once obtained, preclearance is valid only for the day on which it is granted and the following one (1) business day. The **Chief Compliance Officer** may revoke a preclearance any time after it is granted and before you execute the transaction. The **Chief Compliance Officer** may deny or revoke preclearance for any reason. In no event will preclearance be granted for any **Covered Security** if, to the knowledge of the **Chief Compliance Officer**, the Firm has purchased or sold that same security or a closely related security that day OR the Firm has a buy or sell order pending for that same security or a closely related security (such as an option relating to that security, or a related convertible or exchangeable security).

### a.) Limit Orders
Limit Orders will be granted pre-clearance authorization to be placed for a period of ten (10) business days as long as the security is NOT HELD within one of the firm's strategies and will not potentially violate short-term trading restrictions.

· Any change you wish to make to an approved limit order (e.g. limit price) will require a new pre-clearance authorization prior to execution. Unapproved changes to a limit order which are executed will be a violation of the Code and subject to fines and/or sanctions

· Upon such time as the firm may begin to trade and hold a previously approved outstanding limit order security within one of the firm's strategies you will be notified to cancel the limit order. Any desire to trade the security, after a notification to cancel a limit order is given to you, will require a new pre-clearance form and associated authorization. Execution of the original limit order for which notification to cancel hasbeen given will be a violation of the Code and subject to fines and/or sanctions.

### b.) Preclearance Exceptions
The preclearance requirements <u>do not</u> apply to the following categories of transactions:

i. Shares of registered open-end investment companies (mutual funds only, see ETFs at iv) (including **Reportable Funds**).

· *However , **Reportable Funds** <u>are reportable</u> under this code in connection with Initial, Quarterlyand Annual disclosures.* 

ii. Transactions in securities of collective investment vehicles (other than **a Fund/ETF sub-advised by Vaughan Nelson**) for which the Firm serves as the investment adviser (for example, the purchase or redemption by you of an interest in a Firm-managed hedge fund would <u>not</u> be subject to pre-clearance).

iii. Transactions in **Covered Securities** by Firm- sponsored collective investment vehicles for which the Firm serves as investment adviser as to which you may be deemed to have **Beneficial Ownership** (for example, the purchase or sale by a Firm-managed hedge fund of a **Covered Security** would not be subject to pre-clearance, even though the portfolio manager of the hedge fund could be deemed to have a **Beneficial Ownership** of such **Covered Security**).

iv. Exchange Traded Funds (ETFs); other than those ETFs in which the firm trades, or advises/sub-advises.  **<u>Please</u> <u>see "Appendix</u> <u>A"</u> <u>(attached)</u> <u>for</u> <u>a list</u> <u>of</u> <u>Exchange Traded Funds for which pre-clearance IS</u> <u>required</u>** .

v. Transactionsthat occur by operation of law or under any other circumstance in which neither the **Access Person** nor any member of his or her **Family/Household** exercises any discretion to buy or sell or makes recommendations to a person who exercises such discretion.

vi. Transactions effected through an unaffiliated managed account are excluded only if the **Access Person** (or member of his or her **Family/Household**, as applicable) has not initiated the investment transaction, has not been consulted regarding any specific investment recommendations or decisions, and is not otherwise participatingin the account's investment process.

vii. Purchases of **Covered Securities** pursuant to an automatic dividend reinvestment plan.

viii. Purchases pursuant to the exercise of rights issued pro rata to all holders of the class of **Covered Securities** held by the **Access Person** (or **Family/Household** member) and received by the **Access Person** (or **Family/Household** member) from the issuer.

ix. Transactions in futures and options contracts on interest rate instruments or indexes, and options on such contracts.

c.) The following are NOT **Covered Securities,** and so are also not subject to the preclearance requirements:

· direct obligations of the U.S. Government;

· bankers' acceptances, bank certificates of deposit;

· commercial paper and other high quality short-term debt obligations (including repurchase agreements);

· shares issued by money market funds and shares of registered open-end investment companies that are *<u>not</u>* **Reportable Funds**.

2.  **<u>Initial</u> <u>Public</u> <u>Offerings</u> <u>and</u> <u>Private</u> <u>Placements.</u>** 

Neitheryou nor any member of your **Family/Household** may acquire any **Beneficial Ownership** in any **Covered Security** in an initial public offering. In addition, neither you nor any member of your **Family/Household** may acquire **Beneficial Ownership** in any **Covered Security** in a private placement, except with the specific, advance approval of the **Chief Compliance Officer**, which the **Chief Compliance Officer** may deny for any reason.

3.  **<u>Prohibition on Short-Term Trading in Funds/ETFs</u> <u>Advised/Sub-advised</u> <u>by Vaughan</u> <u>Nelson</u>** 

Neither you nor any member of your **Family/Household** may purchase and sell, or sell and purchase, shares of any fund advised or sub-advised by Vaughan Nelson within any period of thirty (30) calendar days <u>for</u> <u>a</u> <u>profit</u> . This prohibition applies to shares of funds advised / sub-advised by Vaughan Nelson held in retirement or 401(k) plan accounts, as well as in other accounts in which you or a member of your **Family/Household** has **Beneficial Ownership**. Note that an exchange of shares (i.e. into another retirement plan option) counts as a sale of shares for purposes of this prohibition.

a.) This prohibition <u>does</u> <u>not</u> apply to the following categories of transactions:

i. A fund sub-advised by an affiliate and on the **Reportable Funds** list.

ii. Transactions under automatic investment or withdrawal plans, including automatic 401(k) plan investments, and transactions under a "fund sub- advised by Vaughan Nelson's" dividend reinvestment plan.

A.) For example, if you have established an automatic investment plan under which regular monthly investments are automatically made in a fund sub-advised by Vaughan Nelson, that investment will not be considered to begin or end a thirty (30) day holding period.

iii. Transactions that occur by operation of law or under any other circumstance in which neither you nor any member of your **Family/Household** exercises any discretion to buy or sell or makes recommendations to a person who exercises such discretion.

b.) In applying the prohibition on short-term trading in **funds advised/sub-advised by Vaughan Nelson**, the Firm may take account of all purchase and sale transactions in the Vaughan Nelson advised/sub-advised fund, even if the transactions were made in different accounts. For example, a purchase of shares of a fund advised/sub-advised by Vaughan Nelson in a brokerage account, followed within thirty (30) days by an exchange out of the same fund advised/sub- advised by Vaughan Nelson in your 401(k) account, will be treated as a violation.

In applying the thirty (30) day holding period, the most recent purchase (or sale) will be measured against the sale (or purchase) in question. (That is, a last-in, first-out analysis will apply.) A violation will be deemed to have occurred even if the number of shares or the dollar value of the second trade was different from the number of shares or dollar value of the first trade.

**4.** **Prohibition on Short-Term Trading of Covered Securities Other Than Funds/ETFs Advised/Sub-advised by Vaughan Nelson.** 

Neither you nor anymember of your **Family/Household** may purchase and sell, or sell and purchase, a **Covered Security** (or any closely related security, such as an option or a related convertible or exchangeable security) within any period of sixty (60) calendar days <u>for</u> <u>a</u> <u>profit</u>. If any such transactions occur, the Firm will require any profits from the transactions to be disgorged for donation by the Firm to charity.

a.) This prohibition on short-term trading <u>does</u> <u>not</u> apply to:

i. Transactions in securities of collective investment vehicles for which the Firm serves as an investment adviser, other than **funds advised/sub-advised by Vaughan Nelson**. Note that Section 3 above contains separate prohibitions on short-term trading in **funds advised/sub-advised by Vaughan Nelson**.

ii. Transactions in **Covered Securities** by Firm- sponsored collective investment vehicles for which the Firm serves as investment adviser as to which you may be deemed to have **Beneficial Ownership** (for example, the purchase or sale by a Firm-managed hedge fund of a **Covered Security** would not be subject to this prohibition, even though the portfolio manager of the hedge fund could be deemed to have a **Beneficial Ownership** of such **Covered Security**).

iii. Transactions that occur by operation of law or under any other circumstance in which neither you nor any member of your **Family/Household** exercises any discretion to buy or sell or makes recommendations to a person who exercises such discretion.

iv. Purchases of **Covered Securities** pursuant to an automatic dividend reinvestment plan.

v. Purchases pursuant to the exercise of rights issued pro rata to all holders of the class of Covered Securities and received by you (or **Family/Household** member) from the issuer.

vi. Transactions in common or preferred stocks of a class that is publicly-traded, has an average daily trading volume greater than 1 million shares (as indicated by a reputable source)  **<u>and</u>** is issued by a company with a stock market capitalization of at least 5 billion U.S. dollars (or the equivalent in foreign currency)

vii. Transactions in Exchange Traded Funds which are considered Covered Securities.

viii. Transactions effected through an unaffiliated managed account where the **Access Person** (or member of his or her **Family/Household**, as the case may be) has not initiated the investment transaction, has not been consulted regarding specific investment recommendations or decisions, and is not otherwise participating in the investment process.

ix. Transactions in municipal bonds, corporate bonds, mortgage-backed securities, and agency bonds (e.g. Fannie Mae's). (Reminder: Governments bonds are not considered **Covered Securities**).

5.  **<u>Seven</u> <u>(7) Day</u> <u>Blackout</u> <u>Period--This</u> <u>Applies</u> <u>to</u> <u>All</u> <u>Access</u> <u>Persons.</u> No Access Person (including any member of the Family/Household of such Access Person) may purchase or sell any Covered Security within the three (3) business days immediately before or after a business day on which any client account managed by the Firm purchases or sells that Covered Security (or any closely related security, such as an option or a related convertible or exchangeable security), unless the Access Person had no actual knowledge that the Covered Security (or any closely related security) was being considered for purchase or sale for any client account. If any such transactions occur, the Firm will generally require any profits from the transactions to be disgorged for donation by the Firm to charity.** 

Note that the total blackout period is seven (7) business days (the day of the client trade, plus three (3) business days before and three (3) business days after).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.) Hardship Exception: to the extent an individual desires to purchase, or sell a security currently owned by that individual, and is only precluded from purchasing or selling the security due to an ongoing blackout period, the individual may request a 'hardship exception' from the **Chief Compliance Officer**. Based upon all facts and circumstances surrounding the hardship, the **Chief Compliance Officer** may, in his/her sole discretion, formulate an objective plan to facilitate the individual's transaction in a manner which will not benefit from or impact transactions undertaken on behalf of the firm's clients.

b.) Backside Blackout Period: The Firm will review situations where a personal trade has been approved (including a review of the frontside blackout period) and transacted and then the same Covered Security (or any closely related security, such as an option or a related convertible or exchangeable security) subsequently transacted by the Firm for client accounts during the backside blackout period. To the extent the Firm's transactions during the backside blackout period consisted of 're-balancing' or 'flow' trades, no violation will have been deemed to occur.

c.) It sometimes happens that an **Access Person** who is responsible for making investment recommendations or decisions for client accounts (such as a portfolio manager or analyst) determines-- within the three (3) business days after the day he or she (or a member of his or her **Family/Household**) has purchased or sold for his or her own account a **Covered Security** that was not, to the **Access Person**'s knowledge, then under consideration for purchase by any client account--that it would be desirable for client accounts as to which the **Access Person** is responsible for making investment recommendations or decisions to purchase or sell the same **Covered Security** (or a closely related security). In this situation, the **Access Person** MUST put the clients' interests first, and promptly make the investment recommendation or decision in the clients' interest, rather than delaying the recommendation or decision for clients until after the third day following the day of the transaction for the **Access Person**'s (or **Family/Household** member's) own account to avoid conflict with the blackout provisions of this Code. The Firm recognizes that this situation may occur entirely in good faith, and will not require disgorgement of profits in such instances if it appears that the **Access Person** acted in good faith and in the best interests of the Firm's clients.

d.) The blackout requirements <u>do</u> <u>not</u> apply to the following categories of transactions:

i. Transactions in futures and options contracts on interest rate instruments or indexes, and options on such contracts.

ii. Transactions that occur by operation of law or under any other circumstance in which neither the **Access Person** nor any member of his or her **Family/Household** exercises any discretion to buy or sell or makes recommendations to a person who exercises such discretion.

iii. Transactions effected through an unaffiliated managed account are excluded only if the **Access Person** (or member of his or her **Family/Household**, as applicable) has not initiated the investment transaction, has not been consulted regarding any specific investment recommendations or decisions, and is not otherwise participating in the account's investment process.

iv. Purchases of **Covered Securities** pursuant to an automatic dividend reinvestment plan.

v. Purchases pursuant to the exercise of rights issued pro rata to all holders of the class of **Covered Securities** held by the **Access Person** (or **Family/Household** member) and received by the **Access Person** (or **Family/Household** member) from the issuer.

vi. Transactions in securities of collective investment vehicles for which the Firm serves as the investment adviser.

vii. **Transactions in Covered Securities by Firm- sponsored collective investment vehicles for which the Firm serves as investment adviser as to which the Investment Person may be deemed to have Beneficial Ownership** 

viii. **Transactions in common or preferred stocks of a class that is publicly-traded, has an average daily trading volume greater than 1 million shares (as indicated by a reliable source) <u>AND</u> is issued by a company with a stock market capitalization of at least 5 billion U.S. dollars (or the equivalent in foreign currency). Day of trade blackout is still applicable.** 

ix. **Transactions in Exchange Traded Funds which are considered Covered Securities. Day of trade blackout is still applicable.** 

x. **Reportable Funds (other than ETFs advised/subadvised by the Firm).** 

### Definitions
These terms have special meanings in this Code of Ethics:

### Access Person Beneficial Ownership

### Chief Compliance Officer Covered Security Family/Household Non-Access Director

### Reportable Fund
The special meanings of these terms as used in this Code of Ethics are explained below. Some of these terms (such as "beneficial ownership") are sometimes used in other contexts, not related to Codes of Ethics, where they have different meanings. For example, "beneficial ownership" has a different meaning in this Code of Ethics than it does in the SEC's rules for proxy statement disclosure of corporate directors' and officers' stockholdings, or in determining whether an investor has to file 13D or 13G reports with the SEC.

### IMPORTANT: If you have any doubt or question about whether an investment, account or person is covered by any of these definitions, ask the Chief Compliance Officer. Don't just guess at the answer.

### Access Person includes:
· **Every member of the board of the Firm or of the Firm's general partner, Vaughan Nelson Investment Management, Inc., other than Non-Access Directors** 

· Every employee of the Firm

· Every employee of the Firm (or of any company that directly or indirectly has a 25% or greater interest in the Firm) who, in connection with his or her regular functions or duties, makes, participates in or obtains information regarding the purchase or sale of a **Covered Security** for any client account, or whose

### Beneficial ownership means any opportunity, directly or indirectly, to profit or share in the profit from any transaction in securities. It also includes transactions over which you exercise investment discretion (other than for a client of the Firm), even if you don't share in the profits.

### Beneficial Ownership is a very broad concept. Some examples of forms of

### Beneficial Ownership include:
· Securities held in a person's own name, or that are held for the person's benefit in nominee, custodial or "street name" accounts.

· Securities owned by or for a partnership in which the person is a general partner (whether the ownership is under the name of that partner, another partner or the partnership or through a nominee, custodial or "street name" account).

· Securities that are being managed for a person's benefit on a discretionary basis by an investment adviser, broker, bank, trust company or other manager, <u>unless</u> the securities are held in a "blind trust" or similar arrangement under which the person is prohibited by contract from communicating with the manager of the account and the manager is prohibited from disclosing to the person what investments are held in the account. (Just putting securities into a discretionary account is not enough to remove them from a person's **Beneficial Ownership**. This is because, unless the arrangement is a "blind trust," the owner of the account can still communicate with the manager about the account and potentially influence the manager's investment decisions.)

· Securities in a person's individual retirement account.

· Securities in a person's account in a 401(k) or similar retirement plan, even if the person has chosen to give someone else investment discretion over the account.

· Securities owned by a trust of which the person is either a trustee or a beneficiary .

· Securities owned by a corporation, partnership or other entity that the person controls (whether the ownership is under the name of that person, under the name of the entity or through a nominee, custodial or "street name" account).

This is not a complete list of the forms of ownership that could constitute **Beneficial Ownership** for purposes of this Code. You should ask the **Chief Compliance Officer** if you have any questions or doubts at all about whether you or a member of your **Family/Household** would be considered to have **Beneficial Ownership** in any particular situation.

### Chief Compliance Officer means Carlos Gonzalez, or another person that he or she designates to perform the functions of Chief Compliance Officer when he or she is not available. For purposes of reviewing the Chief Compliance Officer's own transactions and reports under this Code, the functions of the Chief Compliance Officer are performed by the individual designated to perform such functions by the Chief Compliance Officer .

### Covered Security means anything that is considered a "security" under the Investment Company Act of 1940, or the Investment Advisers Act of 1940, except :
· Direct obligations of the U.S. Government. (Note: This includes only securities supported by the full faith and credit of the U.S. Government, such as U.S. Treasury bonds, and does not include securities issued or guaranteed by federal agencies or government- sponsored enterprises that are not supported by the full faith and credit of the U.S. Government.)

· Bankers' acceptances, bank certificates of deposit, commercial paper and high quality short-term debt obligations, including repurchase agreements.

· Shares of money market funds

· Exchange Traded Funds (ETFs), (other than those ETFs in which the firm trades). Please see "Appendix A" (attached) for a list of Exchange Traded Funds which **ARE** considered Covered Securities.

· **Shares of <u>open-end</u> investment companiesthat are registered under the Investment Company Act (mutual funds) <u>other</u> <u>than</u> Reportable Funds . Please refer to the definition of and current listing of Reportable Funds.** 

This is a very broad definition of security. It includes most kinds of investment instruments, including things that you might not ordinarily think of as "securities," such as:

· options on securities, on indexes and on currencies.

· investments in all kinds of limited partnerships.

· investments in foreign unit trustsand foreign mutual funds.

· investments in private investment funds, hedge funds (e.g., a fund managed by the Firm) and investment clubs.

If you have any question or doubt about whether an investment is considered a security or a **Covered Security** under this Code, <u>ask</u> <u>the</u> **<u>Chief</u> <u>Compliance Officer</u>**.

Members of your **<u>Family/Household</u>** include:

· Your spouse or domesticpartner (unless they do not live in the same household as you and you do not contribute in any way to their support).

· Your children under the age of 18.

· Your children who are 18 or older (unless they do not live in the same household as you and you do not meaningfully contribute in any way to their support).

· Any of these people who live in your household: your stepchildren, grandchildren, parents, stepparents, grandparents, brothers, sisters, parents-in-law, sons-in-law, daughters-in-law, brothers-in-law and sisters-in-law, including adoptive relationships.

Comment--There are a number of reasons why this Code covers transactions in which members of your **Family/Household** have **Beneficial Ownership**. First, the SEC regards any benefit to a person that you help support financially as indirectly benefiting you, because it could reduce the amount that you might otherwise need to contribute to that person's support.

Second, members of your household could, in some circumstances, learn of information regarding the Firm's trading or recommendations for client accounts, and must not be allowed to benefit from that information.

### Non-Access Director means any person who is a director of Vaughan Nelson Trust Company or of the corporate general partner of Vaughan Nelson Investment Management, L.P. but who is not an officer or employee of the Firm or of such corporate general partner and who meets all of the following conditions:
· He or she, in connection with his or her regular functions or duties, does not make, participate in or obtain information regarding the purchase or sale of **Covered Securities** by a registered investment company, and whose functions do not relate to themaking of recommendations with respect to such purchases or sales;

· He or she does not have access to nonpublic information regarding any Firm clients' purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any **Reportable Fund**; and

· He or she is not involved in making securities recommendations to Firm clients, and does not have access to such recommendations that are nonpublic.

### Reportable Fund means any investment companies (other than money market funds) that are registered under the Investment Company Act for which the Firm serves as an investment adviser/sub-adviser, or whose investment adviser or principal underwriter controls the Firm, is controlled
by the Firm, or is under common control with the Firm. A **Reportable Fund** includes registered investment companies that are advised/sub-advised by the Firm or any of the firm's affiliates. See most current listing of **Reportable Funds** maintained by the **Chief Compliance Officer.** 

### Comment Regarding Reportable Funds

### Reportable Funds are mutual funds/ETFs for which the Firm or one of its affiliated companies serves as an investment adviser, sub- adviser or principal underwriter. Reportable Funds are included within the definition of Covered Securities. For a firm like ours that is part of a large organization where there are a number of firms under common control that advise, sub-advise or distribute mutual funds/ETFs, the universe of Reportable Funds is large.

### Appendix A

### Personal Trading – Revised 06/30/22
**A.**  **List of Exchange Traded Funds (ETFs) in which Vaughan Nelson Invests (<u>preclearance is required)</u>:** 

IWN, I-Shares Russell 2000 Value

IWM, I-Shares Russell 2000 Index

IVV, I-Shares S&P 500 Index Fund

IWD, I-Shares Russell 1000 Value IWV, I-Shares Russell 3000 Index

IWS, I-Shares Russell Midcap Value

IWB, I-Shares Russell 1000

IWR, I-Shares Russell Midcap

IYH, I-Shares U.S. Healthcare

SUB, I-Shares Short-Term National AMT-Free Muni Bond

MUB, I-Shares S&P National AMT-Free Muni Bond

AAXJ, I-Shares MSCI All Country Asia ex Japan

ILF, I-Shares S&P Latin America 40

AGG, I-Shares Core Total US Bond Market ETF

EWY, I-Shares MSCI South Korea ETF

INDA, I-Shares MSCI India

OEF, I-Shares S&P 100 ETF

IGIB, I-Shares 5-10 Yr Investment Grade Corp Bond ETF

MGC, Vanguard Mega Cap 300

VO, Vanguard Mid-Cap

BSV, Vanguard Short-Term Bond

VCSH, Vanguard Short-Term Corporate Bond

VGSH, Vanguard Short-Term Government Bond

BIV, Vanguard Intermediate-Term Bond

VCIT, Vanguard Intermediate-Term Corporate Bond

ISTB, I-Shares Core 1-5 Year USD Bond ETF

SHM, SPDR Nuveen Capital Short Term Muni Bond

MUNI, PIMCO Intermediate Muni Bond Strategy

AMLP, Alerian MLP ETF

**B.** **List of Exchange Traded Funds (ETFs) for which Vaughan Nelson is the Advisor/Sub-advisor (subject to preclearance, blackout, and Fund/ETF 30-day S/T trading restriction) :** 

VNSE, Vaughan Nelson Select Equity

VNMC, Vaughan Nelson Mid Cap

## Ex-99.(P)(31)

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**Code of Ethics for Victory Capital Management Inc. and WestEnd Advisors, LLC**

**Code of Ethics for Victory Capital Management Inc.**

**and WestEnd Advisors, LLC**

**Effective January 1, 2022**

**Previously updated: June 1, 2021**

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| | | |
|:---|:---|:---|
|  **Code of Ethics for Victory Capital Management Inc. and WestEnd Advisors, LLC** | **Code of Ethics for Victory Capital Management Inc. and WestEnd Advisors, LLC** | **January 1, 2022** |
| 1. | &nbsp;&nbsp;&nbsp; **Introduction ......................................................................................................................................** | **1** |
| 2. | &nbsp;&nbsp;&nbsp; **Definitions.........................................................................................................................................** | **2** |
| 3. | &nbsp;&nbsp;&nbsp; **Culture of Compliance.....................................................................................................................** | **4** |
| 4. | &nbsp;&nbsp;&nbsp; **Policy Statement on Insider Trading..............................................................................................** | **5** |
| &nbsp;&nbsp;&nbsp;&nbsp;A. Introduction ........................................................................................................................................... | &nbsp;&nbsp;&nbsp;&nbsp;A. Introduction ........................................................................................................................................... | **5** |
| &nbsp;&nbsp;&nbsp;&nbsp;B. Scope of the Policy Statement.............................................................................................................. | &nbsp;&nbsp;&nbsp;&nbsp;B. Scope of the Policy Statement.............................................................................................................. | **5** |
| &nbsp;&nbsp;&nbsp;&nbsp;C. What is Material Information? ............................................................................................................... | &nbsp;&nbsp;&nbsp;&nbsp;C. What is Material Information? ............................................................................................................... | **5** |
| &nbsp;&nbsp;&nbsp;&nbsp;D. What is Non-Public Information? .......................................................................................................... | &nbsp;&nbsp;&nbsp;&nbsp;D. What is Non-Public Information? .......................................................................................................... | **6** |
| &nbsp;&nbsp;&nbsp;&nbsp;E. Identifying Inside Information ................................................................................................................ | &nbsp;&nbsp;&nbsp;&nbsp;E. Identifying Inside Information ................................................................................................................ | **6** |
| &nbsp;&nbsp;&nbsp;&nbsp;F. Contact with Public Companies ............................................................................................................ | &nbsp;&nbsp;&nbsp;&nbsp;F. Contact with Public Companies ............................................................................................................ | **7** |
| &nbsp;&nbsp;&nbsp;&nbsp;G. Tender Offers ........................................................................................................................................ | &nbsp;&nbsp;&nbsp;&nbsp;G. Tender Offers ........................................................................................................................................ | **7** |
| &nbsp;&nbsp;&nbsp;&nbsp;H. Protecting Sensitive Information ........................................................................................................... | &nbsp;&nbsp;&nbsp;&nbsp;H. Protecting Sensitive Information ........................................................................................................... | **7** |
| &nbsp;&nbsp;&nbsp;&nbsp;I. | **Trading in Securities Listed on Exchanges in Other Countries ............................................................** | **7** |
| &nbsp;&nbsp;&nbsp;&nbsp;J. | **Public Company Confidential Records .................................................................................................** | **7** |
| 5. | &nbsp;&nbsp;&nbsp; **Conflicts of Interest..........................................................................................................................** | **8** |
| &nbsp;&nbsp;&nbsp;&nbsp;A. Gifts and Entertainment ........................................................................................................................ | &nbsp;&nbsp;&nbsp;&nbsp;A. Gifts and Entertainment ........................................................................................................................ | **8** |
| &nbsp;&nbsp;&nbsp;&nbsp;B. Political Contributions ........................................................................................................................... | &nbsp;&nbsp;&nbsp;&nbsp;B. Political Contributions ........................................................................................................................... | **9** |
| &nbsp;&nbsp;&nbsp;&nbsp;C. Outside Business Activities................................................................................................................. | &nbsp;&nbsp;&nbsp;&nbsp;C. Outside Business Activities................................................................................................................. | **10** |
| &nbsp;&nbsp;&nbsp;&nbsp;D. Other Prohibitions on Conduct............................................................................................................ | &nbsp;&nbsp;&nbsp;&nbsp;D. Other Prohibitions on Conduct............................................................................................................ | **11** |
| &nbsp;&nbsp;&nbsp;&nbsp;E. Review of Employee Communications ............................................................................................... | &nbsp;&nbsp;&nbsp;&nbsp;E. Review of Employee Communications ............................................................................................... | **11** |
| 6. | &nbsp;&nbsp;&nbsp; **Standards of Business Conduct...................................................................................................** | **12** |
| 7. | &nbsp;&nbsp;&nbsp; **Personal Trading, Code of Ethics Reporting and Certifications...............................................** | **12** |
| &nbsp;&nbsp;&nbsp;&nbsp;A. Employee Investment Accounts ......................................................................................................... | &nbsp;&nbsp;&nbsp;&nbsp;A. Employee Investment Accounts ......................................................................................................... | **12** |
| &nbsp;&nbsp;&nbsp;&nbsp;B. Employee Investment Account Reporting........................................................................................... | &nbsp;&nbsp;&nbsp;&nbsp;B. Employee Investment Account Reporting........................................................................................... | **13** |
| &nbsp;&nbsp;&nbsp;&nbsp;C. Personal Trading Requirements and Restrictions .............................................................................. | &nbsp;&nbsp;&nbsp;&nbsp;C. Personal Trading Requirements and Restrictions .............................................................................. | **14** |
| &nbsp;&nbsp;&nbsp;&nbsp;D. Representation and Warranties .......................................................................................................... | &nbsp;&nbsp;&nbsp;&nbsp;D. Representation and Warranties .......................................................................................................... | **17** |
| &nbsp;&nbsp;&nbsp;&nbsp;E. Quarterly and Annual Certifications of Compliance............................................................................ | &nbsp;&nbsp;&nbsp;&nbsp;E. Quarterly and Annual Certifications of Compliance............................................................................ | **17** |

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| | | |
|:---|:---|:---|
|  **Code of Ethics for Victory Capital Management Inc. and WestEnd Advisors, LLC** | **Code of Ethics for Victory Capital Management Inc. and WestEnd Advisors, LLC** | **January 1, 2022** |
| F. Review Procedures............................................................................................................................. | F. Review Procedures............................................................................................................................. | **18** |
| G. Recordkeeping.................................................................................................................................... | G. Recordkeeping.................................................................................................................................... | **18** |
| H. Whistleblower Provisions .................................................................................................................... | H. Whistleblower Provisions .................................................................................................................... | **18** |
| &nbsp;&nbsp;&nbsp;&nbsp;I. | **Confidentiality......................................................................................................................................** | **18** |
| &nbsp;&nbsp;&nbsp;&nbsp;J. | **Reporting to the Board of Directors of Affiliated Funds ......................................................................** | **18** |
| 8. | **Code of Ethics Violation Guidelines ............................................................................................** | **18** |
| **Appendix 1 – Affiliated Funds, Proprietary Products & Reportable Funds...................................................** | **Appendix 1 – Affiliated Funds, Proprietary Products & Reportable Funds...................................................** | **i** |
| **Appendix 2 – Approved Brokers List ...........................................................................................................** | **Appendix 2 – Approved Brokers List ...........................................................................................................** | **ii** |
| **Appendix 3 – Investment Account Disclosure .............................................................................................** | **Appendix 3 – Investment Account Disclosure .............................................................................................** | **iii** |
| **Appendix 4 – Reportable Securities ...........................................................................................................** | **Appendix 4 – Reportable Securities ...........................................................................................................** | **iv** |
| **Appendix 5 – ETFs Eligible for De Minimis Transaction Exemption ..........................................................** | **Appendix 5 – ETFs Eligible for De Minimis Transaction Exemption ..........................................................** | **vi** |
| **Supplement 1 - RS Investments (Hong Kong) Limited Code of Ethics Supplement ("Hong Kong** | **Supplement 1 - RS Investments (Hong Kong) Limited Code of Ethics Supplement ("Hong Kong** | **Supplement 1 - RS Investments (Hong Kong) Limited Code of Ethics Supplement ("Hong Kong** |
| **Supplement")................................................................................................................................................** | **Supplement")................................................................................................................................................** | **vii** |
| **Supplement 2 - RS Investment Management (Singapore) Pte. Ltd. ("RSIMS") Code of Ethics** | **Supplement 2 - RS Investment Management (Singapore) Pte. Ltd. ("RSIMS") Code of Ethics** | **Supplement 2 - RS Investment Management (Singapore) Pte. Ltd. ("RSIMS") Code of Ethics** |
| **Supplement ("Singapore Supplement") ........................................................................................................** | **Supplement ("Singapore Supplement") ........................................................................................................** | **x** |

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|  **Code of Ethics for Victory Capital Management Inc. and WestEnd Advisors, LLC** | &nbsp;&nbsp;&nbsp;&nbsp; **January 1, 2022** |

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1. INTRODUCTION

Rule 204A-1 of the Investment Advisers Act of 1940 ("Advisers Act") requires all investment advisers registered with the Securities and Exchange Commission ("SEC") to adopt codes of ethics that set forth standards of conduct and require compliance with federal securities laws. Victory Capital Management Inc. ("VCM") and WestEnd Advisors, LLC ("WestEnd") are both registered investment advisers under the Advisers Act and also both wholly owned subsidiaries of Victory Capital Holdings, Inc. ("VCH"). WestEnd and VCM, together with VCM's subsidiaries, RS Investments (UK) Limited, RS Investments (Hong Kong) Limited, and RS Investment Management (Singapore) Pte. Ltd. (collectively the "Affiliated Advisers"), have adopted this Code of Ethics ("Code"), which sets forth the standards of business conduct that are required of Access Persons. As an adviser to regulated investment companies, VCM also adopts this Code in adherence to Rule 17j-1<sup>1</sup> under the Investment Company Act of 1940, as amended (the "Investment Company Act"). Officers and employees of RS Investments (Hong Kong) Limited and RS Investment Management (Singapore) Pte. Ltd. should also review the related Code supplements.

VCH is a Delaware corporation with its Class A common stock listed on the NASDAQ Global Select Market, under the ticker symbol "VCTR." As a public company, compliance policies were adopted that apply to VCH and the Affiliated Advisers (collectively "Victory Capital'). The VCH policies are in addition to the compliance program of the Affiliated Advisers. In particular, the policies that apply to Victory Capital include:

(1)Code of Business Conduct and Ethics, (2) Corporate Communications Policy and (3) Insider Trading Policy. Affiliated Advisers make these policies readily available to their Access Persons.

Victory Capital Services, Inc. ("VCS"), a Victory Capital affiliate, is a registered broker-dealer and principal underwriter of VCM's Affiliated Funds (defined herein) and has adopted this Code in compliance with Rule 17j-1 under the Investment Company Act. Victory Capital Transfer Agent, Inc., also a Victory Capital affiliate, is the registered transfer agent for the USAA Mutual Funds and certain Victory Funds. Certain Access Persons service USAA Mutual Fund direct accounts through a dedicated Contact Center. Victory Capital is not affiliated with United Services Automobile Association ("USAA") or its affiliates.

Access Persons have a responsibility to adhere to the highest ethical principles. Thus, the Code imposes obligations in addition to those required under applicable laws and regulations. The Code is a minimum standard of conduct. Additionally, Access Persons must act in accordance with their fiduciary duty owed to Affiliated Adviser clients. Therefore, literal compliance with the Code will not protect an Access Persons if their behavior otherwise violates their fiduciary duty. If an Access Person is uncertain as to the intent or purpose of any provision of the Code, or whether a proposed action is compatible with their fiduciary duty, they should consult the appropriate Affiliated Adviser Chief Compliance Officer ("CCO") or a member of the Compliance team.

The Affiliated Advisers recognize the importance of an Access Person's ability to manage and develop their own and their dependents' financial resources through long-term investments and strategies. However, because of the potential conflicts of interest inherent in our business and our industry, the Affiliated Advisers have implemented certain standards and limitations designed to minimize these conflicts.

Victory Capital's reputation is of paramount importance; therefore, the Affiliated Advisers will not tolerate blemishes due to careless personal trading or other conduct prohibited by the Code. Consequently, Material Violations (as defined herein) of the Code may be subject to harsh sanctions. Frequent violations of the Code may result in limitations on personal securities trading or other disciplinary actions, which can include termination of employment.

**1**Rule 17j-1 requires that fund advisers adopt written codes of ethics and have procedures in place to prevent their personnel from abusing their access to information about the fund's securities trading and requires "access persons" to submit reports periodically containing information about their personal securities holdings and transactions.

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2. DEFINITIONS

**<u>"Access Person"</u>** means any employee of VCM. It also includes anyone deemed an Access Person by a CCO. As a matter of practice, the Board of Directors of the USAA Mutual Funds Trust, Victory Portfolios, Victory Portfolios II and Victory Variable Insurance Funds (collectively the "Victory Funds") generally consists of members who are not employees or officers of Victory Capital, or their affiliates. Unless designated by the COO, a non-employee director is not treated as an "access person" within the meaning of Rule 204A-1 under the Advisers Act and is not treated as either an "access person" or an "advisory person" of VCM.

<u>"Affiliated Funds"</u> means any individual series portfolio of the USAA Mutual Funds Trust, Victory Portfolios, Victory Portfolios II and Victory Variable Insurance Funds, as well as other sub-advised affiliates listed in Appendix 1, each an investment company registered under the Investment Company Act.

"<u>Automatic or Periodic Investment Plan"</u> is a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An Automatic Investment Plan includes a dividend reinvestment plan.

<u>"Beneficial Interest"</u> means the opportunity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, to profit, or share in any profit derived from, a transaction in the subject Securities. An Access Person is deemed to have a Beneficial Interest in securities owned by members of his or her Immediate Family. Common examples of Beneficial Interest include joint accounts, spousal accounts (including Non-Victory Capital Employee Compensation Programs, Non-Victory Capital Employee Stock Participation Program, and Employer-Sponsored Retirement Plan Accounts), Uniform Transfers to Minors Act accounts, partnerships, trusts and controlling interests in corporations. Any uncertainty as to whether an Access Person has a Beneficial Interest in a Security should be brought to the attention of the Compliance Department. Such questions will be resolved in accordance with, and this definition shall be interpreted in a manner consistent with, the definition of "beneficial owner" set forth in Rules 16a-1(a)(2) and (5) promulgated under the Securities Exchange Act of 1934.

<u>"Blackout Period"</u> means seven (7) calendar days before through three (3) calendar days after the date a client trade is executed for VCM or the month in which a security is added to the Securities Under Consideration list for WestEnd.

<u>"Business Entertainment"</u> includes any social event, hospitality event, charitable event, sporting event, entertainment event, meal, leisure activity or event of like nature or purpose, and any transportation or lodging accompanying or related to such activity or event, including any entertainment activity offered in connection with an educational event or business conference, irrespective of whether any business is conducted during, or is attendant to, such activity.

<u>"Covered Government Official</u>" means a 1) state or local governmental official; 2) candidate for state or local office; or 3) federal candidate currently holding state or local office. A governmental "official" includes an incumbent, candidate, or successful candidate for elective office of a state or local government entity, if the office is directly or indirectly responsible for, or can influence the outcome of, the hiring of an investment adviser, or has authority to appoint any person who is directly or indirectly responsible for, or can influence the outcome of, the hiring of an investment adviser, by a state or a political subdivision of a state.

"De Minimis Security" means a security of an issuer with a market cap of $10 Billion or more at the time of purchase, In certain situations, a client trade in a De Minimis Security may not trigger a Blackout Period (see Section 7.C. Personal Trading Requirements and Restrictions for more detailed information). Personal Trades in De Minimis Securities in Personal Accounts always require pre-clearance and are subject to all other provisions of the Code.

<u>"Exempt Securities"</u> means 1) direct obligations of the U.S. Government; 2) bankers' acceptances, bank certificates of deposit and commercial paper; 3) investment grade, short-term debt instruments, including repurchase agreements; 4) shares held in money market funds; 5) variable insurance products that invest

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in funds for which an Affiliated Adviser does not act as adviser or sub-adviser; 6) open-end mutual funds for which an Affiliated Advisers does not act as adviser or sub-adviser; and 7) investments in qualified tuition programs ("529 Plans"). Exempt Securities do not need to be pre-cleared.

<u>"Franchise"</u> means a group of employees who report directly or indirectly to the same Chief Investment Officer that oversees a brand-named strategy

"<u>Immediate Family</u>" means all family members who share the same household, including but not limited to, a spouse, domestic partner, fiancée, parents, grandparents, children, grandchildren, siblings, step-siblings, step-children, step-parents, or in-laws. Immediate Family includes adoptive relationships and any other relationships (whether or not recognized by law) that a CCO determines could lead to conflicts of interest, diversions of corporate opportunity or create the appearance of impropriety.

"<u>Initial Holdings Report</u>" is a report that discloses all securities holdings of every Access Person, which must be submitted to the Compliance Department within ten (10) calendar days of becoming an Access Person.

"<u>Initial Public Offering" or "IPO"</u> means an offering of securities registered under the Securities Act of 1933, the issuer of which, immediately before such registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the 1934 Act.

<u>"Managed Accounts"</u> means investment advisory or brokerage accounts over which an Access Person has no direct or indirect influence or control in the investment decisions or activities.

"<u>Material Non-Public Information" or "MNPI" means information that is both material and non-public</u> that might have an effect on the market for a security. Access Persons who possess MNPI must not act or cause others to act on such information.

<u>"Material Violation"</u> means any violation of this Code or other misconduct deemed material by a CCO, in conjunction with the Compliance Committee or the VCM Board of Directors.

"<u>Maximum Allowable Trades</u>" means Access Persons are limited to 20 trades per calendar quarter across their Personal Accounts. A trade in the same security in multiple accounts on the same day will count as one trade towards the Maximum Allowable Trades in a quarter. Trades that do not require pre-clearance (i.e. open-end mutual funds, dividend reinvestments) will not count towards the Maximum Allowable Trades.

<u>"MCO"</u> means MyComplianceOffice, which is a web-based compliance system used to track and approve employee personal trading, gifts and entertainment, political contributions, and outside business activities, store policies, and facilitate employee certifications and manage other compliance objectives.

<u>"Personal Account"</u> means an investment account in which an employee retains investment discretion.

"<u>Personal Trading" or "Personal Trades</u>" means trades or transactions by Access Persons in their Personal Accounts.

<u>"Proprietary Product"</u> is a fund or product in which Victory Capital or its employees have an aggregate of 25% or more Beneficial Interest. See Appendix 1 – Affiliated Funds, Proprietary Products & Reportable Funds for more information.

<u>"Reportable Fund"</u> means any investment company registered under the Investment Company Act for which an Affiliated Adviser is an investment adviser or a sub-adviser, or any registered investment company whose investment adviser or principal underwriter controls Victory Capital, is controlled by Victory Capital, or is under common control with Victory Capital. See Appendix 1 – Affiliated Funds, Proprietary Products

&Reportable Funds for more information.

<u>"Reportable Security"</u> means any security that is not an Exempt Security, for which Access persons must submit holdings and transaction reports. See the list of Exempt Securities under Appendix 4, as defined by rule 204A-1 under the Investment Advisers Act of 1940.

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**<u>"RIC"</u>** means a Regulated Investment Company.

<u>"Short-Sell" or "Short-Selling"</u> means the sale of a security that is not owned by the seller. Access Persons may not take a short position in a security. However, mutual funds or ETFs that correspond to the inverse performance of a broad-based index are not considered to be Short-Sales. For example, buying (long) the ProShares Short S&P500 ETF is permitted. Employees may also trade in funds that track a volatility index.

<u>"Solutions Team"</u> means any employee who is a member of the Solutions Platform group, generally involved in passive investments.

"<u>Victory Capital Stock</u>" means securities offered by VCH or any subsidiary through a registration statement that has been declared effective by the SEC (e.g. "VCTR").

3. CULTURE OF COMPLIANCE

The Affiliated Advisers' primary objective is to provide value through investment advisory, sub-advisory and other financial services to a wide range of clients, including governments, corporations, financial institutions, high net worth individuals, pension funds, and retail clients.

The Affiliated Advisers require that all dealings on behalf of existing and prospective clients be handled with honesty, integrity and high ethical standards, and that such dealings adhere to the letter and the spirit of applicable laws, regulations and contractual guidelines. As a general matter, the Affiliated Advisers are fiduciaries that owe their clients a duty of undivided loyalty, and you have a responsibility to act in a manner consistent with this duty. You must actively work to avoid the possibility that the advice or services provided to clients is, or gives the appearance of being, based on your self-interest or the interests of the Affiliated Advisers and not in the clients' best interests. Violations of the Code must be reported promptly to the appropriate CCO or his/her designee.

You must act solely in the best interests of our clients. Statutory and regulatory requirements impose specific responsibilities governing the behavior of personnel in carrying out their responsibilities to clients and you must comply fully with these rules and regulations. Your respective Compliance Department professionals are available to assist you in meeting these requirements.

Since no set of rules can anticipate every possible situation, it is essential that you obtain guidance from the appropriate CCO, Chief Legal Officer ("CLO"), or their designees when you are unsure how to follow these rules in letter and in spirit. It is your responsibility to fully understand and comply with the Code and other applicable policies or seek guidance from a CCO. Technical compliance with the Code and its procedures will not necessarily validate an action. Any activity that compromises the Affiliated Advisers integrity, even if it does not expressly violate a rule, may result in further action from a CCO. In some instances, a CCO holds discretionary authority to apply exceptions under the Code. In a CCO's absence, the CLO may act in his or her place.

The Affiliated Advisers' fiduciary responsibilities apply to a broad range of investment and related activities, including sales and marketing, portfolio management, securities trading, allocation of investment opportunities, client service, operations support, performance measurement and reporting, new product development as well as personal investing activities. These obligations include the duty to avoid material conflicts of interest (and, if this is not possible, to provide full and fair disclosure to clients in communications), to keep accurate books and records, and to supervise personnel appropriately. These concepts are further described in the sections that follow.

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**4. POLICY STATEMENT ON INSIDER TRADING A. Introduction**

The Affiliated Advisers seek to foster a culture of compliance, a reputation for integrity, professionalism and values, and endeavors to protect the confidence and trust placed in us by our clients. To further that goal, this Policy Statement implements procedures to deter the misuse of MNPI in securities transactions.

The term "insider trading" is not defined in the federal securities laws but refers generally to the situation when a person trades while aware of MNPI or communicates MNPI to others in breach of a duty of trust or confidence.

While the law concerning insider trading is not static, it is generally understood that the law prohibits any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Trading by an insider, while aware of MNPI;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Trading by a non-insider, while aware of MNPI, where the information was disclosed to the non-insider in violation of an insider's duty to keep it confidential; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Communicating MNPI to others in breach of a duty of trust or confidence.

Trading securities while in possession of MNPI or improperly communicating that information to others may result in stringent penalties. Criminal sanctions may include fines of up to $5,000,000, twenty years' imprisonment, or both. The civil penalty for a violator may be an amount up to three times the profit (or loss avoided) as a result of the insider trading violation, and a permanent bar from working in the securities industry. Investors may sue and seek to recover damages for insider trading violations.

Regardless of whether a regulatory inquiry occurs, the Affiliated Advisers take seriously any violation of this Policy Statement. Such violations constitute grounds for disciplinary sanctions, up to and including dismissal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B. Scope of the Policy Statement**

This Policy Statement is drafted broadly and will be applied and interpreted in a similar manner. It applies to all Access Persons and to transactions in any security participated in by Immediate Family members of Access Persons or trusts or corporations controlled by Access Persons.

Any questions relating to this Policy Statement should be directed to a CCO or his/her designee. You must notify compliance immediately if you have any reason to believe that a violation of this Policy Statement has occurred or is about to occur.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C. What is Material Information?**

Trading on inside information is not a basis for liability unless the information relied upon is deemed to be material. "Material" information is defined generally as information for which there is a substantial likelihood that a reasonable investor would consider it important in making his or her investment decisions, or information that is reasonably certain to have a substantial effect on the price of a company's securities. If the disclosure of that information would be expected to alter the total mix of information that is publicly available about that company, then the information is considered material. Any questions about whether information is material should be directed to a member of compliance.

Material information often relates to a company's financial results and operations, including, for example, dividend changes, earning results, changes in previously released earnings estimates, significant merger or acquisition proposals or agreements, major litigation, liquidation problems, and

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extraordinary management developments. Information about a company could be material because of its expected effect on a particular class of the company's securities, all of the company's securities, the securities of another company, or the securities of several companies. Material information does not have to relate to a company's business. For example, in Carpenter v. U.S., the Supreme Court considered as material certain information about the contents of a forthcoming newspaper column that was expected to affect the market price of a security. In that case, a reporter for The Wall Street Journal was found criminally liable for disclosing to others the dates that reports on various companies would appear in the Journal and whether those reports would be favorable or not.

D. What is Non-Public Information?

For issues concerning insider trading to arise, information must not only be material, it must also be "non-public". Non-public information is information that has not been made available to investors generally. Information received in circumstances indicating that it is not yet in general circulation or where the recipient knows or should know that the information could only have been provided by an "insider" is also deemed non-public information. For non-public information to become public information, it must be disseminated through recognized channels of distribution designed to broadly reach the securities marketplace.

Facts verifying that the information is public (and therefore has become generally available) may include, for example, and without limitation, disclosure in:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•National business and financial wire service, such as Dow Jones or Reuters;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•National news service or newspaper, such as AP or The Wall Street Journal; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Publicly disseminated disclosure document, such as a proxy statement or prospectus.

The circulation of rumors or "talk on the street", even if accurate, widespread and reported in the media, does not constitute the requisite public disclosure. In addition, the information must not only be publicly disclosed, there must also be adequate time for the market to digest the information. Material non-public information is not made public by selective dissemination. Material information improperly disclosed only to institutional investors or to a fund analyst or a favored group of analysts retains its status as "non-public" information that must not be disclosed or otherwise misused.

Partial disclosure does not constitute public dissemination. So long as any material component of the "inside" information has yet to be publicly disclosed, the information is deemed non-public and may not be misused.

E. Identifying Inside Information

Before executing any Personal Trades or trades for client accounts, Access Persons must determine whether they have access to MNPI. If you believe that you might have access to MNPI, you should take the following steps:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Report the information and proposed trade immediately to a CCO or a member of compliance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Do not purchase or sell the securities as Personal Trades or for clients without written clearance to do so from a CCO or a member of compliance; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Do not communicate the information inside other than to compliance and, if necessary, your direct manager.

A member of the Compliance Department will determine whether the information is material and non- public.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

F. Contact with Public Companies

The Affiliated Advisers contact with public companies may help form the basis of investment decisions. Legal issues may arise if, in the course of these contacts, you become aware of MNPI. This could happen, for example, if a company's chief financial officer were to prematurely disclose quarterly results, or an investor relations representative selectively discloses adverse news to a handful of investors.

G. Tender Offers

Tender offers represent a particular concern in the law of insider trading for two reasons. First, tender offer activity often produces extraordinary gyrations in the price of the target company's securities. Trading during this time is more likely to attract regulatory attention (and produces a disproportionate percentage of insider trading cases). Second, the SEC forbids trading and "tipping" while in possession of MNPI regarding the receipt of a tender offer, the tender offeror, the target company or anyone acting on behalf of either of these parties. You should exercise caution any time you become aware of non-public information relating to a tender offer.

H. Protecting Sensitive Information

You are responsible for safeguarding all confidential information relating to investment research, fund and client holdings, including analyst research reports, investment meeting discussions or notes, and current fund or client transaction information, regardless whether such information is deemed MNPI. Other types of information (for example, marketing plans, employment issues and shareholder identities) may also be confidential and should not be shared with individuals outside the company unless approved by a CCO or an executive officer.

You are expressly prohibited from knowingly spreading any false rumor concerning any company, or any purported market development, that is designed to impact trading in or the price of that company's or any other company's securities, and from engaging in any other type of activity that constitutes illegal market manipulation.

**I.Trading in Securities Listed on Exchanges in Other Countries**

Trading in securities listed on exchanges in other countries is governed by the laws of that country. When trading in such securities, you must ensure compliance with applicable law, which in all relevant cases prohibits trading on the basis of MNPI or price-sensitive information, as those terms are defined in the relevant jurisdiction.

J. Public Company Confidential Records

VCH's and Affiliated Adviser records must always be treated as confidential and must not be disclosed or used for any purpose at any time other than for the normal course of business. Information learned about other entities in a special relationship with VCH, such as acquisition, joint venture and partnership negotiations, is confidential and must not be disclosed without proper authorization.

At all times, you are prohibited from making any recommendation or expressing any opinion as to trading in Victory Capital Stock

See VCH's Corporate Communications Policy and Insider Trading Policy for more information.

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5. CONFLICTS OF INTEREST

A "conflict of interest" exists when your interests may be contrary to our client and shareholders interests. A conflict may arise if you takes action or have business, financial or other interests that may make it difficult to perform your work objectively and effectively.

Conflicts of interest may arise, for example, if you or your Immediate Family member receives improper personal benefits (for example, personal loans, services, or payment for services) as a result of your position at an Affiliated Adviser or you gain personal enrichment or benefits through access to confidential information. Conflicts may also arise if you or an Immediate Family member holds a financial interest in a company that does business with an Affiliated Adviser or has outside business interests that may result in divided loyalties or compromised independent judgment. Conflicts may also arise when making securities investments for Proprietary Products or Personal Accounts or when determining how to allocate trading opportunities.

Conflicts of interest can arise in many common situations, despite best efforts to avoid them. This Code does not attempt to identify all possible conflicts of interest. Literal compliance with each of the specific procedures will not shield you from liability for Personal Trading or other conduct that violates your fiduciary duties to clients. You are encouraged to seek clarification of, and discuss questions about, potential conflicts of interest. Any questions regarding a conflict of interest or potential conflict of interest should be directed to a manager, a CCO or a representative of compliance.

The following areas represent many common types of conflicts of interests and the procedures to be followed; however, the list is not intended to be all-inclusive. A summary is provided for each case, but further details can be found in the related policies and procedures for your specific Affiliated Adviser. To the extent there is a conflict between an Affiliated Adviser's related policies and procedures and the requirements of the Code, the Code shall prevail. For questions related to conflicts of interest, please contact a member of your Affiliated Adviser's compliance department.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Gifts and Entertainment

<u>Gifts</u>

Giving or receiving gifts or other items of value to or from persons doing business or seeking to do business with an Affiliated Adviser could call into question the independence of its judgment as a fiduciary of its clients. Accordingly, such conduct is only permitted in accordance with the limitations stated herein.

Affiliated Adviser policies on gifts and entertainment are derived from industry practices. You should be aware that there are various laws and regulations that prohibit you from giving anything of value to employees of various financial institutions in connection with attempts to obtain any business transaction with the institution, which is viewed as a form of bribery. If there is any question about the appropriateness of any particular gift, you should consult a member of compliance.

Under no circumstances may a gift be received as any form of compensation for services provided by an Affiliated Adviser or an Access Person. Gifts of nominal value may be given to or accepted from present or prospective customers, brokers, service providers, suppliers or vendors with whom there is an actual or potential business relationship. You are required to promptly report all gifts given in excess of $50 in the Affiliated Adviser's expense reporting system. Any gifts received in excess of $50 must promptly be disclosed in MCO. Gifts from an individual or entity may not exceed $100 in aggregate value in any calendar year unless approval is obtained from your direct manager and compliance.

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Gifts of up to $100 per person per year may be provided to present or prospective customers, brokers, service providers, suppliers or vendors with whom there is an actual or potential business relationship.

Additional policies concerning gifts may be applicable depending on the type of customer (e.g., ERISA, foreign, union, government officials, or Covered Government Officials).

Please refer to the Gifts and Entertainment Policy (F-3) for more information.

<u>Entertainment</u>

You may sponsor and participate in Reasonable and Customary Business Entertainment. Any Business Entertainment that is not Reasonable and Customary must be pre-approved by a CCO and your manager. You must accompany the persons being entertained for an entertainment activity to qualify as permissible Business Entertainment. All Business Entertainment expenses must be reported promptly in the applicable expense reporting system, listing each attendee at the entertainment event. The receipt of Business Entertainment in excess of $50 per occurrence per employee must be disclosed promptly after each occurrence in MCO. If the client, broker, service provider, vendor or supplier is not present, the entertainment is considered a gift. Items that are normally associated with entertainment that are given or received during a virtual event can be considered entertainment as long as the appropriate parties are in attendance at the virtual event.

Additional policies concerning gifts and entertainment may be applicable depending on the type of customer (e.g., ERISA, foreign, union, government officials, or Covered Government Officials).

Please refer to the Gifts and Entertainment Policy (F-3) for more information.

B. Political Contributions

SEC regulations limit political contributions to Covered Government Officials by employees of investment advisory firms and certain affiliated companies. The SEC's "Pay-to-Play" Rule 206(4)-5 (the "Rule") prohibits advisers from receiving any compensation for providing investment advice to a government entity within two years after a contribution has been made by the adviser or one of its covered associates. The two-year time out is triggered by a political contribution to an official of a government entity. The date of the contribution starts the time out.

The Rule permits contributions of up to $350 per person for any election to an elected official or candidate for whom the individual is entitled to vote, and up to $150 per person for any election to an elected official or candidate for whom the individual is not entitled to vote. Many U.S. cities, states and other government entities have also adopted regulations restricting political contributions by associates of investment management firms seeking to provide services to a governmental entity. While contributions to candidates in federal elections would generally not raise any issues under state or local laws, contributions to state and local officials may not be approved depending on the circumstances. Prior to the commencement of employment, you must disclose all political contributions in the past 2 years to Human Resources. During employment, you must receive approval from compliance through MCO before making personal political contributions at all levels. Political contributions which require pre-approval include, but are not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Covered Government Officials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Federal candidate campaigns and affiliated committees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Political Action Committees (PACs) and Super PACs; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Non-profit organizations that may engage in political activities, such as 501(c)(4), 501(c)(6) organizations, and 527 organizations

Note: U.S. national political party donations (e.g. Democratic or Republican) do not require pre- clearance.

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Contributions include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Monetary contributions, gifts or loans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"In kind" contributions (e.g. donations of goods or services or underwriting or hosting fundraisers);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Contributions to help pay a debt incurred in connection with an election (including transition or inaugural expenses, purchasing tickets to inaugural events);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Contributions to joint fund-raising committees; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Contributions made by a PAC that is controlled by an Access Person.

See the Political Contributions Policy (F-2) for more information.

C. Outside Business Activities

Prior to commencement of employment with VCM, all Outside Business Activities ("OBAs") must be disclosed to Human Resources. During employment and prior to commencement of any new OBA, you must fill out and submit an OBA request form in MCO. You are responsible for notifying compliance of any material OBA changes and must review, update and certify quarterly to your OBA activities.

<u>Holding Political Office/Appointments</u>

You must avoid any political appointment that may conflict with the performance of your duties on behalf of the Affiliated Advisers and their clients Prior written approval must be obtained from a CCO before holding political office and, if approved, must be confirmed annually through the compliance certification process. You must expressly remove yourself from any discussions and decisions regarding products or services offered by the Affiliated Advisers.

<u>Outside Employment or Business Activities</u>

You may pursue other interests on your own time as long as the activity doesn't conflict, interfere, or reflect negatively on the Affiliated Advisers or their clients. However, full-time employees should consider their position to be their primary employment.

All outside business activities must be reported to and pre-approved by both your manager and a CCO. Outside employment or business activities may be considered any activity conducted by you for another organization or business purpose that is outside the scope of your job function with the Affiliated Advisers. This includes, but is not limited to, being an employee, independent contractor, consultant, sole proprietor, officer, director or partner of another organization, or being compensated by, or having the reasonable expectation of compensation from, any other person or organization as a result of any business activity outside the scope of the relationship with the Affiliated Advisers. Certain activities are <u>not</u> considered reportable OBAs, including any non-investment related activity that is exclusively charitable, civic, religious or fraternal, and is recognized as tax exempt.

Passive investments requirements are governed by the Limited Offerings and Private Placement sections of this Code. If you are unsure if a specific activity is an OBA or passive investment, you should consults with a member of compliance.

Absent prior approval of a CCO and the Chief Executive Officer, you or your Immediate Family member may not serve on the board of directors of any publicly traded company or investment company. You are your Immediate Family member's service on a for-profit private company's board of directors must also be pre-approved by your direct manager and a CCO or CLO, and reported on the your annual Code certification.

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All outside employment or business activities must be reported to and pre-approved by both the your direct manager and a CCO and reported on your quarterly certification. You are prohibited from the commencement of any outside employment or business activities until a CCO's approval within MCO has occurred.

In addition to these outside employment or business activity procedures, if you are a registered representatives of VCS, you must also adhere to related requirements as set forth in VCS's Written Supervisory Procedures Manual.

See the Outside Business Activity Policy (F-4) for more information.

<u>Bequests</u>

A bequest is the act of leaving or giving something of value in a will. The acceptance of a bequest from a client, vendor or business partner may raise questions about the propriety of that relationship. Any potential or actual bequest in excess of $100 made to you by a client, vendor, or business partner under a will or trust agreement must be reported to compliance. Such bequests shall be subject to the approval of your direct manage and a CCO.

D. Other Prohibitions on Conduct

In addition to the specific prohibitions detailed elsewhere in the Code, you are subject to a general requirement not to engage or participate in any act or practice that would defraud Affiliated Adviser clients. This general prohibition includes, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Making any untrue statement of a material fact or employing any device, scheme or artifice to defraud a client;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Omitting to state a material fact, or failing to provide any information necessary to properly clarify any statements made, in light of the circumstances, thereby creating a materially misleading impression;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Misuse of client confidential information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Making investment decisions, changing internal research ratings and trading decisions other than exclusively for the benefit and in the best interest of our clients;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Using information about investment or trading decisions or changes in research ratings (whether considered, proposed or made) to benefit or avoid economic injury to an Access Person or anyone other than our clients.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Taking, delaying or failing to take any action with respect to any research recommendation, report or rating or any investment or trading decision for a client in order to avoid economic injury to an Access Person or anyone other than a client;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Purchasing or selling a security on the basis of knowledge of a possible trade by or for a client with the intent of personally profiting from personal holdings in the same or related securities ("front-running" or "scalping");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Revealing to any other person (except in the normal course of an your duties on behalf of a client) any information regarding securities transactions by any client or the consideration by any client of any such securities transactions; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Engaging in any act, practice or course of business that operates or would operate as a fraud or deceit on a client or engaging in any manipulative practice with respect to any client.

**E.Review of Employee Communications**

All correspondence related to the Affiliated Advisers' business and any client correspondence is subject to review by compliance. The Affiliated Advisers are required to maintain original records of employee correspondence that is communicated on approved devices (such as through email). In addition, the Affiliated Advisers are required to monitor employee communications and compliance

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with conflicts of interest and insider trading policies and procedures. Consequently, all employee communications, including emails and other forms of electronic communication for are archived and subject to review for compliance purposes. You are advised that you should have no expectation of privacy regarding personal communications that are sent or received on company-provided or connected electronic devices or communication platforms, such as instant messages or emails.

Additionally, you are prohibited from sending client communications via any personal email account, instant messaging, text or other method that is not captured in our archiving system. You may only use an Affiliated Adviser's e-mail system, instant messaging system, Bloomberg and other explicitly approved methods for business-related communications. You are permitted to communicate on an Affiliated Adviser's e-mail system connected through personal mobile devices such as smartphones. See the appropriate technology policy for more information.

**6. STANDARDS OF BUSINESS CONDUCT**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**•**You have a duty to place the interests of client accounts first and not take advantage of your position at the expense of clients

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•You must not mislead or defraud any clients by any statement, act or manipulative practice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•All personal securities transactions must be conducted in a manner to avoid any actual, potential, or appearance of, a conflict of interest, or any abuse of your position of trust and responsibility.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•You may not induce or cause a client to take action, or not to take action, for personal benefit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•You may not share portfolio holdings information except as permitted by the applicable portfolio holdings disclosure policy. See the policy for more information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•You must notify a CCO or CLO, as soon as reasonably practical, if you are arrested, arraigned, indicted or plead no contest or guilty to any criminal offense (other than minor traffic violations) or if named as a defendant in any investment-related civil proceeding or any administrative or disciplinary action.

**7. PERSONAL TRADING, CODE OF ETHICS REPORTING AND CERTIFICATIONS**

Personal Trading is a privilege granted by the Affiliated Advisers that may be withdrawn at any time. The CCOs have complete discretion over all Personal Trading activity and have no obligation to explain any denial or restriction relating thereto. You may be required to disgorge any gains generated (or losses avoided) from Personal Trading violations. Access Persons must maintain adequate records of all Personal Trading transactions and be prepared to disclose those transactions to compliance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Employee Investment Accounts

Subject to disclosure and pre-clearance requirements, Access Persons may open and maintain Managed Accounts and Personal Accounts with select brokers supported by MCO through direct electronic feeds ("Approved Brokers"). Any accounts held with a broker that is not on the Approved Broker List must be transferred to an Approved Broker within 90 days of the commencement of employment.

On a case-by-case basis, compliance may approve certain accounts held with brokers that are not on the Approved Brokers List. Compliance must still receive statements for each of these types of accounts, regardless of whether they are Managed or Personal Accounts.

For a list of Approved Brokers see Appendix 2 – Approved Brokers List. For a summary of account disclosure requirements see Appendix 3 – Investment Account Disclosure. For a summary of pre- clearance requirements see Appendix 4 – Reportable Securities.

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<u>Managed Accounts</u>

Access Persons may open and maintain Managed Accounts with Approved Brokers. With the exception of IPOs and Limited Offerings, the requirements listed below under Personal Trading Requirements and Restrictions do not apply to Managed Accounts. Participation in an IPO or a private placement in a Managed Account still requires prior approval of a CCO or his/her designee.

Managed Accounts require the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•They must be approved by compliance prior to trading or on the next quarterly certification, whichever is sooner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•At the end of each quarter, <u>all employees</u> must certify that all Managed Accounts have been disclosed and verify all transactions are correctly reflected in MCO;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The employee must certify and compliance must be able to independently verify that the account is truly discretionary; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Access Persons must certify quarterly that they had no direct or indirect influence or control over any transactions that occurred in their Managed Accounts.

Failure to adhere to these requirements could lead to disciplinary actions and penalties up to and including termination.

<u>Personal Accounts</u>

Access Persons may open and maintain Personal Accounts with brokers on the Approved Brokers List. All requirements listed below under Personal Trading Requirements and Restrictions apply to Personal Accounts.

Personal Accounts require the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•They must be approved by compliance prior to trading or on the next quarterly certification, whichever is sooner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•At the end of each quarter, <u>all employees</u> must certify that all Personal Accounts have been disclosed and verify all Personal Trades or transactions are correctly reflected in MCO.

Access Persons acknowledge and agree that the Affiliated Advisers may request and obtain information regarding Personal Accounts from broker-dealers. Affiliated Advisers may use personal information, including name, address and social security numbers, to identify and verify employee accounts.

B. Employee Investment Account Reporting

<u>Investment Account Disclosure</u>

All Personal Accounts and Managed Accounts must be disclosed to and approved by compliance prior to trading or on the next quarterly certification, whichever is sooner. New Hires may not trade in their existing accounts until they have been disclosed and approved by compliance. By regulation, such disclosure must take place within 10 days of hire. Failure to comply may result in sanctions imposed by the VCM Compliance Committee and/or Board of Directors.

<u>Initial Holdings Report/Annual Holdings Report</u>

No Personal Trading will be authorized before compliance has received a completed Initial Holdings Report as part of the new hire on-boarding process. Any exceptions must be approved by a CCO. The Initial Holdings Report must be submitted to compliance within ten (10) calendar days of

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becoming an Access Person. All Access Persons must submit a similar report annually to compliance. These reports must include the following information:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The date when the individual became an Access Person (Initial Holdings Report only);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The name of each Personal Account in which any securities are or could be held in the Beneficial Interest of the Access Person, and the name of the broker-dealer or financial institution holding these accounts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Current holdings in private placements (or non-public offering), including private equity, hedge funds or partnerships; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Each Reportable Security or Reportable Fund in which the Access Person has a Beneficial Interest, including title, number of shares, and principal amount. Holdings information must be current as of 45 calendar days before the report is submitted.

<u>Quarterly Securities Transaction Report</u>

At the end of each quarter, every Access Person must verify his or her Personal Trades or transactions in Personal Accounts through MCO by submitting a Securities Transaction Report ("STR") no later than 30 calendar days following the end of each calendar quarter (whether or not trades were made). The STR must include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•A description of any transaction in a Reportable Security or Reportable Fund effected during the preceding quarter, such as the date, number of shares, principal amount of securities involved, nature of the transaction (i.e., a buy or a sell), price, and the name of the broker- dealer or financial institution that effected the transaction; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The name and number for any account established in the preceding quarter, including the name and address of the broker-dealer or financial institution where the account is held and the date it was created.

Certain transactions are exempt from the quarterly reporting requirement. See "Summary of Pre- clearance Requirements" in Appendix 4 – Reportable Securities for more information.

C. Personal Trading Requirements and Restrictions

<u>Prohibited Securities and Transactions</u>

Commodities, currencies, futures, options, and selling securities short are prohibited in Personal Accounts.

Investments in companies under common control of VCH are also prohibited in Personal Accounts.

<u>Pre-clearance Requirement</u>

Transactions that require pre-clearance are listed in Appendix 4 – Reportable Securities.

For transactions that require preclearance, you must obtain compliance approval prior to executing the transaction. Approval may only be requested by submitting a Personal Trade Pre-Clearance Request ("PTR") in MCO. Compliance approval expires at the end of the trading day approval was provided (see exception granted to Covered Persons, as defined in VCH's Insider Trading Policy).

In certain circumstances, an approved and executed Personal Trade may need to be broken or profits disgorged (e.g. a Blackout Period triggered by subsequent client trading).

Cryptocurrencies – Trading in cryptocurrencies must be pre-cleared using the appropriate section of the Trade Pre-Clearance form within MCO. Such trades must be executed either in an account at a firm that is on our approved broker list (see Appendix 2) or in an account that does not offer any

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security trading capability. Accounts established to trade cryptocurrencies that do not have security trading capabilities must be reported in MCO. Receiving pre-clearance approval does not relieve you of your fiduciary duty and their responsibility to follow the spirit of the Code.

Compliance will review cryptocurrency trade requests for perceived or actual conflicts. As a general rule, compliance expects that cryptocurrencies traded on common crypto exchanges (e.g. Coinbase) will not pose a conflict and would be approved. Trades in cryptocurrencies will not be subject to the Short-Term Trading Period or count towards your Maximum Allowable Trades, however compliance may deny trades if it determines an actual or perceived conflict exists or an employee is trading too frequently. Decisions for approval and denial are the sole responsibility of compliance and are final.

You should be aware that the regulatory environment continues to evolve with respect to cryptocurrencies. In the future, you may be required to divest crypto holdings or hold them only at approved account providers if deemed necessary to meet regulatory requirements.

<u>Prohibition on Personal Trades Ahead of Client Pending Orders</u>

You are prohibited from executing Personal Trades in securities where you are aware of any pending orders in such securities by any Franchise that, if executed, would trigger a Blackout Period, create a conflict, or disadvantage a client. Adherence to the above Pre-Clearance Requirement does not provide relief from this prohibition.

<u>Franchise Blackout Period</u>

The Franchise Blackout Period is triggered by all client trades within an employee's specific Franchise. There are no exceptions to the Franchise Blackout period. Therefore, a Personal Trade by a Franchise employee in the same name as a client trade of that employee's Franchise during a Blackout Period is strictly prohibited.

<u>Solutions Team Blackout Period</u>

The Solutions Team Blackout Period is triggered by all Solutions Platform client trades. Therefore, a Personal Trade by a Solutions Team member during a Blackout Period in the same name as a Solutions Platform client is generally prohibited. Personal Trades in De Minimis Securities by Solutions Team members are not subject to the Solutions Team Blackout Period. The appropriate CCO, or his/her designee, may determine that a non-volitional client trade (e.g. cash flow trading) did not trigger a Blackout Period. In such cases, Compliance will confirm that there are no other potential conflicts before approving the Personal Trade.

The appropriate CCO, or his/her designee, may extend the Solutions Team Blackout Period beyond 10 days and apply it to employees outside of the Solutions Team during rebalance periods.

<u>Standard Blackout Period</u>

For all other employees (e.g. support staff), the Standard Blackout Period is triggered by all client trades. Therefore, a Personal Trade by an employee during a Blackout Period in the same name as any client is generally prohibited. Personal Trades in De Minimis Securities are not subject to the Standard Blackout Period. The appropriate CCO, or his/her designee, may determine that a non- volitional client trade (e.g. cash flow trading) did not trigger a Blackout Period. In such cases, Compliance will confirm that there are no other potential conflicts before approving the Personal Trade. Additionally, in certain situations (e.g. shared office spaces), the CCO, or his/her designee, may apply the Standard Blackout Period to Franchise or Solutions employees.

<u>Private Equity Prohibitions</u>

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Employees who are part of a franchise that invests in private equity on behalf of clients are prohibited from investing in any publicly-listed portfolio companies held by such franchise. Publicly-listed companies that are not portfolio companies but are in similar sectors and industries as those that are held will be reviewed on a case-by-case basis for potential conflicts.

<u>Short-Term Holding Period</u>

Personal Trading must be for investment purposes rather than for speculation. You may not purchase and sell or sell and purchase the same security within sixty (60) calendar days, calculated on a LIFO basis. This means each purchase will require you to hold your entire position in that security for 60 days. Similarly, this means each sale will require you not to purchase that name for 60 days. Excess profits (or losses avoided) as a result of violating this restriction may be subject to disgorgement. You should carefully consider whether you have the conviction to hold an entire position or refrain from adding to a position for at least 60 days before engaging in buy or sell transactions. See exceptions related to trading in Victory Capital stock. The Short-Term Holding Period only applies to transactions that require pre-clearance.

The appropriate CCO, in his/her sole discretion, may approve exceptions to this requirement.

<u>Maximum Allowable Trades</u>

You are limited to 20 Personal Trades per calendar quarter across your Personal Accounts. A trade in the same security in multiple accounts on the same day will count as one trade. A CCO, in his/her sole discretion, may approve exceptions to this requirement.

<u>Small Market Capitalization Securities</u>

Personal Trading in smaller market capitalization stocks (e.g. less than $1 billion), especially any "microcap stocks", is discouraged. Personal Trading by members of a Franchise in common holdings with clients, especially in low volume or low market capitalization stocks, could lead to a potential conflict of interest and therefore may be prohibited.

<u>IPO Rule</u>

You may <u>not</u> directly or indirectly acquire a Beneficial Interest in any securities offered in an IPO or in an Initial Coin Offering (ICO), in a Personal Account or Managed Account, without prior approval of a CCO or his/her designee.

<u>Limited Offerings (Private Placements)</u>

You may <u>not</u> acquire a Beneficial Interest in a private placement without the prior approval of a CCO or his/her designee. Prior approval is required whether investing directly or through a Personal Account or Managed Account. Private placements, such as investment in a private company, investments in a hedge fund or other private investment fund are reportable through the pre- clearance process. Subsequent capital contributions and full or partial redemptions must be pre- cleared through MCO.

<u>Market Timing Mutual Fund Transactions</u>

You shall not participate in any activity that may be construed as market timing of mutual funds. Specifically, you shall <u>not</u> engage in excessive trading or market timing activities as described in each prospectus of a Proprietary Products or Reportable Fund.

<u>Trading in Victory Capital Stock</u>

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Victory Capital Stock (VCTR) is a Reportable Security under the Code and any transaction in VCTR in a Personal Account must be precleared. You may be eligible for certain benefits related to VCTR, such as participation in the ESPP and grants of stock options or restricted stock. Certain transactions related to these benefits will require pre-clearance. For a summary of pre-clearance requirements for VCTR see Pre-Clearance Requirements for Victory Capital Stock under Appendix 4 – Reportable Securities. If you are uncertain whether a transaction requires pre-clearance, they should consult with compliance prior to trading.

VCTR transactions related to the above employee benefits will not trigger the Short-Term Holding Period in a Personal Account. Likewise, VCTR transactions in a Personal Account will not affect an employee's ability to exercise such employee benefits.

Covered Persons, as defined in VCH's Insider Trading Policy, will have 3 business days upon receipt of approval to effect transactions in VCTR.

D. Representations and Warranties

Each time you submit a PTR, you shall be deemed to make the following representations and warranties:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•You are not in possession of any MNPI for the requested security;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•You are not aware of any client trading in the same security during any Blackout Period to which you are subject

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•You have not traded the same position in the opposite direction, in the past 60 days (Mandatory Short-Term Holding Period);

**E.Quarterly and Annual Certifications of Compliance**

You are required to certify quarterly that you have disclosed all reportable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Gifts and entertainment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Outside Business Activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Political activity and contributions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.All Personal Trading Accounts, including Managed Accounts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.Personal Trades.

You are required to certify annually to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.You have read, understand and complied with this Code and other related policies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.You have read, understand and complied with Victory Capital's Corporate Information Protection and Technology Use Policy (A-8);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.You have provided and verified all reportable holdings data; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.You have answered all additional questions and disclosures within the Annual Code of Ethics Certification in an accurate and truthful manner.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. Review Procedures

Compliance will maintain review procedures consistent with this Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. Recordkeeping

All Code of Ethics records will be maintained pursuant to the provisions of Rule 204A-1 under the Advisers Act and Rule 17j-1 under the Investment Company Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H. Whistleblower Provisions

If you believe that there has been a violation of this Code, you must promptly notify a CCO or CLO or report anonymously to the Ethics telephone hotline at 800-584-9055. You are protected from retaliation for reporting violations of this Code. Retaliation or the threat of retaliation against you for reporting a violation constitutes a further violation of this Code and may lead to immediate suspension and further sanctions. See the appropriate whistleblower policy for more information.

VCM is also responsible for communicating the Affiliated Funds' whistleblower procedures to applicable employees. The Affiliated Funds have implemented procedures for receiving anonymous reports of suspected or actual violations of Affiliated Funds' policies and questionable accounting, internal accounting controls, or auditing matters. Call 866-844-3863 to initiate a report regarding an Affiliated Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**I.Confidentiality**

All information obtained from any employee shall be kept in strict confidence, except when requested by the SEC or any other regulatory or self-regulatory organization, and may otherwise be disclosed to the extent required by law or regulation. Additionally, certain information may be provided to a broker-dealer, service provider or vendor, such as employee name, social security number and home address, in order to ascertain Personal Trading activity that is required to be disclosed by an Access Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;J. Reporting to the Board of Directors of Affiliated Funds

At least annually, the appropriate Affiliated Advisers will provide the Board of Directors of Affiliated Funds with information regarding: 1) any Material Violations under this Code and any sanctions imposed as a response to such Material Violation; and 2) certification that it has adopted procedures necessary to prevent Access Persons from violating this Code.

8. CODE OF ETHICS VIOLATION GUIDELINES

You are responsible for conducting your activities in accordance with this Code. Violations of the Code may result in applicable sanctions.

Sanctions may correlate to the severity of the violation and may take into consideration, among other things, such factors as the frequency and severity of any prior violations. A CCO may recommend escalation to the VCM Board of Directors and Compliance Committee. When necessary, the VCM Board of Directors may obtain input from the Compliance Committee and a CCO when determining whether such violation is a Material Violation.

The CCOs hold discretionary authority to revoke Personal Trading privileges for any length of time and also reserve the right to lift Personal Trading sanctions in response to market conditions. Additionally, a CCO

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or Compliance Committee may impose a monetary penalty for any violation. A CCO will report all warnings, violations, exceptions granted and sanctions to the Compliance Committee.

Minor Violations

• Provided incorrect or incomplete account or trading information

• Engaging in a pattern of discouraged or excessive trading

• Trading without pre-clearance approval when trade would have normally been approved and additional violations did not occur

• Failure to submit a complete or timely initial or annual holdings or securities transactions report

• Failure to provide the Compliance Department a duplicate confirmation in a timely manner after request or notice by the Compliance Department

• Failure to pre-clear properly an outside business activity prior to commencement of such activity

• Failure to complete a quarterly or annual certification by due date

• Failure to pre-clear an investment in a private placement that would have been approved

**Technical Violations**

**•**Any pattern of a Minor Violation within a 12-month period may qualify as a Technical Violation

• Failure to report a Personal Account

• Trading without pre-clearance approval when trade would <u>not</u> have been approved

• Trading without pre-clearance or supplied incorrect information, which may have resulted in additional violations

• Failure to pre-clear any activity that would have been denied by the Compliance Department

• Any willful violations of the Code, as determined by a CCO, to be more severe than a Minor Violation

**Repeat Technical Violations**

**•**Any Technical Violation that is repeated at least two

&nbsp;&nbsp;&nbsp;&nbsp;(2) times during a 12-month period

**Material Violations / Fraudulent Actions**

**Potential Actions**

**•**Compliance may question you and document response

• 1<sup>st</sup> violation within a 12-month period may result in a warning letter

• CCO and Compliance Committee may be notified of all warnings and citations given to employees

• You may be required to break a trade or disgorge profits from the trade

• Any additional actions a CCO or Compliance deem appropriate under the circumstances

**Potential Actions**

**•**Compliance may question you and document response

• Compliance may issue a warning letter

• Compliance Committee may be notified

• Human Resources may be notified

• You may be required to break a trade or disgorge profits from the trade – any such profits will be donated to charity

• Temporary ban from Personal Trading for no less than 30 calendar days

• A fine may be imposed, as determined by a CCO on a case-by-case basis

• Any other actions deemed appropriate by a CCO or compliance

**Potential Actions**

**•**A CCO may meet with your direct manager to discuss violation

• Human Resources may be notified

• You may be required to break a trade or disgorge profits from the trade – any such profits will be donated to charity

• Three (3) or more technical violations within a 12- month period may receive a citation letter, monetary fine and loss of Personal Trading privileges for no less than 90 calendar days

• Any other actions deemed appropriate by a CCO or compliance

**Potential Actions**

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|:---|:---|
| **• Any Material Violation** | • Compliance Committee will review and recommend |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; sanctions and penalties up to and including |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; termination of employment |
|  | • The Board of Directors and, when applicable, clients |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; may be notified |
|  | • Possible criminal sanctions imposed by regulatory |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; authorities |
|  | • A fine of $10,000 may be imposed by the Board of |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Directors |
|  | • Any other actions deemed appropriate by a CCO, |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Compliance Committee or the Board of Directors |

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The Code of Ethics Violation Guidelines provides examples of potential Code violations and the actions that Victory Capital might take if you violate the Code; it is not intended to serve as an exhaustive list of potential Code violations or actions relating thereto. All findings of Code violations and any actions relating thereto will be made on a case-by-case basis. The CCOs have discretion to interpret violations and impose various sanctions in response to such violations as deemed necessary.

**Reconsideration**

If you wish to dispute a violation notice, you may submit a written explanation of the circumstances of the violation to a CCO. The CCOs (and the CLO if escalation is deemed necessary) will review submissions on a case-by-case basis. The CCOs and CLO are under no obligation to change any sanction that has been imposed.

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**Appendix 1 – Affiliated Funds, Proprietary Products & Reportable Funds**

As described in this Code, certain restrictions apply to trading in an Affiliated Fund, a Proprietary Product and any fund sub-advised by an Affiliated Adviser. Please refer to the company's intranet site "Under the wing" for a complete list or follow one of the links below.

**Affiliated Funds**

For the most up-to-date list of Affiliated Victory Funds, please visit <u>www.vcm.com.</u>

**Proprietary Products**

Pre-clearance is required before trading in one of the following Proprietary Products, which is a fund or product in which Victory Capital or its employees have an aggregate of 25% or more Beneficial Interest:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Victory Munder Small Cap Growth Fund (MASCX, MYSGX), managed by Munder Capital Management

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Victory Munder Small Cap/Mid-Cap Blend (strategy), managed by Munder Capital Management

**Sub-Advised Funds**

VCM acts as sub-adviser to a number of unaffiliated registered investment companies (mutual funds). Please refer to VCM's ADV filed with the SEC by searching for the firm name on <u>https://www.adviserinfo.sec.gov</u>. ADV Part 1 contains SECTION 5.G.(3), which lists "Advisers to Registered Investment Companies and Business Development Companies". The name of the fund complex can be obtained by searching for the SEC File Number (under More Options) using EDGAR: <u>https://www.sec.gov/edgar/searchedgar/companysearch.html</u>. A complete list is also available on the company's intranet site "Under the wing" under the compliance tab.

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**Appendix 2 – Approved Brokers List**

You are allowed to open new or maintain existing personal or managed accounts at any of the brokers listed below. However, you may NOT begin trading in a brokerage account until it is reported in MCO and set up on our broker data feed. The approved brokers have been divided into tiers based on how responsive they typically are to our requests to add new accounts to the broker data feed.

<u>Tier 1 Approved Brokers</u>

These brokers provide enhanced broker data feed functionality and typically add new accounts to our broker data feed within 1 – 3 business days.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Charles Schwab

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Fidelity Investments

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Interactive Brokers

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.TD Ameritrade

<u>Tier 2 Approved Brokers</u>

These brokers may take longer than Tier 1 Approved Brokers, but they generally add new accounts to our broker data feed within 5 business days.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Ameriprise Financial Services

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.E\*TRADE

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Edward Jones

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Merrill Lynch

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.UBS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.Vanguard

<u>Tier 3 Approved Brokers</u>

These brokers may require you to sign a form before they will add a new account to our broker data feed, and/or typically take longer to update the feed once all their requirements are met – your ability to trade in a new account at these firms may be significantly delayed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.JP Morgan Chase

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Morgan Stanley

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Northern Trust

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Raymond James

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.RBC

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.Wells Fargo

<u>Approved Non-Brokers</u>

The following types of accounts are typically not held through a traditional brokerage firm but are still allowed under the Code of Ethics – you may be required to manually report transactions effected in reportable securities within these types of accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Employer Sponsored Retirement Plans

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.ESOP/ESPP

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Direct Registration Service (DRS – i.e. Computershare, American Stock Transfer Company, etc.)

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**Appendix 3 – Investment Account Disclosure**

New Hires may not trade in their existing accounts until they have been disclosed and approved by compliance. By regulation, such disclosure must take place within 10 days of hire. All new Personal Accounts and Managed Accounts must be reported to compliance prior to trading or on the next quarterly certification, whichever is sooner. Failure to comply may result in sanctions imposed by the VCM Compliance Committee and/or Board of Directors.

The below chart summarizes certain account types and their disclosure requirements. If you have a beneficial interest in any account identified below, you must follow the disclosure requirements. If you are uncertain whether an account should be disclosed or if you have a beneficial interest in an account not listed below, you should consult with a CCO or a member of the Compliance team.

---

| | | |
|:---|:---|:---|
| **Account Type** | **Initial Disclosure** | **Periodic Verification** |
| **All Pe**rsonal Accounts | Yes | Yes |
| All Managed Accounts | Yes | Yes |
| Affiliated Fund Direct Accounts | Yes | Yes |
| 401(k) if able to hold Reportable Securities | Yes | Yes |
| Security Lending Accounts | Yes | Yes |
| Margin Accounts | Yes | Yes |
| Investment Club Accounts | Yes | Yes |
| Private Placements | Yes | No |
| Unaffiliated Open-end Mutual Fund Direct Accounts | No | No |
| Retirement accounts if unable to hold Reportable Securities | No | No |
| 529 Plans | No | No |
| Bank accounts if unable to hold Reportable Securities | No | No |
| Bank accounts if unable to hold Reportable Securities | No | No |
| Donor Advised Fund (only pre-clear gift of stock to account) | No | No |
| HSA Investments (if unable to hold Reportable Securities) | No | No |
| Accounts that facilitate trading cryptocurrencies | Yes | Yes |

---

Also see the Account Reporting Job Aid for more details.

Copyright© 2022, Victory Capital Management Inc. Page iii of xi

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**Appendix 4 – Reportable Securities**

Most transactions in Personal Accounts require you to submit a PTR through MCO. See Section VI: Personal Trading Requirements and Restrictions for more information.

Summary of Pre-clearance and Reporting Requirements

The below chart summarizes the pre-clearance and reporting requirements of certain security types. Additional details can be found in the Pre-Clearance Job Aid. If you are uncertain whether a transaction requires pre-clearance, you should consult with a CCO or a member of the Compliance team. For Victory Capital Stock, please refer to the Summary of Pre-Clearance Requirements for Victory Capital Stock provided in this Appendix.

Prohibited in Personal Accounts

Commodity Futures

Futures

Options

Currency Futures

Selling Securities Short

Companies under common control with VCH

Pre-clear in Managed Accounts and Personal Accounts

Initial Public Offerings (IPO)

Initial Coin Offerings (ICO)

Private placements

Pre-clear in Personal Accounts

Equities

Corporate, High-Yield, Convertible, International, and Municipal Bonds

Exchange-traded funds (ETFs), including affiliated ETFs

Exchange-traded notes (ETNs)

Closed-end funds

Mortgage-Backed Securities

Agency Securities (e.g. Fannie Mae, Freddie Mac etc.)

Trust preferred & traditional preferred securities

Any securities that are gifted or donated by an Access Person (e.g. direct to charity or to donor advised fund)

Unit investment trusts

Victory Proprietary Products (MASCX, MYSGX, MAEMX, MYEMX)

VCM 401(k) transactions greater than $100,000 in a Proprietary Product

Cryptocurrencies (e.g. Bitcoin, Ethereum, etc.)

Reportable <u>ONLY</u> (pre-clearance NOT required)

Dividend Reinvestment Plans (DRIPs)

Victory or USAA Mutual Funds, unless it's a Proprietary Product

Variable insurance products only where an Affiliated Adviser serves as adviser or sub-adviser

Exempt Transactions (only the effect of these transactions will be captured as an update on the annual holdings certification)

Approved automatic or periodic investment plans

Dividend reinvestment transactions

Corporate action transactions (e.g., stock splits, rights offerings, mergers and acquisitions)

Security lending transactions

Exempt Securities not subject to the Code

Direct obligations of the U.S. government

Bankers' acceptances, bank certificates of deposit and commercial paper

Investment grade, short-term debt instruments, including repurchase agreements

Copyright© 2022, Victory Capital Management Inc. Page iv of xi

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Money market funds

Variable insurance products unless an Affiliated Adviser acts as adviser or sub-adviser

Unaffiliated open-end mutual funds

Investments in qualified tuition programs ("529 Plans"), including the USAA College Savings Plan

Physical Commodities (i.e. precious metals)

Foreign Currencies held in order to use as currency (not for investment/speculation purposes)

Summary of Pre-Clearance Requirements for Victory Capital Stock (ticker "VCTR")

---

| | |
|:---|:---|
| &nbsp;&nbsp; **VCTR Transaction Description** | &nbsp;&nbsp; **Pre-Clear** |
| &nbsp;&nbsp; Common Stock (Class A Shares) |  |
| &nbsp;&nbsp; Employee purchase or sale in any Personal Account (e.g. a brokerage account for the benefit | Yes |
| &nbsp;&nbsp; of the employee or for the benefit of the employee's Immediate Family) | Yes |
| &nbsp;&nbsp; of the employee or for the benefit of the employee's Immediate Family) |  |
| &nbsp;&nbsp; Employee purchase or sale in a Managed Account approved by Compliance. | No |
| &nbsp;&nbsp; Employee Stock Purchase Plan (ESPP) |  |
| &nbsp;&nbsp; Purchases made pursuant to Employee Stock Purchase Plan | No |
| &nbsp;&nbsp; Sales of shares acquired through the Employee Stock Purchase Plan | Yes |
| &nbsp;&nbsp; Options |  |
| &nbsp;&nbsp; Sale of shares in the open market acquired through the exercise of any options | Yes |
| &nbsp;&nbsp; Cash Exercise - Employee pays the entire cost of the exercise. | No |
| &nbsp;&nbsp; Withhold Shares - Victory Capital withholds shares equal to the cost of the exercise. | No |
| &nbsp;&nbsp; Restricted Stock (Class B Shares) |  |
| &nbsp;&nbsp; Selling restricted stock in the open market | Yes |
| &nbsp;&nbsp; Cash - Cash payment to cover vested shares tax liability | No |
| &nbsp;&nbsp; Net - Surrender shares to Victory Capital to cover vested shares tax liability | No |
| &nbsp;&nbsp; 10b5-1 Trading Plan |  |
| &nbsp;&nbsp; Officers of VCH required to make filings under Section 16 of the Securities and Exchange |  |
| &nbsp;&nbsp; Act of 1934, as amended, conducting trades in accordance with an approved 10b5-1 Trading | No |
| &nbsp;&nbsp; Plan. |  |

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| **Copyright© 2022, Victory Capital Management Inc.** | **Page v of xi** |

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**Appendix 5 – ETFs Eligible for De Minimis Transaction Exemption**

Firm trades in the following ETFs will not trigger any Blackout Period due to their use as highly liquid cash management vehicles in various client accounts.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp; **Name** | &nbsp;&nbsp; **Symbol** | &nbsp;&nbsp; **CUSIP** |
| &nbsp;&nbsp; **i**Shares 7-10 Year Treasury Bond ETF | &nbsp;&nbsp; IEF | &nbsp;&nbsp; 464287440 |
| &nbsp;&nbsp; iShares 20+ Year Treasury Bond ETF | &nbsp;&nbsp; TLT | &nbsp;&nbsp; 464287432 |
| &nbsp;&nbsp; iShares Core MSCI EAFE ETF | &nbsp;&nbsp; IEFA | &nbsp;&nbsp; 46432F842 |
| &nbsp;&nbsp; iShares Core MSCI Emerging Markets ETF | &nbsp;&nbsp; IEMG | &nbsp;&nbsp; 46434G103 |
| &nbsp;&nbsp; iShares Core S&P 500 ETF | &nbsp;&nbsp; IVV | &nbsp;&nbsp; 464287200 |
| &nbsp;&nbsp; iShares Core U.S. Aggregate Bond ETF | &nbsp;&nbsp; AGG | &nbsp;&nbsp; 464287226 |
| &nbsp;&nbsp; iShares FTSE China 25 Index | &nbsp;&nbsp; FXI | &nbsp;&nbsp; 464287184 |
| &nbsp;&nbsp; iShares iBoxx $ High Yield Corporate Bond | &nbsp;&nbsp; HYG | &nbsp;&nbsp; 464288513 |
| &nbsp;&nbsp; iShares iBoxx $ Investment Grade Corporate Bond ETF | &nbsp;&nbsp; LQD | &nbsp;&nbsp; 464287242 |
| &nbsp;&nbsp; iShares MSCI ACWI Index Fund | &nbsp;&nbsp; ACWI | &nbsp;&nbsp; 464288257 |
| &nbsp;&nbsp; iShares MSCI China Index Fund | &nbsp;&nbsp; MCHI | &nbsp;&nbsp; 46429B671 |
| &nbsp;&nbsp; iShares MSCI Emerging Index Fund ETF | &nbsp;&nbsp; EEM | &nbsp;&nbsp; 464287234 |
| &nbsp;&nbsp; iShares MSCI EAFE Index Fund ETF | &nbsp;&nbsp; EFA | &nbsp;&nbsp; 464287465 |
| &nbsp;&nbsp; iShares MSCI Japan Index Fund ETF | &nbsp;&nbsp; EWJ | &nbsp;&nbsp; 464286848 |
| &nbsp;&nbsp; iShares MSCI India | &nbsp;&nbsp; INDA | &nbsp;&nbsp; 46429B598 |
| &nbsp;&nbsp; iShares Russell 1000 | &nbsp;&nbsp; IWF | &nbsp;&nbsp; 464287614 |
| &nbsp;&nbsp; iShares Russell 2000 ETF | &nbsp;&nbsp; IWM | &nbsp;&nbsp; 464287655 |
| &nbsp;&nbsp; iShares Russell 2000 Value | &nbsp;&nbsp; IWN | &nbsp;&nbsp; 464287630 |
| &nbsp;&nbsp; iShares Russell Mid-Cap Value | &nbsp;&nbsp; IWS | &nbsp;&nbsp; 464287473 |
| &nbsp;&nbsp; SPDR Bloomberg Barclays High Yield Bond ETF | &nbsp;&nbsp; JNK | &nbsp;&nbsp; 78468R622 |
| &nbsp;&nbsp; SPDR S&P 500 ETF | &nbsp;&nbsp; SPY | &nbsp;&nbsp; 78462F103 |
| &nbsp;&nbsp; SPDR S&P MidCap 400 ETF | &nbsp;&nbsp; MDY | &nbsp;&nbsp; 78467Y107 |
| &nbsp;&nbsp; Vanguard FTSE All-World ex-US ETF | &nbsp;&nbsp; VEU | &nbsp;&nbsp; 922042775 |
| &nbsp;&nbsp; Vanguard FTSE Developed Markets ETF | &nbsp;&nbsp; VEA | &nbsp;&nbsp; 921943858 |
| &nbsp;&nbsp; Vanguard FTSE Emerging Markets ETF | &nbsp;&nbsp; VWO | &nbsp;&nbsp; 922042858 |
| &nbsp;&nbsp; Vanguard FTSE Europe ETF | &nbsp;&nbsp; VGK | &nbsp;&nbsp; 922042874 |
| &nbsp;&nbsp; Vanguard Mortgage-Backed Securities ETF | &nbsp;&nbsp; VMBS | &nbsp;&nbsp; 92206C771 |
| &nbsp;&nbsp; Vanguard Real Estate ETF | &nbsp;&nbsp; VNQ | &nbsp;&nbsp; 922908553 |
| &nbsp;&nbsp; Vanguard Short-Term Bond ETF | &nbsp;&nbsp; BSV | &nbsp;&nbsp; 921937827 |
| &nbsp;&nbsp; Vanguard Short-Term Corporate Bond ETF | &nbsp;&nbsp; VCSH | 92206C409 |
| &nbsp;&nbsp; Vanguard S&P 500 ETF | &nbsp;&nbsp; VOO | &nbsp;&nbsp; 922908363 |
| &nbsp;&nbsp; Vanguard Total Bond Market ETF | &nbsp;&nbsp; BND | &nbsp;&nbsp; 921937835 |
| &nbsp;&nbsp; Vanguard Total International Stock ETF | &nbsp;&nbsp; VXUS | &nbsp;&nbsp; 921909768 |
| &nbsp;&nbsp; Vanguard Total Stock Market ETF | &nbsp;&nbsp; VTI | &nbsp;&nbsp; 922908769 |

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Copyright© 2022, Victory Capital Management Inc. Page vi of xi

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|:---|:---|
|  **Code of Ethics for Victory Capital Management Inc. and WestEnd Advisors, LLC** | &nbsp;&nbsp;&nbsp;&nbsp; **January 1, 2022** |

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**Supplement 1**

**RS Investments (Hong Kong) Limited**

**Code of Ethics Supplement ("Hong Kong Supplement")**

The following policies and procedures are in addition to, and supersede where relevant, the policies and procedures detailed in the Code.

I.COMPLIANCE General

Compliance with all regulatory requirements is of the utmost importance to RS Investments (Hong Kong) Limited ("RSHK"). All staff members of RSHK should read and understand the content of the Code and Victory Capital's Compliance Manual (the "Compliance Manual"), and each staff member should also read and understand the content of the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission (the "Code of Conduct") and the Fund Manager Code of Conduct (the "FMCC") issued by the Securities and Futures Commission (the "SFC") where such staff member is licensed by the SFC. RSHK should at all times have at least one designated Compliance Officer. The Compliance Officer and the responsible officers who are ultimately responsible for seeking to ensure compliance by RSHK with all applicable regulatory requirements on a daily basis are identified in the RSHK Compliance Manual.

In addition, it is also the duty of all staff members of RSHK to comply with the contents of the Code and the Compliance Manual, and to observe all other regulatory requirements as applicable to them from time to time, in all their activities on behalf of RSHK. Failure to do so may result in disciplinary action.

II.PROHIBITED CONDUCT General

Every director, manager or any other person involved in the management of RSHK has a statutory obligation to take all reasonable measures from time to time to seek to ensure that proper safeguards exist to prevent RSHK from acting in a way which would result in RSHK perpetrating any market misconduct under the Securities and Futures Ordinance (the "SFO").

Market Misconduct

"Market misconduct" under the SFO means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Insider dealing

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.False trading

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Price rigging

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Disclosure of information about prohibited transactions

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.Disclosure of false or misleading information inducing transactions stock market manipulation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.Includes attempting to engage in, or assisting, counseling or procuring another person to engage in any of the above activities

Insider Dealing

See Section IV – Policy Statement on Insider Trading for more information.

False Trading

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|  **Code of Ethics for Victory Capital Management Inc. and WestEnd Advisors, LLC** | &nbsp;&nbsp;&nbsp;&nbsp; **January 1, 2022** |

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False trading attracts civil and criminal liabilities. In brief, false trading occurs when a person, in Hong Kong or elsewhere, engages in conduct intending that, or being reckless as to whether, it creates, or is likely to create, a false or misleading appearance of active trading in securities or futures contracts traded on a Hong Kong or overseas market. An on-market "wash sale" or "matched order" is presumed to create a false or misleading appearance of active trading.

Price Rigging

Price rigging attracts civil and criminal liabilities. In brief, price rigging occurs where a person, in Hong Kong or elsewhere engages, directly or indirectly, in:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.A wash sale which maintains, increases, reduces, stabilizes or causes fluctuations in, the price of securities traded on a Hong Kong market; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Any fictitious or artificial transaction or device, intending that, or being reckless as to whether, it maintains, increases, reduces, stabilizes or causes fluctuations in, the price of securities, or the price for dealing in futures contracts, traded on a Hong Kong market.

There will also be a breach where such activity is carried out in Hong Kong which affects shares and futures contracts that are traded on an overseas market.

Disclosure of Prohibited Transactions and Disclosure of False and Misleading Information

Disclosure of prohibited transactions and disclosure of false and misleading information inducing transactions attract civil and criminal liabilities. In brief, these occur when a person discloses, circulates or disseminates information:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.To the effect that the price of securities of a corporation, or the price for dealings in futures contracts, will be maintained, reduced or stabilized because of a prohibited transaction; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.That is likely to induce a transaction in securities or futures contracts if the information is false or misleading.

Stock Market Manipulation

Stock market manipulation attracts civil and criminal liabilities under the laws of Hong Kong. It is prohibited when, in Hong Kong or elsewhere, a person enters into, directly or indirectly, two or more transactions in securities that by themselves or in conjunction with any other transaction increase reduce, maintain or stabilize the price of securities and with the effect of influencing the investment decisions of other persons.

Other Offenses

All Victory Capital employees, including the employees of RSHK, are prohibited from engaging in the Short- Selling of any securities, including "naked" or "uncovered," Short-Selling on the SEHK. It is a criminal offence under the SFO for a person to sell securities at or through the SEHK unless at the time of the sale he (or his client, if he acts as an agent) has a presently exercisable and unconditional right to vest the securities in the purchaser of them, or believes and has reasonable grounds to believe that he (or his client, as the case may be) has such a right.

RSHK should also note that section 171 of the SFO imposes a duty to report Short-Selling transactions (which are covered) on both the seller (as a principal, whether he is a client or an intermediary) and the intermediary (as an agent). RSHK must also observe the Securities and Futures (Short-Selling and Securities Borrowing and Lending (Miscellaneous) Rules) and the SFC's "Guidance Note on Short-Selling Reporting and Stock Lending Record Keeping Requirements" as applicable.

RSHK and the employees of RSHK shall not make any unsolicited call (unless specifically allowed under s174 of the SFO or under the Securities and Futures (Unsolicited Calls – Exclusion) Rules in order to induce

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or attempt to induce another person to sell or purchase securities, futures contract or leveraged foreign exchange contract.

Other criminal offences under the SFO include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Offence involving fraudulent or deceptive devices etc. in transactions in securities, futures contracts or leveraged foreign exchange trading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Offence of disclosing false or misleading information inducing others to enter into leveraged foreign exchange contracts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Offence of falsely representing dealings in futures contracts on behalf of others, etc.

Other Misconduct

<u>Prohibition on Shadowing</u>

An employee is prohibited from replicating deliberately what the clients of RSHK trade for the purpose of making speculative profits or avoiding losses.

<u>Prohibition on Churning or Twisting</u>

RSHK is not permitted to generate high commission income by putting excessive orders through the client accounts.

<u>Prohibition on Rat Trading</u>

An employee is prohibited from rat trading, which covers deliberate trading to the disadvantage of the client. For example, a fund manager might execute a buy order and delay allocating it to the funds or accounts it manages. If the price moves up, he may allocate it to his own account or to a nominee account at the lower execution price. On the other hand, he may delay executing the order and, if the price moves down, buy it at the lower price for himself or herself and sell it to the fund or accounts that it manages.

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|  **Code of Ethics for Victory Capital Management Inc. and WestEnd Advisors, LLC** | &nbsp;&nbsp;&nbsp;&nbsp; **January 1, 2022** |

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**Supplement 2**

**RS Investment Management (Singapore) Pte. Ltd. ("RSIMS")**

**Code of Ethics Supplement ("Singapore Supplement")**

The policies and procedures in this Singapore Supplement to the Code apply to Access Persons of RSIMS and are in addition to, and supplement, the policies and procedures detailed in the Code.

Matters set out in the relevant sections of this Singapore Supplement shall be read in conjunction, and as one, with the Code. To the extent there is any inconsistency between the Code and this Singapore Supplement, this Singapore Supplement shall prevail.

Short-Selling of Securities

All Victory Capital employees, including employees of RSIMS, are prohibited from Short-Selling any security.

Trading on Inside Information

In addition to the requirements set out in the Code, all employees of RSIMS and all members of their Immediate Family are required to comply with all applicable laws in Singapore in relation to any Securities Transactions. Such laws include but are not limited to Part XII (Market Conduct) of the Securities and Futures Act (Chapter 289 of Singapore) ("SFA") which set out prohibitions against the following conduct:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•False trading and market rigging transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Securities market manipulation and manipulation of prices of futures contracts and cornering;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The making of false or misleading statements or the dissemination of information that is false or misleading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Fraudulently inducing persons to deal in securities or trade in futures contracts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Employment of fraudulent or deceptive devices, or manipulative and deceptive devices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Bucketing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Insider trading and tipping off.

Reporting Requirements

In addition to the Personal Account and Personal Trading requirements and restrictions set out in the Code, each employee of RSIMS who acts as a representative of RSIMS in RSIMS' capacity as the holder of a capital markets services license issued pursuant to the SFA for fund management (each a "Relevant Access Person") is required to maintain a register of his or her interests in securities (as such term is defined in section 2(1) of the SFA, the relevant extract of which is set out in the Appendix) that are listed for quotation, or quoted, on a securities exchange or recognized market operator in the prescribed Form 15 to the Securities and Futures (Licensing and Conduct of Business) Regulations (Rg 10).

Within 7 days after the date he or she acquires the interest in the relevant securities, each Relevant Access Person shall be required to enter into his or her register:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Particulars of securities in which such Relevant Access Person has any interest; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Particulars of such interests.

Where there is any change in any interest in the securities of such Relevant Access Person, he or she shall enter particulars of the change (including the date of the change and the circumstances by reason of which the change has occurred), within 7 days after the date of the change.

All entries in the register must be kept in an easily accessible form for a period of not less than 5 years after the date on which such entry was first made. The register shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. If in physical form, be kept at RSIMS's principal place of business in Singapore; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.If in electronic form, be kept in such manner so as to ensure that full access to the register may be gained by the Monetary Authority of Singapore ("MAS") at RSIMS's principal place of business in Singapore.

RSIMS is required to maintain records of the place at which the Relevant Access Persons keep their respective registers and the places at which copies of those registers are kept in Singapore. As a separate matter, RSIMS is also required to maintain a Form 15 in relation to RSIMS' own interests in the relevant Securities.

Copyright© 2022, Victory Capital Management Inc. Page xi of xi

## Ex-99.(P)(34)

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**CODE OF ETHICS**

**Westwood Holdings Group, Inc.**

**Westwood Management Corp.**

**Westwood Trust**

**Westwood Advisors, L.L.C.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**I.Introduction**

**The purpose of this Code of Ethics is to promote honest and ethical conduct, focus the Board of Directors and management of Westwood Holdings Group, Inc. ("WHG") and its subsidiaries on areas of ethical risk, provide guidance to directors, officers and employees to help them recognize and deal with ethical issues, provide mechanisms to report unethical conduct and help to preserve the culture of honesty and accountability at the Companies (as defined below).**

**This Code of Ethics establishes rules of conduct for persons who are associated with the Companies. The Code governs their personal investment and other investment-related activities and is designed to prevent violations of the applicable federal securities laws and mitigate conflicts of interest.**

**The basic rule is very simple: Put the client's interests first. The rest of the rules elaborate this principle. This Code is intended to assist the Companies in fulfilling their obligations under the law. Article II sets forth to whom the Code applies, Article III deals with personal investment activities, Article IV deals with other sensitive business practices, and subsequent parts deal with reporting and administrative procedures.**

**The Code is very important to the Companies and their employees. Violations can not only cause the Companies embarrassment, loss of business, legal restrictions, fines and other punishments, but for employees can lead to demotion, suspension, termination, ejection from the securities business, and large fines.**

**Annually, each Covered Person will receive a copy of this Code and any amendments thereto and will provide the Chief Compliance Officer with a written acknowledgment of their receipt.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**II.Applicability**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.The Code applies to each of the following:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.The Companies named or described at the top of page one of the Code and all entities that are under common management with these Companies or otherwise agree to be subject to the Code ("Affiliates").**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.Any officer,** employee-director, or employee of any Company or Affiliate, and, as may be determined by the Chief Compliance Officer on a case-by-case basis, any other non- employee, consultant, or long-term contract employee of any Company or Affiliate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.In the case of any** non-employee, consultant, or long-term contract employee, the Chief Compliance Officer shall notify such individual as to whether he or she is considered a Covered Person (as defined below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.Definitions**

**1 Investing Where It Counts**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

![](westwood-coejuly20222x1.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.<u>Beneficial Ownership.</u>** Ownership of a security where a Covered Person, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares (1) Voting power which includes the power to vote, or to direct the voting of, such security; and/or, (2) Investment power which includes the power to dispose, or to direct the disposition of, such security.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.<u>Chief Compliance Officer.</u>** The person designated as WHG's Chief Compliance Officer. Actions and approvals to be taken by the Chief Compliance Officer under this Code may be delegated by the Chief Compliance Officer to other members of the Legal and Compliance Department.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.<u>Clients.</u>** Investment advisory accounts maintained with any of the Companies or Affiliates by any person, other than Covered Person Accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.<u>Companies.</u>** The companies named or described at the top of page one of this Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.<u>Compliance Monitoring System.</u>** My Compliance Office (also known as MCO) or such other similar system or software as the Companies may use from time to time for their electronic compliance monitoring activities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.<u>Covered Persons.</u>** The Companies and the persons described in item (A) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.<u>Covered Person Account.</u>** Includes all advisory, brokerage, trust or other accounts or forms of direct Beneficial Ownership in which one or more Covered Persons and/or one or more members of a Covered Person's immediate family have a substantial proportionate economic interest excluding 529 Plans and any accounts with Westwood Trust for the benefit of the employee or their immediate family over which such individuals do not have investment discretion. Immediate family includes a Covered Person's spouse and minor children and any family member living in the same household as the Covered Person. A substantial proportionate economic interest will generally be 10% of the equity in the account in the case of a Covered Person and 25% of the equity in the account in the case of all Covered Persons in the aggregate, whichever is first applicable. Investment partnerships and similar indirect means of ownership other than registered open-end investment companies are also treated as accounts.

**Bona fide error accounts of the Companies and the Affiliates are not considered Covered Person Accounts:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.<u>Executive Manager.</u>** The Chief Executive Officer ("CEO"), the co-Directors of Equity Portfolios, the Director of Equity Research of WHG, the Director of Multi Asset Portfolios or the senior operating person of Westwood International Advisors Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.<u>Fund Clients.</u>** Clients that are registered investment companies or series thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.<u>Portfolio Managers.</u>** Covered Persons who are principally responsible for investment decisions with respect to any Westwood Strategies.

**2 Investing Where It Counts**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

![](westwood-coejuly20223x1.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.<u>Security.</u>** Any financial instruments treated as a security for investment purposes and any related instruments such as futures, forward or swap contracts entered with respect to one or more securities. However, the term Security does not include securities issued by the Government of the United States (e.g., Treasury bonds, Treasury notes, and Treasury bills), bankers' acceptances, bank certificates of deposit, and commercial paper.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.<u>Westwood Strategy.</u>** Products managed and controlled by (a) Westwood Management Corp., other than the Custom Asset Allocation accounts, (b) Westwood Advisors, L.L.C., or (c) Westwood Trust, with respect to its proprietary model accounts only. For the sake of additional clarity, a strategy that is managed by a sub-advisor or independent third party is not considered a Westwood Strategy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**III.Personal Account Reporting**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.<u>Initial Holdings Report</u>**

**No later than 10 business days after beginning employment or otherwise becoming a Covered Person, each Covered Person must submit an Initial Holdings Report through the Compliance Monitoring System containing the following information for all accounts that can hold securities excluding 529 Plans:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.The title, number of shares and principal amount of each Security in which the Covered Person had any direct or indirect Beneficial Ownership when the person became a Covered Person;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.The name of any broker, dealer or bank with whom the Covered Person maintained an account in which any Securities were held for the direct or indirect benefit of the Covered Person as of the date the person became a Covered Person; and**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.The date that the report is submitted.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. **<u>Monitoring of Covered Accounts</u>**

**Covered Persons must direct brokerage and other firms with which they have Covered Person Accounts to furnish to the Chief Compliance Officer, on a timely basis, duplicate copies of confirmations of, and account statements concerning, all personal Securities transactions or to allow an electronic feed of such statements and confirmations to the Compliance Monitoring System.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.<u>Quarterly Transaction Reports</u>**

**Every Covered Person must submit a quarterly transaction affirmation through the Compliance Monitoring System, containing the information set forth in paragraph C.2. below with respect to transactions in any Security in which such Covered Person has or by reason of such transactions acquires, any direct or indirect Beneficial Ownership in the Security, subject to the exceptions listed below in paragraph E. The required Transaction Report information is provided in the Compliance Monitoring System quarterly transaction affirmation for all personal brokerage accounts that are directly linked in the system. For those accounts that are not directly linked in the Compliance Monitoring System, the Covered Person must certify that they have reported all brokerage accounts containing reportable securities in the system and that they have requested from the broker that Westwood receive duplicate statements and transaction confirmations for all non-linked accounts. If**

**3 Investing Where It Counts**

![](westwood-coejuly20224x1.jpg)

**the necessary transaction and brokerage account information is not being provided to Westwood through either of the above methods, the Covered Person must create and upload a Transaction Report into the Compliance Monitoring System as part of their quarterly transaction affirmation.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.The Transaction Report must be submitted to the Chief Compliance Officer no later than 30 days after the end of the calendar quarter in which the transaction or account to which the report relates** was effected or established, and the report must contain the date that the report is submitted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.A Transaction Report must contain the following information:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.The date of the transaction, the title, and as applicable the exchange ticker symbol or CUSIP number, interest rate and maturity date, number of shares and the principal amount of each Security involved;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition);**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.The price at which the transaction was effected;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.The name of the broker, dealer or bank with or through whom the transaction was effected; and**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e.The date the Covered Person submits the report.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.This report must contain the following information with respect to accounts established:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.The name of the broker, dealer or bank with whom the account was established; and**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.The date the account was established.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.In addition to the quarterly transaction affirmation, employees with Managed Accounts will be required to certify in the Compliance Monitoring System on a quarterly basis that they have fully delegated investment responsibility for such accounts to a third party.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.Electronic or duplicate brokerage statements in lieu of reports.**

**A Covered Person will be deemed to have complied with the quarterly transaction report requirements of this Article III insofar as the Chief Compliance Officer receives in a timely fashion either electronic or duplicate monthly or quarterly brokerage statements on which all transactions required to be reported hereunder are described or an electronic feed of such statements and confirmations through the Compliance Monitoring System.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.Transaction Report Exceptions**

**A Covered Person is not required to submit a report in the following instances:**

**4 Investing Where It Counts**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

![](westwood-coejuly20225x1.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.A Covered Person need not make a report with respect to any transactions over which such person does not have any direct or indirect influence or control; and**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.A Covered Person need not make a report with respect to any transactions effected pursuant to an automatic investment plan (this includes dividend reinvestment plans).**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**F.<u>Ownership Admission</u>**

**Any report submitted to comply with the requirements of this Article III may contain a statement that the report shall not be construed as an admission by the person making such report that he or she has any direct or indirect Beneficial Ownership in the Security to which the report relates.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**G.<u>Annual Holdings Report</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.Each Covered Person must certify on an annual basis that he or she has disclosed or reported all personal Securities transactions required to be disclosed or reported under the Code and that he or she is not subject to any regulatory disability described in the annual certification form.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.All Annual Holdings Reports will be submitted through the Compliance Monitoring System. The report will contain the following information (which information must be current as of a date no more than 30 days before the report is submitted):**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.The title and type of security, and as applicable the exchange ticker symbol or CUSIP number, number of shares and principal amount of each Security in which the Covered Person had any direct or indirect Beneficial Ownership;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.The name of any broker, dealer or bank with whom the Covered Person maintains an account in which any Securities are held for the direct or indirect benefit of the Covered Person; and**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.The date that the report is submitted.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.The following Covered Person Accounts are only required to be reported and monitored annually as part of the Annual Holdings Report and are not subject to the** intra-year monitoring set forth above in paragraph B:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.Managed Accounts - accounts in which one or more Covered Persons and/or their immediate family have a substantial proportionate interest which are maintained with persons/entities who have no affiliation with the Companies and with respect to which no Covered Person has, in the judgment of the Chief Compliance Officer after reviewing the terms and circumstances, any direct or indirect influence or control over the investment or portfolio execution process.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.401(k) accounts that can only hold mutual funds.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**IV.** Personal Trading Restrictions

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.<u>Basic Restriction on Investing Activities</u>**

**If a Security is owned in any Westwood Strategy, excluding municipal securities, such Security or**

**5 Investing Where It Counts**

![](westwood-coejuly20226x1.jpg)

**any related Security (such as an option, warrant or convertible security) may not be purchased or sold for any Covered Person Account subject to the previously owned related Security exception set forth in paragraph (B) and permitted exceptions set forth in paragraph (G) below. If a Covered Person owns a Security that is subsequently purchased in any Westwood Strategy, the Covered Person may not sell such Security until it is sold out of all Westwood Strategies subject to the permitted exceptions set forth in paragraph (G) below. If a purchase or sale order is pending for any Westwood Strategy by any Company or Affiliate, any request to purchase or sell such Security or any related Security (such as an option, warrant or convertible security) for a Covered Person Account will be denied unless the request complies with the permitted exceptions set forth in paragraph (G) below. If a Security is under active consideration for purchase in any Westwood Strategy by any Company or Affiliate, any request to purchase or sell such Security or any related Security (such as an option, warrant or convertible security) for a Covered Person Account may be denied at the discretion of the Chief Compliance Officer and the Executive Manager.**

**For further restrictions on the purchase or sale of WHG securities, please refer to the Amended and Restated Insider Trading Policy.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.<u>Investments Owned Prior to Employment (Amnesty Period)</u>**

**If a Security or a related Security that is owned in a Westwood Strategy is also owned by a Covered Person when such person becomes a new employee, such Covered Person will have two weeks from the date of their employment orientation (the "Amnesty Period") to decide whether they want to sell their position in the Security, and all sales must occur within the Amnesty Period. After Amnesty Period, all future transactions in such Security will be subject to paragraph (A). Covered Persons must obtain pre-clearance approval for any Security or related Security traded during the two-week window.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.<u>Initial Public Offerings</u>**

**No Security or related Security may be acquired in an initial public offering ("IPO") for any Covered Person Account, unless the IPO is granted as part of an employee benefit plan to a non-employee Covered Person (for example, an employee's spouse is awarded IPO shares from his or her employer).**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.<u>Blackout Period</u>**

**No Security or related Security may be bought, sold or exercised for any Covered Person Account during the period commencing three (3) business days prior to and ending three (3) business days after the purchase or sale (or entry of an order for the purchase or sale) of that Security or any related Security for the account of any Client unless the transaction falls under the exception set forth in paragraph III.(B) or complies with the permitted exceptions set forth in paragraph (G).**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.<u>Short-Term</u>** Trading

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.No shares of WHG stock or any Security or related Security that is held within a Westwood Strategy may, within a** 60-day period, be bought and sold or sold and bought at a profit for any Covered Person Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.If WHG stock or any Security or related Security that is held within a Westwood Strategy is, within a** 60-day period, bought and sold or sold and bought for a profit in violation of this provision in any Covered Person Account, then any resulting profits must be disgorged. For purposes of disgorgement, profit recognition is based upon the difference

**6 Investing Where It Counts**

![](westwood-coejuly20227x1.jpg)

**between the most recent purchase and sale prices for the most recent transactions. Accordingly, profit recognition for disgorgement purposes may differ from the capital gains calculations for tax purposes.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.The use of any disgorged profits will be at WHG's discretion, and the employee will be responsible for any tax and related costs.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.For the purpose of the** short-term trading restriction, the expiration of an option within 60 days of the initial purchase or sale is not considered a sale of a Security.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**F.<u>Exempt Transactions</u>**.

**The following transactions are exempt from the restrictions set forth in paragraphs (A), (B) and**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) above and do not require pre-clearance under paragraph (H) below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.Participation in an ongoing automatic investment plan including 401K plans or an issuer's dividend reinvestment or stock purchase plan;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.Participation in any transaction over which no Covered Person had any direct or indirect influence or control, involuntary transactions (such as mergers, inheritances, gifts, etc.);**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.The donation of Company stock does not require** pre-clearance approval so long as the director, officer or employee donating the stock complies with the Company's Insider Trading Policy and does not possess material nonpublic information about the Company at the time of donation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.Purchases and sales of shares of registered** open-end investment companies other than shares of investment companies advised or sub-advised by the Companies ("Non- Affiliated Funds").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**G.<u>Permitted Exceptions</u>**

**Purchases and sales of the following Securities for Covered Person Accounts are exempt from the restrictions set forth in paragraphs (A), (D) and (E) above if such purchases and sales comply with the pre-clearance requirements of paragraph (H) below:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.De minimis trades of any Security or related Security (such as an option, warrant or convertible security) that is owned in a Westwood Strategy, subject to the following parameters:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.The issuer of the security must have a common equity market capitalization greater than $5 billion USD;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.The transaction is limited to 100 shares or $10,000 USD (whichever value is greater);**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.Covered Persons are limited to a maximum of 3 such de minimis trades per month; de minimis bond trades may be consolidated within a calendar month, with approval; and**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.Subject to these parameters, a Covered Person may sell a Security that is**

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![](westwood-coejuly20228x1.jpg)

**owned in a Westwood Strategy or buy a Security that Westwood is selling out of a Strategy; however, a Covered Person cannot take a position contrary to the position taken in a Westwood Strategy (e.g., cannot short a Security or hold a long PUT position in a Security where Westwood holds long position in the Security).**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.Shares of registered** open-end investment companies and certain other pooled vehicles advised or sub-advised by the Companies ("Affiliated Funds"). For reference, a list of such funds which require pre-clearance is set forth in Exhibit A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.Exchange traded funds.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.Closed-end** funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.The exercise of voluntary corporate actions is exempt if the** pre-clearance procedures for the purchase of the security to which the actions relate were satisfied.

**In addition to the exceptions set forth above, purchases and sales of Securities for Covered Person Accounts that are established for the sole purpose of product development are exempt from the restrictions set forth in paragraphs (A), (D), and (E) above and do not need to comply with the requirements of paragraph (H) below if such accounts are disclosed as Managed Accounts in the Compliance Monitoring System and are subject to regular review by the Risk Management team to ensure compliance with the investment strategy for which the product is being developed and to ensure the product development account is not being favored.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**H.<u>Pre-Clearance</u>** of Personal Securities Transactions

**Unless exempt from pre-clearance as set forth in this Code, no Security or related Security (such as an option, warrant or convertible security) may be bought, sold or exercised for a Covered Person Account unless (i) the Covered Person obtains prior approval from an Executive Manager and the Chief Compliance Officer; (ii) the approved transaction is completed on the same day or within two (2) business days after approval is received; and**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Chief Compliance Officer or an Executive Manager does not rescind such approval prior to execution of the transaction. (See paragraph (J) below for details of the Pre- Clearance Process.) Pre-clearance of personal securities transactions is typically executed through the Compliance Monitoring System.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**I.<u>Westwood Private Funds and Other Private Placements</u>**

**The purchases or sales of Securities that are not publicly traded (including shares or other participation in Westwood-affiliated private funds) will not be approved unless the Covered Person provides full details of the proposed transaction (including written certification that the investment opportunity did not arise by virtue of such person's activities on behalf of any Client) and the Chief Compliance Officer and an Executive Manager conclude, after consultation with one or more of the relevant Portfolio Managers, that the Companies would have no foreseeable interest in investing in such Security or any related Security for the account of any Client, or, if the Companies have such an interest, that the Covered Person's investment in the Security would not disadvantage a Client's investment in the Security or operate to usurp a Client's opportunity to make an investment in the Security.**

**8 Investing Where It Counts**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

![](westwood-coejuly20229x1.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**J.<u>Pre-Clearance</u>** Process

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.No Security may be purchased or sold for any Covered Person Account unless the particular transaction has been approved as required by this Code in the Compliance Monitoring System or in writing by an Executive Manager and the Chief Compliance Officer.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.For Covered Person Accounts covered by paragraph J.1. above, an electronic pre- clearance request must be submitted through the Compliance Monitoring System, and an emailed notification of** pre-clearance must be received prior to the entry of an order. If an employee cannot enter an electronic pre-clearance request through the Compliance Monitoring System for any reason, a pre-clearance request can be made by completing and submitting a Trading Approval Form, attached as Exhibit B, to the Chief Compliance Officer for approval by the Chief Compliance Officer and an Executive Manager prior to the entry of an order.

**After reviewing the proposed trade and the level of potential investment interest on behalf of Clients in the Security in question, the Chief Compliance Officer and an Executive Manager shall approve (or disapprove) a pre-clearance request on behalf of a Covered Person as expeditiously as possible. Transactions described in paragraph**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(G) above will generally be approved unless it is believed for any reason that the Covered Person Account should not trade in such Security at such time. The Chief Compliance Officer may establish automated processes for approving certain types of transactions in lieu of manual pre-trade reviews.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.Once a Covered Person's** pre-clearance request is approved, the transaction must be executed within two (2) business days after receiving approval ("Approved Period").

**If the Covered Person's trading order request is not approved, or is not executed within the Approved Period, the clearance lapses, although such trading order request may be resubmitted after such lapse. An exception to this rule applies when pre-clearance is requested for a transaction in WHG stock during an open Trading Window, in which case the pre-clearance remains effective throughout the Trading Window and expires when either the requested number of shares has been executed or the Trading Window closes.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.Trading** pre-clearance approval for the Chief Compliance Officer must be obtained from the General Counsel or Associate General Counsel and an Executive Manager. Trading pre-clearance approval for an Executive Manager must be obtained from the Chief Compliance Officer and a different Executive Manager.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.The Chief Compliance Officer shall review all** pre-clearance requests, all initial, quarterly and annual disclosure certifications and the trading activities on behalf of all Westwood Strategies with a view to ensuring that all Covered Persons are complying with the spirit as well as the detailed requirements of this Code. The Chief Compliance Officer shall periodically review confirmations from brokers to assure that all transactions effected for Covered Person Accounts are effected in compliance with this Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**V.Other** Investment-Related Restrictions

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.<u>Material Nonpublic Information</u>**

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![](westwood-coejuly202210x1.jpg)

**A Covered Person may come in contact with material nonpublic information about WHG or any other issuer in the ordinary course of business or based on a personal or professional affiliation with an issuer. In no case may a Covered Person conduct personal trades in the securities of an issuer while in possession of material nonpublic information about the issuer; and, at times, trading in the securities of any such issuer may be limited or restricted for all Covered Persons and/or for the firm as a whole even if only one Covered Person is aware of the information.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.<u>Wall Cross Securities.</u>** In the ordinary course of business, a Covered Person may receive access to material nonpublic information about another issuer related to a "wall- crossed" or "pre-marketed" public offering deal. Upon receipt of such information, the Covered Person shall immediately inform the Compliance Department that he or she possesses such information and/or that a Westwood strategy may participate in the deal. The Compliance Department shall then add the security to a firm-wide Wall Cross restricted list in the trade order management system(s) and to the restricted lists in the Compliance Monitoring System to restrict all firm and personal trades involving any such security. The restricted lists in these systems will automatically block any trades until the Compliance Department removes the security from the restricted lists. Securities shall only be removed from the lists once the information has been made public.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.<u>Employee-Affiliated</u> <u>Securities.</u>** A Covered Person may receive access to material nonpublic information about another issuer based on a personal or professional affiliation with the issuer (an "Employee-Affiliated Security"). For example, a Covered Person may serve on the board of directors of another issuer, or a Covered Person's spouse may be employed by an issuer and have access to material nonpublic information. The Compliance Department identifies any such affiliations based on the outside business activities and initial and ongoing holdings disclosures that all Covered Persons are required to make in the Compliance Monitoring System. When an Employee-Affiliated Security is identified, the Compliance Department shall place the security on a watch list in the trade order management system(s) and the Compliance Monitoring System. Firm-level and personal trade requests involving any such security

**will be automatically restricted and flagged for review by the Compliance Department, at which point the Chief Compliance Officer shall review the proposed trade and determine whether it is appropriate to lift the restriction for the trade under the circumstances. In making such determination, the Chief Compliance Officer shall consider (a) the nature of the affiliation with the issuer, (b) any limitations the issuer has placed on transactions in its securities, (c) the likelihood that the employee affiliated with the security is aware of material nonpublic information and/or could have shared it, (d) who is requesting the trade and whether the trade is for a Covered Person Account or a Client account, (e) the size, timing, and direction of the trade, (f) past practice, and (g) such other factors as may be relevant under the circumstances. The Chief Compliance Officer shall document the reasons for the determination. The security shall remain on the watch list until the affiliation has ended, at which point the Chief Compliance Officer or other senior member of the Compliance Department will authorize the removal of the restrictions on the security.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;VI. Conflicts of Interest

**Covered Persons are prohibited from engaging in any activity, practice, or act which conflicts with, or appears**

**10 Investing Where It Counts**

![](westwood-coejuly202211x1.jpg)

**to conflict with, the interests of the Companies, its customers, or vendors.**

**Covered Persons are required to fully disclose any potential conflict of interest to the Compliance Department via the Compliance Monitoring System.**

**A conflict of interest exists when you, knowingly or unknowingly, engage in any activity that may compromise you, another employee, or the Company in its relationship with a customer, vendor, or competitor.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.<u>Gifts & Entertainment.</u>** Potential conflicts of interest with a customer, vendor, or competitor may include soliciting business for personal gain, accepting gifts other than those of nominal value (not more than $100), or requesting favors, discounts, or services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.Gifts Received: No Covered Person shall accept any gift or other item of more than $100 in value from any Client, competitor, or any person or entity that does business with or on behalf of any Client;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.Entertainment Received: Covered Persons shall report accepted offers of entertainment (dinners, sports/concert events, etc.) from any person or entity that does business with or on behalf of any Client;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.Gifts Given: Covered Persons shall report all gifts or other items of value given to any Client, competitor, vendor or any person or entity that does business with or on behalf of any Client in all instances where such Covered Persons are acting in their capacity as representatives of the Companies;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.Entertainment Given: Covered Persons shall report all offers of entertainment accepted by any Client, competitor, vendor or any person or entity that does business with or on behalf of any Client in all instances where such Covered Persons are acting in their capacity as representatives of the Companies;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e.Reporting of gifts and entertainment shall be made through the Compliance Monitoring System or through our expense management system in the case of reimbursable gifts that are given; and**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**f.Westwood's Compliance Department (in conjunction with all employees servicing Clients) shall track all gifts and entertainment, if any, offered to and accepted by** Taft-Hartley Clients.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.<u>Outside Business Activities</u>**.

**Potential conflicts of interest may arise in connection with a Covered Person's activities outside the scope of their employment with the Company. All Covered Persons are required to disclose their outside business activities upon hire and are required to obtain pre-clearance approval for any new outside business activities engaged in after hire. No Covered Person shall participate in any outside business activity without prior written authorization from his or her supervisor and the Chief Compliance Officer based upon a determination that the activity would not be inconsistent with the interests of the Company or Clients or in violation of this Code or the Code of Business Conduct. Generally, outside business activities requiring disclosure and/or pre-clearance approval fall under the following categories:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.Outside Activities: Activities that must be reported and/or** pre-cleared include (i) any outside activity involving work for another financial services firm or (ii) any recurring

**11 Investing Where It Counts**

![](westwood-coejuly202212x1.jpg)

**outside activity, whether for compensation or not, that regularly obligates the Covered Person to consistently take time off work**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.Service as a Director or Trustee: No Covered Person shall serve (i) as a director on the board of a publicly traded company, or any company with which the Companies do or may do business, or any company in which any Westwood strategy has an interest, or on the board of a professional organization, (ii) as a trustee at a charitable or other non- profit organization with which the Companies do or may do business, or (iii) in any other**

**position that may involve a level of influence or control over the financial ![](westwood-coejuly202212xi2.jpg)dealings or decisions of any such organization, without prior written authorization from the Chief Compliance Officer and the Covered Person's supervisor based upon a determination that the board service would not be inconsistent with the interests of the Clients or in violation of this Code or the Code of Business Conduct.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.<u>SEC</u>** Pay-to-Play Rule – Political Contributions

**Covered Persons are permitted to make political contributions to elected officials, candidates, and others in a manner that is consistent with regulatory requirements and Westwood's Policies & Procedures Manual. All Covered Persons are subject to Westwood's political contributions rules set forth below, although whether a Covered Person is considered a "Covered Associate," as defined in the SEC's Pay-to-Play Rules, is a determination that will be made by the Compliance Department on a case-by-case basis.**

**It is never appropriate to make or solicit political contributions or provide gifts or entertainment for the purpose of improperly influencing the actions of public officials. Accordingly, our policy is to restrict, monitor, and require prior approval of any political contributions.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.Every Covered Person who is newly hired must provide information to the Chief Compliance Officer no later than 30 days after his or her date of hire regarding any political contributions made within the preceding two years of his or her date of hire.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.Prior to accepting a new advisory client that is a government entity, the Chief Compliance Officer will review any political contributions made by Covered Persons.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.No political contribution may be made by any Covered Person unless the contribution has been approved by the Chief Compliance Officer in advance.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.An electronic** pre-clearance request must be submitted through the Compliance Monitoring System (including the name and title of the recipient, the amount, and the anticipated date of the contribution), and an emailed notification of pre-clearance must be received before the contribution is made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.After reviewing the proposed contribution to the candidate and the level of potential involvement the Companies may have with such candidate or a government entity with which such candidate is or may become affiliated, the Chief Compliance Officer, and an Executive Manager when appropriate, will approve (or disapprove) a** pre-clearance request as expeditiously as possible. Proposed contributions will generally be approved unless it is believed for any reason that the Covered Person's contribution may currently or in the future violate the Pay-to-Play Rules.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

![](westwood-coejuly202213x1.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.Contribution** pre-clearance approval for the Chief Compliance Officer must be obtained from the Associate General Counsel and an Executive Manager.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.On an annual basis, Covered Persons must submit disclosure certifications regarding**

**their political contributions and must ensure that all required information (including the name and title of each recipient, the amount, and the exact date each contribution was ultimately made) is disclosed.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.<u>Disclosure of Conflicts</u>**

**Full disclosure to the Compliance Department of any potential conflict of interest is required as soon as such potential conflict is discovered. If you believe that unusual circumstances justify your engaging in an activity that may result in a conflict of interest, you may request in writing that the Compliance Department review the situation and grant a waiver in consultation with senior management, which consists of the Chief Executive Officer, General Counsel & Chief Compliance Officer, and Head of Westwood Trust Operations.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;VII. Reports and Additional Compliance Procedures

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.**![](westwood-coejuly202213xi2.jpg)Reporting of Violations

**Violations of the Code of Ethics must be promptly reported to the Chief Compliance Officer.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.Anonymous reporting is acceptable; and**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.All violations will be reviewed by the Compliance Department and/or the Westwood Holdings Group, Inc. Audit Committee.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.<u>Board Reporting for Fund Clients</u>**

**At least annually (or quarterly in the case of Items 4 and 5 below), each of the Companies that has a Fund Client or that provides principal underwriting services for a Fund Client, shall, together with each Fund Client, furnish a written report to the Board of Directors of the Fund Client that:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.Describes any issues arising under the Code since the last report;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.Certifies that Companies have developed procedures concerning Covered Persons' personal trading activities and reporting requirements relevant to such Fund Clients that are reasonably necessary to prevent violations of the Code;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.Recommends changes, if any, to the Fund Clients' or the Companies' Codes of Ethics or procedures;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.Provides a summary of any material or substantive violations of this Code by Covered Persons with respect to such Fund Clients which occurred during the past quarter and the nature of any remedial action taken; and**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.Describes any material or significant violations or "exceptions" to any provisions of this Code of Ethics as determined under Article VI below.**

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

![](westwood-coejuly202214x1.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;VIII. Certifications

**Annually, each Covered Person must certify that he or she has read and understood the Code and recognizes that he or she is subject to such Code. A Covered Person's initial Code of Ethics certification will be submitted through the Compliance Monitoring System. All other certifications will be submitted through the Compliance Monitoring System.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IX. Sanctions

**Upon discovering that a Covered Person has not complied with the requirements of this Code, the Compliance Department will determine appropriate sanctions. The Chief Compliance Officer will consult on sanctions with senior management and the Covered Person's supervisor if necessary. In addition, the Board of Directors of the relevant Company or of the relevant Fund Client, whichever is most appropriate under the circumstances, may impose on that person whatever sanctions the Board deems appropriate, including, among other things, disgorgement of profit, censure, suspension, or termination of employment. Violations of requirements of this Code by employees or Covered Persons and any sanctions imposed in connection therewith shall be reported not less frequently than quarterly to the Board of Directors of any relevant Company or Fund Client, as applicable.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**X.Waivers**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.The Compliance Department, in consultation with senior management, when necessary, reserves the right to grant, on a** case-by-case basis, waivers to any provisions under this Code that would not be violations of Rule 204A-1. Any waivers made hereunder will be maintained in writing by the Compliance Department.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.Requests for waivers to the personal investing restrictions set forth in Article III of this Code must be submitted in writing to the Chief Compliance Officer along with any Trading Approval request required for the transaction. Following are guidelines that will be considered when reviewing requests for personal investing restriction waivers:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.Access to research/analyst information: an employee requesting a waiver should have little or no access to research/analyst information;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.De minimis trade: if an employee requests a waiver for a transaction in a security that is held in a Westwood Strategy, the transaction must, in the opinion of the Chief Compliance Officer, be a de minimis trade, i.e., a small number of shares in a security with a large market cap and a high average trading volume that is not likely to adversely affect the price of the security; or**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.Expiration of stock options: the exercise of stock options granted by a previous employer that are about to expire.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;XI. Preservation of Documents

**This Code, a copy of each report by a Covered Person, a record of any violation of this Code and any action**

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![](westwood-coejuly202215x1.jpg)

**taken as a result of the violation, a record of all written acknowledgments for each Covered Person, any written report made hereunder by the Companies or the Chief Compliance Officer, lists of all persons required to make reports, a list of any waivers, and the reasons therefor, with respect to Article III, and any records with respect to transactions pursuant to Article III above, shall be preserved with the records of the relevant Company and any relevant Fund Client for the period required by Rule 204A-1 and Rule 17j-l.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;XII. Other Laws, Rules and Statements of Policy

**Nothing contained in this Code shall be interpreted as relieving any Covered Person from acting in accordance with the provision of any applicable law, rule or regulation or any other statement of policy or procedure governing the conduct of such person adopted by the Companies, the Affiliates or the Fund Clients.**

**All activities of the Company must be conducted in full compliance with all applicable laws and regulations. Senior management should be informed regarding all matters pertinent to the Company's position regarding such laws and regulations. The Company expects all employees to follow the spirit as well as the letter of the law. In addition, Covered Persons are expected to fully comply with the Company's Amended and Restated Insider Trading Policy that prohibits illegal insider trading and the use of material non-public information. All employees are expected to cooperate fully with the Company's internal and outside auditors, attorneys, and regulatory examiners.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;XIII. Further Information

**If any person has any question with regard to the applicability of the provisions of this Code generally or with regard to any Securities transaction or transactions, they should consult the Chief Compliance Officer.**

**Updated July 26, 2022**

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![](westwood-coejuly202216x1.jpg)

**Exhibit A**

**List of Affiliated Funds That Require Pre-Clearance for Personal Investing Activities**

**Westwood Quality Value Fund – WHGLX, WWLAX, WWLCX**

**Westwood Quality MidCap Fund - WWMCX**

**Westwood Quality SMidCap Fund – WHGMX & WWSMX**

**Westwood Quality SmallCap Fund – WHGSX, WWSYX, WHGAX, WHGCX**

**Westwood Quality AllCap Fund – WQAIX & WQAUX**

**Westwood Alternative Income Fund – WMNIX, WMNUX, WMNAX, WWACX**

**Westwood Total Return Fund – WLVIX, WWTAX, WTOCX**

**Westwood Income Opportunity Fund – WHGIX, WWIAX, WWICX**

**Westwood High Income Fund – WHGHX, WSDAX, WWHCX**

**Westwood SmallCap Growth Fund - WSCIX**

**Morningstar U.S. Equity Fund – MSTQX**

**Teton Westwood Equity Fund**

**Teton Westwood Balanced Fund**

**Principal Investors Fund – LargeCap Value Fund III**

**RBC Private U.S. Value Equity Pool**

**Timothy Plan Large/Mid-Cap Value Fund**

**Timothy Plan Small-Cap Value Fund**

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![](westwood-coejuly202217x1.jpg)

**Exhibit B**

**<u>PRE-CLEARANCE TRADING APPROVAL FORM</u>**

**I, _________________________________________________ (name), am a Covered Person or authorized officer thereof and seek pre-clearance to engage in the transaction described below, for the benefit of myself or another Covered Person:**

**<u>Acquisition or Disposition</u> (circle one)**

**Name of Account:**

**Account Number:**

**Date of Request:**

**Security (Name & Ticker):**

**Amount or # of Shares:**

**Broker:**

**If the transaction involves a Security that is not publicly traded, a description of proposed transaction, source of investment opportunity and any potential conflicts of interest:**

**I hereby certify that, to the best of my knowledge, the transaction described herein is not prohibited by the Code of Ethics and that the opportunity to engage in the transaction did not arise by virtue of my activities on behalf of any Client.**

---

| | |
|:---|:---|
| **Signature: _________________________** | **Print Name: ________________________** |

---

**<u>Approved or Disapproved:</u> (circle one)**

**Date of Approval: _____________________________**

---

| | |
|:---|:---|
| **Signature: _________________________** | **Print Name: ________________________** |

---

**Compliance Approval: ______________________________**

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