# EDGAR Filing Document

**Accession Number:** 0000012601
**File Stem:** 0000012601-26-000240
**Filing Date:** 2026-4
**Character Count:** 2007320
**Document Hash:** a53cf8e5a1661bad0337039105ce38f9
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000012601-26-000240.hdr.sgml**: 20260427

**ACCESSION NUMBER**: 0000012601-26-000240

**CONFORMED SUBMISSION TYPE**: 485BPOS

**PUBLIC DOCUMENT COUNT**: 144

**FILED AS OF DATE**: 20260427

**DATE AS OF CHANGE**: 20260427

**EFFECTIVENESS DATE**: 20260501

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PRINCIPAL VARIABLE CONTRACTS FUNDS INC
- **CENTRAL INDEX KEY:** 0000012601

**ORGANIZATION NAME:**
- **EIN:** 000000000
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-01944
- **FILM NUMBER:** 26899524

**BUSINESS ADDRESS:**
- **STREET 1:** 711 HIGH STREET
- **CITY:** DES MOINES
- **STATE:** IA
- **ZIP:** 50392
- **BUSINESS PHONE:** 515-247-5477

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

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PRINCIPAL VARIABLE CONTRACTS FUND INC
- **DATE OF NAME CHANGE:** 19980617

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PRINCIPAL CAPITAL ACCUMULATION FUND INC
- **DATE OF NAME CHANGE:** 19920703

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PRINCOR INVESTMENT FUND INC
- **DATE OF NAME CHANGE:** 19880906
**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PRINCIPAL VARIABLE CONTRACTS FUNDS INC
- **CENTRAL INDEX KEY:** 0000012601

**ORGANIZATION NAME:**
- **EIN:** 000000000
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 002-35570
- **FILM NUMBER:** 26899523

**BUSINESS ADDRESS:**
- **STREET 1:** 711 HIGH STREET
- **CITY:** DES MOINES
- **STATE:** IA
- **ZIP:** 50392
- **BUSINESS PHONE:** 515-247-5477

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

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PRINCIPAL VARIABLE CONTRACTS FUND INC
- **DATE OF NAME CHANGE:** 19980617

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PRINCIPAL CAPITAL ACCUMULATION FUND INC
- **DATE OF NAME CHANGE:** 19920703

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PRINCOR INVESTMENT FUND INC
- **DATE OF NAME CHANGE:** 19880906

## Series and Classes Contracts Data

### Global Emerging Markets Account (formerly, International Emerging Markets Account) (Series ID: S000007656)

| Class ID   | Class Name                              | Ticker Symbol   |
|:---|:---|:---|
| C000020904 | Global Emerging Markets Account Class 1 |  |

### LargeCap S&P 500 Index Account (Series ID: S000007660)

| Class ID   | Class Name                             | Ticker Symbol   |
|:---|:---|:---|
| C000020908 | LargeCap S&P 500 Index Account Class 1 |  |
| C000155998 | LargeCap S&P 500 Index Account Class 2 |  |

### MidCap Account (Series ID: S000007662)

| Class ID   | Class Name             | Ticker Symbol   |
|:---|:---|:---|
| C000020910 | MidCap Account Class 1 |  |
| C000079602 | MidCap Account Class 2 |  |

### Principal LifeTime 2020 Account (Series ID: S000007668)

| Class ID   | Class Name                              | Ticker Symbol   |
|:---|:---|:---|
| C000020916 | Principal LifeTime 2020 Account Class 1 |  |

### Principal LifeTime 2030 Account (Series ID: S000007669)

| Class ID   | Class Name                              | Ticker Symbol   |
|:---|:---|:---|
| C000020917 | Principal LifeTime 2030 Account Class 1 |  |

### Principal LifeTime 2040 Account (Series ID: S000007670)

| Class ID   | Class Name                              | Ticker Symbol   |
|:---|:---|:---|
| C000020918 | Principal LifeTime 2040 Account Class 1 |  |

### Principal LifeTime 2050 Account (Series ID: S000007671)

| Class ID   | Class Name                              | Ticker Symbol   |
|:---|:---|:---|
| C000020919 | Principal LifeTime 2050 Account Class 1 |  |

### Principal LifeTime Strategic Income Account (Series ID: S000007672)

| Class ID   | Class Name                                          | Ticker Symbol   |
|:---|:---|:---|
| C000020920 | Principal LifeTime Strategic Income Account Class 1 |  |

### Real Estate Securities Account (Series ID: S000007673)

| Class ID   | Class Name                             | Ticker Symbol   |
|:---|:---|:---|
| C000020921 | Real Estate Securities Account Class 1 |  |
| C000038552 | Real Estate Securities Account Class 2 |  |

### SmallCap Account (Series ID: S000007675)

| Class ID   | Class Name               | Ticker Symbol   |
|:---|:---|:---|
| C000020923 | SmallCap Account Class 1 |  |
| C000152597 | SmallCap Account Class 2 |  |

### Core Plus Bond Account (Series ID: S000007677)

| Class ID   | Class Name                     | Ticker Symbol   |
|:---|:---|:---|
| C000020925 | Core Plus Bond Account Class 1 |  |

### Diversified International Account (Series ID: S000007681)

| Class ID   | Class Name                                | Ticker Symbol   |
|:---|:---|:---|
| C000020929 | Diversified International Account Class 1 |  |

### LargeCap Growth Account I (Series ID: S000007682)

| Class ID   | Class Name                        | Ticker Symbol   |
|:---|:---|:---|
| C000020930 | LargeCap Growth Account I Class 1 |  |

### Equity Income Account (Series ID: S000014083)

| Class ID   | Class Name                    | Ticker Symbol   |
|:---|:---|:---|
| C000038528 | Equity Income Account Class 1 |  |
| C000038529 | Equity Income Account Class 2 |  |

### Strategic Asset Management Strategic Growth Portfolio (Series ID: S000014084)

| Class ID   | Class Name                                                    | Ticker Symbol   |
|:---|:---|:---|
| C000038530 | Strategic Asset Management Strategic Growth Portfolio Class 1 |  |
| C000038531 | Strategic Asset Management Strategic Growth Portfolio Class 2 |  |

### Principal Capital Appreciation Account (Series ID: S000014085)

| Class ID   | Class Name                                     | Ticker Symbol   |
|:---|:---|:---|
| C000038532 | Principal Capital Appreciation Account Class 1 |  |
| C000038533 | Principal Capital Appreciation Account Class 2 |  |

### Government & High Quality Bond Account f/k/a Mortgage Securities Account (Series ID: S000014088)

| Class ID   | Class Name                                     | Ticker Symbol   |
|:---|:---|:---|
| C000038539 | Government & High Quality Bond Account Class 1 |  |

### Short-Term Income Account (Series ID: S000014089)

| Class ID   | Class Name                        | Ticker Symbol   |
|:---|:---|:---|
| C000038541 | Short-Term Income Account Class 1 |  |

### Strategic Asset Management Balanced Portfolio (Series ID: S000014090)

| Class ID   | Class Name                                            | Ticker Symbol   |
|:---|:---|:---|
| C000038542 | Strategic Asset Management Balanced Portfolio Class 2 |  |
| C000038543 | Strategic Asset Management Balanced Portfolio Class 1 |  |

### Strategic Asset Management Conservative Balanced Portfolio (Series ID: S000014091)

| Class ID   | Class Name                                                         | Ticker Symbol   |
|:---|:---|:---|
| C000038544 | Strategic Asset Management Conservative Balanced Portfolio Class 2 |  |
| C000038545 | Strategic Asset Management Conservative Balanced Portfolio Class 1 |  |

### Strategic Asset Management Conservative Growth Portfolio (Series ID: S000014092)

| Class ID   | Class Name                                                       | Ticker Symbol   |
|:---|:---|:---|
| C000038546 | Strategic Asset Management Conservative Growth Portfolio Class 1 |  |
| C000038547 | Strategic Asset Management Conservative Growth Portfolio Class 2 |  |

### Strategic Asset Management Flexible Income Portfolio (Series ID: S000014093)

| Class ID   | Class Name                                                   | Ticker Symbol   |
|:---|:---|:---|
| C000038548 | Strategic Asset Management Flexible Income Portfolio Class 1 |  |
| C000038549 | Strategic Asset Management Flexible Income Portfolio Class 2 |  |

### Diversified Balanced Account (Series ID: S000027170)

| Class ID   | Class Name                           | Ticker Symbol   |
|:---|:---|:---|
| C000081996 | Diversified Balanced Account Class 2 |  |
| C000186093 | Diversified Balanced Account Class 1 |  |

### Diversified Growth Account (Series ID: S000027171)

| Class ID   | Class Name                         | Ticker Symbol   |
|:---|:---|:---|
| C000081997 | Diversified Growth Account Class 2 |  |

### Bond Market Index Account (Series ID: S000036925)

| Class ID   | Class Name                        | Ticker Symbol   |
|:---|:---|:---|
| C000112990 | Bond Market Index Account Class 1 |  |

### Diversified Income Account (Series ID: S000036926)

| Class ID   | Class Name                         | Ticker Symbol   |
|:---|:---|:---|
| C000112991 | Diversified Income Account Class 2 |  |

### Principal LifeTime 2060 Account (Series ID: S000040678)

| Class ID   | Class Name                              | Ticker Symbol   |
|:---|:---|:---|
| C000126088 | Principal LifeTime 2060 Account Class 1 |  |

### Diversified Balanced Adaptive Allocation Account (formerly, Diversified Balanced Volatility Control Account) (Series ID: S000056528)

| Class ID   | Class Name                                                                                                           | Ticker Symbol   |
|:---|:---|:---|
| C000178859 | Diversified Balanced Adaptive Allocation Account (formerly, Diversified Balanced Volatility Control Account) Class 2 |  |

### Diversified Growth Adaptive Allocation Account (formerly, Diversified Growth Volatility Control Account) (Series ID: S000056529)

| Class ID   | Class Name                                                                                                       | Ticker Symbol   |
|:---|:---|:---|
| C000178860 | Diversified Growth Adaptive Allocation Account (formerly, Diversified Growth Volatility Control Account) Class 2 |  |

### Blue Chip Account (Series ID: S000070249)

| Class ID   | Class Name                | Ticker Symbol   |
|:---|:---|:---|
| C000260396 | Blue Chip Account Class 2 |  |

### U.S. LargeCap S&P 500 Index Buffer July Account (formerly, U.S. LargeCap Buffer July Account) (Series ID: S000076127)

| Class ID   | Class Name   | Ticker Symbol   |
|:---|:---|:---|
| C000235586 | Class 2      |  |

### U.S. LargeCap S&P 500 Index Buffer October Account (formerly, U.S. LargeCap Buffer October Account) (Series ID: S000077914)

| Class ID   | Class Name   | Ticker Symbol   |
|:---|:---|:---|
| C000238594 | Class 2      |  |

### U.S. LargeCap S&P 500 Index Buffer April Account (formerly, U.S. LargeCap Buffer April Account) (Series ID: S000077915)

| Class ID   | Class Name   | Ticker Symbol   |
|:---|:---|:---|
| C000238595 | Class 2      |  |

### U.S. LargeCap S&P 500 Index Buffer January Account (formerly, U.S. LargeCap Buffer January Account) (Series ID: S000077916)

| Class ID   | Class Name   | Ticker Symbol   |
|:---|:---|:---|
| C000238596 | Class 2      |  |

?xml version='1.0' encoding='ASCII'? ck0000012601-20260427

Registration No. 002-35570

**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. 134

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 134

**PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.**

(Registrant Exact Name as Specified in Charter)

711 High Street

Des Moines, IA 50392

(Address of Principal Executive Offices)

(515) 247-5419

(Registrant's Telephone Number, including Area Code)

---

| |
|:---|
| Laura B. Latham |
| 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):**

☐&nbsp;&nbsp;&nbsp;&nbsp;immediately upon filing pursuant to paragraph (b)

☒&nbsp;&nbsp;&nbsp;&nbsp;on May 1, 2026 pursuant to paragraph (b)

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

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

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

☐&nbsp;&nbsp;&nbsp;&nbsp;on (date) pursuant to paragraph (a)(2) of rule 485

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

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

**Title of securities being registered:** 

Class 1 and Class 2 shares

**EXPLANATORY NOTE**

Principal Variable Contracts Funds, Inc. (the "Registrant") is filing this Amendment as an annual update to the Registrant's Registration Statement for all series. The Amendment includes the following: (1) facing page; (2) Part A (Prospectus for Class 1 and Class 2 shares); (3) Part B (Statement of Additional Information); (4) Part C; and (5) signature pages.

------

---

| |
|:---|
| **PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.** |
| ("PVC" or the "Registrant") |
| **Class 1 Shares** |
| **Class 2 Shares** |
| The date of this Prospectus is May 1, 2026. |
| **ACCOUNTS OF THE REGISTRANT** |
| (each, a "Fund" and, together, the "Funds") |

---

---

| | |
|:---|:---|
| **Equity Accounts** | **Asset Allocation Accounts** |
| Blue Chip Account (Class 2) | Diversified Balanced Account (Class 1 & Class 2) |
| Diversified International Account (Class 1) | Diversified Balanced Adaptive Allocation Account (Class 2) |
| Equity Income Account (Class 1 & Class 2) | Diversified Growth Account (Class 2) |
| Global Emerging Markets Account (Class 1) | Diversified Growth Adaptive Allocation Account (Class 2) |
| LargeCap Growth Account I (Class 1) | Diversified Income Account (Class 2) |
| LargeCap S&P 500 Index Account (Class 1 & Class 2) | Principal LifeTime Accounts |
| MidCap Account (Class 1 & Class 2) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Strategic Income Account (Class 1) |
| Principal Capital Appreciation Account (Class 1 & Class 2) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2020 Account (Class 1) |
| Real Estate Securities Account (Class 1 & Class 2) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2030 Account (Class 1) |
| SmallCap Account (Class 1 & Class 2) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2040 Account (Class 1) |
| U.S. LargeCap S&P 500 Index Buffer January Account (Class 2) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2050 Account (Class 1) |
| U.S. LargeCap S&P 500 Index Buffer April Account (Class 2) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2060 Account (Class 1) |
| U.S. LargeCap S&P 500 Index Buffer July Account (Class 2)  | Strategic Asset Management Portfolios (the "SAM Portfolios") |
| U.S. LargeCap S&P 500 Index Buffer October Account (Class 2) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SAM Balanced Portfolio (Class 1 & Class 2) |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SAM Conservative Balanced Portfolio (Class 1 & Class 2) |
| **Fixed-Income Accounts** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SAM Conservative Growth Portfolio (Class 1 & Class 2) |
| Bond Market Index Account (Class 1) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SAM Flexible Income Portfolio (Class 1 & Class 2) |
| Core Plus Bond Account (Class 1) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SAM Strategic Growth Portfolio (Class 1 & Class 2) |
| Government & High Quality Bond Account (Class 1) |  |
| Short-Term Income Account (Class 1) |  |

---

This Prospectus describes a mutual fund organized by Principal Financial Group, Inc. and its affiliates. The Registrant provides a choice of investment objectives through the Funds listed above.

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

------

---

| | |
|:---|:---|
| **TABLE OF CONTENTS** | **TABLE OF CONTENTS** |
| | **<u>Page</u>** |
| FUND SUMMARIES |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Blue Chip Account | <u>[4](#i4eeb2d0d314249afa955c9a57524e6d5_13)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Bond Market Index Account | <u>[7](#i4eeb2d0d314249afa955c9a57524e6d5_22)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Core Plus Bond Account | <u>[11](#i4eeb2d0d314249afa955c9a57524e6d5_31)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Diversified Balanced Account | <u>[15](#i4eeb2d0d314249afa955c9a57524e6d5_40)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Diversified Balanced Adaptive Allocation Account | <u>[20](#i4eeb2d0d314249afa955c9a57524e6d5_58)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Diversified Growth Account | <u>[25](#i4eeb2d0d314249afa955c9a57524e6d5_67)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Diversified Growth Adaptive Allocation Account | <u>[30](#i4eeb2d0d314249afa955c9a57524e6d5_85)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Diversified Income Account | <u>[35](#i4eeb2d0d314249afa955c9a57524e6d5_94)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Diversified International Account | <u>[40](#i4eeb2d0d314249afa955c9a57524e6d5_103)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity Income Account | <u>[43](#i4eeb2d0d314249afa955c9a57524e6d5_112)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Global Emerging Markets Account | <u>[46](#i4eeb2d0d314249afa955c9a57524e6d5_121)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Government & High Quality Bond Account | <u>[50](#i4eeb2d0d314249afa955c9a57524e6d5_130)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;LargeCap Growth Account I | <u>[54](#i4eeb2d0d314249afa955c9a57524e6d5_139)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;LargeCap S&P 500 Index Account | <u>[57](#i4eeb2d0d314249afa955c9a57524e6d5_148)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;MidCap Account | <u>[60](#i4eeb2d0d314249afa955c9a57524e6d5_166)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Principal Capital Appreciation Account | <u>[63](#i4eeb2d0d314249afa955c9a57524e6d5_175)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Principal LifeTime Strategic Income Account | <u>[66](#i4eeb2d0d314249afa955c9a57524e6d5_184)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Principal LifeTime 2020 Account | <u>[71](#i4eeb2d0d314249afa955c9a57524e6d5_193)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Principal LifeTime 2030 Account | <u>[77](#i4eeb2d0d314249afa955c9a57524e6d5_202)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Principal LifeTime 2040 Account | <u>[83](#i4eeb2d0d314249afa955c9a57524e6d5_211)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Principal LifeTime 2050 Account | <u>[89](#i4eeb2d0d314249afa955c9a57524e6d5_220)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Principal LifeTime 2060 Account | <u>[95](#i4eeb2d0d314249afa955c9a57524e6d5_229)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Real Estate Securities Account | <u>[101](#i4eeb2d0d314249afa955c9a57524e6d5_238)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;SAM (Strategic Asset Management) Balanced Portfolio | <u>[105](#i4eeb2d0d314249afa955c9a57524e6d5_247)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;SAM (Strategic Asset Management) Conservative Balanced Portfolio | <u>[110](#i4eeb2d0d314249afa955c9a57524e6d5_256)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;SAM (Strategic Asset Management) Conservative Growth Portfolio | <u>[115](#i4eeb2d0d314249afa955c9a57524e6d5_265)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;SAM (Strategic Asset Management) Flexible Income Portfolio | <u>[120](#i4eeb2d0d314249afa955c9a57524e6d5_274)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;SAM (Strategic Asset Management) Strategic Growth Portfolio | <u>[125](#i4eeb2d0d314249afa955c9a57524e6d5_283)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Short-Term Income Account | <u>[129](#i4eeb2d0d314249afa955c9a57524e6d5_292)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;SmallCap Account | <u>[133](#i4eeb2d0d314249afa955c9a57524e6d5_301)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. LargeCap S&P 500 Index Buffer January Account | <u>[136](#i4eeb2d0d314249afa955c9a57524e6d5_310)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. LargeCap S&P 500 Index Buffer April Account | <u>[144](#i4eeb2d0d314249afa955c9a57524e6d5_313)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. LargeCap S&P 500 Index Buffer July Account | <u>[152](#i4eeb2d0d314249afa955c9a57524e6d5_316)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. LargeCap S&P 500 Index Buffer October Account | <u>[160](#i4eeb2d0d314249afa955c9a57524e6d5_319)</u> |
| ADDITIONAL INFORMATION ABOUT INVESTMENT STRATEGIES AND RISKS | <u>[168](#i4eeb2d0d314249afa955c9a57524e6d5_322)</u> |
| PORTFOLIO HOLDINGS INFORMATION | <u>[194](#i4eeb2d0d314249afa955c9a57524e6d5_325)</u> |
| MANAGEMENT OF THE FUNDS | <u>[195](#i4eeb2d0d314249afa955c9a57524e6d5_328)</u> |
| PRICING OF FUND SHARES | <u>[200](#i4eeb2d0d314249afa955c9a57524e6d5_343)</u> |
| PURCHASE OF FUND SHARES | <u>[201](#i4eeb2d0d314249afa955c9a57524e6d5_346)</u> |
| SALE OF FUND SHARES | <u>[202](#i4eeb2d0d314249afa955c9a57524e6d5_355)</u> |

---

------

---

| | |
|:---|:---|
| **TABLE OF CONTENTS** | **TABLE OF CONTENTS** |
| | **<u>Page</u>** |
| DIVIDENDS AND DISTRIBUTIONS | <u>[203](#i4eeb2d0d314249afa955c9a57524e6d5_361)</u> |
| FREQUENT PURCHASES AND REDEMPTIONS | <u>[203](#i4eeb2d0d314249afa955c9a57524e6d5_364)</u> |
| TAX CONSIDERATIONS | <u>[204](#i4eeb2d0d314249afa955c9a57524e6d5_367)</u> |
| ONGOING FEES | <u>[205](#i4eeb2d0d314249afa955c9a57524e6d5_370)</u> |
| DISTRIBUTION PLANS AND INTERMEDIARY COMPENSATION | <u>[205](#i4eeb2d0d314249afa955c9a57524e6d5_373)</u> |
| APPENDIX A – DESCRIPTION OF BOND RATINGS | <u>A-[1](#i4eeb2d0d314249afa955c9a57524e6d5_382)</u> |
| APPENDIX B – FINANCIAL HIGHLIGHTS | <u>B-[1](#i4eeb2d0d314249afa955c9a57524e6d5_385)</u> |
| ADDITIONAL INFORMATION | C |

---

------

**BLUE CHIP ACCOUNT**

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 2** |
| Management Fees | 0.60% |
| Distribution and/or Service (12b-1) Fees | 0.25% |
| Other Expenses | 0.08% |
| **Total Annual Fund Operating Expenses** | **0.93%** |
| Expense Reimbursement <sup>(1)</sup> | (0.03)% |
| **Total Annual Fund Operating Expenses after Expense Reimbursement** | **0.90%** |

---

<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 0.90% for Class 2 shares. It is expected the expense limit will continue through the period ending April 30, 2027; however, Principal Variable Contracts 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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Blue Chip Account - Class 2** | $92 | $293 | $512 | $1140 |

---

**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. 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 37.4% 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 that, in the opinion of Principal Global Investors, LLC ("PGI"), the Fund's investment advisor, display characteristics of a "blue chip" company. For this Fund, companies with large market capitalizations are those with market capitalizations similar to companies in the S&P 500<sup>®</sup> Index (as of March 31, 2026, this was between approximately $5.3 billion and $4.2 trillion). In PGI's view, "blue chip" companies typically display some or all of the following characteristics: (1) large, well-established, and financially sound companies; and (2) considered market leaders or among the top three companies in their sector. The Fund tends to focus on securities of companies that show potential for growth of capital as well as an expectation for above-average earnings. In selecting securities in which to invest, PGI uses a bottom-up, fundamental process, focusing on a fundamental analysis of individual companies. The Fund also invests in securities of foreign companies.

------

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.

**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.

**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).

**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.

**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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

Using the historical performance of the Fund's Class 3 shares, adjusted as described below, the bar chart shows changes in the performance of the Fund's Class 2 shares from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

For periods prior to the inception date of Class 2 shares (April 30, 2025), the performance shown in the table for Class 2 shares is that of the Fund's Class 3 shares, adjusted to reflect the fees and expenses of the Class 2 shares. These adjustments result in performance for such periods that is no higher than the historical performance of the Class 3 shares, which were first sold on December 9, 2020, and liquidated on May 1, 2025.

Life of Fund returns are measured from the date the Fund's shares were first sold (December 9, 2020).

------

**Total Returns as of December 31**

![549755859763](ck0000012601-20260427_g1.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | Q4 2023 | 17.47% |
| **Lowest return for a quarter during the period of the bar chart above:** | Q2 2022 | (20.36)% |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Year** | **Life of Fund** |
| **Blue Chip Account - Class 2** | **9.32%** | **9.56%** | **10.17%** |
| Russell 1000 Index (reflects no deduction for fees, expenses, or taxes) | 17.37% | 13.59% | 13.19% |
| Russell 1000 Growth Index (reflects no deduction for fees, expenses, or taxes) | 18.56% | 15.32% | 15.43% |

---

The Russell 1000 Index is the Fund's primary broad-based securities market index. The Russell 1000 Growth Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• K. William Nolin (since 2020), Portfolio Manager

• Tom Rozycki (since 2020), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**BOND MARKET INDEX ACCOUNT**

**Objective**

The Fund seeks to provide 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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 1** |
| Management Fees | 0.14% |
| Other Expenses | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.15%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Bond Market Index Account - Class 1** | $15 | $48 | $85 | $192 |

---

**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. 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 39.7% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund uses a passive investment approach known as "sampling" to invest at least 80% of its net assets, plus any borrowings for investment purposes, in investments designed to track the Bloomberg US Aggregate Index (the "Index"). The Index is composed of investment-grade, fixed-rate debt issues with maturities of one year or more, including government securities, corporate securities, and asset-backed and mortgage-backed securities (securitized products). As of March 31, 2026, the Index was composed of 14,087 issues. The Index is rebalanced monthly to reflect securities that have dropped out of or entered the Index in the preceding month. Generally, the Fund makes corresponding changes to its portfolio shortly after Index changes are made public. Because of the practical difficulties and expense of purchasing all of the securities in the Index, the Fund does not purchase all of the securities in the Index. Instead, the Fund uses a sampling methodology to purchase securities with generally the same risk and return characteristics of the Index. Under normal circumstances, the Fund maintains an average portfolio duration that is in line with the duration of the Index, which as of March 31, 2026 was 5.78 years.

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 March 31, 2026, the Index was not concentrated in any 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.

**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.

**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.

**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. The value of U.S. government securities may be adversely impacted by changes in interest rates, changes in the credit rating of the U.S. government, or a default by the U.S. government.

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

------

**Performance**

The following information provides some 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 by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

**Total Returns as of December 31**

![4938](ck0000012601-20260427_g2.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q4 2023** | **6.70%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2022** | **(5.86)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **Bond Market Index Account - Class 1** | **7.16%** | **(0.52)%** | **1.80%** |
| Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |

---

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

*•* Scott Brustkern (since 2026), Portfolio Manager

• Jeff Callahan (since 2020), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

------

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**CORE PLUS BOND ACCOUNT**

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 1** |
| Management Fees | 0.47% |
| Other Expenses | 0.02% |
| Acquired Fund Fees and Expenses | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.50%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Core Plus Bond Account - Class 1** | $51 | $160 | $280 | $628 |

---

**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. 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 170.0% 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. Bonds include securities issued or guaranteed by the U.S. government or its agencies or instrumentalities; asset-backed securities and mortgage-backed securities (securitized products, including collateralized mortgage obligations); and corporate bonds. The Fund also invests in other debt securities, including foreign securities and 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 the rating agencies, that rating will determine the security's rating; if the security is rated differently by the rating agencies, the highest rating will be used; and if the security has not been rated by either of the rating agencies, those selecting such investments will determine the security's quality. 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 US Aggregate Index, which as of March 31, 2026 was 6.03 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, credit index 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.

**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.

**• 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. The value of U.S. government securities may be adversely impacted by changes in interest rates, changes in the credit rating of the U.S. government, or a default by the U.S. government.

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

**Performance**

The following information provides some 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 by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

------

**Total Returns as of December 31**

![5195](ck0000012601-20260427_g3.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q4 2023** | **7.36%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2022** | **(6.01)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **Core Plus Bond Account - Class 1** | **7.46%** | **(0.48)%** | **2.36%** |
| Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |

---

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Bryan C. Davis (since 2022), Portfolio Manager

• John R. Friedl (since 2025), Portfolio Manager

• Michael Goosay (since 2023), Portfolio Manager

• Tina Paris (since 2025), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**DIVERSIFIED BALANCED ACCOUNT**

**Objective**

The Fund 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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | | |
|:---|:---|:---|
| | **Share Class** | **Share Class** |
| | **Class 1** | **Class 2** |
| Management Fees | 0.05% | 0.05% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.25% |
| Other Expenses | 0.01% | 0.01% |
| Acquired Fund Fees and Expenses | 0.18% | 0.18% |
| **Total Annual Fund Operating Expenses** | **0.24%** | **0.49%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Diversified Balanced Account - Class 1** | $25 | $77 | $135 | $306 |
| **Diversified Balanced Account - Class 2** | 50 | 157 | 274 | 616 |

---

**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 19.0% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a fund of funds and invests in funds and exchange-traded funds ("ETFs") of Principal Funds, Inc., PVC, Principal Exchange-Traded Funds, and other fund complexes (collectively, the "Underlying Funds"). The Fund generally allocates approximately 50% of its assets to equity index Underlying Funds to gain broad market capitalization exposure to both U.S. and non-U.S investments, including investments in smaller companies, and approximately 50% to fixed-income index Underlying Funds for intermediate duration fixed-income exposure. The asset class diversification of the Fund is designed to moderate overall price volatility and cushion severe losses in any one investment sector.

The Fund's assets are allocated among Underlying Funds in accordance with the Fund's investment objective and based on qualitative and quantitative analyses and the relative market valuations of the Underlying Funds. Without shareholder approval, Principal Global Investors, LLC ("PGI"), the Fund's investment advisor, may alter the percentage ranges and/or substitute or remove Underlying Funds when it deems appropriate. The Fund is rebalanced monthly.

The Underlying Funds utilize 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. Specifically, the Underlying Funds invest in equity index futures and ETFs to manage the equity exposure.

------

**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**

**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.

**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.

**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.

------

**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. The value of U.S. government securities may be adversely impacted by changes in interest rates, changes in the credit rating of the U.S. government, or a default by the U.S. government.

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

**Performance**

The following information provides some 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 by calling 1-800-222-5852.

The bar chart shows changes in the Fund's Class 2 performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

For periods prior to the inception date of Class 1 shares (May 1, 2017), the performance shown in the table for Class 1 shares is that of the Fund's Class 2 shares, adjusted to reflect the fees and expenses of the Class 1 shares. However, where the adjustment for fees and expenses results in performance for Class 1 shares that is higher than the historical performance of the Class 2 shares, the historical performance of Class 2 shares is used. These adjustments result in performance for such periods that is no higher than the historical performance of the Class 2 shares.

------

**Total Returns as of December 31**

![5415](ck0000012601-20260427_g4.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **11.21%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q2 2022** | **(10.31)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **Diversified Balanced Account - Class 1** | **12.46%** | **5.93%** | **7.51%** |
| **Diversified Balanced Account - Class 2** | **12.09%** | **5.66%** | **7.27%** |
| Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| Diversified Balanced Custom Index (except as noted for MSCI EAFE Index NTR, reflects no deduction for fees, expenses, or taxes) | 12.63% | 6.19% | 7.76% |
| &nbsp;&nbsp;&nbsp;Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| &nbsp;&nbsp;&nbsp;S&P 500 Index (reflects no deduction for fees, expenses, or taxes) | 17.88% | 14.42% | 14.82% |
| &nbsp;&nbsp;&nbsp;MSCI EAFE Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 31.22% | 8.92% | 8.18% |
| &nbsp;&nbsp;&nbsp;S&P MidCap 400 Index (reflects no deduction for fees, expenses, or taxes) | 7.50% | 9.12% | 10.72% |
| &nbsp;&nbsp;&nbsp;S&P SmallCap 600 Index (reflects no deduction for fees, expenses, or taxes) | 6.02% | 7.31% | 9.81% |

---

The Bloomberg US Aggregate Index is the Fund's primary broad-based securities market index. The Diversified Balanced Custom Index is included as an additional index for the Fund as it shows how the Fund's performance compares with returns of indices of funds with similar investment objectives. Performance of each component of the custom index is also shown. The weightings of the Diversified Balanced Custom Index are as follows: 50% Bloomberg US Aggregate Index, 35% S&P 500 Index, 7% MSCI EAFE Index NTR, 4% S&P MidCap 400 Index, and 4% S&P SmallCap 600 Index.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Brody Dass (since 2023), Portfolio Manager

• Yesim Tokat-Acikel (since 2023), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

------

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**DIVERSIFIED BALANCED ADAPTIVE ALLOCATION ACCOUNT**

**Objective**

The Fund seeks to provide as high a level of total return (consisting of reinvested income and capital appreciation) as is consistent with reasonable risk, while seeking to control volatility.

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 2** |
| Management Fees | 0.12% |
| Distribution and/or Service (12b-1) Fees | 0.25% |
| Other Expenses | 0.01% |
| Acquired Fund Fees and Expenses | 0.15% |
| **Total Annual Fund Operating Expenses** | **0.53%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Diversified Balanced Adaptive Allocation Account - Class 2** | $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 fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 41.2% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a fund of funds and invests in funds and exchange-traded funds ("ETFs") of Principal Funds, Inc., PVC, Principal Exchange-Traded Funds, and other fund complexes (collectively, the "Underlying Funds"). The Fund also invests in cash and cash equivalents (as investments and/or to serve as margin or collateral for derivatives positions) and derivative instruments (primarily exchange-traded futures). A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index.

The Fund uses a systematic approach to identify volatility signals in the market and determine whether equity market volatility is below or above average. During periods of lower equity market volatility, the Fund generally allocates approximately 50% of its assets to equity index Underlying Funds and long positions in ETFs and exchange-traded futures to gain broad market capitalization exposure to both U.S. and non-U.S. equity investments, including investments in smaller companies, and approximately 50% to fixed-income Underlying Funds for intermediate duration fixed-income exposure.

During periods of higher equity market volatility, the Fund implements a volatility control strategy to hedge its equity exposure. Specifically, the Fund invests in cash and/or cash equivalents, such as high-quality, short-term money market investments, and/or takes short positions in exchange-traded futures.

------

The Fund's assets are allocated among Underlying Funds in accordance with the Fund's investment objective and based on qualitative and quantitative analyses and the relative market valuations of the Underlying Funds. Without shareholder approval, Principal Global Investors, LLC ("PGI"), the Fund's investment advisor, may alter the percentage ranges and strategy allocations and/or substitute or remove Underlying Funds when it deems appropriate. For example, during periods of higher equity market volatility, the allocations to the equity Underlying Funds might be reduced. The asset class diversification of the Fund is designed to moderate overall price volatility and cushion severe losses in any one investment sector.

**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.

**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.

**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.

**Short Sales Risk.** A short sale involves the sale by the Fund of a security that it does not own with the hope of purchasing the same security at a later date at a lower price. A fund may also enter into a short derivative position through a futures contract or swap agreement. If the price of the security or derivative has increased during this time, 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 third party. Therefore, short sales involve the risk that losses may be exaggerated, potentially losing more money than the actual cost of the investment. Also, there is the risk that the third party to the short sale may fail to honor its contract terms, causing a loss to the Fund.

**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.

------

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**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.

**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.

**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. The value of U.S. government securities may be adversely impacted by changes in interest rates, changes in the credit rating of the U.S. government, or a default by the U.S. government.

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

**Performance**

The following information provides some 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 by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

Life of Fund returns are measured from the date the Fund's shares were first sold (March 30, 2017).

**Total Returns as of December 31**

![6175](ck0000012601-20260427_g5.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q4 2023** | **9.18%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q2 2022** | **(8.01)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **Life of Fund** |
| **Diversified Balanced Adaptive Allocation Account - Class 2** | **7.00%** | **4.50%** | **5.74%** |
| Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 1.24% |
| Diversified Balanced Adaptive Allocation Custom Index (except as noted for MSCI EAFE Index NTR, reflects no deduction for fees, expenses, or taxes) | 12.63% | 6.19% | 6.98% |
| &nbsp;&nbsp;&nbsp;Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 1.24% |
| &nbsp;&nbsp;&nbsp;S&P 500 Index (reflects no deduction for fees, expenses, or taxes) | 17.88% | 14.42% | 14.40% |
| &nbsp;&nbsp;&nbsp;MSCI EAFE Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 31.22% | 8.92% | 5.70% |
| &nbsp;&nbsp;&nbsp;S&P MidCap 400 Index (reflects no deduction for fees, expenses, or taxes) | 7.50% | 9.12% | 9.72% |
| &nbsp;&nbsp;&nbsp;S&P SmallCap 600 Index (reflects no deduction for fees, expenses, or taxes) | 6.02% | 7.31% | 8.51% |

---

The Bloomberg US Aggregate Index is the Fund's primary broad-based securities market index. The Diversified Balanced Adaptive Allocation Custom Index is included as an additional index for the Fund as it shows how the Fund's performance compares with returns of indices of funds with similar investment objectives. Performance of each component of the custom index is also shown. The weightings of the Diversified Balanced Adaptive Allocation Custom Index are as follows: 50% Bloomberg US Aggregate Index, 35% S&P 500 Index, 7% MSCI EAFE Index NTR, 4% S&P MidCap 400 Index, and 4% S&P SmallCap 600 Index.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Brody Dass (since 2023), Portfolio Manager

• Tyler O'Donnell (since 2023), Portfolio Manager

• Aaron J. Siebel (since 2018), Portfolio Manager

• Yesim Tokat-Acikel (since 2023), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**DIVERSIFIED GROWTH ACCOUNT**

**Objective**

The Fund 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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 2** |
| Management Fees | 0.05% |
| Distribution and/or Service (12b-1) Fees | 0.25% |
| Other Expenses | 0.00% |
| Acquired Fund Fees and Expenses | 0.19% |
| **Total Annual Fund Operating Expenses** | **0.49%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Diversified Growth Account - Class 2** | $50 | $157 | $274 | $616 |

---

**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 19.8% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a fund of funds and invests in funds and exchange-traded funds ("ETFs") of Principal Funds, Inc., PVC, Principal Exchange-Traded Funds, and other fund complexes (collectively, the "Underlying Funds"). The Fund generally allocates approximately 65% of its assets to equity index Underlying Funds to gain broad market capitalization exposure to both U.S. and non-U.S investments, including investments in smaller companies, and approximately 35% to fixed-income index Underlying Funds for intermediate duration fixed-income exposure. The asset class diversification of the Fund is designed to moderate overall price volatility and cushion severe losses in any one investment sector.

The Fund's assets are allocated among Underlying Funds in accordance with the Fund's investment objective and based on qualitative and quantitative analyses and the relative market valuations of the Underlying Funds. Without shareholder approval, Principal Global Investors, LLC ("PGI"), the Fund's investment advisor, may alter the percentage ranges and/or substitute or remove Underlying Funds when it deems appropriate. The Fund is rebalanced monthly.

The Underlying Funds utilize 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. Specifically, the Underlying Funds invest in equity index futures and ETFs to manage the equity exposure.

------

**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**

**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.

**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.

**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. The value of U.S. government securities may be adversely impacted by changes in interest rates, changes in the credit rating of the U.S. government, or a default by the U.S. government.

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

**Performance**

The following information provides some 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 by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

------

**Total Returns as of December 31**

![5068](ck0000012601-20260427_g6.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **13.81%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(13.22)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **Diversified Growth Account - Class 2** | **13.86%** | **7.60%** | **8.90%** |
| S&P 500 Index (reflects no deduction for fees, expenses, or taxes) | 17.88% | 14.42% | 14.82% |
| Diversified Growth Custom Index (except as noted for MSCI EAFE Index NTR, reflects no deduction for fees, expenses, or taxes) | 14.38% | 8.14% | 9.40% |
| &nbsp;&nbsp;&nbsp;S&P 500 Index (reflects no deduction for fees, expenses, or taxes) | 17.88% | 14.42% | 14.82% |
| &nbsp;&nbsp;&nbsp;Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| &nbsp;&nbsp;&nbsp;MSCI EAFE Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 31.22% | 8.92% | 8.18% |
| &nbsp;&nbsp;&nbsp;S&P MidCap 400 Index (reflects no deduction for fees, expenses, or taxes) | 7.50% | 9.12% | 10.72% |
| &nbsp;&nbsp;&nbsp;S&P SmallCap 600 Index (reflects no deduction for fees, expenses, or taxes) | 6.02% | 7.31% | 9.81% |

---

The S&P 500 Index is the Fund's primary broad-based securities market index. The Diversified Growth Custom Index is included as an additional index for the Fund as it shows how the Fund's performance compares with returns of indices of funds with similar investment objectives. Performance of each component of the custom index is also shown. The weightings of the Diversified Growth Custom Index are as follows: 45% S&P 500 Index, 35% Bloomberg US Aggregate Index, 10% MSCI EAFE Index NTR, 5% S&P MidCap 400 Index, and 5% S&P SmallCap 600 Index.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Brody Dass (since 2023), Portfolio Manager

• Yesim Tokat-Acikel (since 2023), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

------

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**DIVERSIFIED GROWTH ADAPTIVE ALLOCATION ACCOUNT**

**Objective**

The Fund seeks to provide long-term capital appreciation, while seeking to control volatility.

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 2** |
| Management Fees | 0.12% |
| Distribution and/or Service (12b-1) Fees | 0.25% |
| Other Expenses | 0.00% |
| Acquired Fund Fees and Expenses | 0.16% |
| **Total Annual Fund Operating Expenses** | **0.53%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Diversified Growth Adaptive Allocation Account - Class 2** | $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 fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 44.4% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a fund of funds and invests in funds and exchange-traded funds ("ETFs") of Principal Funds, Inc., PVC, Principal Exchange-Traded Funds, and other fund complexes (collectively, the "Underlying Funds"). The Fund also invests in cash and cash equivalents (as investments and/or to serve as margin or collateral for derivatives positions) and derivative instruments (primarily exchange-traded futures). A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index.

The Fund uses a systematic approach to identify volatility signals in the market and determine whether equity market volatility is below or above average. During periods of lower equity market volatility, the Fund generally allocates approximately 65% of its assets to equity index Underlying Funds and long positions in ETFs and exchange-traded futures to gain broad market capitalization exposure to both U.S. and non-U.S. equity investments, including investments in smaller companies, and approximately 35% to fixed-income Underlying Funds for intermediate duration fixed-income exposure.

During periods of higher equity market volatility, the Fund implements a volatility control strategy to hedge its equity exposure. Specifically, the Fund invests in cash and/or cash equivalents, such as high-quality, short-term money market investments, and/or takes short positions in exchange-traded futures.

------

The Fund's assets are allocated among Underlying Funds in accordance with the Fund's investment objective and based on qualitative and quantitative analyses and the relative market valuations of the Underlying Funds. Without shareholder approval, Principal Global Investors, LLC ("PGI"), the Fund's investment advisor, may alter the percentage ranges and strategy allocations and/or substitute or remove Underlying Funds when it deems appropriate. For example, during periods of higher equity market volatility, the allocations to the equity Underlying Funds might be reduced. The asset class diversification of the Fund is designed to moderate overall price volatility and cushion severe losses in any one investment sector.

**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.

**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.

**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.

**Short Sales Risk.** A short sale involves the sale by the Fund of a security that it does not own with the hope of purchasing the same security at a later date at a lower price. A fund may also enter into a short derivative position through a futures contract or swap agreement. If the price of the security or derivative has increased during this time, 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 third party. Therefore, short sales involve the risk that losses may be exaggerated, potentially losing more money than the actual cost of the investment. Also, there is the risk that the third party to the short sale may fail to honor its contract terms, causing a loss to the Fund.

**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.

------

**Principal Risks due to the Fund's Investments in Underlying Funds**

**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.

**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.

**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. The value of U.S. government securities may be adversely impacted by changes in interest rates, changes in the credit rating of the U.S. government, or a default by the U.S. government.

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

**Performance**

The following information provides some 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 by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

Life of Fund returns are measured from the date the Fund's shares were first sold (March 30, 2017).

**Total Returns as of December 31**

![6070](ck0000012601-20260427_g7.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q4 2023** | **9.81%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q2 2022** | **(8.91)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **Life of Fund** |
| **Diversified Growth Adaptive Allocation Account - Class 2** | **7.31%** | **6.13%** | **6.98%** |
| S&P 500 Index (reflects no deduction for fees, expenses, or taxes) | 17.88% | 14.42% | 14.40% |
| Diversified Growth Adaptive Allocation Custom Index (except as noted for MSCI EAFE Index NTR, reflects no deduction for fees, expenses, or taxes) | 14.38% | 8.14% | 8.59% |
| &nbsp;&nbsp;&nbsp;S&P 500 Index (reflects no deduction for fees, expenses, or taxes) | 17.88% | 14.42% | 14.40% |
| &nbsp;&nbsp;&nbsp;Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 1.24% |
| &nbsp;&nbsp;&nbsp;MSCI EAFE Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 31.22% | 8.92% | 5.70% |
| &nbsp;&nbsp;&nbsp;S&P MidCap 400 Index (reflects no deduction for fees, expenses, or taxes) | 7.50% | 9.12% | 9.72% |
| &nbsp;&nbsp;&nbsp;S&P SmallCap 600 Index (reflects no deduction for fees, expenses, or taxes) | 6.02% | 7.31% | 8.51% |

---

The S&P 500 Index is the Fund's primary broad-based securities market index. The Diversified Growth Adaptive Allocation Custom Index is included as an additional index for the Fund as it shows how the Fund's performance compares with returns of indices of funds with similar investment objectives. Performance of each component of the custom index is also shown. The weightings of the Diversified Growth Adaptive Allocation Custom Index are as follows: 45% S&P 500 Index, 35% Bloomberg US Aggregate Index, 10% MSCI EAFE Index NTR, 5% S&P MidCap 400 Index, and 5% S&P SmallCap 600 Index.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Brody Dass (since 2023), Portfolio Manager

• Tyler O'Donnell (since 2023), Portfolio Manager

• Aaron J. Siebel (since 2018), Portfolio Manager

• Yesim Tokat-Acikel (since 2023), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**DIVERSIFIED INCOME ACCOUNT**

**Objective**

The Fund 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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 2** |
| Management Fees | 0.05% |
| Distribution and/or Service (12b-1) Fees | 0.25% |
| Other Expenses | 0.01% |
| Acquired Fund Fees and Expenses | 0.17% |
| **Total Annual Fund Operating Expenses** | **0.48%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Diversified Income Account - Class 2** | $49 | $154 | $269 | $604 |

---

**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 20.6% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund operates as a fund of funds and invests in funds and exchange-traded funds ("ETFs") of Principal Funds, Inc., PVC, Principal Exchange-Traded Funds, and other fund complexes (collectively, the "Underlying Funds"). The Fund generally allocates approximately 35% of its assets to equity index Underlying Funds to gain broad market capitalization exposure to both U.S. and non-U.S investments, including investments in smaller companies, and approximately 65% to fixed-income index Underlying Funds for intermediate duration fixed-income exposure. The asset class diversification of the Fund is designed to moderate overall price volatility and cushion severe losses in any one investment sector.

The Fund's assets are allocated among Underlying Funds in accordance with the Fund's investment objective and based on qualitative and quantitative analyses and the relative market valuations of the Underlying Funds. Without shareholder approval, Principal Global Investors, LLC ("PGI"), the Fund's investment advisor, may alter the percentage ranges and/or substitute or remove Underlying Funds when it deems appropriate. The Fund is rebalanced monthly.

The Underlying Funds utilize 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. Specifically, the Underlying Funds invest in equity index futures and ETFs to manage the equity exposure.

------

**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**

**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.

**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.

**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.

------

**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. The value of U.S. government securities may be adversely impacted by changes in interest rates, changes in the credit rating of the U.S. government, or a default by the U.S. government.

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

**Performance**

The following information provides some 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 by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

------

**Total Returns as of December 31**

![5126](ck0000012601-20260427_g8.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **8.67%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q2 2022** | **(8.70)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **Diversified Income Account - Class 2** | **10.38%** | **3.74%** | **5.61%** |
| Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| Diversified Income Custom Index (except as noted for MSCI EAFE Index NTR, reflects no deduction for fees, expenses, or taxes) | 10.89% | 4.25% | 6.10% |
| &nbsp;&nbsp;&nbsp;Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| &nbsp;&nbsp;&nbsp;S&P 500 Index (reflects no deduction for fees, expenses, or taxes) | 17.88% | 14.42% | 14.82% |
| &nbsp;&nbsp;&nbsp;MSCI EAFE Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 31.22% | 8.92% | 8.18% |
| &nbsp;&nbsp;&nbsp;S&P MidCap 400 Index (reflects no deduction for fees, expenses, or taxes) | 7.50% | 9.12% | 10.72% |
| &nbsp;&nbsp;&nbsp;S&P SmallCap 600 Index (reflects no deduction for fees, expenses, or taxes) | 6.02% | 7.31% | 9.81% |

---

The Bloomberg US Aggregate Index is the Fund's primary broad-based securities market index. The Diversified Income Custom Index is included as an additional index for the Fund as it shows how the Fund's performance compares with returns of indices of funds with similar investment objectives. Performance of each component of the custom index is also shown. The weightings of the Diversified Income Custom Index are as follows: 65% Bloomberg US Aggregate Index, 25% S&P 500 Index, 4% MSCI EAFE Index NTR, 3% S&P MidCap 400 Index, and 3% S&P SmallCap 600 Index.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Brody Dass (since 2023), Portfolio Manager

• Yesim Tokat-Acikel (since 2023), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

------

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**DIVERSIFIED INTERNATIONAL ACCOUNT**

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 1** |
| Management Fees | 0.81% |
| Other Expenses | 0.05% |
| **Total Annual Fund Operating Expenses** | **0.86%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Diversified International Account - Class 1** | $88 | $274 | $477 | $1061 |

---

**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. 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 33.7% 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.

• **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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

------

**Total Returns as of December 31**

![3648](ck0000012601-20260427_g9.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **18.11%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(23.04)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **Diversified International Account - Class 1** | **32.36%** | **7.40%** | **8.08%** |
| MSCI ACWI Ex USA Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 32.39% | 7.91% | 8.41% |

---

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Paul H. Blankenhagen (since 2003), Portfolio Manager

• George P. Maris (since 2023), Portfolio Manager

• Matthew Peron (since 2025), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**EQUITY INCOME ACCOUNT**

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | | |
|:---|:---|:---|
| | **Share Class** | **Share Class** |
| | **Class 1** | **Class 2** |
| Management Fees | 0.47% | 0.47% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.25% |
| Other Expenses | 0.01% | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.48%** | **0.73%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Equity Income Account - Class 1** | $49 | $154 | $269 | $604 |
| **Equity Income Account - Class 2** | 75 | 233 | 406 | 906 |

---

**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. 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 12.7% 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. The Fund defines dividend-paying equity securities as securities that produced dividend income within the last rolling 12 months. 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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

The bar chart shows changes in the Fund's Class 1 performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

------

**Total Returns as of December 31**

![3912](ck0000012601-20260427_g10.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q4 2020** | **15.69%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(25.51)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **Equity Income Account - Class 1** | **15.50%** | **10.21%** | **11.51%** |
| **Equity Income Account - Class 2** | **15.25%** | **9.94%** | **11.24%** |
| Russell 1000 Index (reflects no deduction for fees, expenses, or taxes) | 17.37% | 13.59% | 14.59% |
| Russell 1000 Value Index (reflects no deduction for fees, expenses, or taxes) | 15.91% | 11.33% | 10.53% |

---

The Russell 1000 Index is the Fund's primary broad-based securities market index. The Russell 1000 Value Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Daniel R. Coleman (since 2010), Portfolio Manager

• Sarah E. Radecki (since 2021), Portfolio Manager

• Nedret Vidinli (since 2017), Associate Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**GLOBAL EMERGING MARKETS ACCOUNT** 

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 1** |
| Management Fees | 1.00% |
| Other Expenses | 0.12% |
| **Total Annual Fund Operating Expenses** | **1.12%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Global Emerging Markets Account - Class 1** | $114 | $356 | $617 | $1363 |

---

**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. 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 51.4% 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. The Fund considers "emerging market" to mean any country that is not in the MSCI World Index. Generally, emerging markets include all countries except the United States, Canada, Japan, Australia, Singapore, New Zealand, and most nations located in Western Europe. The Fund also includes Mainland China and its administrative and other districts such as Hong Kong and Macau in its definition of "emerging market." The Fund considers a security to be tied economically to an emerging market if one or more of the following criteria is present: (i) the issuer or guarantor of the security has its principal place of business or principal office in an emerging market; (ii) the principal trading market for the security is in an emerging market; (iii) the issuer or guarantor of the security derives a majority of its revenue from emerging markets; or (iv) the currency of settlement of the security is the currency of an emerging market.

The Fund invests in equity securities regardless of market capitalization (small, medium, or large) and style (growth or value).

The Fund may invest in and have direct access to China A shares listed on the Shanghai Stock Stock Connect program ("SSE") via the Shanghai-Hong Kong Stock Connect and Shenzhen Hong Kong Stock Connect Schemes.

*On or about July 1, 2026, subject to shareholder approval, add the following:*

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.

**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 and its administrative and other districts such as Hong Kong and Macau. 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).

*On or about July 1, 2026, subject to shareholder approval, add* **Non-Diversification 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.

------

**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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

During 2016, the Fund experienced a significant one-time gain of approximately $0.07 per 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**

![4317](ck0000012601-20260427_g11.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **19.63%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(24.46)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** | |
| **Global Emerging Markets Account - Class 1** | **37.27%** | **5.06%** | **8.12%** | <sup>(1)</sup> |
| MSCI Emerging Markets Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 33.57% | 4.20% | 8.42% |  |

---

<sup>(1)</sup> During 2016, the Fund experienced a significant one-time gain of approximately $0.07 per 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.

------

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

*•* Daniel Graña (since 2025), Portfolio Manager

• John Paul Lech (since 2025), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**GOVERNMENT & HIGH QUALITY BOND ACCOUNT** 

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 1** |
| Management Fees | 0.48% |
| Other Expenses | 0.02% |
| **Total Annual Fund Operating Expenses** | **0.50%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Government & High Quality Bond Account - Class 1** | $51 | $160 | $280 | $628 |

---

**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. 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 240.0% 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 issued by the U.S. government, its agencies, or instrumentalities or bonds that are rated AAA by S&P Global Ratings ("S&P Global") or Aaa by Moody's Investors Service, Inc. ("Moody's"). Bonds include, but are 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. If a security has been rated by only one of the rating agencies, that rating will determine the security's rating; if the security is rated differently by the rating agencies, the highest rating will be used; and if the security has not been rated by either of the rating agencies, those selecting such investments will determine the security's quality.

Under normal circumstances, the Fund maintains an average portfolio duration that is within ±50% of the duration of the Bloomberg US Agency Fixed Rate MBS Index, which as of March 31, 2026 was 5.52 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.

**• 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. The value of U.S. government securities may be adversely impacted by changes in interest rates, changes in the credit rating of the U.S. government, or a default by the U.S. government.

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

------

**Performance**

The following information provides some 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 by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

**Total Returns as of December 31**

![4883](ck0000012601-20260427_g12.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q4 2023** | **7.26%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q3 2022** | **(5.32)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **Government & High Quality Bond Account - Class 1** | **7.91%** | **(0.23)%** | **1.26%** |
| Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| Bloomberg US Agency Fixed Rate MBS Index (reflects no deduction for fees, expenses, or taxes) | 8.58% | 0.15% | 1.59% |

---

The Bloomberg US Aggregate Index is the Fund's primary broad-based securities market index. The Bloomberg US Agency Fixed Rate MBS Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Bryan C. Davis (since 2019), Portfolio Manager

• Zach Gassmann (since 2019), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

------

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**LARGECAP GROWTH ACCOUNT 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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 1** |
| Management Fees | 0.68% |
| Other Expenses | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.69%** |
| Fee Waiver <sup>(1)</sup> | (0.02)% |
| **Total Annual Fund Operating Expenses after Fee Waiver** | **0.67%** |

---

<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 April 30, 2027. 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 Variable Contracts 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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **LargeCap Growth Account I - Class 1** | $68 | $219 | $382 | $857 |

---

**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. 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 50.7% 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 growth equity securities of companies with large market capitalizations. For this Fund, large market capitalization growth equity securities are securities (i) with market capitalizations within the range of companies comprising the Russell 1000<sup>®</sup> Index (as of March 31, 2026, this was between approximately $907.9 million and $4.3 trillion), and (ii) that are included within at least one of the following growth indices: the MSCI All Country World IMI Growth Index, the S&P 1500 Growth Index, or the Russell 3000 Growth Index. The Fund also invests in equity securities of companies with medium market capitalizations.

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.

**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.

**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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

------

**Total Returns as of December 31**

![4582](ck0000012601-20260427_g13.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **27.91%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q2 2022** | **(21.64)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **LargeCap Growth Account I - Class 1** | **11.39%** | **9.44%** | **15.00%** |
| Russell 1000 Index (reflects no deduction for fees, expenses, or taxes) | 17.37% | 13.59% | 14.59% |
| Russell 1000 Growth Index (reflects no deduction for fees, expenses, or taxes) | 18.56% | 15.32% | 18.13% |

---

The Russell 1000 Index is the Fund's primary broad-based securities market index. The Russell 1000 Growth Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• James W. Fennessey (since 2009), Portfolio Manager

• Michael Messina (since 2025), Portfolio Manager

• May Tong (since 2025), Portfolio Manager

**Sub-Advisors**

Los Angeles Capital Management LLC

T. Rowe Price Associates, Inc.

Westfield Capital Management Company, L.P.

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**LARGECAP S&P 500 INDEX ACCOUNT**

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | | |
|:---|:---|:---|
| | **Share Class** | **Share Class** |
| | **Class 1** | **Class 2** |
| Management Fees | 0.19% | 0.19% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.25% |
| Other Expenses | 0.01% | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.20%** | **0.45%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **LargeCap S&P 500 Index Account - Class 1** | $20 | $64 | $113 | $255 |
| **LargeCap S&P 500 Index Account - Class 2** | 46 | 144 | 252 | 567 |

---

**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. 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 3.4% 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<sup>®</sup> ("S&P") 500 Index (the "Index"). The Index is designed to represent U.S. equities with risk/return characteristics of the large cap universe. As of March 31, 2026, the market capitalization range of the companies comprising the Index was between approximately $5.3 billion and $4.2 trillion. 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 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 March 31, 2026, the Index was not concentrated in any industry. The Fund may operate as a non-diversified fund, as defined under the Investment Company Act of 1940 ("1940 Act"), to the approximate extent the Index is non-diversified. The Fund may, therefore, operate as non-diversified solely as a result of a change in relative market capitalization or index weighting of one or more constituents of the Index. A non-diversified fund 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 share price of a non-diversified fund than would occur in a more diversified fund.

------

**Note:&nbsp;&nbsp;&nbsp;&nbsp;**"Standard & Poor's 500<sup>®</sup>" and "S&P 500<sup>®</sup>" 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.

**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.

**Non-Diversification Risk.** From time to time, the Fund may operate as a non-diversified fund under the 1940 Act, solely as a result of a change in relative market capitalization or index weighting of one or more constituents of the Fund's Index. 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.

**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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

The bar chart shows changes in the Fund's Class 1 performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

------

**Total Returns as of December 31**

![4922](ck0000012601-20260427_g14.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **20.47%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(19.66)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **LargeCap S&P 500 Index Account - Class 1** | **17.62%** | **14.14%** | **14.52%** |
| **LargeCap S&P 500 Index Account - Class 2** | **17.31%** | **13.85%** | **14.22%** |
| S&P 500 Index (reflects no deduction for fees, expenses, or taxes) | 17.88% | 14.42% | 14.82% |

---

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Tyler O'Donnell (since 2023), Portfolio Manager

• Aaron J. Siebel (since 2018), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**MIDCAP ACCOUNT**

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | | |
|:---|:---|:---|
| | **Share Class** | **Share Class** |
| | **Class 1** | **Class 2** |
| Management Fees | 0.53% | 0.53% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.25% |
| Other Expenses | 0.00% | 0.00% |
| **Total Annual Fund Operating Expenses** | **0.53%** | **0.78%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **MidCap Account - Class 1** | $54 | $170 | $296 | $665 |
| **MidCap Account - Class 2** | 80 | 249 | 433 | 966 |

---

**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. 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 14.8% 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 (MidCap). For this Fund, companies with medium market capitalizations (MidCap) are those with market capitalizations within the range of companies comprising the Russell MidCap<sup>®</sup> Index (as of March 31, 2026, this was between approximately $907.9 million and $116.5 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 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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

The bar chart shows changes in the Fund's Class 1 performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

**Total Returns as of December 31**

![3491](ck0000012601-20260427_g15.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **24.91%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(23.86)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **MidCap Account - Class 1** | **1.78%** | **8.33%** | **12.58%** |
| **MidCap Account - Class 2** | **1.52%** | **8.06%** | **12.30%** |
| Russell 3000 Index (reflects no deduction for fees, expenses, or taxes) | 17.15% | 13.15% | 14.29% |
| Russell MidCap Index (reflects no deduction for fees, expenses, or taxes) | 10.60% | 8.67% | 11.01% |

---

The Russell 3000 Index is the Fund's primary broad-based securities market index. The Russell MidCap Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• K. William Nolin (since 2000), Portfolio Manager

• Tom Rozycki (since 2013), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**PRINCIPAL CAPITAL APPRECIATION ACCOUNT**

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | | |
|:---|:---|:---|
| | **Share Class** | **Share Class** |
| | **Class 1** | **Class 2** |
| Management Fees | 0.63% | 0.63% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.25% |
| Other Expenses | 0.00% | 0.00% |
| **Total Annual Fund Operating Expenses** | **0.63%** | **0.88%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Principal Capital Appreciation Account - Class 1** | $64 | $202 | $351 | $786 |
| **Principal Capital Appreciation Account - Class 2** | 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. 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 58.0% of the average value of its portfolio.

**Principal Investment Strategies**

The Fund invests primarily in equity securities of U.S. companies with any market capitalization, but it has a greater exposure to large market capitalization companies than small or medium market capitalization companies. Although there is no restriction on the size of the companies in which the Fund invests, most of the Fund's investments typically include companies with a market capitalization over $10 billion at the time of purchase. 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.

*On or about July 1, 2026, subject to shareholder approval, add the following:*

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.

------

**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.

*On or about July 1, 2026, subject to shareholder approval, add* **Non-Diversification 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.

**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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

The bar chart shows changes in the Fund's Class 1 performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

------

**Total Returns as of December 31**

![3552](ck0000012601-20260427_g16.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **19.79%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(19.40)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **Principal Capital Appreciation Account - Class 1** | **13.52%** | **13.82%** | **14.35%** |
| **Principal Capital Appreciation Account - Class 2** | **13.22%** | **13.53%** | **14.07%** |
| Russell 1000 Index (reflects no deduction for fees, expenses, or taxes) | 17.37% | 13.59% | 14.59% |

---

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Daniel R. Coleman (since 2010), Portfolio Manager

• Theodore Jayne (since 2015), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**PRINCIPAL LIFETIME STRATEGIC INCOME ACCOUNT**

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 1** |
| Management Fees | 0.00% |
| Other Expenses | 0.03% |
| Acquired Fund Fees and Expenses | 0.45% |
| **Total Annual Fund Operating Expenses** | **0.48%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Principal LifeTime Strategic Income Account – Class 1** | $49 | $154 | $269 | $604 |

---

**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 38.6% 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 Exchange-Traded Funds ("PETF"), Principal Funds, Inc. ("PFI"), and Principal Variable Contracts Funds, Inc. ("PVC"). 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.

![PFI PVC PLT Portfolios_bw.jpg](ck0000012601-20260427_g17.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: the 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. The value of U.S. government securities may be adversely impacted by changes in interest rates, changes in the credit rating of the U.S. government, or a default by the U.S. government.

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

**Performance**

The following information provides some 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 by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

------

**Total Returns as of December 31**

![5697](ck0000012601-20260427_g18.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:** | **Q2 2022** | **(8.43)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **Principal LifeTime Strategic Income Account - Class 1** | **10.45%** | **3.48%** | **4.98%** |
| Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| S&P Target Date Retirement Income Index (reflects no deduction for fees, expenses, or taxes) | 11.66% | 4.15% | 5.32% |

---

The Bloomberg US Aggregate Index is the Fund's primary broad-based securities market index. The S&P Target Date Retirement Income Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• James W. Fennessey (since 2007), Portfolio Manager

• Todd A. Jablonski (since 2025), Portfolio Manager

• Chad Severin (since 2025), Portfolio Manager

• Scott Smith (since 2017), Portfolio Manager

• May Tong (since 2025), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**PRINCIPAL LIFETIME 2020 ACCOUNT** 

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 1** |
| Management Fees | 0.00% |
| Other Expenses | 0.01% |
| Acquired Fund Fees and Expenses | 0.46% |
| **Total Annual Fund Operating Expenses** | **0.47%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Principal LifeTime 2020 Account - Class 1** | $48 | $151 | $263 | $591 |

---

**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 38.1% 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 Exchange-Traded Funds ("PETF"), Principal Funds, Inc. ("PFI"), and Principal Variable Contracts Funds, Inc. ("PVC"). 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, 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 as the Fund reaches its stated target year and the Fund's strategy becomes more risk adverse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Strategic Income Account. At that time, the Fund may be combined with the Principal LifeTime Strategic Income Account 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.

![PFI PVC PLT Portfolios_bw.jpg](ck0000012601-20260427_g17.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: the 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. The value of U.S. government securities may be adversely impacted by changes in interest rates, changes in the credit rating of the U.S. government, or a default by the U.S. government.

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

**Performance**

The following information provides some 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 by calling 1-800-222-5852.

------

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

**Total Returns as of December 31**

![6311](ck0000012601-20260427_g19.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **12.53%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(11.58)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **Principal LifeTime 2020 Account - Class 1** | **11.33%** | **4.65%** | **6.77%** |
| Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| S&P Target Date 2020 Index (reflects no deduction for fees, expenses, or taxes) | 12.72% | 5.35% | 6.81% |

---

The Bloomberg US Aggregate Index is the Fund's primary broad-based securities market index. The S&P Target Date 2020 Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• James W. Fennessey (since 2007), Portfolio Manager

• Todd A. Jablonski (since 2025), Portfolio Manager

• Chad Severin (since 2025), Portfolio Manager

• Scott Smith (since 2017), Portfolio Manager

• May Tong (since 2025), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

------

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**PRINCIPAL LIFETIME 2030 ACCOUNT** 

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 1** |
| Management Fees | 0.00% |
| Other Expenses | 0.01% |
| Acquired Fund Fees and Expenses | 0.49% |
| **Total Annual Fund Operating Expenses** | **0.50%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Principal LifeTime 2030 Account - Class 1** | $51 | $160 | $280 | $628 |

---

**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 43.1% 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 Exchange-Traded Funds ("PETF"), Principal Funds, Inc. ("PFI"), and Principal Variable Contracts Funds, Inc. ("PVC"). 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 (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 as the Fund reaches its stated target year and the Fund's strategy becomes more risk adverse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Strategic Income Account. At that time, the Fund may be combined with the Principal LifeTime Strategic Income Account 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.

![PFI PVC PLT Portfolios_bw.jpg](ck0000012601-20260427_g17.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: the 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. The value of U.S. government securities may be adversely impacted by changes in interest rates, changes in the credit rating of the U.S. government, or a default by the U.S. government.

------

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

**Performance**

The following information provides some 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 by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

**Total Returns as of December 31**

![6334](ck0000012601-20260427_g20.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **15.73%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(15.70)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **Principal LifeTime 2030 Account - Class 1** | **13.21%** | **5.91%** | **8.07%** |
| **S&P 1500 Index (reflects no deduction for fees, expenses, or taxes)** | 17.02% | 13.96% | 14.46% |
| S&P Target Date 2030 Index (reflects no deduction for fees, expenses, or taxes) | 15.13% | 7.07% | 8.41% |

---

The S&P 1500 Index is the Fund's primary broad-based securities market index. The S&P Target Date 2030 Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• James W. Fennessey (since 2007), Portfolio Manager

• Todd A. Jablonski (since 2025), Portfolio Manager

• Chad Severin (since 2025), Portfolio Manager

• Scott Smith (since 2017), Portfolio Manager

• May Tong (since 2025), Portfolio Manager

------

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**PRINCIPAL LIFETIME 2040 ACCOUNT** 

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 1** |
| Management Fees | 0.00% |
| Other Expenses | 0.01% |
| Acquired Fund Fees and Expenses | 0.53% |
| **Total Annual Fund Operating Expenses** | **0.54%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Principal LifeTime 2040 Account - Class 1** | $55 | $173 | $302 | $677 |

---

**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 46.7% 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 Exchange-Traded Funds ("PETF"), Principal Funds, Inc. ("PFI"), and Principal Variable Contracts Funds, Inc. ("PVC"). 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 as the Fund reaches its stated target year and the Fund's strategy becomes more risk adverse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Strategic Income Account. At that time, the Fund may be combined with the Principal LifeTime Strategic Income Account 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.

![PFI PVC PLT Portfolios_bw.jpg](ck0000012601-20260427_g17.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: the 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. The value of U.S. government securities may be adversely impacted by changes in interest rates, changes in the credit rating of the U.S. government, or a default by the U.S. government.

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

**Performance**

The following information provides some 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 by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

**Total Returns as of December 31**

![6293](ck0000012601-20260427_g21.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **18.06%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(18.74)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **Principal LifeTime 2040 Account - Class 1** | **15.57%** | **7.56%** | **9.35%** |
| S&P 1500 Index (reflects no deduction for fees, expenses, or taxes) | 17.02% | 13.96% | 14.46% |
| S&P Target Date 2040 Index (reflects no deduction for fees, expenses, or taxes) | 18.20% | 9.18% | 10.06% |

---

The S&P 1500 Index is the Fund's primary broad-based securities market index. The S&P Target Date 2040 Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• James W. Fennessey (since 2007), Portfolio Manager

• Todd A. Jablonski (since 2025), Portfolio Manager

• Chad Severin (since 2025), Portfolio Manager

• Scott Smith (since 2017), Portfolio Manager

• May Tong (since 2025), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**PRINCIPAL LIFETIME 2050 ACCOUNT** 

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 1** |
| Management Fees | 0.00% |
| Other Expenses | 0.02% |
| Acquired Fund Fees and Expenses | 0.56% |
| **Total Annual Fund Operating Expenses** | **0.58%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Principal LifeTime 2050 Account - Class 1** | $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 fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 57.6% 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 Exchange-Traded Funds ("PETF"), Principal Funds, Inc. ("PFI"), and Principal Variable Contracts Funds, Inc. ("PVC"). 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 as the Fund reaches its stated target year and the Fund's strategy becomes more risk adverse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Strategic Income Account. At that time, the Fund may be combined with the Principal LifeTime Strategic Income Account 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.

![PFI PVC PLT Portfolios_bw.jpg](ck0000012601-20260427_g17.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: the 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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

**Total Returns as of December 31**

![6226](ck0000012601-20260427_g22.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **19.68%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(20.78)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **Principal LifeTime 2050 Account - Class 1** | **17.50%** | **8.77%** | **10.22%** |
| S&P 1500 Index (reflects no deduction for fees, expenses, or taxes) | 17.02% | 13.96% | 14.46% |
| S&P Target Date 2050 Index (reflects no deduction for fees, expenses, or taxes) | 19.56% | 10.13% | 10.79% |

---

The S&P 1500 Index is the Fund's primary broad-based securities market index. The S&P Target Date 2050 Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• James W. Fennessey (since 2007), Portfolio Manager

• Todd A. Jablonski (since 2025), Portfolio Manager

• Chad Severin (since 2025), Portfolio Manager

• Scott Smith (since 2017), Portfolio Manager

• May Tong (since 2025), Portfolio Manager

------

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**PRINCIPAL LIFETIME 2060 ACCOUNT**

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 1** |
| Management Fees | 0.00% |
| Other Expenses | 0.04% |
| Acquired Fund Fees and Expenses | 0.57% |
| **Total Annual Fund Operating Expenses** | **0.61%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Principal LifeTime 2060 Account - Class 1** | $62 | $195 | $340 | $762 |

---

**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 60.6% 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 Exchange-Traded Funds ("PETF"), Principal Funds, Inc. ("PFI"), and Principal Variable Contracts Funds, Inc. ("PVC"). 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 as the Fund reaches its stated target year and the Fund's strategy becomes more risk adverse. Approximately 10 years after its target year, the Fund's underlying fund allocation is expected to match that of the Principal LifeTime Strategic Income Account. At that time, the Fund may be combined with the Principal LifeTime Strategic Income Account 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.

![PFI PVC PLT Portfolios_bw.jpg](ck0000012601-20260427_g17.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: the 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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

**Total Returns as of December 31**

![6316](ck0000012601-20260427_g23.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **20.23%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(21.87)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **Principal LifeTime 2060 Account - Class 1** | **17.68%** | **8.97%** | **10.35%** |
| S&P 1500 Index (reflects no deduction for fees, expenses, or taxes) | 17.02% | 13.96% | 14.46% |
| S&P Target Date 2060 Index (reflects no deduction for fees, expenses, or taxes) | 19.94% | 10.26% | 10.98% |

---

The S&P 1500 Index is the Fund's primary broad-based securities market index. The S&P Target Date 2060 Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• James W. Fennessey (since 2013), Portfolio Manager

• Todd A. Jablonski (since 2025), Portfolio Manager

• Chad Severin (since 2025), Portfolio Manager

• Scott Smith (since 2017), Portfolio Manager

• May Tong (since 2025), Portfolio Manager

------

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**REAL ESTATE SECURITIES ACCOUNT**

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses** 

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

---

| | | |
|:---|:---|:---|
| | **Share Class** | **Share Class** |
| | **Class 1** | **Class 2** |
| Management Fees | 0.77% | 0.77% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.25% |
| Other Expenses | 0.01% | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.78%** | **1.03%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Real Estate Securities Account - Class 1** | $80 | $249 | $433 | $966 |
| **Real Estate Securities Account - Class 2** | 105 | 328 | 569 | 1259 |

---

**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. 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 20.8% 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. 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.

------

**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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

The bar chart shows changes in the Fund's Class 1 performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

**Total Returns as of December 31**

![4721](ck0000012601-20260427_g24.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q1 2019** | **17.53%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(22.98)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **Real Estate Securities Account - Class 1** | **1.24%** | **4.88%** | **5.94%** |
| **Real Estate Securities Account - Class 2** | **0.92%** | **4.61%** | **5.67%** |
| Russell 3000 Index (reflects no deduction for fees, expenses, or taxes) | 17.15% | 13.15% | 14.29% |
| FTSE NAREIT All Equity REIT Index (reflects no deduction for fees, expenses, or taxes) | 2.27% | 4.85% | 5.77% |

---

The Russell 3000 Index is the Fund's primary broad-based securities market index. The FTSE NAREIT All Equity REIT Index is included as an additional index for the Fund as it shows how the Fund's performance compares with returns of an index of funds with similar investment objectives.

------

**Investment Advisor**

Principal Global Investors, LLC

**Sub-Advisor and Portfolio Managers**

Principal Real Estate Investors, LLC

• Keith Bokota (since 2013), Portfolio Manager

• Anthony Kenkel (since 2012), Portfolio Manager

• Kelly D. Rush (since 2000), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**SAM (STRATEGIC ASSET MANAGEMENT) BALANCED PORTFOLIO**

**Objective**

The Fund 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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses**

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

---

| | | |
|:---|:---|:---|
| | **Share Class** | **Share Class** |
| | **Class 1** | **Class 2** |
| Management Fees | 0.23% | 0.23% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.25% |
| Other Expenses | 0.00% | 0.00% |
| Acquired Fund Fees and Expenses | 0.45% | 0.45% |
| **Total Annual Fund Operating Expenses** | **0.68%** | **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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **SAM Balanced Portfolio - Class 1** | $69 | $218 | $379 | $847 |
| **SAM Balanced Portfolio - Class 2** | 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 48.2% 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., PVC, 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 Fund generally invests:

• 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 corporate bonds;

• 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

• 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 Fund 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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

The bar chart shows changes in the Fund's Class 1 performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

------

**Total Returns as of December 31**

![5267](ck0000012601-20260427_g25.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **13.19%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(15.32)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **SAM Balanced Portfolio - Class 1** | **14.00%** | **7.27%** | **8.29%** |
| **SAM Balanced Portfolio - Class 2** | **13.65%** | **6.99%** | **8.01%** |
| MSCI ACWI Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 22.34% | 11.19% | 11.72% |
| Russell 3000 Index (reflects no deduction for fees, expenses, or taxes) | 17.15% | 13.15% | 14.29% |
| SAM Balanced Blended Index (except as noted for MSCI ACWI Index NTR, reflects no deduction for fees, expenses, or taxes) | 16.22% | 6.57% | 7.96% |
| &nbsp;&nbsp;&nbsp;MSCI ACWI Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 22.34% | 11.19% | 11.72% |
| &nbsp;&nbsp;&nbsp;Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| SAM Balanced Blended Index (except as noted for MSCI EAFE Index NTR, reflects no deduction for fees, expenses, or taxes) | 15.26% | 7.15% | 8.61% |
| &nbsp;&nbsp;&nbsp;Russell 3000 Index (reflects no deduction for fees, expenses, or taxes) | 17.15% | 13.15% | 14.29% |
| &nbsp;&nbsp;&nbsp;Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| &nbsp;&nbsp;&nbsp;MSCI EAFE Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 31.22% | 8.92% | 8.18% |

---

Effective March 1, 2026, the Fund changed its primary broad-based securities market index to the MSCI ACWI Index NTR because it more closely aligns with the Fund's investment approach. Prior to March 1, 2026, the Fund's primary broad-based securities market index was the Russell 3000 Index. The SAM Balanced Blended Index is included as an additional index for the Fund as it shows how the Fund's performance compares with returns of indices of funds with similar investment objectives. Performance of each component of the blended index is also shown. Effective as of March 1, 2026, the Fund changed the weightings of the SAM Balanced Blended Index to the following because such weightings more closely align with the Fund's investment approach: 60% MSCI ACWI Index NTR and 40% Bloomberg US Aggregate Index. Prior to March 1, 2026, the components and weightings of the SAM Balanced Blended Index were as follows: 45% Russell 3000 Index, 40% Bloomberg US Aggregate Index, and 15% MSCI EAFE Index NTR. The blended index returns reflect the allocations described in the preceding sentences and are as of December 31, 2025.

------

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Brody Dass (since 2022), Portfolio Manager

• Todd A. Jablonski (since 2010), Portfolio Manager

• Yesim Tokat-Acikel (since 2023), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**SAM (STRATEGIC ASSET MANAGEMENT) CONSERVATIVE BALANCED PORTFOLIO**

**Objective**

The Fund 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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses** 

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

---

| | | |
|:---|:---|:---|
| | **Share Class** | **Share Class** |
| | **Class 1** | **Class 2** |
| Management Fees | 0.23% | 0.23% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.25% |
| Other Expenses | 0.01% | 0.01% |
| Acquired Fund Fees and Expenses | 0.43% | 0.43% |
| **Total Annual Fund Operating Expenses** | **0.67%** | **0.92%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **SAM Conservative Balanced Portfolio - Class 1** | $68 | $214 | $373 | $835 |
| **SAM Conservative Balanced Portfolio - Class 2** | 94 | 293 | 509 | 1131 |

---

**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 40.4% 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., PVC, 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 Fund generally invests:

• 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;

• 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

• 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 Fund 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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

------

The bar chart shows changes in the Fund's Class 1 performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

**Total Returns as of December 31**

![5346](ck0000012601-20260427_g26.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **10.38%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(11.48)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **SAM Conservative Balanced Portfolio - Class 1** | **11.69%** | **5.04%** | **6.39%** |
| **SAM Conservative Balanced Portfolio - Class 2** | **11.28%** | **4.78%** | **6.12%** |
| Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| SAM Conservative Balanced Blended Index (except as noted for MSCI ACWI Index NTR, reflects no deduction for fees, expenses, or taxes) | 13.21% | 4.26% | 6.02% |
| &nbsp;&nbsp;&nbsp;Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| &nbsp;&nbsp;&nbsp;MSCI ACWI Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 22.34% | 11.19% | 11.72% |
| SAM Conservative Balanced Blended Index (except as noted for MSCI EAFE Index NTR, reflects no deduction for fees, expenses, or taxes) | 12.59% | 4.64% | 6.45% |
| &nbsp;&nbsp;&nbsp;Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| &nbsp;&nbsp;&nbsp;Russell 3000 Index (reflects no deduction for fees, expenses, or taxes) | 17.15% | 13.15% | 14.29% |
| &nbsp;&nbsp;&nbsp;MSCI EAFE Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 31.22% | 8.92% | 8.18% |

---

The Bloomberg US Aggregate Index is the Fund's primary broad-based securities market index. The SAM Conservative Balanced Blended Index is included as an additional index for the Fund as it shows how the Fund's performance compares with returns of indices of funds with similar investment objectives. Performance of each component of the blended index is also shown. Effective as of March 1, 2026, the Fund changed the weightings of the SAM Conservative Balanced Blended Index to the following because such weightings more closely align with the Fund's investment approach: 60% Bloomberg US Aggregate Index and 40% MSCI ACWI Index NTR. Prior to March 1, 2026, the components and weightings of the SAM Conservative Balanced Blended Index were as follows: 60% Bloomberg US Aggregate Index, 30% Russell 3000 Index, and 10% MSCI EAFE Index NTR. The blended index returns reflect the allocations described in the preceding sentences and are as of December 31, 2025.

------

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Brody Dass (since 2022), Portfolio Manager

• Todd A. Jablonski (since 2010), Portfolio Manager

• Yesim Tokat-Acikel (since 2023), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**SAM (STRATEGIC ASSET MANAGEMENT) CONSERVATIVE GROWTH PORTFOLIO**

**Objective**

The Fund 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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses** 

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

---

| | | |
|:---|:---|:---|
| | **Share Class** | **Share Class** |
| | **Class 1** | **Class 2** |
| Management Fees | 0.23% | 0.23% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.25% |
| Other Expenses | 0.01% | 0.01% |
| Acquired Fund Fees and Expenses | 0.48% | 0.48% |
| **Total Annual Fund Operating Expenses** | **0.72%** | **0.97%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **SAM Conservative Growth Portfolio – Class 1** | $74 | $230 | $401 | $894 |
| **SAM Conservative Growth Portfolio - Class 2** | 99 | 309 | 536 | 1190 |

---

**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 47.2% 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., PVC, 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 Fund generally invests:

• 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;

• 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

• 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 Fund 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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

The bar chart shows changes in the Fund's Class 1 performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

------

**Total Returns as of December 31**

![5152](ck0000012601-20260427_g27.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **16.04%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(19.01)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **SAM Conservative Growth Portfolio - Class 1** | **15.56%** | **9.00%** | **9.94%** |
| **SAM Conservative Growth Portfolio - Class 2** | **15.31%** | **8.74%** | **9.67%** |
| MSCI ACWI Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 22.34% | 11.19% | 11.72% |
| Russell 3000 Index (reflects no deduction for fees, expenses, or taxes) | 17.15% | 13.15% | 14.29% |
| SAM Conservative Growth Blended Index (except as noted for MSCI ACWI Index NTR, reflects no deduction for fees, expenses, or taxes) | 19.26% | 8.88% | 9.87% |
| &nbsp;&nbsp;&nbsp;MSCI ACWI Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 22.34% | 11.19% | 11.72% |
| &nbsp;&nbsp;&nbsp;Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| SAM Conservative Growth Blended Index (except as noted for MSCI EAFE Index NTR, reflects no deduction for fees, expenses, or taxes) | 17.95% | 9.66% | 10.73% |
| &nbsp;&nbsp;&nbsp;Russell 3000 Index (reflects no deduction for fees, expenses, or taxes) | 17.15% | 13.15% | 14.29% |
| &nbsp;&nbsp;&nbsp;Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| &nbsp;&nbsp;&nbsp;MSCI EAFE Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 31.22% | 8.92% | 8.18% |

---

Effective March 1, 2026, the Fund changed its primary broad-based securities market index to the MSCI ACWI Index NTR because it more closely aligns with the Fund's investment approach. Prior to March 1, 2026, the Fund's primary broad-based securities market index was the Russell 3000 Index. The SAM Conservative Growth Blended Index is included as an additional index for the Fund as it shows how the Fund's performance compares with returns of indices of funds with similar investment objectives. Performance of each component of the blended index is also shown. Effective as of March 1, 2026, the Fund changed the weightings of the SAM Conservative Growth Blended Index to the following because such weightings more closely align with the Fund's investment approach: 80% MSCI ACWI Index NTR and 20% Bloomberg US Aggregate Index. Prior to March 1, 2026, the components and weightings of the SAM Conservative Growth Blended Index were as follows: 60% Russell 3000 Index, 20% Bloomberg US Aggregate Index, and 20% MSCI EAFE Index NTR. The blended index returns reflect the allocations described in the preceding sentences and are as of December 31, 2025.

------

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Brody Dass (since 2022), Portfolio Manager

• Todd A. Jablonski (since 2010), Portfolio Manager

• Yesim Tokat-Acikel (since 2023), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**SAM (STRATEGIC ASSET MANAGEMENT) FLEXIBLE INCOME PORTFOLIO**

**Objective**

The Fund 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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses** 

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

---

| | | |
|:---|:---|:---|
| | **Share Class** | **Share Class** |
| | **Class 1** | **Class 2** |
| Management Fees | 0.23% | 0.23% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.25% |
| Other Expenses | 0.01% | 0.02% |
| Acquired Fund Fees and Expenses | 0.40% | 0.40% |
| **Total Annual Fund Operating Expenses** | **0.64%** | **0.90%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **SAM Flexible Income Portfolio - Class 1** | $65 | $205 | $357 | $798 |
| **SAM Flexible Income Portfolio - Class 2** | 92 | 287 | 498 | 1108 |

---

**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 27.7% 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., PVC, 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 Fund generally invests:

• 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, corporate bonds, and U.S. government securities;

• 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

• 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 Fund 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**

**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).

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

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

**Performance**

The following information provides some 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 by calling 1-800-222-5852.

The bar chart shows changes in the Fund's Class 1 performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

------

**Total Returns as of December 31**

![5248](ck0000012601-20260427_g28.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **7.83%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(8.66)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **SAM Flexible Income Portfolio - Class 1** | **9.96%** | **3.57%** | **5.12%** |
| **SAM Flexible Income Portfolio - Class 2** | **9.61%** | **3.31%** | **4.85%** |
| Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| SAM Flexible Income Blended Index (except as noted for MSCI ACWI Index NTR, reflects no deduction for fees, expenses, or taxes) | 10.98% | 2.52% | 4.53% |
| &nbsp;&nbsp;&nbsp;Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| &nbsp;&nbsp;&nbsp;MSCI ACWI Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 22.34% | 11.19% | 11.72% |
| SAM Flexible Income Blended Index (except as noted for MSCI EAFE Index NTR, reflects no deduction for fees, expenses, or taxes) | 10.44% | 2.81% | 4.87% |
| &nbsp;&nbsp;&nbsp;Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| &nbsp;&nbsp;&nbsp;Russell 3000 Index (reflects no deduction for fees, expenses, or taxes) | 17.15% | 13.15% | 14.29% |
| &nbsp;&nbsp;&nbsp;MSCI EAFE Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 31.22% | 8.92% | 8.18% |

---

The Bloomberg US Aggregate Index is the Fund's primary broad-based securities market index. The SAM Flexible Income Blended Index is included as an additional index for the Fund as it shows how the Fund's performance compares with returns of indices of funds with similar investment objectives. Performance of each component of the blended index is also shown. Effective as of March 1, 2026, the Fund changed the weightings of the SAM Flexible Income Blended Index to the following because such weightings more closely align with the Fund's investment approach: 75% Bloomberg US Aggregate Index and 25% MSCI ACWI Index NTR. Prior to March 1, 2026, the components and weightings of the SAM Flexible Income Blended Index were as follows: 75% Bloomberg US Aggregate Index, 20% Russell 3000 Index, and 5% MSCI EAFE Index NTR. The blended index returns reflect the allocations described in the preceding sentences and are as of December 31, 2025.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Brody Dass (since 2022), Portfolio Manager

• Todd A. Jablonski (since 2010), Portfolio Manager

• Yesim Tokat-Acikel (since 2023), Portfolio Manager

------

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**SAM (STRATEGIC ASSET MANAGEMENT) STRATEGIC GROWTH PORTFOLIO**

**Objective**

The Fund 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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses** 

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

---

| | | |
|:---|:---|:---|
| | **Share Class** | **Share Class** |
| | **Class 1** | **Class 2** |
| Management Fees | 0.23% | 0.23% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.25% |
| Other Expenses | 0.01% | 0.01% |
| Acquired Fund Fees and Expenses | 0.51% | 0.51% |
| **Total Annual Fund Operating Expenses** | **0.75%** | **1.00%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **SAM Strategic Growth Portfolio - Class 1** | $77 | $240 | $417 | $930 |
| **SAM Strategic Growth Portfolio - Class 2** | 102 | 318 | 552 | 1225 |

---

**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 49.8% 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., PVC, 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 Fund generally invests:

• 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

• 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 Fund 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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

The bar chart shows changes in the Fund's Class 1 performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

**Total Returns as of December 31**

![4903](ck0000012601-20260427_g29.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **19.27%** |
| **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, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **SAM Strategic Growth Portfolio - Class 1** | **16.86%** | **10.16%** | **10.96%** |
| **SAM Strategic Growth Portfolio - Class 2** | **16.61%** | **9.88%** | **10.69%** |
| MSCI ACWI Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 22.34% | 11.19% | 11.72% |
| Russell 3000 Index (reflects no deduction for fees, expenses, or taxes) | 17.15% | 13.15% | 14.29% |
| SAM Strategic Growth Blended Index (except as noted for MSCI ACWI Index NTR, reflects no deduction for fees, expenses, or taxes) | 21.57% | 10.61% | 11.26% |
| &nbsp;&nbsp;&nbsp;MSCI ACWI Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 22.34% | 11.19% | 11.72% |
| &nbsp;&nbsp;&nbsp;Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| SAM Strategic Growth Blended Index (except as noted for MSCI EAFE Index NTR, reflects no deduction for fees, expenses, or taxes) | 20.15% | 11.49% | 12.22% |
| &nbsp;&nbsp;&nbsp;Russell 3000 Index (reflects no deduction for fees, expenses, or taxes) | 17.15% | 13.15% | 14.29% |
| &nbsp;&nbsp;&nbsp;MSCI EAFE Index NTR (reflects withholding taxes on foreign dividends, but no deduction for fees, expenses, or other taxes) | 31.22% | 8.92% | 8.18% |
| &nbsp;&nbsp;&nbsp;Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |

---

Effective March 1, 2026, the Fund changed its primary broad-based securities market index to the MSCI ACWI Index NTR because it more closely aligns with the Fund's investment approach. Prior to March 1, 2026, the Fund's primary broad-based securities market index was the Russell 3000 Index. The SAM Strategic Growth Blended Index is included as an additional index for the Fund as it shows how the Fund's performance compares with returns of indices of funds with similar investment objectives. Performance of each component of the blended index is also shown. Effective as of March 1, 2026, the Fund changed the weightings of the SAM Strategic Growth Blended Index to the following because such weightings more closely align with the Fund's investment approach: 95% MSCI ACWI Index NTR and 5% Bloomberg US Aggregate Index. Prior to March 1, 2026, the weightings for SAM Strategic Growth Blended Index were as follows: 70% Russell 3000 Index, 25% MSCI EAFE Index NTR, and 5% Bloomberg US Aggregate Index. The blended index returns reflect the allocations described in the preceding sentences and are as of December 31, 2025.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Brody Dass (since 2022), Portfolio Manager

• Todd A. Jablonski (since 2010), Portfolio Manager

• Yesim Tokat-Acikel (since 2023), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**SHORT-TERM INCOME ACCOUNT** 

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses** 

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 1** |
| Management Fees | 0.40% |
| Other Expenses | 0.02% |
| **Total Annual Fund Operating Expenses** | **0.42%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **Short-Term Income Account - Class 1** | $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. 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 49.3% 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 the security has been rated by only one of the rating agencies, that rating will determine the security's rating; if the security is rated differently by the rating agencies, the highest rating will be used; and if the security has not been rated by either of the rating agencies, those selecting such investments will determine the security's 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 ±30% of the duration of the Bloomberg Credit 1-3 Year Index, which as of March 31, 2026 was 1.84 years.

The Fund invests in derivatives, including Treasury futures and credit index futures, for hedging purposes and to manage 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. The value of U.S. government securities may be adversely impacted by changes in interest rates, changes in the credit rating of the U.S. government, or a default by the U.S. government.

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

------

**Performance**

The following information provides some 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 by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

**Total Returns as of December 31**

![4337](ck0000012601-20260427_g30.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **3.14%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2022** | **(2.37)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **Short-Term Income Account - Class 1** | **5.48%** | **2.33%** | **2.52%** |
| Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes) | 7.30% | (0.36)% | 2.01% |
| Bloomberg Credit 1-3 Year Index (reflects no deduction for fees, expenses, or taxes) | 5.82% | 2.46% | 2.64% |

---

The Bloomberg US Aggregate Index is the Fund's primary broad-based securities market index. The Bloomberg Credit 1-3 Year Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Jeff Callahan (since 2025), Portfolio Manager

• Michael Goosay (since 2023), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

------

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**SMALLCAP ACCOUNT**

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

**Annual Fund Operating Expenses** 

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

---

| | | |
|:---|:---|:---|
| | **Share Class** | **Share Class** |
| | **Class 1** | **Class 2** |
| Management Fees | 0.83% | 0.83% |
| Distribution and/or Service (12b-1) Fees | N/A | 0.25% |
| Other Expenses | 0.01% | 0.02% |
| **Total Annual Fund Operating Expenses** | **0.84%** | **1.10%** |

---

**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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **SmallCap Account - Class 1** | $86 | $268 | $466 | $1037 |
| **SmallCap Account - Class 2** | 112 | 350 | 606 | 1340 |

---

**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. 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 37.0% 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. 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 March 31, 2026, this was between approximately $3.3 million and $34.2 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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

The bar chart shows changes in the Fund's Class 1 performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

**Total Returns as of December 31**![4021](ck0000012601-20260427_g31.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q2 2020** | **28.64%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(30.53)%** |

---

------

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| | **1 Year** | **5 Years** | **10 Years** |
| **SmallCap Account - Class 1** | **15.10%** | **6.29%** | **9.57%** |
| **SmallCap Account - Class 2** | **14.78%** | **6.02%** | **9.29%** |
| Russell 3000 Index (reflects no deduction for fees, expenses, or taxes) | 17.15% | 13.15% | 14.29% |
| Russell 2000 Index (reflects no deduction for fees, expenses, or taxes) | 12.81% | 6.09% | 9.62% |

---

The Russell 3000 Index is the Fund's primary broad-based securities market index. The Russell 2000 Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Emily Foshag (since 2025), Portfolio Manager

• Phil Nordhus (since 2006), Portfolio Manager

• Brian W. Pattinson (since 2011), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**U.S. LARGECAP S&P 500 INDEX BUFFER JANUARY ACCOUNT**

• **<u>The Fund employs a defined outcome strategy, but there is no guarantee that such outcomes for an Outcome Period, as defined below, will be achieved. You may lose some or all of your money by investing in the Fund.</u> The Fund's defined outcome strategy seeks to provide investors with returns (<u>before Fund fees and expenses)</u> based on the S&P 500 Price Return Index (the "Index"), while seeking to provide a buffer against the first 10% of Index losses <u>(before Fund fees and expenses)</u>, over a twelve-month period beginning on January 1 and ending on December 31. The Fund has characteristics unlike many other typical investment products and may not be suitable for all investors. It is important that investors understand the Fund's investment strategy before making an investment in the Fund.**

• The defined outcomes may only be realized if you are holding shares on the first day of an Outcome Period and continue to hold them on the last day of that Outcome Period. If you purchase shares after an Outcome Period has begun or sell shares prior to an Outcome Period's conclusion, you may experience investment returns very different from those that the Fund seeks to provide. Investors purchasing shares of the Fund after the Outcome Period begins can see their expected outcomes until the end of the period by visiting the Fund's website, https://annuity.principal.com/variableannuity/bufferaccounts. The Fund's performance over an Outcome Period will be exposed to losses beyond the Buffer, as defined below, in the amount of the Fund's expenses.

• The Fund will not terminate after the conclusion of the Outcome Period. After the conclusion of an Outcome Period with respect to the Fund, another will begin.

• The Fund only seeks to provide shareholders that hold shares for an entire Outcome Period with a Buffer against a pre-determined percentage of Index declines. You will bear all losses beyond that pre-determined percentage as described below. While the Fund seeks to limit losses for shareholders who hold shares for the entire Outcome Period, there is no guarantee it will successfully do so.

• The Fund's website, https://annuity.principal.com/variableannuity/bufferaccounts, provides important information about the Fund, including, among other items, Outcome Period start and end dates, information about the Buffer, the Fund's performance during the current Outcome Period relative to its Buffer, and potential outcomes for the Fund updated on a daily basis. If you are contemplating purchasing or selling shares of the Fund, please visit the website.

• Investors should consider this investment only under the following circumstances: they fully understand the risks inherent in an investment in the Fund; they seek returns based on the performance of the Index, while also seeking to be buffered against the first 10% of Index losses, over an Outcome Period; they are willing to hold shares for the entirety of an Outcome Period; they are willing to accept the risk of losing their entire investment; and they have visited the Fund's website and understand the outcomes available based on timing of purchase.

**Objective**

The Fund seeks to provide investors with returns (before fees and expenses) based on the S&P 500 Price Return Index (the "Index"), while seeking to provide a buffer against the first 10% (prior to taking into account any fees and expenses of the Fund) of Index losses, over a twelve-month period beginning on January 1 and ending on December 31.

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

------

**Annual Fund Operating Expenses** 

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 2** |
| Management Fees | 0.69% |
| Distribution and/or Service (12b-1) Fees | 0.25% |
| Other Expenses <sup>(1)</sup> | 0.04% |
| Acquired Fund Fees and Expenses | 0.03% |
| **Total Annual Fund Operating Expenses** | **1.01%** |
| Expense Reimbursement <sup>(2)</sup> | (0.02)% |
| **Total Annual Fund Operating Expenses after Expense Reimbursement** | **0.99%** |

---

<sup>(1)</sup> Includes 0.01% of interest expense on borrowings. The expense is not subject to the contractual expense limit.

<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 0.95% for Class 2 shares. It is expected the expense limit will continue through the period ending April 30, 2027; however, Principal Variable Contracts 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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **U.S. LargeCap S&P 500 Index Buffer January Account - Class 2** | $101 | $320 | $556 | $1234 |

---

**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. 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 112.3% 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 exchange-traded funds ("ETFs") and options that reference the S&P 500 Price Return Index (the "Index"). The Index represents U.S. equities with risk/return characteristics of the large cap universe. As of March 31, 2026, the market capitalization range of the Index was between approximately $5.3 billion and $4.2 trillion. The Index is distinct from the S&P 500 Total Return Index in that it only tracks the performance of the stock prices of the companies included in the Index and does not include returns from dividends paid by the companies included in the Index. The Fund's strategies may result in the active and frequent trading of the Fund's portfolio securities.

The Fund's investment advisor, Principal Global Investors, LLC ("PGI"), employs a defined outcome strategy that uses options to seek to achieve exposure to the Index while mitigating the first 10% decline in the Index (the "Buffer") over a 12-month period beginning on the first day of each January (the "Specified Date"). The one-year period following the Specified Date is referred to as the "Outcome Period." Subject to certain limitations described in more detail below, the Fund generally seeks to maintain net costs from its use of options approximately equal to its anticipated receipt of dividends as determined at the beginning of the Outcome Period. Intra-period cash flows are managed to target and maintain the return pattern determined at the beginning of the Outcome Period. Accordingly, changes in the amounts of dividends paid by companies underlying the Index and changes in the value of companies underlying the Index can cause performance to be lower than the performance of the Index.

------

At the beginning of each Outcome Period, the Fund will purchase ETFs and call options that reference the Index and a put option at-the-money for the purpose of providing downside protection. The Fund will sell (write) put options on the Index or an ETF that tracks the Index with a strike price approximately 10% lower than the closing value of the Index or an ETF that tracks the Index at the beginning of the Outcome Period. The Fund will sell (write) call options on the Index or an ETF that tracks the Index with a strike price approximately 10% higher than the closing value of the Index or an ETF that tracks the Index at the beginning of the Outcome Period. As the seller of these options, the Fund receives a premium from the buyer of the options. The Fund expects to write the call options on one or more of the ETFs owned by the Fund or the Index to the extent necessary to maintain its net costs from the purchase and sale of options approximately equal to its anticipated receipt of dividends, as determined at the beginning of the Outcome Period, but it will do so only to the extent that the written call options on each respective ETF or the Index have an aggregate notional value less than or equal to the market value of the respective ETF or the Index owned by the Fund. The Fund will generally not seek to offset the costs of call options purchased. The Fund's returns are generally expected to appreciate to a similar extent as the Index for the first 10% of the Index gains. The prices of the call options and put options sold and purchased by the Fund, in addition to the Fund's direct investments in underlying ETFs, will determine the Fund's exposure to the Index during the Outcome Period. Intra-period cash flows are managed to target and maintain the return pattern determined at the beginning of the Outcome Period.

An option gives the purchaser of the option the right to purchase (for a call option) or sell (for a put option) the underlying asset (or deliver cash equal to the value of an underlying index) at a specified price (the strike price). If the underlying asset declines in value, the value of a put option will generally increase (and the value of a call option will generally decrease and may end up worthless), and in the event the underlying asset appreciates in value, the value of a put option will generally decrease and may end up worthless (and the value of a call option will generally increase). **Due to the cost of the options used by the Fund, the correlation of the Fund's performance to that of the Index is expected to be less than if the Fund invested directly in the Index without using options, and could be substantially less.** This means that if the Index experiences gains for an Outcome Period, the Fund may not realize gains to the same extent, as illustrated in the second hypothetical graphical illustration below.

The Fund's strategy is to seek to protect investors from a decline of up to 10% in the performance of the Index over the Outcome Period. **The Fund is not designed to protect against declines of more than 10% in the level of the Index, and there can be no guarantee that the Fund will be successful in implementing its strategy to buffer against the first 10% of Index losses.** The Fund, and therefore investors, will bear all losses exceeding 10%. In addition, because the outcome is calculated before taking into account the Fund's expenses, Fund performance over an Outcome Period will be exposed to losses beyond the Buffer in the amount of such Fund expenses. The Fund may underperform the Index due to the cost of the Buffer protection.

The Fund will invest in exchange-traded FLexible EXchange Options ("FLEX Options"), which are customized exchange-traded option contracts available through the Chicago Board Option Exchange ("Cboe") that are guaranteed for settlement by The Options Clearing Corporation ("OCC"). FLEX Options provide investors with the ability to customize exercise prices, exercise styles, and expiration dates. All FLEX Options in the Fund are European-style options (i.e., they can only be exercised at the expiration date of the option) based on the Index or an ETF that tracks the Index and have an expiration date that is the last day of the Outcome Period.

**The hypothetical graphical illustrations provided below are designed to illustrate the hypothetical outcomes of the Buffer strategy based upon hypothetical performance of the Index for a shareholder that holds shares for the entirety of an Outcome Period. The illustrations assume that the Fund will write call options with an aggregate notional amount equal to 50% of the market value of the ETFs and purchased call options. There is no guarantee that the Fund will be successful in its attempt to provide such outcomes for an Outcome Period, and the actual aggregate notional amount of written call options could be significantly different depending upon changes in the amounts of dividends paid by companies underlying the Index, changes in the value of companies underlying the index, and the relative prices of the options used by the Fund.** The returns that the Fund seeks to provide do not include the costs associated with purchasing shares of the Fund and the expenses incurred by the Fund.

------

![Buffer line graph bw.jpg](ck0000012601-20260427_g32.jpg)

![Buffer bar graph bw.jpg](ck0000012601-20260427_g33.jpg)

------

The Buffer is designed to have its full effect only for investors who continually hold Fund shares for an entire Outcome Period. The Fund is designed to seek to achieve the results described above for investments made on the first day of the Outcome Period and held until the last day of the Outcome Period. **Investments made on any other day may differ significantly, positively or negatively, from the results described above.**

The Fund's operations are intended to be continuous. It will not terminate and distribute its assets at the conclusion of each Outcome Period. On the Specified Date, another Outcome Period will commence, and the Fund will invest in a new set of FLEX Options.

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 March 31, 2026, the Index was not concentrated in any industry.

The Fund's website, https://annuity.principal.com/variableannuity/bufferaccounts, provides important Fund information on a daily basis, including information about the Buffer, current Outcome Period start and end dates, and information relating to the remaining potential outcomes of an investment in the Fund. Investors considering purchasing shares should visit the website for the latest information.

**Note:**&nbsp;&nbsp;&nbsp;&nbsp;"Standard & Poor's 500<sup>®</sup>" and "S&P 500<sup>®</sup>" are trademarks of S&P Global and have been licensed by PGI. 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 Fund has characteristics unlike many other traditional investment products and is not appropriate for all investors. In particular, investment in the Fund may not be appropriate for investors who do not intend to maintain their investment through the entire Outcome Period. There is no guarantee that the Fund will be able to achieve the stated Defined Outcome.**

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.

**Buffered Loss Risk.** There can be no guarantee that the Fund will be successful in its strategy to provide buffer protection against Index losses if the Index decreases over the Outcome Period by 10% or less. A shareholder may lose his or her entire investment. The Fund's strategy seeks to deliver returns that match the Index (but will be less than the Index due to the cost of the options used by the Fund), while limiting downside losses, if shares are bought on the day on which the Fund enters into the options and held until those options expire at the end of each Outcome Period. Intra-period cash flows are managed to target and maintain the return pattern determined at the beginning of the Outcome Period. Accordingly, changes in the amounts of dividends paid by companies underlying the Index and changes in the value of companies underlying the Index can cause performance to be lower than the performance of the Index. Further, in the event an investor purchases shares after the date on which the options were entered into or sells shares prior to the expiration of the options, the Buffer that the Fund seeks to provide may not be available. The Fund does not provide principal protection, and an investor may experience significant losses on its investment, including the loss of its entire investment.

**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.

**• Options.** Options 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 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.

------

**Exchange-Traded Funds Risk.** When the Fund invests in ETFs, you will indirectly bear fees and expenses charged by the ETFs in addition to the Fund's direct fees and expenses. In addition, the Fund may be affected by losses of the ETFs and the level of risk arising from the investment practices of the ETFs (such as the use of leverage by the ETFs). The Fund has no control over the investments and related risks taken by the ETFs in which it invests. Additionally, investments in ETFs are also subject to the following risks: (i) the market price of an ETF's shares may trade above or below their net asset value; (ii) an active trading market for an ETF's shares may not develop or be maintained; or (iii) trading of an ETF's shares may be halted for a number of reasons.

**FLEX Options Risk.** The Fund may invest in FLEX Options issued and guaranteed for settlement by the OCC. The Fund bears the risk that the OCC will be unable or unwilling to perform its obligations under the FLEX Options contracts. If the OCC becomes insolvent or is otherwise unable to meet its settlement obligations, the Fund could incur significant losses. Additionally, FLEX Options may be illiquid if trading in the FLEX Options is limited or absent, and in such cases, the Fund may have difficulty closing out certain FLEX Options positions at desired times and prices, decreasing the value of the FLEX Options. There is no guarantee that a liquid secondary trading market will exist for FLEX Options, and a less liquid trading market may adversely impact the value of FLEX Options. The Fund intends to treat any income it may derive from the FLEX Options as "qualifying income" under the provisions of the Internal Revenue Code applicable to regulated investment companies ("RICs"). In addition, based upon language in legislative history, the Fund intends to treat the issuer of the FLEX Options as the referenced asset for diversification purposes. If the income is not qualifying income or the issuer of the FLEX Options is not appropriately the referenced asset, the Fund could lose its own status as a RIC.

**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.

**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.

**Outcome Period Risk.** The Fund's strategy seeks to match the performance of the Index, before the deduction of Fund expenses, and subject to the Buffer amount, only if an investor holds Fund shares on the first day of the Outcome Period and continues holding his or her shares until the last day of the Outcome Period. If you redeem your shares before the end of the Outcome Period, you may experience investment returns very different from those that the Fund seeks to provide, including potentially a loss of some or all of your investment. **In particular, you will receive no protection against losses from the Buffer amount if you redeem before the last day of the Outcome Period, and you might lose some or all of your investment.** 

**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. Further, the Fund's strategy may be sensitive to large purchases and redemptions occurring near the Outcome Period end date and/or large redemptions in each quarter following the Outcome Period end date, which may affect the Fund's ability to achieve its defined outcome strategy.

**Short Sales Risk.** A short sale involves the sale by the Fund of a security that it does not own with the hope of purchasing the same security at a later date at a lower price. A fund may also enter into a short derivative position through a futures contract or swap agreement. If the price of the security or derivative has increased during this time, 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 third party. Therefore, short sales involve the risk that losses may be exaggerated, potentially losing more money than the actual cost of the investment. Also, there is the risk that the third party to the short sale may fail to honor its contract terms, causing a loss to the Fund.

**Tracking Error Risk.** The Fund may be subject to tracking error, which is the divergence of the Fund's performance (without regard to the Buffer amount) from that of the Index. Tracking error may occur because of differences between the securities and other instruments held in the Fund's portfolio and those included in the Index, the Fund's expenses, changes in the composition of the index, transaction costs incurred by the Fund (such as brokerage commissions in executing transactions), the Fund's holding of uninvested cash, and the timing of purchases and redemptions of Fund shares.

**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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

Life of Fund returns are measured from the date the Fund's shares were first sold (December 28, 2022).

------

**Total Returns as of December 31**

![549755841441](ck0000012601-20260427_g34.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q1 2024** | **9.01%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2025** | **(2.78)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | |
|:---|:---|:---|
| | **1 Year** | **Life of Fund** |
| **U.S. LargeCap S&P 500 Index Buffer January Account - Class 2** | **12.74%** | **16.73%** |
| S&P 500 Index (reflects no deduction for fees, expenses, or taxes) | 17.88% | 26.45% |
| S&P 500 Price Return Index (reflects no deduction for fees, expenses, or taxes) | 16.39% | 24.55% |

---

The S&P 500 Index is the Fund's primary broad-based securities market index. The S&P 500 Price Return Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Tyler O'Donnell (since 2023), Portfolio Manager

• Aaron J. Siebel (since 2022), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**U.S. LARGECAP S&P 500 INDEX BUFFER APRIL ACCOUNT**

• **<u>The Fund employs a defined outcome strategy, but there is no guarantee that such outcomes for an Outcome Period, as defined below, will be achieved. You may lose some or all of your money by investing in the Fund.</u> The Fund's defined outcome strategy seeks to provide investors with returns (<u>before Fund fees and expenses)</u> based on the S&P 500 Price Return Index (the "Index"), while seeking to provide a buffer against the first 10% of Index losses <u>(before Fund fees and expenses)</u>, over a twelve-month period beginning on April 1 and ending on March 31. The Fund has characteristics unlike many other typical investment products and may not be suitable for all investors. It is important that investors understand the Fund's investment strategy before making an investment in the Fund.**

• The defined outcomes may only be realized if you are holding shares on the first day of an Outcome Period and continue to hold them on the last day of that Outcome Period. If you purchase shares after an Outcome Period has begun or sell shares prior to an Outcome Period's conclusion, you may experience investment returns very different from those that the Fund seeks to provide. Investors purchasing shares of the Fund after the Outcome Period begins can see their expected outcomes until the end of the period by visiting the Fund's website, https://annuity.principal.com/variableannuity/bufferaccounts. The Fund's performance over an Outcome Period will be exposed to losses beyond the Buffer, as defined below, in the amount of the Fund's expenses.

• The Fund will not terminate after the conclusion of the Outcome Period. After the conclusion of an Outcome Period with respect to the Fund, another will begin.

• The Fund only seeks to provide shareholders that hold shares for an entire Outcome Period with a Buffer against a pre-determined percentage of Index declines. You will bear all losses beyond that pre-determined percentage as described below. While the Fund seeks to limit losses for shareholders who hold shares for the entire Outcome Period, there is no guarantee it will successfully do so.

• The Fund's website, https://annuity.principal.com/variableannuity/bufferaccounts, provides important information about the Fund, including, among other items, Outcome Period start and end dates, information about the Buffer, the Fund's performance during the current Outcome Period relative to its Buffer, and potential outcomes for the Fund updated on a daily basis. If you are contemplating purchasing or selling shares of the Fund, please visit the website.

• Investors should consider this investment only under the following circumstances: they fully understand the risks inherent in an investment in the Fund; they seek returns based on the performance of the Index, while also seeking to be buffered against the first 10% of Index losses, over an Outcome Period; they are willing to hold shares for the entirety of an Outcome Period; they are willing to accept the risk of losing their entire investment; and they have visited the Fund's website and understand the outcomes available based on timing of purchase.

**Objective**

The Fund seeks to provide investors with returns (before fees and expenses) based on the S&P 500 Price Return Index (the "Index"), while seeking to provide a buffer against the first 10% (prior to taking into account any fees and expenses of the Fund) of Index losses, over a twelve-month period beginning on April 1 and ending on March 31.

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

------

**Annual Fund Operating Expenses** 

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 2** |
| Management Fees | 0.69% |
| Distribution and/or Service (12b-1) Fees | 0.25% |
| Other Expenses | 0.04% |
| Acquired Fund Fees and Expenses | 0.03% |
| **Total Annual Fund Operating Expenses** | **1.01%** |
| Expense Reimbursement <sup>(1)</sup> | (0.03)% |
| **Total Annual Fund Operating Expenses after Expense Reimbursement** | **0.98%** |

---

<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 0.95% for Class 2 shares. It is expected the expense limit will continue through the period ending April 30, 2027; however, Principal Variable Contracts 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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **U.S. LargeCap S&P 500 Index Buffer April Account - Class 2** | $100 | $319 | $555 | $1234 |

---

**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. 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 25.3% 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 exchange-traded funds ("ETFs") and options that reference the S&P 500 Price Return Index (the "Index"). The Index represents U.S. equities with risk/return characteristics of the large cap universe. As of March 31, 2026, the market capitalization range of the Index was between approximately $5.3 billion and $4.2 trillion. The Index is distinct from the S&P 500 Total Return Index in that it only tracks the performance of the stock prices of the companies included in the Index and does not include returns from dividends paid by the companies included in the Index. The Fund's strategies may result in the active and frequent trading of the Fund's portfolio securities.

The Fund's investment advisor, Principal Global Investors, LLC ("PGI"), employs a defined outcome strategy that uses options to seek to achieve exposure to the Index while mitigating the first 10% decline in the Index (the "Buffer") over a 12-month period beginning on the first day of each April (the "Specified Date"). The one-year period following the Specified Date is referred to as the "Outcome Period." Subject to certain limitations described in more detail below, the Fund generally seeks to maintain net costs from its use of options approximately equal to its anticipated receipt of dividends as determined at the beginning of the Outcome Period. Intra-period cash flows are managed to target and maintain the return pattern determined at the beginning of the Outcome Period. Accordingly, changes in the amounts of dividends paid by companies underlying the Index and changes in the value of companies underlying the Index can cause performance to be lower than the performance of the Index.

------

At the beginning of each Outcome Period, the Fund will purchase ETFs and call options that reference the Index and a put option at-the-money for the purpose of providing downside protection. The Fund will sell (write) put options on the Index or an ETF that tracks the Index with a strike price approximately 10% lower than the closing value of the Index or an ETF that tracks the Index at the beginning of the Outcome Period. The Fund will sell (write) call options on the Index or an ETF that tracks the Index with a strike price approximately 10% higher than the closing value of the Index or an ETF that tracks the Index at the beginning of the Outcome Period. As the seller of these options, the Fund receives a premium from the buyer of the options. The Fund expects to write the call options on one or more of the ETFs owned by the Fund or the Index to the extent necessary to maintain its net costs from the purchase and sale of options approximately equal to its anticipated receipt of dividends, as determined at the beginning of the Outcome Period, but it will do so only to the extent that the written call options on each respective ETF or the Index have an aggregate notional value less than or equal to the market value of the respective ETF or the Index owned by the Fund. The Fund will generally not seek to offset the costs of call options purchased. The Fund's returns are generally expected to appreciate to a similar extent as the Index for the first 10% of the Index gains. The prices of the call options and put options sold and purchased by the Fund, in addition to the Fund's direct investments in underlying ETFs, will determine the Fund's exposure to the Index during the Outcome Period. Intra-period cash flows are managed to target and maintain the return pattern determined at the beginning of the Outcome Period.

An option gives the purchaser of the option the right to purchase (for a call option) or sell (for a put option) the underlying asset (or deliver cash equal to the value of an underlying index) at a specified price (the strike price). If the underlying asset declines in value, the value of a put option will generally increase (and the value of a call option will generally decrease and may end up worthless), and in the event the underlying asset appreciates in value, the value of a put option will generally decrease and may end up worthless (and the value of a call option will generally increase). **Due to the cost of the options used by the Fund, the correlation of the Fund's performance to that of the Index is expected to be less than if the Fund invested directly in the Index without using options, and could be substantially less.** This means that if the Index experiences gains for an Outcome Period, the Fund may not realize gains to the same extent, as illustrated in the second hypothetical graphical illustration below.

The Fund's strategy is to seek to protect investors from a decline of up to 10% in the performance of the Index over the Outcome Period. **The Fund is not designed to protect against declines of more than 10% in the level of the Index, and there can be no guarantee that the Fund will be successful in implementing its strategy to buffer against the first 10% of Index losses.** The Fund, and therefore investors, will bear all losses exceeding 10%. In addition, because the outcome is calculated before taking into account the Fund's expenses, Fund performance over an Outcome Period will be exposed to losses beyond the Buffer in the amount of such Fund expenses. The Fund may underperform the Index due to the cost of the Buffer protection.

The Fund will invest in exchange-traded FLexible EXchange Options ("FLEX Options"), which are customized exchange-traded option contracts available through the Chicago Board Option Exchange ("Cboe") that are guaranteed for settlement by The Options Clearing Corporation ("OCC"). FLEX Options provide investors with the ability to customize exercise prices, exercise styles, and expiration dates. All FLEX Options in the Fund are European-style options (i.e., they can only be exercised at the expiration date of the option) based on the Index or an ETF that tracks the Index and have an expiration date that is the last day of the Outcome Period.

**The hypothetical graphical illustrations provided below are designed to illustrate the hypothetical outcomes of the Buffer strategy based upon hypothetical performance of the Index for a shareholder that holds shares for the entirety of an Outcome Period. The illustrations assume that the Fund will write call options with an aggregate notional amount equal to 50% of the market value of the ETFs and purchased call options. There is no guarantee that the Fund will be successful in its attempt to provide such outcomes for an Outcome Period, and the actual aggregate notional amount of written call options could be significantly different depending upon changes in the amounts of dividends paid by companies underlying the Index, changes in the value of companies underlying the index, and the relative prices of the options used by the Fund.** The returns that the Fund seeks to provide do not include the costs associated with purchasing shares of the Fund and the expenses incurred by the Fund.

------

![Buffer line graph bw.jpg](ck0000012601-20260427_g32.jpg)

![Buffer bar graph bw.jpg](ck0000012601-20260427_g33.jpg)

------

The Buffer is designed to have its full effect only for investors who continually hold Fund shares for an entire Outcome Period. The Fund is designed to seek to achieve the results described above for investments made on the first day of the Outcome Period and held until the last day of the Outcome Period. **Investments made on any other day may differ significantly, positively or negatively, from the results described above.**

The Fund's operations are intended to be continuous. It will not terminate and distribute its assets at the conclusion of each Outcome Period. On the Specified Date, another Outcome Period will commence, and the Fund will invest in a new set of FLEX Options.

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 March 31, 2026, the Index was not concentrated in any industry.

The Fund's website, https://annuity.principal.com/variableannuity/bufferaccounts, provides important Fund information on a daily basis, including information about the Buffer, current Outcome Period start and end dates, and information relating to the remaining potential outcomes of an investment in the Fund. Investors considering purchasing shares should visit the website for the latest information.

**Note:**&nbsp;&nbsp;&nbsp;&nbsp;"Standard & Poor's 500<sup>®</sup>" and "S&P 500<sup>®</sup>" are trademarks of S&P Global and have been licensed by PGI. 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 Fund has characteristics unlike many other traditional investment products and is not appropriate for all investors. In particular, investment in the Fund may not be appropriate for investors who do not intend to maintain their investment through the entire Outcome Period. There is no guarantee that the Fund will be able to achieve the stated Defined Outcome.**

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.

**Buffered Loss Risk.** There can be no guarantee that the Fund will be successful in its strategy to provide buffer protection against Index losses if the Index decreases over the Outcome Period by 10% or less. A shareholder may lose his or her entire investment. The Fund's strategy seeks to deliver returns that match the Index (but will be less than the Index due to the cost of the options used by the Fund), while limiting downside losses, if shares are bought on the day on which the Fund enters into the options and held until those options expire at the end of each Outcome Period. Intra-period cash flows are managed to target and maintain the return pattern determined at the beginning of the Outcome Period. Accordingly, changes in the amounts of dividends paid by companies underlying the Index and changes in the value of companies underlying the Index can cause performance to be lower than the performance of the Index. Further, in the event an investor purchases shares after the date on which the options were entered into or sells shares prior to the expiration of the options, the Buffer that the Fund seeks to provide may not be available. The Fund does not provide principal protection, and an investor may experience significant losses on its investment, including the loss of its entire investment.

**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.

**• Options.** Options 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 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.

------

**Exchange-Traded Funds Risk.** When the Fund invests in ETFs, you will indirectly bear fees and expenses charged by the ETFs in addition to the Fund's direct fees and expenses. In addition, the Fund may be affected by losses of the ETFs and the level of risk arising from the investment practices of the ETFs (such as the use of leverage by the ETFs). The Fund has no control over the investments and related risks taken by the ETFs in which it invests. Additionally, investments in ETFs are also subject to the following risks: (i) the market price of an ETF's shares may trade above or below their net asset value; (ii) an active trading market for an ETF's shares may not develop or be maintained; or (iii) trading of an ETF's shares may be halted for a number of reasons.

**FLEX Options Risk.** The Fund may invest in FLEX Options issued and guaranteed for settlement by the OCC. The Fund bears the risk that the OCC will be unable or unwilling to perform its obligations under the FLEX Options contracts. If the OCC becomes insolvent or is otherwise unable to meet its settlement obligations, the Fund could incur significant losses. Additionally, FLEX Options may be illiquid if trading in the FLEX Options is limited or absent, and in such cases, the Fund may have difficulty closing out certain FLEX Options positions at desired times and prices, decreasing the value of the FLEX Options. There is no guarantee that a liquid secondary trading market will exist for FLEX Options, and a less liquid trading market may adversely impact the value of FLEX Options. The Fund intends to treat any income it may derive from the FLEX Options as "qualifying income" under the provisions of the Internal Revenue Code applicable to regulated investment companies ("RICs"). In addition, based upon language in legislative history, the Fund intends to treat the issuer of the FLEX Options as the referenced asset for diversification purposes. If the income is not qualifying income or the issuer of the FLEX Options is not appropriately the referenced asset, the Fund could lose its own status as a RIC.

**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.

**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.

**Outcome Period Risk.** The Fund's strategy seeks to match the performance of the Index, before the deduction of Fund expenses, and subject to the Buffer amount, only if an investor holds Fund shares on the first day of the Outcome Period and continues holding his or her shares until the last day of the Outcome Period. If you redeem your shares before the end of the Outcome Period, you may experience investment returns very different from those that the Fund seeks to provide, including potentially a loss of some or all of your investment. **In particular, you will receive no protection against losses from the Buffer amount if you redeem before the last day of the Outcome Period, and you might lose some or all of your investment.** 

**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. Further, the Fund's strategy may be sensitive to large purchases and redemptions occurring near the Outcome Period end date and/or large redemptions in each quarter following the Outcome Period end date, which may affect the Fund's ability to achieve its defined outcome strategy.

**Short Sales Risk.** A short sale involves the sale by the Fund of a security that it does not own with the hope of purchasing the same security at a later date at a lower price. A fund may also enter into a short derivative position through a futures contract or swap agreement. If the price of the security or derivative has increased during this time, 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 third party. Therefore, short sales involve the risk that losses may be exaggerated, potentially losing more money than the actual cost of the investment. Also, there is the risk that the third party to the short sale may fail to honor its contract terms, causing a loss to the Fund.

**Tracking Error Risk.** The Fund may be subject to tracking error, which is the divergence of the Fund's performance (without regard to the Buffer amount) from that of the Index. Tracking error may occur because of differences between the securities and other instruments held in the Fund's portfolio and those included in the Index, the Fund's expenses, changes in the composition of the index, transaction costs incurred by the Fund (such as brokerage commissions in executing transactions), the Fund's holding of uninvested cash, and the timing of purchases and redemptions of Fund shares.

**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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

Life of Fund returns are measured from the date the Fund's shares were first sold (March 29, 2023).

------

**Total Returns as of December 31**

![549755869593](ck0000012601-20260427_g35.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q1 2024** | **7.77%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2025** | **(3.64)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | |
|:---|:---|:---|
| | **1 Year** | **Life of Fund** |
| **U.S. LargeCap S&P 500 Index Buffer April Account - Class 2** | **11.95%** | **15.73%** |
| S&P 500 Index (reflects no deduction for fees, expenses, or taxes) | 17.88% | 25.84% |
| S&P 500 Price Return Index (reflects no deduction for fees, expenses, or taxes) | 16.39% | 23.99% |

---

The S&P 500 Index is the Fund's primary broad-based securities market index. The S&P 500 Price Return Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Tyler O'Donnell (since 2023), Portfolio Manager

• Aaron J. Siebel (since 2023), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**U.S. LARGECAP S&P 500 INDEX BUFFER JULY ACCOUNT**

• **<u>The Fund employs a defined outcome strategy, but there is no guarantee that such outcomes for an Outcome Period, as defined below, will be achieved. You may lose some or all of your money by investing in the Fund.</u> The Fund's defined outcome strategy seeks to provide investors with returns (<u>before Fund fees and expenses)</u> based on the S&P 500 Price Return Index (the "Index"), while seeking to provide a buffer against the first 10% of Index losses <u>(before Fund fees and expenses)</u>, over a twelve-month period beginning on July 1 and ending on June 30. The Fund has characteristics unlike many other typical investment products and may not be suitable for all investors. It is important that investors understand the Fund's investment strategy before making an investment in the Fund.**

• The defined outcomes may only be realized if you are holding shares on the first day of an Outcome Period and continue to hold them on the last day of that Outcome Period. If you purchase shares after an Outcome Period has begun or sell shares prior to an Outcome Period's conclusion, you may experience investment returns very different from those that the Fund seeks to provide. Investors purchasing shares of the Fund after the Outcome Period begins can see their expected outcomes until the end of the period by visiting the Fund's website, https://annuity.principal.com/variableannuity/bufferaccounts. The Fund's performance over an Outcome Period will be exposed to losses beyond the Buffer, as defined below, in the amount of the Fund's expenses.

• The Fund will not terminate after the conclusion of the Outcome Period. After the conclusion of an Outcome Period with respect to the Fund, another will begin.

• The Fund only seeks to provide shareholders that hold shares for an entire Outcome Period with a Buffer against a pre-determined percentage of Index declines. You will bear all losses beyond that pre-determined percentage as described below. While the Fund seeks to limit losses for shareholders who hold shares for the entire Outcome Period, there is no guarantee it will successfully do so.

• The Fund's website, https://annuity.principal.com/variableannuity/bufferaccounts, provides important information about the Fund, including, among other items, Outcome Period start and end dates, information about the Buffer, the Fund's performance during the current Outcome Period relative to its Buffer, and potential outcomes for the Fund updated on a daily basis. If you are contemplating purchasing or selling shares of the Fund, please visit the website.

• Investors should consider this investment only under the following circumstances: they fully understand the risks inherent in an investment in the Fund; they seek returns based on the performance of the Index, while also seeking to be buffered against the first 10% of Index losses, over an Outcome Period; they are willing to hold shares for the entirety of an Outcome Period; they are willing to accept the risk of losing their entire investment; and they have visited the Fund's website and understand the outcomes available based on timing of purchase.

**Objective**

The Fund seeks to provide investors with returns (before fees and expenses) based on the S&P 500 Price Return Index (the "Index"), while seeking to provide a buffer against the first 10% (prior to taking into account any fees and expenses of the Fund) of Index losses, over a twelve-month period beginning on July 1 and ending on June 30.

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

------

**Annual Fund Operating Expenses** 

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 2** |
| Management Fees | 0.69% |
| Distribution and/or Service (12b-1) Fees | 0.25% |
| Other Expenses <sup>(1)</sup> | 0.05% |
| Acquired Fund Fees and Expenses | 0.03% |
| **Total Annual Fund Operating Expenses** | **1.02%** |
| Expense Reimbursement <sup>(2)</sup> | (0.02)% |
| **Total Annual Fund Operating Expenses after Expense Reimbursement** | **1.00%** |

---

<sup>(1)</sup> Includes 0.02% of interest expense on borrowings. The expense is not subject to the contractual expense limit.

<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 0.95% for Class 2 shares. It is expected the expense limit will continue through the period ending April 30, 2027; however, Principal Variable Contracts 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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **U.S. LargeCap S&P 500 Index Buffer July Account - Class 2** | $102 | $323 | $561 | $1246 |

---

**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. 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 126.9% 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 exchange-traded funds ("ETFs") and options that reference the S&P 500 Price Return Index (the "Index"). The Index represents U.S. equities with risk/return characteristics of the large cap universe. As of March 31, 2026, the market capitalization range of the Index was between approximately $5.3 billion and $4.2 trillion. The Index is distinct from the S&P 500 Total Return Index in that it only tracks the performance of the stock prices of the companies included in the Index and does not include returns from dividends paid by the companies included in the Index. The Fund's strategies may result in the active and frequent trading of the Fund's portfolio securities.

The Fund's investment advisor, Principal Global Investors, LLC ("PGI"), employs a defined outcome strategy that uses options to seek to achieve exposure to the Index while mitigating the first 10% decline in the Index (the "Buffer") over a 12-month period beginning on the first day of each July (the "Specified Date"). The one-year period following the Specified Date is referred to as the "Outcome Period." Subject to certain limitations described in more detail below, the Fund generally seeks to maintain net costs from its use of options approximately equal to its anticipated receipt of dividends as determined at the beginning of the Outcome Period. Intra-period cash flows are managed to target and maintain the return pattern determined at the beginning of the Outcome Period. Accordingly, changes in the amounts of dividends paid by companies underlying the Index and changes in the value of companies underlying the Index can cause performance to be lower than the performance of the Index.

------

At the beginning of each Outcome Period, the Fund will purchase ETFs and call options that reference the Index and a put option at-the-money for the purpose of providing downside protection. The Fund will sell (write) put options on the Index or an ETF that tracks the Index with a strike price approximately 10% lower than the closing value of the Index or an ETF that tracks the Index at the beginning of the Outcome Period. The Fund will sell (write) call options on the Index or an ETF that tracks the Index with a strike price approximately 10% higher than the closing value of the Index or an ETF that tracks the Index at the beginning of the Outcome Period. As the seller of these options, the Fund receives a premium from the buyer of the options. The Fund expects to write the call options on one or more of the ETFs owned by the Fund or the Index to the extent necessary to maintain its net costs from the purchase and sale of options approximately equal to its anticipated receipt of dividends, as determined at the beginning of the Outcome Period, but it will do so only to the extent that the written call options on each respective ETF or the Index have an aggregate notional value less than or equal to the market value of the respective ETF or the Index owned by the Fund. The Fund will generally not seek to offset the costs of call options purchased. The Fund's returns are generally expected to appreciate to a similar extent as the Index for the first 10% of the Index gains. The prices of the call options and put options sold and purchased by the Fund, in addition to the Fund's direct investments in underlying ETFs, will determine the Fund's exposure to the Index during the Outcome Period. Intra-period cash flows are managed to target and maintain the return pattern determined at the beginning of the Outcome Period.

An option gives the purchaser of the option the right to purchase (for a call option) or sell (for a put option) the underlying asset (or deliver cash equal to the value of an underlying index) at a specified price (the strike price). If the underlying asset declines in value, the value of a put option will generally increase (and the value of a call option will generally decrease and may end up worthless), and in the event the underlying asset appreciates in value, the value of a put option will generally decrease and may end up worthless (and the value of a call option will generally increase). **Due to the cost of the options used by the Fund, the correlation of the Fund's performance to that of the Index is expected to be less than if the Fund invested directly in the Index without using options, and could be substantially less.** This means that if the Index experiences gains for an Outcome Period, the Fund may not realize gains to the same extent, as illustrated in the second hypothetical graphical illustration below.

The Fund's strategy is to seek to protect investors from a decline of up to 10% in the performance of the Index over the Outcome Period. **The Fund is not designed to protect against declines of more than 10% in the level of the Index, and there can be no guarantee that the Fund will be successful in implementing its strategy to buffer against the first 10% of Index losses.** The Fund, and therefore investors, will bear all losses exceeding 10%. In addition, because the outcome is calculated before taking into account the Fund's expenses, Fund performance over an Outcome Period will be exposed to losses beyond the Buffer in the amount of such Fund expenses. The Fund may underperform the Index due to the cost of the Buffer protection.

The Fund will invest in exchange-traded FLexible EXchange Options ("FLEX Options"), which are customized exchange-traded option contracts available through the Chicago Board Option Exchange ("Cboe") that are guaranteed for settlement by The Options Clearing Corporation ("OCC"). FLEX Options provide investors with the ability to customize exercise prices, exercise styles, and expiration dates. All FLEX Options in the Fund are European-style options (i.e., they can only be exercised at the expiration date of the option) based on the Index or an ETF that tracks the Index and have an expiration date that is the last day of the Outcome Period.

**The hypothetical graphical illustrations provided below are designed to illustrate the hypothetical outcomes of the Buffer strategy based upon hypothetical performance of the Index for a shareholder that holds shares for the entirety of an Outcome Period. The illustrations assume that the Fund will write call options with an aggregate notional amount equal to 50% of the market value of the ETFs and purchased call options. There is no guarantee that the Fund will be successful in its attempt to provide such outcomes for an Outcome Period, and the actual aggregate notional amount of written call options could be significantly different depending upon changes in the amounts of dividends paid by companies underlying the Index, changes in the value of companies underlying the index, and the relative prices of the options used by the Fund.** The returns that the Fund seeks to provide do not include the costs associated with purchasing shares of the Fund and the expenses incurred by the Fund.

------

![Buffer line graph bw.jpg](ck0000012601-20260427_g32.jpg)

![Buffer bar graph bw.jpg](ck0000012601-20260427_g33.jpg)

------

The Buffer is designed to have its full effect only for investors who continually hold Fund shares for an entire Outcome Period. The Fund is designed to seek to achieve the results described above for investments made on the first day of the Outcome Period and held until the last day of the Outcome Period. **Investments made on any other day may differ significantly, positively or negatively, from the results described above.**

The Fund's operations are intended to be continuous. It will not terminate and distribute its assets at the conclusion of each Outcome Period. On the Specified Date, another Outcome Period will commence, and the Fund will invest in a new set of FLEX Options.

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 March 31, 2026, the Index was not concentrated in any industry.

The Fund's website, https://annuity.principal.com/variableannuity/bufferaccounts, provides important Fund information on a daily basis, including information about the Buffer, current Outcome Period start and end dates, and information relating to the remaining potential outcomes of an investment in the Fund. Investors considering purchasing shares should visit the website for the latest information.

**Note:**&nbsp;&nbsp;&nbsp;&nbsp;"Standard & Poor's 500<sup>®</sup>" and "S&P 500<sup>®</sup>" are trademarks of S&P Global and have been licensed by PGI. 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 Fund has characteristics unlike many other traditional investment products and is not appropriate for all investors. In particular, investment in the Fund may not be appropriate for investors who do not intend to maintain their investment through the entire Outcome Period. There is no guarantee that the Fund will be able to achieve the stated Defined Outcome.**

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.

**Buffered Loss Risk.** There can be no guarantee that the Fund will be successful in its strategy to provide buffer protection against Index losses if the Index decreases over the Outcome Period by 10% or less. A shareholder may lose his or her entire investment. The Fund's strategy seeks to deliver returns that match the Index (but will be less than the Index due to the cost of the options used by the Fund), while limiting downside losses, if shares are bought on the day on which the Fund enters into the options and held until those options expire at the end of each Outcome Period. Intra-period cash flows are managed to target and maintain the return pattern determined at the beginning of the Outcome Period. Accordingly, changes in the amounts of dividends paid by companies underlying the Index and changes in the value of companies underlying the Index can cause performance to be lower than the performance of the Index. Further, in the event an investor purchases shares after the date on which the options were entered into or sells shares prior to the expiration of the options, the Buffer that the Fund seeks to provide may not be available. The Fund does not provide principal protection, and an investor may experience significant losses on its investment, including the loss of its entire investment.

**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.

**• Options.** Options 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 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.

------

**Exchange-Traded Funds Risk.** When the Fund invests in ETFs, you will indirectly bear fees and expenses charged by the ETFs in addition to the Fund's direct fees and expenses. In addition, the Fund may be affected by losses of the ETFs and the level of risk arising from the investment practices of the ETFs (such as the use of leverage by the ETFs). The Fund has no control over the investments and related risks taken by the ETFs in which it invests. Additionally, investments in ETFs are also subject to the following risks: (i) the market price of an ETF's shares may trade above or below their net asset value; (ii) an active trading market for an ETF's shares may not develop or be maintained; or (iii) trading of an ETF's shares may be halted for a number of reasons.

**FLEX Options Risk.** The Fund may invest in FLEX Options issued and guaranteed for settlement by the OCC. The Fund bears the risk that the OCC will be unable or unwilling to perform its obligations under the FLEX Options contracts. If the OCC becomes insolvent or is otherwise unable to meet its settlement obligations, the Fund could incur significant losses. Additionally, FLEX Options may be illiquid if trading in the FLEX Options is limited or absent, and in such cases, the Fund may have difficulty closing out certain FLEX Options positions at desired times and prices, decreasing the value of the FLEX Options. There is no guarantee that a liquid secondary trading market will exist for FLEX Options, and a less liquid trading market may adversely impact the value of FLEX Options. The Fund intends to treat any income it may derive from the FLEX Options as "qualifying income" under the provisions of the Internal Revenue Code applicable to regulated investment companies ("RICs"). In addition, based upon language in legislative history, the Fund intends to treat the issuer of the FLEX Options as the referenced asset for diversification purposes. If the income is not qualifying income or the issuer of the FLEX Options is not appropriately the referenced asset, the Fund could lose its own status as a RIC.

**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.

**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.

**Outcome Period Risk.** The Fund's strategy seeks to match the performance of the Index, before the deduction of Fund expenses, and subject to the Buffer amount, only if an investor holds Fund shares on the first day of the Outcome Period and continues holding his or her shares until the last day of the Outcome Period. If you redeem your shares before the end of the Outcome Period, you may experience investment returns very different from those that the Fund seeks to provide, including potentially a loss of some or all of your investment. **In particular, you will receive no protection against losses from the Buffer amount if you redeem before the last day of the Outcome Period, and you might lose some or all of your investment.** 

**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. Further, the Fund's strategy may be sensitive to large purchases and redemptions occurring near the Outcome Period end date and/or large redemptions in each quarter following the Outcome Period end date, which may affect the Fund's ability to achieve its defined outcome strategy.

**Short Sales Risk.** A short sale involves the sale by the Fund of a security that it does not own with the hope of purchasing the same security at a later date at a lower price. A fund may also enter into a short derivative position through a futures contract or swap agreement. If the price of the security or derivative has increased during this time, 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 third party. Therefore, short sales involve the risk that losses may be exaggerated, potentially losing more money than the actual cost of the investment. Also, there is the risk that the third party to the short sale may fail to honor its contract terms, causing a loss to the Fund.

**Tracking Error Risk.** The Fund may be subject to tracking error, which is the divergence of the Fund's performance (without regard to the Buffer amount) from that of the Index. Tracking error may occur because of differences between the securities and other instruments held in the Fund's portfolio and those included in the Index, the Fund's expenses, changes in the composition of the index, transaction costs incurred by the Fund (such as brokerage commissions in executing transactions), the Fund's holding of uninvested cash, and the timing of purchases and redemptions of Fund shares.

**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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

Life of Fund returns are measured from the date the Fund's shares were first sold (June 29, 2022).

------

**Total Returns as of December 31**

![549755840945](ck0000012601-20260427_g36.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q4 2023** | **8.53%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2025** | **(3.08)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | |
|:---|:---|:---|
| | **1 Year** | **Life of Fund** |
| **U.S. LargeCap S&P 500 Index Buffer July Account - Class 2** | **13.26%** | **14.53%** |
| S&P 500 Index (reflects no deduction for fees, expenses, or taxes) | 17.88% | 20.66% |
| S&P 500 Price Return Index (reflects no deduction for fees, expenses, or taxes) | 16.39% | 18.79% |

---

The S&P 500 Index is the Fund's primary broad-based securities market index. The S&P 500 Price Return Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Tyler O'Donnell (since 2023), Portfolio Manager

• Aaron J. Siebel (since 2022), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**U.S. LARGECAP S&P 500 INDEX BUFFER OCTOBER ACCOUNT**

• **<u>The Fund employs a defined outcome strategy, but there is no guarantee that such outcomes for an Outcome Period, as defined below, will be achieved. You may lose some or all of your money by investing in the Fund.</u> The Fund's defined outcome strategy seeks to provide investors with returns (<u>before Fund fees and expenses)</u> based on the S&P 500 Price Return Index (the "Index"), while seeking to provide a buffer against the first 10% of Index losses <u>(before Fund fees and expenses)</u>, over a twelve-month period beginning on October 1 and ending on September 30. The Fund has characteristics unlike many other typical investment products and may not be suitable for all investors. It is important that investors understand the Fund's investment strategy before making an investment in the Fund.**

• The defined outcomes may only be realized if you are holding shares on the first day of an Outcome Period and continue to hold them on the last day of that Outcome Period. If you purchase shares after an Outcome Period has begun or sell shares prior to an Outcome Period's conclusion, you may experience investment returns very different from those that the Fund seeks to provide. Investors purchasing shares of the Fund after the Outcome Period begins can see their expected outcomes until the end of the period by visiting the Fund's website, https://annuity.principal.com/variableannuity/bufferaccounts. The Fund's performance over an Outcome Period will be exposed to losses beyond the Buffer, as defined below, in the amount of the Fund's expenses.

• The Fund will not terminate after the conclusion of the Outcome Period. After the conclusion of an Outcome Period with respect to the Fund, another will begin.

• The Fund only seeks to provide shareholders that hold shares for an entire Outcome Period with a Buffer against a pre-determined percentage of Index declines. You will bear all losses beyond that pre-determined percentage as described below. While the Fund seeks to limit losses for shareholders who hold shares for the entire Outcome Period, there is no guarantee it will successfully do so.

• The Fund's website, https://annuity.principal.com/variableannuity/bufferaccounts, provides important information about the Fund, including, among other items, Outcome Period start and end dates, information about the Buffer, the Fund's performance during the current Outcome Period relative to its Buffer, and potential outcomes for the Fund updated on a daily basis. If you are contemplating purchasing or selling shares of the Fund, please visit the website.

• Investors should consider this investment only under the following circumstances: they fully understand the risks inherent in an investment in the Fund; they seek returns based on the performance of the Index, while also seeking to be buffered against the first 10% of Index losses, over an Outcome Period; they are willing to hold shares for the entirety of an Outcome Period; they are willing to accept the risk of losing their entire investment; and they have visited the Fund's website and understand the outcomes available based on timing of purchase.

**Objective**

The Fund seeks to provide investors with returns (before fees and expenses) based on the S&P 500 Price Return Index (the "Index"), while seeking to provide a buffer against the first 10% (prior to taking into account any fees and expenses of the Fund) of Index losses, over a twelve-month period beginning on October 1 and ending on September 30.

**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 table and examples below.** These fees and expenses do not reflect the fees and expenses of any variable insurance contract that may invest in the Fund and would be higher if they did.

------

**Annual Fund Operating Expenses** 

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

---

| | |
|:---|:---|
| | **Share Class** |
| | **Class 2** |
| Management Fees | 0.69% |
| Distribution and/or Service (12b-1) Fees | 0.25% |
| Other Expenses <sup>(1)</sup> | 0.03% |
| Acquired Fund Fees and Expenses | 0.03% |
| **Total Annual Fund Operating Expenses** | **1.00%** |
| Expense Reimbursement <sup>(2)</sup> | (0.01)% |
| **Total Annual Fund Operating Expenses after Expense Reimbursement** | **0.99%** |

---

<sup>(1)</sup> Includes 0.01% of interest expense on borrowings. The expense is not subject to the contractual expense limit.

<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 0.95% for Class 2 shares. It is expected the expense limit will continue through the period ending April 30, 2027; however, Principal Variable Contracts 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. If separate account expenses and contract-level expenses were included, expenses would be higher. 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** |
| **U.S. LargeCap S&P 500 Index Buffer October Account - Class 2** | $101 | $317 | $551 | $1224 |

---

**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. 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 89.5% 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 exchange-traded funds ("ETFs") and options that reference the S&P 500 Price Return Index (the "Index"). The Index represents U.S. equities with risk/return characteristics of the large cap universe. As of March 31, 2026, the market capitalization range of the Index was between approximately $5.3 billion and $4.2 trillion. The Index is distinct from the S&P 500 Total Return Index in that it only tracks the performance of the stock prices of the companies included in the Index and does not include returns from dividends paid by the companies included in the Index. The Fund's strategies may result in the active and frequent trading of the Fund's portfolio securities.

The Fund's investment advisor, Principal Global Investors, LLC ("PGI"), employs a defined outcome strategy that uses options to seek to achieve exposure to the Index while mitigating the first 10% decline in the Index (the "Buffer") over a 12-month period beginning on the first day of each October (the "Specified Date"). The one-year period following the Specified Date is referred to as the "Outcome Period." Subject to certain limitations described in more detail below, the Fund generally seeks to maintain net costs from its use of options approximately equal to its anticipated receipt of dividends as determined at the beginning of the Outcome Period. Intra-period cash flows are managed to target and maintain the return pattern determined at the beginning of the Outcome Period. Accordingly, changes in the amounts of dividends paid by companies underlying the Index and changes in the value of companies underlying the Index can cause performance to be lower than the performance of the Index.

------

At the beginning of each Outcome Period, the Fund will purchase ETFs and call options that reference the Index and a put option at-the-money for the purpose of providing downside protection. The Fund will sell (write) put options on the Index or an ETF that tracks the Index with a strike price approximately 10% lower than the closing value of the Index or an ETF that tracks the Index at the beginning of the Outcome Period. The Fund will sell (write) call options on the Index or an ETF that tracks the Index with a strike price approximately 10% higher than the closing value of the Index or an ETF that tracks the Index at the beginning of the Outcome Period. As the seller of these options, the Fund receives a premium from the buyer of the options. The Fund expects to write the call options on one or more of the ETFs owned by the Fund or the Index to the extent necessary to maintain its net costs from the purchase and sale of options approximately equal to its anticipated receipt of dividends, as determined at the beginning of the Outcome Period, but it will do so only to the extent that the written call options on each respective ETF or the Index have an aggregate notional value less than or equal to the market value of the respective ETF or the Index owned by the Fund. The Fund will generally not seek to offset the costs of call options purchased. The Fund's returns are generally expected to appreciate to a similar extent as the Index for the first 10% of the Index gains. The prices of the call options and put options sold and purchased by the Fund, in addition to the Fund's direct investments in underlying ETFs, will determine the Fund's exposure to the Index during the Outcome Period. Intra-period cash flows are managed to target and maintain the return pattern determined at the beginning of the Outcome Period.

An option gives the purchaser of the option the right to purchase (for a call option) or sell (for a put option) the underlying asset (or deliver cash equal to the value of an underlying index) at a specified price (the strike price). If the underlying asset declines in value, the value of a put option will generally increase (and the value of a call option will generally decrease and may end up worthless), and in the event the underlying asset appreciates in value, the value of a put option will generally decrease and may end up worthless (and the value of a call option will generally increase). **Due to the cost of the options used by the Fund, the correlation of the Fund's performance to that of the Index is expected to be less than if the Fund invested directly in the Index without using options, and could be substantially less.** This means that if the Index experiences gains for an Outcome Period, the Fund may not realize gains to the same extent, as illustrated in the second hypothetical graphical illustration below.

The Fund's strategy is to seek to protect investors from a decline of up to 10% in the performance of the Index over the Outcome Period. **The Fund is not designed to protect against declines of more than 10% in the level of the Index, and there can be no guarantee that the Fund will be successful in implementing its strategy to buffer against the first 10% of Index losses.** The Fund, and therefore investors, will bear all losses exceeding 10%. In addition, because the outcome is calculated before taking into account the Fund's expenses, Fund performance over an Outcome Period will be exposed to losses beyond the Buffer in the amount of such Fund expenses. The Fund may underperform the Index due to the cost of the Buffer protection.

The Fund will invest in exchange-traded FLexible EXchange Options ("FLEX Options"), which are customized exchange-traded option contracts available through the Chicago Board Option Exchange ("Cboe") that are guaranteed for settlement by The Options Clearing Corporation ("OCC"). FLEX Options provide investors with the ability to customize exercise prices, exercise styles, and expiration dates. All FLEX Options in the Fund are European-style options (i.e., they can only be exercised at the expiration date of the option) based on the Index or an ETF that tracks the Index and have an expiration date that is the last day of the Outcome Period.

**The hypothetical graphical illustrations provided below are designed to illustrate the hypothetical outcomes of the Buffer strategy based upon hypothetical performance of the Index for a shareholder that holds shares for the entirety of an Outcome Period. The illustrations assume that the Fund will write call options with an aggregate notional amount equal to 50% of the market value of the ETFs and purchased call options. There is no guarantee that the Fund will be successful in its attempt to provide such outcomes for an Outcome Period, and the actual aggregate notional amount of written call options could be significantly different depending upon changes in the amounts of dividends paid by companies underlying the Index, changes in the value of companies underlying the index, and the relative prices of the options used by the Fund.** The returns that the Fund seeks to provide do not include the costs associated with purchasing shares of the Fund and the expenses incurred by the Fund.

------

![Buffer line graph bw.jpg](ck0000012601-20260427_g32.jpg)

![Buffer bar graph bw.jpg](ck0000012601-20260427_g33.jpg)

------

The Buffer is designed to have its full effect only for investors who continually hold Fund shares for an entire Outcome Period. The Fund is designed to seek to achieve the results described above for investments made on the first day of the Outcome Period and held until the last day of the Outcome Period. **Investments made on any other day may differ significantly, positively or negatively, from the results described above.**

The Fund's operations are intended to be continuous. It will not terminate and distribute its assets at the conclusion of each Outcome Period. On the Specified Date, another Outcome Period will commence, and the Fund will invest in a new set of FLEX Options.

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 March 31, 2026, the Index was not concentrated in any industry.

The Fund's website, https://annuity.principal.com/variableannuity/bufferaccounts, provides important Fund information on a daily basis, including information about the Buffer, current Outcome Period start and end dates, and information relating to the remaining potential outcomes of an investment in the Fund. Investors considering purchasing shares should visit the website for the latest information.

**Note:**&nbsp;&nbsp;&nbsp;&nbsp;"Standard & Poor's 500<sup>®</sup>" and "S&P 500<sup>®</sup>" are trademarks of S&P Global and have been licensed by PGI. 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 Fund has characteristics unlike many other traditional investment products and is not appropriate for all investors. In particular, investment in the Fund may not be appropriate for investors who do not intend to maintain their investment through the entire Outcome Period. There is no guarantee that the Fund will be able to achieve the stated Defined Outcome.**

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.

**Buffered Loss Risk.** There can be no guarantee that the Fund will be successful in its strategy to provide buffer protection against Index losses if the Index decreases over the Outcome Period by 10% or less. A shareholder may lose his or her entire investment. The Fund's strategy seeks to deliver returns that match the Index (but will be less than the Index due to the cost of the options used by the Fund), while limiting downside losses, if shares are bought on the day on which the Fund enters into the options and held until those options expire at the end of each Outcome Period. Intra-period cash flows are managed to target and maintain the return pattern determined at the beginning of the Outcome Period. Accordingly, changes in the amounts of dividends paid by companies underlying the Index and changes in the value of companies underlying the Index can cause performance to be lower than the performance of the Index. Further, in the event an investor purchases shares after the date on which the options were entered into or sells shares prior to the expiration of the options, the Buffer that the Fund seeks to provide may not be available. The Fund does not provide principal protection, and an investor may experience significant losses on its investment, including the loss of its entire investment.

**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.

**• Options.** Options 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 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.

------

**Exchange-Traded Funds Risk.** When the Fund invests in ETFs, you will indirectly bear fees and expenses charged by the ETFs in addition to the Fund's direct fees and expenses. In addition, the Fund may be affected by losses of the ETFs and the level of risk arising from the investment practices of the ETFs (such as the use of leverage by the ETFs). The Fund has no control over the investments and related risks taken by the ETFs in which it invests. Additionally, investments in ETFs are also subject to the following risks: (i) the market price of an ETF's shares may trade above or below their net asset value; (ii) an active trading market for an ETF's shares may not develop or be maintained; or (iii) trading of an ETF's shares may be halted for a number of reasons.

**FLEX Options Risk.** The Fund may invest in FLEX Options issued and guaranteed for settlement by the OCC. The Fund bears the risk that the OCC will be unable or unwilling to perform its obligations under the FLEX Options contracts. If the OCC becomes insolvent or is otherwise unable to meet its settlement obligations, the Fund could incur significant losses. Additionally, FLEX Options may be illiquid if trading in the FLEX Options is limited or absent, and in such cases, the Fund may have difficulty closing out certain FLEX Options positions at desired times and prices, decreasing the value of the FLEX Options. There is no guarantee that a liquid secondary trading market will exist for FLEX Options, and a less liquid trading market may adversely impact the value of FLEX Options. The Fund intends to treat any income it may derive from the FLEX Options as "qualifying income" under the provisions of the Internal Revenue Code applicable to regulated investment companies ("RICs"). In addition, based upon language in legislative history, the Fund intends to treat the issuer of the FLEX Options as the referenced asset for diversification purposes. If the income is not qualifying income or the issuer of the FLEX Options is not appropriately the referenced asset, the Fund could lose its own status as a RIC.

**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.

**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.

**Outcome Period Risk.** The Fund's strategy seeks to match the performance of the Index, before the deduction of Fund expenses, and subject to the Buffer amount, only if an investor holds Fund shares on the first day of the Outcome Period and continues holding his or her shares until the last day of the Outcome Period. If you redeem your shares before the end of the Outcome Period, you may experience investment returns very different from those that the Fund seeks to provide, including potentially a loss of some or all of your investment. **In particular, you will receive no protection against losses from the Buffer amount if you redeem before the last day of the Outcome Period, and you might lose some or all of your investment.** 

**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. Further, the Fund's strategy may be sensitive to large purchases and redemptions occurring near the Outcome Period end date and/or large redemptions in each quarter following the Outcome Period end date, which may affect the Fund's ability to achieve its defined outcome strategy.

**Short Sales Risk.** A short sale involves the sale by the Fund of a security that it does not own with the hope of purchasing the same security at a later date at a lower price. A fund may also enter into a short derivative position through a futures contract or swap agreement. If the price of the security or derivative has increased during this time, 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 third party. Therefore, short sales involve the risk that losses may be exaggerated, potentially losing more money than the actual cost of the investment. Also, there is the risk that the third party to the short sale may fail to honor its contract terms, causing a loss to the Fund.

**Tracking Error Risk.** The Fund may be subject to tracking error, which is the divergence of the Fund's performance (without regard to the Buffer amount) from that of the Index. Tracking error may occur because of differences between the securities and other instruments held in the Fund's portfolio and those included in the Index, the Fund's expenses, changes in the composition of the index, transaction costs incurred by the Fund (such as brokerage commissions in executing transactions), the Fund's holding of uninvested cash, and the timing of purchases and redemptions of Fund shares.

**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 is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852.

The bar chart shows changes in the Fund's performance from year to year. The table shows how the Fund's average annual returns for 1, 5, and 10 years (or, if shorter, the life of the Fund) compare with those of one or more broad measures of market performance. Performance figures for the Fund do not include any separate account expenses, cost of insurance, or other contract-level expenses; total returns for the Fund would be lower if such expenses were included.

Life of Fund returns are measured from the date the Fund's shares were first sold (September 29, 2022).

------

**Total Returns as of December 31**

![549755840967](ck0000012601-20260427_g37.jpg)

---

| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q4 2023** | **8.70%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2025** | **(2.52)%** |

---

**Average Annual Total Returns**

**For the periods ended December 31, 2025**

---

| | | |
|:---|:---|:---|
| | **1 Year** | **Life of Fund** |
| **U.S. LargeCap S&P 500 Index Buffer October Account - Class 2** | **13.10%** | **17.61%** |
| S&P 500 Index (reflects no deduction for fees, expenses, or taxes) | 17.88% | 25.61% |
| S&P 500 Price Return Index (reflects no deduction for fees, expenses, or taxes) | 16.39% | 23.69% |

---

The S&P 500 Index is the Fund's primary broad-based securities market index. The S&P 500 Price Return Index is included as an additional index for the Fund as it shows how the Fund's performance compares with the returns of an index of funds with similar investment objectives.

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

• Tyler O'Donnell (since 2023), Portfolio Manager

• Aaron J. Siebel (since 2022), Portfolio Manager

**Tax Information**

The Fund intends to comply with applicable variable asset diversification regulations. Taxation to you will depend on what you do with your variable life insurance or variable annuity contract. See your variable product prospectus for information about the tax implications of investing in the Fund.

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

If you purchase through a broker-dealer or other financial intermediary (such as an insurance company), 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, to recommend one Fund or share class of the Fund over another Fund or share class, or to recommend one variable annuity, variable life insurance policy, or mutual fund over another. Ask your salesperson or visit your financial intermediary's website for more information.

------

**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, hybrid funds that include a passive component, and "buffer" funds that seek returns based on an index) 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.

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**

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

**Liquidity**

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

**Market Volatility and Securities Issuers**

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

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

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

Health crises, such as a global pandemic, may cause disruptions to business operations, supply chains, and customer activity; event cancellations and restrictions; and service cancellations and restrictions. These disruptions may exacerbate other pre-existing political, social, economic, market, and financial risks and negatively affect the global economy, as well as the economies of individual countries, the financial performance of individual companies and sectors, and the markets in general in significant ways.

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

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

The impact of current and future market disruption events may last for an extended period of time and could result in a substantial economic downturn or recession. Such events could have significant adverse direct or indirect effects on the funds and their investments, and may result in a fund's inability to achieve its investment objective, cause funds to experience significant redemptions, cause the postponement of reconstitution/rebalance dates of passive funds' underlying indices, adversely affect the prices and liquidity of the securities and other instruments in which a fund invests, negatively impact the fund's performance, and cause losses on your investment in the fund. You should also review this Prospectus and the SAI to understand each Fund's discretion to implement temporary defensive measures, as well as the circumstances in which a Fund may satisfy redemption requests in-kind.

------

**Securities Lending**

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

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

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

**Temporary Defensive Measures**

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

**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.

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **INVESTMENT STRATEGIES AND RISKS** | **BLUE CHIP** | **BOND MARKET<br>INDEX** | **CORE PLUS<br>BOND** | **DIVERSIFIED<br>BALANCED** |
| Counterparty Risk |  |  | X |  |
| Derivatives |  |  | X | X |
| Emerging Markets |  |  | X |  |
| Equity Securities | X |  |  | X |
| • Growth Style | X |  |  |  |
| • Smaller Companies |  |  |  | X |
| • Value Style |  |  |  |  |
| Fixed-Income Securities |  | X | X | X |
| Foreign Currency | X |  | X |  |
| Foreign Securities | X |  | X |  |
| Fund of Funds |  |  |  | X |
| Hedging |  |  | X |  |
| High Portfolio Turnover |  |  | X |  |
| High Yield Securities |  |  | X |  |
| Industry Concentration |  | &nbsp;&nbsp;&nbsp;&nbsp;X<sup>(1)</sup> |  |  |
| Investment Company Securities |  |  |  | X |
| Leverage |  |  | X |  |
| Portfolio Duration |  | X | X | X |
| Real Estate Investment Trusts ("REITs") |  |  |  |  |
| Real Estate Securities |  | X | X | X |
| Redemption and Large Transaction Risk | X | X | X | X |
| Securitized Products |  | X | X | X |
| Short Sales |  |  |  |  |
| U.S. Government and U.S. Government-Sponsored Securities |  | X | X | X |
| Volatility Mitigation |  |  |  |  |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;The Account 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.

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **INVESTMENT STRATEGIES AND RISKS** | **DIVERSIFIED<br>BALANCED<br>ADAPTIVE ALLOCATION** | **DIVERSIFIED<br>GROWTH** | **DIVERSIFIED<br>GROWTH<br>ADAPTIVE ALLOCATION** | **DIVERSIFIED<br>INCOME** |
| Counterparty Risk | | | | |
| Derivatives | X | X | X | X |
| Emerging Markets | | | | |
| Equity Securities | X | X | X | X |
| • Growth Style | | | | |
| • Smaller Companies | X | X | X | X |
| • Value Style | | | | |
| Fixed-Income Securities | X | X | X | X |
| Foreign Currency | | X | X | |
| Foreign Securities | | X | X | |
| Fund of Funds | X | X | X | X |
| Hedging | X | | X | |
| High Portfolio Turnover | | | | |
| High Yield Securities | | | | |
| Industry Concentration | | | | |
| Investment Company Securities | X | X | X | X |
| Leverage | | | | |
| Portfolio Duration | X | X | X | X |
| Real Estate Investment Trusts ("REITs") | | | | |
| Real Estate Securities | X | X | X | X |
| Redemption and Large Transaction Risk | X | X | X | X |
| Securitized Products | X | X | X | X |
| Short Sales | X | | X | |
| U.S. Government and U.S. Government-Sponsored Securities | X | X | X | X |
| Volatility Mitigation | X | | X | |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **INVESTMENT STRATEGIES AND RISKS** | <br>**DIVERSIFIED**<br>**INTERNATIONAL** | <br>**EQUITY INCOME** | **GLOBAL<br>EMERGING<br>MARKETS** | **GOVERNMENT &<br>HIGH QUALITY<br>BOND** |
| Counterparty Risk | | | | |
| Derivatives | | | | X |
| Emerging Markets | X | | X | |
| Equity Securities | X | X | X | |
| • Growth Style | X | | X | |
| • Smaller Companies | X | X | X | |
| • Value Style | X | X | X | |
| Fixed-Income Securities | | | | X |
| Foreign Currency | X | | X | |
| Foreign Securities | X | X | X | |
| Fund of Funds | | | | |
| Hedging | | | | |
| High Portfolio Turnover | | | | X |
| High Yield Securities | | | | |
| Industry Concentration | | | | |
| Investment Company Securities | | | | |
| Leverage | | | | |
| Portfolio Duration | | | | X |
| Real Estate Investment Trusts ("REITs") | | | | |
| Real Estate Securities | | | | X |
| Redemption and Large Transaction Risk | X | X | X | X |
| Securitized Products | | | | X |
| Short Sales | | | | |
| U.S. Government and U.S. Government-Sponsored Securities | | | | X |
| Volatility Mitigation | | | | |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **INVESTMENT STRATEGIES AND RISKS** | **LARGECAP<br>GROWTH I** | **LARGECAP<br>S&P 500 INDEX** | <br>**MIDCAP** | **PRINCIPAL<br>CAPITAL<br>APPRECIATION** |
| Counterparty Risk |  |  |  |  |
| Derivatives |  |  |  |  |
| Emerging Markets |  |  |  |  |
| Equity Securities | X | X | X | X |
| • Growth Style | X |  |  |  |
| • Smaller Companies | X |  | X | X |
| • Value Style |  |  |  |  |
| Fixed-Income Securities |  |  |  |  |
| Foreign Currency |  |  |  |  |
| Foreign Securities |  |  | X |  |
| Fund of Funds |  |  |  |  |
| Hedging |  |  |  |  |
| High Portfolio Turnover |  |  |  |  |
| High Yield Securities |  |  |  |  |
| Industry Concentration |  | &nbsp;&nbsp;&nbsp;&nbsp;X<sup>(1)</sup> |  |  |
| Investment Company Securities |  |  |  |  |
| Leverage |  |  |  |  |
| Portfolio Duration |  |  |  |  |
| Real Estate Investment Trusts ("REITs") |  |  |  |  |
| Real Estate Securities |  |  |  |  |
| Redemption and Large Transaction Risk | X | X | X | X |
| Securitized Products |  |  |  |  |
| Short Sales |  |  |  |  |
| U.S. Government and U.S. Government-Sponsored Securities |  |  |  |  |
| Volatility Mitigation |  |  |  |  |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;The Account 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.

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **INVESTMENT STRATEGIES AND RISKS** | **PRINCIPAL<br>LIFETIME<br>STRATEGIC<br>INCOME** | **PRINCIPAL<br>LIFETIME 2020** | **PRINCIPAL<br>LIFETIME 2030** | **PRINCIPAL<br>LIFETIME 2040** |
| Counterparty Risk | X | X | X | X |
| Derivatives | X | X | X | X |
| Emerging Markets |  |  |  | X |
| Equity Securities | X | X | X | X |
| • Growth Style | X | X | X | X |
| • Smaller Companies |  |  |  | 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 |
| Hedging |  |  |  |  |
| High Portfolio Turnover |  |  |  |  |
| High Yield Securities |  |  |  |  |
| Industry Concentration |  |  |  |  |
| Investment Company Securities | X | X | X | X |
| Leverage |  |  |  |  |
| Portfolio Duration | X | X | X | X |
| Real Estate Investment Trusts ("REITs") |  |  |  |  |
| Real Estate Securities |  |  |  |  |
| Redemption and Large Transaction Risk | X | X | X | X |
| Securitized Products | X | X | X | X |
| Short Sales |  |  |  |  |
| U.S. Government and U.S. Government-Sponsored Securities | X | X | X | X |
| Volatility Mitigation |  |  |  |  |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **INVESTMENT STRATEGIES AND RISKS** | **PRINCIPAL<br>LIFETIME 2050** | **PRINCIPAL<br>LIFETIME 2060** | **REAL ESTATE<br>SECURITIES** | **SAM BALANCED** |
| Counterparty Risk | X | X |  |  |
| Derivatives | X | X |  |  |
| Emerging Markets | X | X |  | X |
| Equity Securities | X | X | X | X |
| • Growth Style | X | X | X | X |
| • Smaller Companies | X | X | X | X |
| • Value Style | X | X | X | X |
| Fixed-Income Securities | X | X |  | X |
| Foreign Currency | X | X |  | X |
| Foreign Securities | X | X |  | X |
| Fund of Funds | X | X |  | X |
| Hedging |  |  |  |  |
| High Portfolio Turnover |  |  |  |  |
| High Yield Securities |  |  |  |  |
| Industry Concentration |  |  | X |  |
| Investment Company Securities | X | X |  | X |
| Leverage |  |  |  |  |
| Portfolio Duration | X | X |  | X |
| Real Estate Investment Trusts ("REITs") |  |  | X |  |
| Real Estate Securities |  |  | X |  |
| Redemption and Large Transaction Risk | X | X | X | X |
| Securitized Products |  |  |  |  |
| Short Sales |  |  |  |  |
| U.S. Government and U.S. Government-Sponsored Securities |  |  |  |  |
| Volatility Mitigation |  |  |  |  |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **INVESTMENT STRATEGIES AND RISKS** | **SAM<br>CONSERVATIVE<br>BALANCED** | **SAM<br>CONSERVATIVE<br>GROWTH** | **SAM<br>FLEXIBLE<br>INCOME** | **SAM <br>STRATEGIC<br>GROWTH** |
| Counterparty Risk | | | | |
| Derivatives | | | | |
| Emerging Markets | X | X | | X |
| Equity Securities | X | X | X | X |
| • Growth Style | X | X | X | X |
| • Smaller Companies | X | X | X | X |
| • Value Style | X | X | X | X |
| Fixed-Income Securities | X | X | X | |
| Foreign Currency | X | X | X | X |
| Foreign Securities | X | X | X | X |
| Fund of Funds | X | X | X | X |
| Hedging | | | | |
| High Portfolio Turnover | | | | |
| High Yield Securities | X | | X | |
| Industry Concentration | | | | |
| Investment Company Securities | X | X | X | X |
| Leverage | | | | |
| Portfolio Duration | X | X | X | |
| Real Estate Investment Trusts ("REITs") | | | | |
| Real Estate Securities | | | | |
| Redemption and Large Transaction Risk | X | X | X | X |
| Securitized Products | X | | X | |
| Short Sales | | | | |
| U.S. Government and U.S. Government-Sponsored Securities | | | X | |
| Volatility Mitigation | | | | |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **INVESTMENT STRATEGIES AND RISKS** | **SHORT-TERM<br>INCOME** | **SMALLCAP** | **U.S. LARGECAP S&P 500 INDEX<br>BUFFER JANUARY** | **U.S. LARGECAP S&P 500 INDEX<br>BUFFER APRIL** |
| Counterparty Risk |  |  |  |  |
| Derivatives | X |  | X | X |
| Emerging Markets |  |  |  |  |
| Equity Securities |  | X | X | X |
| • Growth Style |  |  |  |  |
| • Smaller Companies |  | X |  |  |
| • Value Style |  |  |  |  |
| Fixed-Income Securities | X |  |  |  |
| Foreign Currency |  |  |  |  |
| Foreign Securities | X |  |  |  |
| Fund of Funds |  |  |  |  |
| Hedging |  |  | X | X |
| High Portfolio Turnover |  |  | X | X |
| High Yield Securities |  |  |  |  |
| Industry Concentration |  |  | &nbsp;&nbsp;&nbsp;&nbsp;X<sup>(1)</sup> | &nbsp;&nbsp;&nbsp;&nbsp;X<sup>(1)</sup> |
| Investment Company Securities |  |  | X | X |
| Leverage |  |  |  |  |
| Portfolio Duration | X |  |  |  |
| Real Estate Investment Trusts ("REITs") |  |  |  |  |
| Real Estate Securities | X |  |  |  |
| Redemption and Large Transaction Risk | X | X | X | X |
| Securitized Products | X |  |  |  |
| Short Sales |  |  | X | X |
| U.S. Government and U.S. Government-Sponsored Securities | X |  |  |  |
| Volatility Mitigation |  |  | X | X |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;The Account 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.

------

---

| | | |
|:---|:---|:---|
| **INVESTMENT STRATEGIES AND RISKS** | **U.S. LARGECAP S&P 500 INDEX<br>BUFFER JULY** | **U.S. LARGECAP S&P 500 INDEX<br>BUFFER OCTOBER** |
| Counterparty Risk |  |  |
| Derivatives | X | X |
| Emerging Markets |  |  |
| Equity Securities | X | X |
| • Growth Style |  |  |
| • Smaller Companies |  |  |
| • Value Style |  |  |
| Fixed-Income Securities |  |  |
| Foreign Currency |  |  |
| Foreign Securities |  |  |
| Fund of Funds |  |  |
| Hedging | X | X |
| High Portfolio Turnover | X | X |
| High Yield Securities |  |  |
| Industry Concentration | &nbsp;&nbsp;&nbsp;&nbsp;X<sup>(1)</sup> | &nbsp;&nbsp;&nbsp;&nbsp;X<sup>(1)</sup> |
| Investment Company Securities | X | X |
| Leverage |  |  |
| Portfolio Duration |  |  |
| Real Estate Investment Trusts ("REITs") |  |  |
| Real Estate Securities |  |  |
| Redemption and Large Transaction Risk | X | X |
| Securitized Products |  |  |
| Short Sales | X | X |
| U.S. Government and U.S. Government-Sponsored Securities |  |  |
| Volatility Mitigation | X | X |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;The Account 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.

------

**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:

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

• 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;

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

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

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

• 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.

• 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.

• 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.

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

------

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

• 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 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. The Funds also consider a security to be tied economically to an emerging market if the currency of settlement of the security is the currency of the emerging market.

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, unless otherwise stated in the Fund Summary.

Investments in companies in emerging markets are subject to higher risks than investments in companies in more developed markets. These risks include:

• increased social, political, and economic instability;

• a smaller market for these securities and low or nonexistent trading volume that results in a lack of liquidity and greater price volatility;

• lack of publicly available information, including reports of payments of dividends or interest on outstanding securities;

• foreign government policies that may restrict opportunities, including restrictions on investment in issuers or industries deemed sensitive to national interests;

• relatively new capital market structure or market-oriented economy;

• the possibility that recent favorable economic developments may be slowed or reversed by unanticipated political or social events in these countries;

• 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

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

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

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

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

------

**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 or guarantor 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 Funds also consider a security to be a foreign security if the settlement currency for the security is currency of a country outside of 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 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 a 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:

• 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.

------

**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 December 31, 2025, the PVC Principal LifeTime Accounts, PVC SAM Portfolios, Diversified Balanced Account, Diversified Balanced Adaptive Allocation Account, Diversified Growth Account, Diversified Growth Adaptive Allocation Account, and Diversified Income Account assets were allocated among the underlying funds as identified in the tables below.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;<br>**Underlying Fund**  | **Diversified<br>Balanced<br>Account** | **Diversified<br>Balanced<br>Adaptive Allocation<br>Account** | **Diversified<br>Growth<br>Account** | **Diversified<br>Growth<br>Adaptive Allocation<br>Account** | **Diversified<br>Income<br>Account** |
| Bond Market Index Account | 50.1% | 62.5% | 35.1% | 43.8% | 65.1% |
| International Equity Index Fund | 7.1% | 8.9% | 10.1% | 12.6% | 4.0% |
| LargeCap S&P 500 Index Account | 35.0% | 18.8% | 45.0% | 31.3% | 25.0% |
| MidCap S&P 400 Index Fund | 3.9% | 4.9% | 4.9% | 6.2% | 3.0% |
| SmallCap S&P 600 Index Fund | 3.9% | 4.9% | 4.9% | 6.1% | 2.9% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total** | **100.0%** | **100.0%** | **100.0%** | **100.0%** | **100.0%** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Underlying Fund** | **Principal <br>LifeTime Strategic <br>Income Account** | **Principal<br>LifeTime<br>2020 Account** | **Principal<br>LifeTime<br>2030 Account** | **Principal<br>LifeTime<br>2040 Account** | **Principal<br>LifeTime<br>2050 Account** | **Principal<br>LifeTime<br>2060 Account** |
| Blue Chip Fund | 2.3% | 2.7% | 3.7% | 5.1% | 6.2% | 6.4% |
| Core Fixed Income Fund | 34.5% | 32.7% | 28.5% | 18.9% | 4.1% | 2.3% |
| Diversified Real Asset Fund | 0.4% | 0.4% | 0.5% | 0.0% | 0.0% | 0.0% |
| Equity Income Fund | 2.6% | 3.0% | 4.2% | 5.7% | 6.9% | 7.1% |
| Global Emerging Markets Fund | 1.9% | 2.2% | 3.0% | 4.1% | 5.0% | 5.1% |
| High Yield Fund | 6.4% | 5.9% | 4.6% | 3.2% | 1.2% | 0.8% |
| Inflation Protection Fund | 5.6% | 5.2% | 3.8% | 0.0% | 0.0% | 0.0% |
| International Equity Fund | 9.2% | 10.7% | 14.8% | 20.1% | 24.6% | 25.1% |
| International Small Company Fund | 0.5% | 0.5% | 0.7% | 1.0% | 1.3% | 1.3% |
| LargeCap Growth Fund I | 2.5% | 2.9% | 4.0% | 5.4% | 6.6% | 6.8% |
| LargeCap S&P 500 Index Fund | 10.0% | 11.7% | 16.1% | 21.8% | 26.7% | 27.3% |
| LargeCap Value Fund III | 2.4% | 2.8% | 3.9% | 5.3% | 6.5% | 6.6% |
| MidCap Fund | 0.8% | 0.9% | 1.2% | 1.7% | 2.1% | 2.2% |
| Real Estate Securities Fund | 1.6% | 1.6% | 1.6% | 2.0% | 1.9% | 1.9% |
| Short-Term Income Fund | 16.7% | 13.8% | 5.2% | 0.0% | 0.0% | 0.0% |
| SmallCap Fund | 1.5% | 1.8% | 2.5% | 3.4% | 4.1% | 4.2% |
| SmallCap S&P 600 Index Fund | 0.2% | 0.2% | 0.3% | 0.4% | 0.4% | 0.4% |
| Small-MidCap Dividend Income Fund | 0.9% | 1.0% | 1.4% | 1.9% | 2.4% | 2.5% |
| &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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total** | **100.0%** | **100.0%** | **100.0%** | **100.0%** | **100.0%** | **100.0%** |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Underlying Fund** | **SAM Balanced<br>Portfolio** | **SAM Conservative<br>Balanced Portfolio** | **SAM<br>Conservative Growth Portfolio** | **SAM Flexible Income Portfolio** | **SAM Strategic<br>Growth<br>Portfolio** |
| Blue Chip Fund | 1.7% | 1.3% | 2.2% | 0.0% | 2.6% |
| Bond Market Index Fund | 4.5% | 6.2% | 3.4% | 6.3% | 0.0% |
| Core Fixed Income Fund | 11.9% | 22.5% | 5.5% | 29.2% | 0.0% |
| Diversified Real Asset Fund | 1.4% | 1.1% | 1.5% | 0.7% | 1.7% |
| Equity Income Account | 5.8% | 4.9% | 6.8% | 3.6% | 7.7% |
| Finisterre Emerging Markets Total Return Bond Fund | 2.3% | 5.5% | 1.0% | 7.5% | 0.0% |
| Global Emerging Markets Fund | 4.4% | 2.9% | 5.6% | 0.8% | 6.9% |
| Global Listed Infrastructure Fund | 0.5% | 0.5% | 1.0% | 0.0% | 1.0% |
| Global Macro Fund | 1.0% | 1.0% | 0.8% | 1.2% | 0.8% |
| Government & High Quality Bond Account | 1.1% | 2.2% | 0.4% | 4.4% | 0.0% |
| Government Money Market Fund | 2.0% | 5.0% | 0.9% | 6.8% | 0.9% |
| High Yield Fund | 4.3% | 5.5% | 1.8% | 4.1% | 0.0% |
| Inflation Protection Fund | 2.5% | 3.8% | 1.4% | 5.1% | 1.0% |
| International Equity Index Fund | 5.8% | 3.6% | 7.1% | 2.3% | 7.6% |
| International Small Company Fund | 0.9% | 0.6% | 1.3% | 0.0% | 2.2% |
| LargeCap Growth Fund I | 1.5% | 0.7% | 2.9% | 0.3% | 4.3% |
| LargeCap S&P 500 Index Fund | 2.0% | 1.4% | 2.1% | 0.5% | 2.9% |
| LargeCap Value Fund III | 3.6% | 1.0% | 5.5% | 1.7% | 6.2% |
| MidCap Account | 0.4% | 0.4% | 0.5% | 0.5% | 0.5% |
| Overseas Fund | 5.3% | 3.3% | 7.2% | 0.9% | 8.7% |
| Principal Active High Yield ETF | 0.0% | 0.0% | 0.0% | 2.0% | 0.0% |
| Principal Capital Appreciation Fund | 8.6% | 4.7% | 11.7% | 2.4% | 13.3% |
| Principal International Equity ETF | 6.0% | 3.6% | 7.2% | 3.4% | 7.6% |
| Principal U.S. Mega-Cap ETF | 12.2% | 8.4% | 14.2% | 5.9% | 14.9% |
| Principal U.S. Small-Cap ETF | 3.6% | 2.0% | 4.7% | 1.3% | 5.5% |
| Principal Value ETF | 0.0% | 0.0% | 0.0% | 0.0% | 0.5% |
| Real Estate Securities Account | 0.6% | 0.7% | 1.0% | 0.5% | 0.9% |
| Short-Term Income Fund | 2.6% | 3.6% | 0.0% | 4.6% | 0.0% |
| Small-MidCap Dividend Income Fund | 1.5% | 1.1% | 1.5% | 1.3% | 2.3% |
| Spectrum Preferred and Capital Securities Income Fund | 2.0% | 2.5% | 0.8% | 2.7% | 0.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total**  | **100.0%** | **100.0%** | **100.0%** | **100.0%** | **100.0%** |

---

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 Account, you should take into account your estimated retirement date and risk tolerance. In general, each Principal LifeTime Account is managed with the assumption that the investor will invest in a Principal LifeTime Account 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 Accounts 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:

• 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,

• 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,

• 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,

• 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

• 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.

**Hedging**

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

**High Portfolio Turnover**

"Portfolio turnover" is the term used in the industry for measuring the amount of trading that occurs in a fund's portfolio during the year. For example, a 100% turnover rate means that, on average, every security in the portfolio has been replaced once during the year. Funds with high turnover rates (more than 100%) often have higher transaction costs (which are paid by the fund) 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.

**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 the rating agencies, that rating will determine the security's rating; if the security is rated differently by the rating agencies, the highest rating will be used; and if the security has not been rated by either of the rating agencies, those selecting such investments will determine the security's quality.

------

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:

• High yield securities may be less liquid than investment-grade securities.

• 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.

• 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.

• 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.

• If the issuer of high yield securities defaults, a Fund may incur additional expenses to seek recovery.

• 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.

**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.

**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.

------

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.

**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.

**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 December 31, 2025, series of the Registrant 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.

---

| | |
|:---|:---|
| **Account** | **Total Percentage of Outstanding Shares Owned** |
| Bond Market Index | 97.13% |
| Equity Income | 16.31% |
| Government & High Quality Bond | 15.34% |
| LargeCap S&P 500 Index | 60.71% |
| MidCap | 1.37% |
| Real Estate Securities | 5.44% |

---

**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.

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

• 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.

• 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.

**Short Sales**

A fund enters into a short sale by selling a security it has borrowed (typically from a broker or other institution) with the hope of purchasing the same security at a later date at a lower price. A fund may also take a short position in a derivative instrument, such as a future, forward or swap. If the market price of the security or derivatives increases, the fund will suffer a (potentially unlimited) loss when it replaces the security or derivative at the higher price. In certain cases, purchasing a security to cover a short position can itself cause the price of the security to rise further, thereby exacerbating the loss. In addition, a fund may not always be able to borrow the security at a particular time or at an acceptable price. Before a fund replaces a borrowed security, it is required to post collateral to cover the fund's short position, marking the collateral to market daily. This obligation limits a fund's investment flexibility, as well as its ability to meet redemption requests or other current obligations. A short position in a derivative instrument involves the risk of a theoretically unlimited increase in the value of the underlying instrument. Short sales also involve transaction and other costs that will reduce potential fund gains and increase potential Fund losses.

Certain funds may also invest the proceeds received from short selling securities, which creates additional leverage. Using such leverage allows the fund to use the proceeds to purchase additional securities, thereby increasing its exposure to assets, such that its total assets may be greater than its capital. Leverage also magnifies the volatility of changes in the value of the fund's portfolio. The effect of the use of leverage by the fund in a market that moves adversely to its investments could result in substantial losses to the fund, which would be greater than if the fund were not leveraged. Because a short position loses value as the security's price increases, the loss on a short sale is theoretically unlimited.

The short sale proceeds utilized by a fund to leverage investments are collateralized by all or a portion of such fund's portfolio. Accordingly, a fund may pledge securities in order to effect short sales, utilize short sale proceeds or otherwise obtain leverage for investment or other purposes. Should the securities pledged to brokers to secure the fund's margin accounts decline in value, the fund could be subject to a "margin call", pursuant to which the fund must either deposit additional funds or securities with the broker or suffer mandatory liquidation of all or a portion of the pledged securities to compensate for the decline in value. The banks and dealers that provide leverage to the fund have discretion to change the fund's margin requirements at any time. Changes by counterparties in the foregoing may result in large margin calls, loss of leverage and forced liquidations of positions at disadvantageous prices. The utilization of short sale proceeds for leverage will cause the fund to be subject to higher transaction fees and other costs.

------

**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.<sup>®</sup> ("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.

---

| | |
|:---|:---|
| **Advisor:** | **Principal Global Investors, LLC** (doing business as Principal Asset Management<sup>SM</sup>), 711 High Street, Des Moines, IA 50392, is part of a diversified global asset management organization that utilizes specialized investment teams and affiliates to provide institutional investors and individuals with diverse investment capabilities, including fixed income, equities, real estate, and asset allocation. In addition to its asset management offices in the U.S., PGI has asset management offices of affiliate advisors located in Europe, Asia, Latin America, and Australia. PGI has been a registered investment advisor since 1998. |
| **Accounts/ Portfolios:** | In fulfilling its investment advisory responsibilities, PGI provides day-to-day discretionary investment services (directly making decisions to purchase or sell securities) for all or a portion of the following Funds: |

---

---

| |
|:---|
| • Blue Chip (services provided by Principal Aligned, an investment team within PGI) |
| • Bond Market Index |
| • Core Plus Bond |
| • Diversified Balanced (services provided by Principal Asset Allocation, an investment team within PGI) |
| • Diversified Balanced Adaptive Allocation (services provided by Principal Asset Allocation, an investment team within PGI) |
| • Diversified Growth (services provided by Principal Asset Allocation, an investment team within PGI) |
| • Diversified Growth Adaptive Allocation (services provided by Principal Asset Allocation, an investment team within PGI) |
| • Diversified Income (services provided by Principal Asset Allocation, an investment team within PGI) |
| • Diversified International |
| • Equity Income (services provided by Principal Edge, an investment team within PGI) |
| • Global Emerging Markets |
| • Government & High Quality Bond |
| • LargeCap Growth I (services provided by Principal Asset Allocation, an investment team within PGI) |
| • LargeCap S&P 500 Index (services provided by Principal Asset Allocation, an investment team within PGI) |
| • MidCap (services provided by Principal Aligned, an investment team within PGI) |
| • Principal Capital Appreciation (services provided by Principal Edge, an investment team within PGI) |
| • Principal LifeTime Accounts (services provided by Principal Asset Allocation, an investment team within PGI) |
| • SAM (Strategic Asset Management) Portfolios (services provided by Principal Asset Allocation, an investment team within PGI) |
| • Short-Term Income |
| • SmallCap |
| • U.S. LargeCap S&P 500 Index Buffer Accounts (services provided by Principal Asset Allocation, an investment team within PGI) |

---

------

Several of the Funds have multiple sub-advisors. A team within Principal 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 Blue Chip and MidCap Accounts, Mr. Nolin has ultimate decision making authority. Mr. Rozycki may make investment decisions in Mr. Nolin's absence.

**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.

**Scott Brustkern** has been with Principal<sup>®</sup> since 2001. He earned an M.B.A. in Finance from Iowa State University, a master's degree in Business Analytics from the University of Iowa, and a bachelor's degree in Actuarial Science and Statistics from the University of Northern Iowa. Mr. Brustkern has earned the right to use the Chartered Financial Analyst designation.

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

**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.

**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.

**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. Mr. Fennessey has earned the right to use the Chartered Financial Analyst designation.

**Emily Foshag** has been with Principal<sup>®</sup> since 2019. She earned a bachelor's degree in Accounting from New York University and an M.S. degree from New York University with a concentration in global energy and environmental policy. Ms. Foshag 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.

**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.

------

**Michael Goosay** has been with Principal<sup>®</sup> since 2023. Prior to that, Mr. Goosay was the Head of Global Pensions and Multi-Sector Fixed Income Portfolio Management at Goldman Sachs Asset Management since 2009. He earned a bachelor's degree in Finance from Albright College and an M.B.A. from Rutgers University.

**Daniel Graña** has been with Principal<sup>®</sup> since 2025. Prior to that, Mr. Graña was the Lead Portfolio Manager on the Janus Henderson Emerging Market Equity Strategy since 2019. He earned a Masters of Management from the Kellogg School of Management at Northwestern University and a Bachelor of Science in Economics and Bachelor of Science in Political Science from the Massachusetts Institute of Technology. Mr. Graña has earned the right to use the Chartered Financial Analyst designation.

**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.

**John Paul Lech** has been with Principal<sup>®</sup> since 2025. Prior to that, Mr. Lech founded and served as Lead Portfolio Manager of the Diversified Emerging Markets strategy at Matthews Asia. He earned a Masters of Arts in Latin American Studies and a Bachelor of Science in Foreign Service from the Walsh School of Foreign Service at Georgetown University.

**George P. Maris** has been with Principal<sup>®</sup> since 2023. Prior to that, Mr. Maris was the Head of Equities, Americas region, and Lead Portfolio Manager of the Global Alpha Equity Team at Janus Henderson Investors since 2011. He earned a bachelor's degree in Economics from Swarthmore College, an M.B.A. from the University of Chicago, and a J.D. from the University of Illinois. Mr. Maris has earned the right to use the Chartered Financial Analyst designation.

**Michael Messina** has been with Principal<sup>®</sup> since 2022. Prior to that, Mr. Messina was a Lead Analyst for Franklin Templeton Multi-Asset Solutions since 2018. He earned a bachelor's degree in MIS from the University of Central Florida and an M.B.A. from Nova Southeastern University.

**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.

**Tyler O'Donnell** has been with Principal<sup>®</sup> since 2015. He earned bachelor's degrees in Mathematics and Biochemistry from the University of Iowa and an M.B.A. from Iowa State University. Mr. O'Donnell has earned the right to use the Chartered Financial Analyst designation.

**Tina Paris** has been with Principal<sup>®</sup> since 2001. She earned a bachelor's degree in Finance and Economics from the University of Northern Iowa and an M.B.A with a Finance emphasis from the University of Iowa. Ms. Paris 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.

**Matthew Peron** has been with Principal<sup>®</sup> since 2025. Prior to that, Mr. Peron was the Global Head of Solutions at Janus Henderson Investors since 2023 and Director of Research from 2020 to 2024. He earned a bachelor's degree in Electrical Engineering from Swarthmore College and an M.B.A. from the University of Chicago.

**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.

**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.

**Chad Severin** has been with Principal® since 2003. He earned a bachelor's degree in Accounting from Simpson College.

------

**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.

**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. She earned a bachelor's degree in Accounting and Finance from Boston College and an M.B.A. from Columbia University. Ms. Tong 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.

**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:** | **Los Angeles Capital Management LLC ("Los Angeles Capital")**, 11150 Santa Monica Boulevard, Suite 200, Los Angeles, CA 90025, founded in 2002, is a registered investment advisor offering risk-controlled, active equity management services to a broad range of institutional investors. |
| **Fund(s):** | a portion of LargeCap Growth I |

---

---

| | |
|:---|:---|
| **Sub-Advisor:** | **Principal Real Estate Investors, LLC** (doing business as Principal Real Estate) **("Principal-REI")**, 711 High Street, Des Moines, IA 50392, was founded in 2000 and manages commercial real estate across the spectrum of public and private equity and debt investments, primarily for institutional investors. |
| **Fund(s):** | Real Estate Securities |

---

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.

**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:** | **T. Rowe Price Associates, Inc. ("T. Rowe Price")**, 1307 Point Street, Baltimore, MD 21231, has over 75 years of investment management experience. |
| **Fund(s):** | a portion of LargeCap Growth I |

---

---

| | |
|:---|:---|
| **Sub-Advisor:** | **Westfield Capital Management Company, L.P. ("Westfield Capital")**, One Financial Center, 23<sup>rd</sup> Floor, Boston, MA 02111, has been a registered investment advisor since 1989 and specializes primarily in U.S. growth equity strategies. |
| **Fund(s):** | a portion of LargeCap Growth I |

---

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 Funds assets are managed by employees of Principal Global Investors (Europe) Limited pursuant to such an arrangement. Each such affiliate and any of their respective employees who provide services to a Fund are considered under the Participating Affiliate Agreement to be "supervised persons" of the advisor or sub-advisor (as applicable) as that term is defined in the Investment Advisers Act of 1940, as amended.

**Fees Paid to PGI**

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 December 31, 2025 was:

---

| | | | |
|:---|:---|:---|:---|
| **Account/Portfolio** | **Percentage of the Fund's Average Daily Net Assets** | **Account/Portfolio** | **Percentage of the Fund's Average Daily Net Assets** |
| Blue Chip | 0.60% | Principal LifeTime 2030 | 0.00% |
| Bond Market Index | 0.14% | Principal LifeTime 2040 | 0.00% |
| Core Plus Bond | 0.47% | Principal LifeTime 2050 | 0.00% |
| Diversified Balanced | 0.05% | Principal LifeTime 2060 | 0.00% |
| Diversified Balanced Adaptive Allocation | 0.12% | Principal LifeTime Strategic Income | 0.00% |
| Diversified Growth | 0.05% | Real Estate Securities | 0.77% |
| Diversified Growth Adaptive Allocation | 0.12% | SAM Balanced | 0.23% |
| Diversified Income | 0.05% | SAM Conservative Balanced | 0.23% |
| Diversified International | 0.81% | SAM Conservative Growth | 0.23% |
| Equity Income | 0.47% | SAM Flexible Income | 0.23% |
| Global Emerging Markets | 1.00% | SAM Strategic Growth | 0.23% |
| Government & High Quality Bond | 0.48% | Short-Term Income | 0.40% |
| LargeCap Growth I | 0.68% | SmallCap | 0.83% |
| LargeCap S&P 500 Index | 0.19% | U.S. LargeCap S&P 500 Index Buffer January | 0.69% |
| MidCap | 0.53% | U.S. LargeCap S&P 500 Index Buffer April | 0.69% |
| Principal Capital Appreciation | 0.63% | U.S. LargeCap S&P 500 Index Buffer July | 0.69% |
| Principal LifeTime 2020 | 0.00% | U.S. LargeCap S&P 500 Index Buffer October | 0.69% |

---

The discussions regarding the basis for the Board's approval of various management and sub-advisory agreements are available for all Funds in the Registrant's Form N-CSR filing on the SEC's website at www.sec.gov for the period ending December 31, 2025.

------

**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:

• hire one or more sub-advisors;

• change sub-advisors; and

• 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:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Account/Portfolio** | **Unaffiliated <br>Sub-Advisors** | **Wholly-Owned Affiliated Sub-Advisors** | **Majority-Owned Affiliated Sub-Advisors** | **Any Other Sub-Advisors Regardless of <br>Degree of Affiliation** |
| All Other Accounts/Portfolios | X | 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 net asset value ("NAV") per share. Each Fund's NAV is calculated each day the New York Stock Exchange ("NYSE") is open. Shares are not priced 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 NAV is determined at 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 we receive the order 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, NAV is calculated by:

• &nbsp;&nbsp;&nbsp;&nbsp;taking the current market value of the total assets of the Fund,

• &nbsp;&nbsp;&nbsp;&nbsp;subtracting liabilities of the Fund,

• &nbsp;&nbsp;&nbsp;&nbsp;dividing the remainder proportionately into the classes of the Fund,

• &nbsp;&nbsp;&nbsp;&nbsp;subtracting the liability of each class, and

• &nbsp;&nbsp;&nbsp;&nbsp;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.

------

**Notes**:

• 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.

• 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 Registrant. These fair valuation procedures are intended to discourage shareholders from investing in the Funds for the purpose of engaging in market timing or arbitrage transactions.

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

• 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 Registrant has a policy to value such securities at a price at which PGI expects the securities may be sold.

**PURCHASE OF FUND SHARES**

The Registrant offers accounts in two share classes: 1 and 2. Funds available in multiple share classes have the same investments, but differing expenses. Classes 1 and 2 shares are available in this Prospectus.

Shares are purchased from the Funds' principal underwriter on any business day (normally any day when the NYSE is open for regular trading) upon request through the insurance company issuing the variable annuity, variable life contract, or the trustees or administrators of the qualified retirement plan offering the Fund. There are no sales charges on shares of the Funds; however, your variable contract may impose a charge. There are no restrictions on amounts to be invested in shares of the Funds.

The Funds, at their discretion, may permit the purchase of shares using securities as consideration (a purchase in-kind) in accordance with procedures approved by the Board. 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.

Shareholder accounts for each Fund are maintained under an open account system. Under this system, an account is opened and maintained for each investor. Each investment is confirmed by sending the investor a statement of account showing the current purchase and the total number of shares owned. The statement of account is treated by each Fund as evidence of ownership of Fund shares. Share certificates are not issued.

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. ("PFD" or the "Distributor").

**Eligible Purchasers**

Only certain eligible purchasers may buy shares of the Funds. Eligible purchasers are limited to 1) separate accounts of Principal Life or of other insurance companies, 2) Principal Life or any of its subsidiaries or affiliates, and 3) trustees of other managers of any qualified profit sharing, incentive, or bonus plan established by Principal Life or any subsidiary or affiliate of such company, for employees of such company, subsidiary, or affiliate. Such trustees or managers may buy Fund shares only in their capacities as trustees or managers and not for their personal accounts. The Board reserves the right to broaden or limit the designation of eligible purchaser.

------

Each Fund serves as the underlying investment vehicle for variable annuity contracts and variable life insurance policies that are funded through separate accounts established by Principal Life and by other insurance companies as well as for certain qualified plans. It is possible that in the future, it may not be advantageous for variable life insurance separate accounts, variable annuity separate accounts, and qualified plan investors to invest in the Funds at the same time. Although neither Principal Life nor the Registrant currently foresees any such disadvantage, the Board monitors events in order to identify any material conflicts between such policy owners, contract holders, and qualified plan investors. Material conflict could result from, for example, 1) changes in state insurance laws, 2) changes in federal income tax law, 3) changes in the investment management of a Fund, or 4) differences in voting instructions between those given by policy owners, those given by contract holders, and those given by qualified plan investors. Should it be necessary, the Board would determine what action, if any, should be taken. Such action could include the sale of Fund shares by one or more of the separate accounts or qualified plans, which could have adverse consequences.

PGI may recommend to the Board, and the Board may elect, to close certain Funds or share classes to new investors or close certain Funds or share classes to new and existing investors.

**Restricted Transfers**

Shares of each of the Funds may be transferred to an eligible purchaser. However, if a Fund is requested to transfer shares to other than an eligible purchaser, the Fund has the right, at its election, to purchase the shares at the NAV next calculated after the receipt of the transfer request. However, the Fund must give written notification to the transferee(s) of the shares of the election to buy the shares within seven days of the request. Settlement for the shares shall be made within the seven-day period.

**SALE OF FUND SHARES**

Variable contracts owners should refer to the variable contract product prospectus for details on how to allocate policy or contract value. Qualified plan participants should refer to the qualified plan documents.

Each Fund sells its shares on any business day (normally any day when the NYSE is open for regular trading) upon request through the insurance company issuing the variable annuity, variable life contract, or the trustees or administrators of the qualified retirement plan offering the Fund. There is no charge for the redemption. Shares are redeemed at the NAV per share next computed after the request is received by the Fund in proper and complete form.

Sale proceeds are generally sent the following business day after the request is received in proper form. However, the right to sell shares may be suspended up to seven days, as permitted by federal securities law, during any period when 1) trading on the NYSE is restricted as determined by the SEC or when the NYSE is closed for reasons other than weekends and holidays or 2) an emergency exists, as determined by the SEC, as a result of which a) disposal by a Fund of securities owned by it is not reasonably practicable, b) it is not reasonably practicable for a Fund to fairly determine the value of its net assets, or c) the SEC permits suspension for the protection of security holders.

If payments are delayed and the instruction is not canceled by the shareholder's written instruction, the amount of the transaction is determined as of the first valuation date following the expiration of the permitted delay. The transaction occurs within five days thereafter.

In addition, payments on surrender requests submitted before a related premium payment made by check has cleared may be delayed up to seven days. This permits payment to be collected on the check.

**Distributions in Kind**

The Registrant 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 "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.

------

Under normal circumstances, each Fund expects 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. Each Fund 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 State Street Bank and Trust Company.

**DIVIDENDS AND DISTRIBUTIONS**

The Funds earn dividends, interest, and other income from investments and distribute this income (less expenses) as dividends. The Funds also realize capital gains from investments and distribute these gains (less any losses) as capital gain distributions. The Funds normally make dividends and capital gain distributions at least annually, in September. Dividends and capital gain distributions are automatically reinvested in additional shares of the Fund making the distribution. If deemed necessary by the Board and management to comply with regulatory requirements or if in the best interest of shareholders, dividend and capital distributions may be paid at other times during the year.

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. 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 eligible shareholders a Form 1099-DIV for the calendar year that will tell shareholders how to report these distributions for federal income tax purposes. Distribution notices and fund-related tax information are also available at www.principal.com/tax-center.

**FREQUENT PURCHASES AND REDEMPTIONS**

The Funds are not designed for, and do not knowingly accommodate, frequent purchases and redemptions ("excessive trading") of Fund shares by investors. If you intend to trade frequently and/or use market timing investment strategies, do not purchase shares of these Funds.

Frequent purchases and redemptions pose a risk to the Funds because they may:

• &nbsp;&nbsp;&nbsp;&nbsp;Disrupt the management of the Funds by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ 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;◦ causing unplanned portfolio turnover;

• Hurt the portfolio performance of the Funds; and

• Increase expenses of the Funds due to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;increased broker-dealer commissions and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;increased recordkeeping and related costs.

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.

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. This risk is particularly relevant to the Diversified International and Global Emerging Market Accounts. The Funds have adopted fair valuation procedures. These procedures are intended to discourage market timing transactions in shares of the Funds.

------

As each Fund is only available through variable annuity or variable life contracts or to qualified retirement plans, the Funds must rely on the insurance company that issues the contract, or the trustees or administrators of qualified retirement plans ("intermediary"), to monitor customer trading activity to identify and take action against excessive trading. There can be no certainty that the intermediary will identify and prevent excessive trading in all instances. As such, the Funds' transfer agent also employs transaction monitoring that management believes is reasonably likely to assist in identifying and preventing excessive trading in Fund shares. When an intermediary or the Funds' transfer agent identifies excessive trading, it will act to curtail such trading in a fair and uniform manner. If an intermediary or the Funds' transfer agent is unable to identify such abusive trading practices, the abuses described above may negatively impact the Funds.

If an intermediary, or the Fund, deems excessive trading practices to be occurring, it will take action that may include, but is not limited to:

• Rejecting exchange instructions from a shareholder or other person authorized by the shareholder to direct exchanges;

• 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 via the internet, by facsimile, by overnight courier, or by telephone;

• Limiting the dollar amount of an exchange and/or the number of exchanges during a year;

• Requiring 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); and

• Taking such other action as directed by the Fund.

The Board has found the imposition of a redemption fee with respect to redemptions from Class 1 and Class 2 shares of the Funds is neither necessary nor appropriate in light of measures taken by intermediaries through which such shares are currently available.

In order to prevent excessive trading, the Funds have reserved the right to accept or reject, without prior written notice, any exchange requests (an exchange request is a redemption request coupled with a request to purchase shares with the proceeds of the redemption; such restriction applies to the purchase of fund shares in an exchange request and does not restrict a shareholder from requesting a redemption). In some instances, an exchange may be completed prior to a determination of abusive trading. In those instances, the intermediary will reverse an exchange (within one business day of the exchange) and return the account holdings to the positions held prior to the exchange. The intermediary will give you notice in writing in this instance.

**TAX CONSIDERATIONS**

The Funds intend to comply with applicable variable asset diversification regulations. If a Fund fails to comply with such regulations, contracts invested in the Fund will not be treated as annuity, endowment, or life insurance contracts under the Internal Revenue Code.

Contract owners should review the applicable contract prospectus for information concerning the federal income tax treatment of their contracts and distributions from the Fund to the separate accounts.

Contract owners are urged to consult their tax advisors regarding the status of their contracts under state and local tax laws.

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

------

**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.

The Funds that operate as funds of funds, as shareholders in the underlying funds, bear their 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:

• Management Fee — Through the Management Agreement with the Registrant, PGI has agreed to provide investment advisory services and corporate administrative services to the Funds.

• Distribution Fee — The Funds with Class 2 shares have adopted a distribution plan under Rule 12b-1 of the 1940 Act for its Class 2 shares. Under the plan, Class 2 shares of each Fund pays 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 they will increase the cost of your investment and may cost you more than paying other types of sales charges.

• Other Expenses — A portion of certain expenses are allocated to all classes of the Funds, unless an expense is specific to a particular share class. Other expenses include, for example, interest expense, expenses related to fund investments, certain expenses related to regulatory requirements, and index licensing fees.

• Acquired Fund Fees and Expenses — 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 the Funds. PFD is an affiliate of Principal Life Insurance Company, a subsidiary of Principal Financial Group, Inc., and a member of Principal<sup>®</sup>.

The Registrant has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act for Class 2 shares of the Funds. Under the 12b-1 plans, each Fund makes payments from its assets attributable to Class 2 shares to the Fund's Distributor for distribution-related expenses and for providing services to shareholders of that share class. Payments under the 12b-1 plans are made by the Funds to the Distributor pursuant to the 12b-1 plans 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 Class 2 shareholders 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.

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 annualized Rule 12b-1 fee for distribution related expenses and/or for providing services to shareholders (as a percentage of average daily net assets) for Class 2 shares of each Fund is 0.25%.

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 plan if the Board directs the closure of a Fund.

------

**Payments to Financial Professionals and Their Firms**

Financial intermediaries receive compensation from the Distributor and its affiliates for marketing, selling, and/or providing services to variable annuities and variable life insurance contracts that invest in the Funds. Financial intermediaries also receive compensation for marketing, selling, and/or providing services to certain retirement plans that offer the Funds as investment options. Financial intermediaries may include, among others, broker/dealers, registered investment advisors, banks, trust companies, pension plan consultants, retirement plan administrators, and insurance companies. Financial Professionals who deal with investors on an individual basis are typically associated with a financial intermediary. The Distributor and its affiliates may fund this compensation from various sources, including any Rule 12b-1 plan fee that the Fund pays to the Distributor. Individual Financial Professionals may receive some or all of the amounts paid to the financial intermediary with which he or she is associated.

**Ongoing Payments**

In the case of Class 2, and pursuant to the Rule 12b-1 plan applicable to Class 2 shares, the Distributor generally makes ongoing payments to your financial intermediary at an annual rate of 0.25% of average net assets attributable to your indirect investment in the Funds. In addition, the Distributor or PGI may make from its own resources ongoing payments to an insurance company, which payments will generally not exceed 0.27% of the average net assets of the Funds held by the insurance company in its separate accounts. The payments are for distribution support and/or administrative services and may be made with respect to either or all classes of shares of the Funds.

**Other Payments to Intermediaries**

In addition to any commissions that may be paid at the time of sale and ongoing payments, the Distributor and its affiliates, at their expense, currently provide additional payments to financial intermediaries that sell variable annuities and variable life insurance contracts that may be funded by shares of the Funds, or may sell shares of the Funds to retirement plans for distribution services. Although payments made to each qualifying financial intermediary in any given year may vary, such payments will generally not exceed 0.25% of the current year's sales of applicable variable annuities and variable life insurance contracts that may be funded by account shares, or 0.25% of the current year's sales of Fund shares to retirement plans by that financial intermediary.

Additionally, in some cases, the Distributor and its affiliates will provide payments or reimbursements in connection with the costs of conferences, educational seminars, due diligence trips, training, and marketing efforts related to the Funds for the financial intermediary's personnel and/or their clients and potential clients. Such activities may be sponsored by financial 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. See also the section titled "Payments to Broker-Dealers and Other Financial Intermediaries" in each Fund Summary.

Your variable life insurance or variable annuity contract or your retirement plan may impose other charges and expenses, some of which may also be used in connection with the sale of such contracts in addition to those described in the prospectus. The amount and applicability of any insurance contract fee are determined and disclosed separately within the prospectus for your insurance contract.

The payments described in this Prospectus may create a conflict of interest by influencing your Financial Professional or your financial intermediary to recommend one variable annuity, variable life insurance policy, or mutual fund over another, or to recommend one Fund or share class over another Fund or share class. Ask your Financial Professional or visit your financial 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 financial intermediary may charge you additional fees other than those disclosed in this Prospectus. Ask your Financial Professional about any fees and commissions they charge.

------

**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: | Obligations rated Baa are subject to moderate credit risk. They are considered medium-grade and as such may possess certain speculative characteristics. |
| 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: | Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest. |
| C: | Obligations rated C are the lowest rated class of bonds and are typically in default, with little prospect for recovery of principal or interest. |

---

---

| | |
|:---|:---|
| **NOTE:** | Moody's appends numerical modifiers, 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category, the modifier 2 indicates a mid-range ranking, and the modifier 3 indicates a ranking in the lower end of that generic rating category. Additionally, a "(hyb)" indicator is appended to all ratings of hybrid securities issued by banks, issuers, financial companies, and securities firms.\* |

---

**\***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 three 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 established cash flows, 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:

• 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;

• Nature of and provisions of the financial obligation;

• 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: | Obligations rated 'AAA' have the highest rating assigned by S&P Global Ratings. The obligor's capacity to meet its financial commitment on the obligation is extremely strong. |
| AA: | Obligations rated 'AA' differ from the highest-rated issues only in small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong. |
| A: | Obligations rated 'A' have a strong capacity to meet financial commitment on the obligation although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. |
| BBB: | Obligations rated 'BBB' exhibit adequate protection parameters; however, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to meet financial commitment on the obligation. |
| BB, B, CCC,<br>CC and C: | Obligations rated 'BB', 'B', 'CCC', 'CC', and 'C' are regarded, on balance, as having significant speculative characteristics. 'BB' indicates the lowest degree of speculation and 'C' the highest degree of speculation. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major risk exposures to adverse conditions.  |
| BB: | Obligations rated 'BB' are less vulnerable to nonpayment than other speculative issues. However it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation. |
| B: | Obligations rated 'B' are more vulnerable to nonpayment than 'BB' but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair this capacity. |
| CCC: | Obligations rated 'CCC' are currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. If adverse business, financial, or economic conditions occur, the obligor is not likely to have the capacity to meet its financial commitment on the obligation. |
| CC: | Obligations rated 'CC' are currently highly vulnerable to nonpayment. The 'CC' rating is used when a default has not yet occurred but S&P Global Ratings expects default to be a virtual certainty, regardless of anticipated time to default. |
| C: | The rating 'C' is highly vulnerable to nonpayment, the obligation is expected to have lower relative seniority or lower ultimate recovery compared to higher rated obligations.  |
| D: | Obligations rated 'D' are in default, or in breach of an imputed promise. For non-hybrid capital instruments, the 'D' rating category is used when payments on an obligation are not made on the date due, unless S&P Global Ratings believes that such payments will be made within five business days in the absence of a stated grace period or within the earlier of the stated grace period or 30 calendar days. The rating will also be used upon filing for bankruptcy petition or the taking of similar action and where default is a virtual certainty. If an obligation is subject to a distressed exchange offer the rating is lowered to 'D'. |

---

------

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 a rating has not been assigned or is no longer assigned.

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: | This is the highest category. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong. |
| A-2: | Issues carrying this designation are somewhat more susceptible to the adverse effects of the changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory. |
| A-3: | Issues carrying this designation exhibit adequate capacity to meet their financial obligations. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet it financial commitment on the obligation. |
| B: | Issues rated 'B' are regarded as vulnerable and have significant speculative characteristics. The obligor has capacity to meet financial commitments; however, it faces major ongoing uncertainties which could lead to obligor's inadequate capacity to meet its financial obligations. |
| C: | This rating is assigned to short-term debt obligations that are currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions to meet its financial commitment on the obligation. |
| D: | This rating indicates that the issue is either in default or in breach of an imputed promise. For non-hybrid capital instruments, the 'D' rating category is used when payments on an obligation are not made on the date due, unless S&P Global Ratings believes that such payments will be made within any stated grace period. However, any stated grace period longer than five business days will be treated as five business days. The rating will also be used upon filing for bankruptcy petition or the taking of similar action and where default is a virtual certainty. If an obligation is subject to a distressed debt restructuring the rating is lowered to 'D'. |

---

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: | A strong capacity to pay principal and interest. Issues that possess a very strong capacity to pay debt service is given a "+" designation. |
| SP-2: | A satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the terms of the notes. |
| SP-3: | A speculative capacity to pay principal and interest. |
| D: | Assigned upon failure to pay the note when due, completion of a distressed debt restructuring, or the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty.  |

---

------

**APPENDIX B — 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 Variable Contracts Funds, Inc. <u>[Annual Report to Shareholders](https://www.sec.gov/ix?doc=/Archives/edgar/data/12601/000001260126000120/primary-document.htm)</u> for the fiscal year ended December 31, 2025, 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.

------

![null001.jpg](ck0000012601-20260427_g38.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate BLUE CHIP ACCOUNT Class 2 shares 2025(c) $14.50 ($0.05) $1.74 $1.69 $16.19 11.66%(d) $24,412 0.90%(e),(f) (0.44)%(e) 37.4%(g) (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) Period from April 30, 2025, date operations commenced, through December 31, 2025. (d) Total return amounts have not been annualized. (e) Computed on an annualized basis. (f) Subject to Manager's contractual expense limit. (g) Period from January 1, 2025 through December 31, 2025. Effective May 1, 2025, Class 3 shares converted into Class 2 shares. B-2

------

![null002.jpg](ck0000012601-20260427_g39.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate BLUE CHIP ACCOUNT Class 2 shares 2025(c) $14.50 ($0.05) $1.74 $1.69 $16.19 11.66%(d) $24,412 0.90%(e),(f) (0.44)%(e) 37.4%(g) (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) Period from April 30, 2025, date operations commenced, through December 31, 2025. (d) Total return amounts have not been annualized. (e) Computed on an annualized basis. (f) Subject to Manager's contractual expense limit. (g) Period from January 1, 2025 through December 31, 2025. Effective May 1, 2025, Class 3 shares converted into Class 2 shares. B-3

------

![null003.jpg](ck0000012601-20260427_g40.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate BOND MARKET INDEX ACCOUNT Class 1 shares 2025 $9.21 $0.34 $0.32 $0.66 ($0.41) $– ($0.41) $9.46 7.16% $1,802,149 0.15% 3.66% 39.7% 2024 9.40 0.32 (0.21) 0.11 (0.30) – (0.30) 9.21 1.08 2,160,284 0.15 3.42 49.4 2023 9.13 0.28 0.21 0.49 (0.22) – (0.22) 9.40 5.51 2,440,279 0.15 3.07 47.4 2022 10.76 0.21 (1.62) (1.41) (0.21) (0.01) (0.22) 9.13 (13.16) 2,290,071 0.14 2.19 102.0 2021 11.21 0.17 (0.37) (0.20) (0.22) (0.03) (0.25) 10.76 (1.83) 2,900,608 0.14 1.58 130.5 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-4

------

![null004.jpg](ck0000012601-20260427_g41.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate BOND MARKET INDEX ACCOUNT Class 1 shares 2025 $9.21 $0.34 $0.32 $0.66 ($0.41) $– ($0.41) $9.46 7.16% $1,802,149 0.15% 3.66% 39.7% 2024 9.40 0.32 (0.21) 0.11 (0.30) – (0.30) 9.21 1.08 2,160,284 0.15 3.42 49.4 2023 9.13 0.28 0.21 0.49 (0.22) – (0.22) 9.40 5.51 2,440,279 0.15 3.07 47.4 2022 10.76 0.21 (1.62) (1.41) (0.21) (0.01) (0.22) 9.13 (13.16) 2,290,071 0.14 2.19 102.0 2021 11.21 0.17 (0.37) (0.20) (0.22) (0.03) (0.25) 10.76 (1.83) 2,900,608 0.14 1.58 130.5 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-5

------

![null005.jpg](ck0000012601-20260427_g42.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate CORE PLUS BOND ACCOUNT Class 1 shares 2025 $9.42 $0.45 $0.25 $0.70 ($0.41) $– ($0.41) $9.71 7.46% $246,054 0.49% 4.68% 170.0% 2024 9.63 0.41 (0.31) 0.10 (0.31) – (0.31) 9.42 0.90 204,623 0.49 4.25 177.7 2023 9.42 0.34 0.15 0.49 (0.28) – (0.28) 9.63 5.34 199,271 0.50 3.57 143.3 2022 11.48 0.28 (1.90) (1.62) (0.32) (0.12) (0.44) 9.42 (14.13) 187,023 0.49 2.76 146.8 2021 12.15 0.25 (0.30) (0.05) (0.32) (0.30) (0.62) 11.48 (0.45) 236,382 0.47 2.12 150.8 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-6

------

![null006.jpg](ck0000012601-20260427_g43.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate CORE PLUS BOND ACCOUNT Class 1 shares 2025 $9.42 $0.45 $0.25 $0.70 ($0.41) $– ($0.41) $9.71 7.46% $246,054 0.49% 4.68% 170.0% 2024 9.63 0.41 (0.31) 0.10 (0.31) – (0.31) 9.42 0.90 204,623 0.49 4.25 177.7 2023 9.42 0.34 0.15 0.49 (0.28) – (0.28) 9.63 5.34 199,271 0.50 3.57 143.3 2022 11.48 0.28 (1.90) (1.62) (0.32) (0.12) (0.44) 9.42 (14.13) 187,023 0.49 2.76 146.8 2021 12.15 0.25 (0.30) (0.05) (0.32) (0.30) (0.62) 11.48 (0.45) 236,382 0.47 2.12 150.8 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-7

------

![null007.jpg](ck0000012601-20260427_g44.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate DIVERSIFIED BALANCED ACCOUNT Class 1 shares 2025 $14.81 $0.45 $1.35 $1.80 ($0.50) ($1.84) ($2.34) $14.27 12.46% $34,570 0.06% 3.01% 19.0% 2024 14.21 0.37 1.03 1.40 (0.33) (0.47) (0.80) 14.81 9.86 34,312 0.05 2.51 12.6 2023 13.57 0.27 1.57 1.84 (0.29) (0.91) (1.20) 14.21 14.17 33,872 0.05 1.95 13.9 2022 18.11 0.28 (2.96) (2.68) (0.40) (1.46) (1.86) 13.57 (14.85) 32,564 0.05 1.79 19.5 2021 17.58 0.36 1.55 1.91 (0.40) (0.98) (1.38) 18.11 11.06 41,982 0.05 2.00 14.3 Class 2 shares 2025 14.88 0.39 1.37 1.76 (0.45) (1.84) (2.29) 14.35 12.09 468,973 0.31 2.60 19.0 2024 14.26 0.32 1.05 1.37 (0.28) (0.47) (0.75) 14.88 9.67 585,489 0.30 2.14 12.6 2023 13.61 0.24 1.57 1.81 (0.25) (0.91) (1.16) 14.26 13.86 701,248 0.30 1.68 13.9 2022 18.15 0.24 (2.97) (2.73) (0.35) (1.46) (1.81) 13.61 (15.10) 715,788 0.30 1.52 19.5 2021 17.61 0.31 1.57 1.88 (0.36) (0.98) (1.34) 18.15 10.83 962,935 0.30 1.72 14.3 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-8

------

![null008.jpg](ck0000012601-20260427_g45.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate DIVERSIFIED BALANCED ACCOUNT Class 1 shares 2025 $14.81 $0.45 $1.35 $1.80 ($0.50) ($1.84) ($2.34) $14.27 12.46% $34,570 0.06% 3.01% 19.0% 2024 14.21 0.37 1.03 1.40 (0.33) (0.47) (0.80) 14.81 9.86 34,312 0.05 2.51 12.6 2023 13.57 0.27 1.57 1.84 (0.29) (0.91) (1.20) 14.21 14.17 33,872 0.05 1.95 13.9 2022 18.11 0.28 (2.96) (2.68) (0.40) (1.46) (1.86) 13.57 (14.85) 32,564 0.05 1.79 19.5 2021 17.58 0.36 1.55 1.91 (0.40) (0.98) (1.38) 18.11 11.06 41,982 0.05 2.00 14.3 Class 2 shares 2025 14.88 0.39 1.37 1.76 (0.45) (1.84) (2.29) 14.35 12.09 468,973 0.31 2.60 19.0 2024 14.26 0.32 1.05 1.37 (0.28) (0.47) (0.75) 14.88 9.67 585,489 0.30 2.14 12.6 2023 13.61 0.24 1.57 1.81 (0.25) (0.91) (1.16) 14.26 13.86 701,248 0.30 1.68 13.9 2022 18.15 0.24 (2.97) (2.73) (0.35) (1.46) (1.81) 13.61 (15.10) 715,788 0.30 1.52 19.5 2021 17.61 0.31 1.57 1.88 (0.36) (0.98) (1.34) 18.15 10.83 962,935 0.30 1.72 14.3 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-9

------

![null009.jpg](ck0000012601-20260427_g46.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate DIVERSIFIED BALANCED ADAPTIVE ALLOCATION ACCOUNT Class 2 shares 2025 $12.30 $0.32 $0.52 $0.84 ($0.31) ($0.89) ($1.20) $11.94 7.00% $216,884 0.38% 2.67% 41.2% 2024 11.66 0.26 0.73 0.99 (0.20) (0.15) (0.35) 12.30 8.54 234,904 0.38 2.17 32.7 2023 10.53 0.19 1.18 1.37 (0.15) (0.09) (0.24) 11.66 13.08 241,311 0.38 1.76 35.7 2022 13.27 0.16 (1.99) (1.83) (0.20) (0.71) (0.91) 10.53 (13.79) 207,220 0.38 1.40 104.9 2021 12.40 0.22 1.02 1.24 (0.17) (0.20) (0.37) 13.27 10.08 229,787 0.38 1.67 47.6 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-10

------

![null010.jpg](ck0000012601-20260427_g47.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate DIVERSIFIED BALANCED ADAPTIVE ALLOCATION ACCOUNT Class 2 shares 2025 $12.30 $0.32 $0.52 $0.84 ($0.31) ($0.89) ($1.20) $11.94 7.00% $216,884 0.38% 2.67% 41.2% 2024 11.66 0.26 0.73 0.99 (0.20) (0.15) (0.35) 12.30 8.54 234,904 0.38 2.17 32.7 2023 10.53 0.19 1.18 1.37 (0.15) (0.09) (0.24) 11.66 13.08 241,311 0.38 1.76 35.7 2022 13.27 0.16 (1.99) (1.83) (0.20) (0.71) (0.91) 10.53 (13.79) 207,220 0.38 1.40 104.9 2021 12.40 0.22 1.02 1.24 (0.17) (0.20) (0.37) 13.27 10.08 229,787 0.38 1.67 47.6 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-11

------

![null011.jpg](ck0000012601-20260427_g48.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate DIVERSIFIED GROWTH ACCOUNT Class 2 shares 2025 $18.51 $0.41 $2.06 $2.47 ($0.55) ($3.27) ($3.82) $17.16 13.86% $1,852,824 0.30% 2.24% 19.8% 2024 17.35 0.35 1.77 2.12 (0.35) (0.61) (0.96) 18.51 12.26 2,382,875 0.30 1.90 13.2 2023 16.20 0.27 2.32 2.59 (0.29) (1.15) (1.44) 17.35 16.60 3,076,955 0.30 1.59 13.7 2022 21.68 0.27 (3.66) (3.39) (0.40) (1.69) (2.09) 16.20 (15.70) 3,045,729 0.30 1.47 20.1 2021 20.15 0.37 2.56 2.93 (0.38) (1.02) (1.40) 21.68 14.79 3,974,179 0.30 1.74 14.7 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-12

------

![null012.jpg](ck0000012601-20260427_g49.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate DIVERSIFIED GROWTH ACCOUNT Class 2 shares 2025 $18.51 $0.41 $2.06 $2.47 ($0.55) ($3.27) ($3.82) $17.16 13.86% $1,852,824 0.30% 2.24% 19.8% 2024 17.35 0.35 1.77 2.12 (0.35) (0.61) (0.96) 18.51 12.26 2,382,875 0.30 1.90 13.2 2023 16.20 0.27 2.32 2.59 (0.29) (1.15) (1.44) 17.35 16.60 3,076,955 0.30 1.59 13.7 2022 21.68 0.27 (3.66) (3.39) (0.40) (1.69) (2.09) 16.20 (15.70) 3,045,729 0.30 1.47 20.1 2021 20.15 0.37 2.56 2.93 (0.38) (1.02) (1.40) 21.68 14.79 3,974,179 0.30 1.74 14.7 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-13

------

![null013.jpg](ck0000012601-20260427_g50.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate DIVERSIFIED GROWTH ADAPTIVE ALLOCATION ACCOUNT Class 2 shares 2025 $13.35 $0.31 $0.64 $0.95 ($0.30) ($0.95) ($1.25) $13.05 7.31% $1,453,120 0.37% 2.34% 44.4% 2024 12.42 0.27 1.08 1.35 (0.19) (0.23) (0.42) 13.35 10.88 1,548,784 0.37 2.08 38.9 2023 11.07 0.20 1.47 1.67 (0.14) (0.18) (0.32) 12.42 15.33 1,440,339 0.37 1.68 38.6 2022 14.07 0.17 (2.12) (1.95) (0.20) (0.85) (1.05) 11.07 (13.82) 1,196,821 0.37 1.36 101.8 2021 12.68 0.23 1.52 1.75 (0.16) (0.20) (0.36) 14.07 13.89 1,277,128 0.37 1.69 57.4 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-14

------

![null014.jpg](ck0000012601-20260427_g51.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate DIVERSIFIED GROWTH ADAPTIVE ALLOCATION ACCOUNT Class 2 shares 2025 $13.35 $0.31 $0.64 $0.95 ($0.30) ($0.95) ($1.25) $13.05 7.31% $1,453,120 0.37% 2.34% 44.4% 2024 12.42 0.27 1.08 1.35 (0.19) (0.23) (0.42) 13.35 10.88 1,548,784 0.37 2.08 38.9 2023 11.07 0.20 1.47 1.67 (0.14) (0.18) (0.32) 12.42 15.33 1,440,339 0.37 1.68 38.6 2022 14.07 0.17 (2.12) (1.95) (0.20) (0.85) (1.05) 11.07 (13.82) 1,196,821 0.37 1.36 101.8 2021 12.68 0.23 1.52 1.75 (0.16) (0.20) (0.36) 14.07 13.89 1,277,128 0.37 1.69 57.4 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-15

------

![null015.jpg](ck0000012601-20260427_g52.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Gross Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate DIVERSIFIED INCOME ACCOUNT Class 2 shares 2025 $12.93 $0.39 $0.94 $1.33 ($0.41) ($0.70) ($1.11) $13.15 10.38% $180,099 0.31% –% 2.96% 20.6% 2024 12.57 0.30 0.60 0.90 (0.26) (0.28) (0.54) 12.93 7.11 214,228 0.31 – 2.35 20.5 2023 12.00 0.22 1.08 1.30 (0.22) (0.51) (0.73) 12.57 11.20 246,966 0.31 – 1.80 15.8 2022 15.21 0.21 (2.41) (2.20) (0.29) (0.72) (1.01) 12.00 (14.54) 254,300 0.30 – 1.58 23.5 2021 14.82 0.26 0.77 1.03 (0.29) (0.35) (0.64) 15.21 6.96 325,983 0.30 (c) 0.30 (d) 1.75 24.8 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) Subject to Manager's voluntary expense limit. (d) Excludes expense reimbursement from Manager. B-16

------

![null016.jpg](ck0000012601-20260427_g53.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Gross Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate DIVERSIFIED INCOME ACCOUNT Class 2 shares 2025 $12.93 $0.39 $0.94 $1.33 ($0.41) ($0.70) ($1.11) $13.15 10.38% $180,099 0.31% –% 2.96% 20.6% 2024 12.57 0.30 0.60 0.90 (0.26) (0.28) (0.54) 12.93 7.11 214,228 0.31 – 2.35 20.5 2023 12.00 0.22 1.08 1.30 (0.22) (0.51) (0.73) 12.57 11.20 246,966 0.31 – 1.80 15.8 2022 15.21 0.21 (2.41) (2.20) (0.29) (0.72) (1.01) 12.00 (14.54) 254,300 0.30 – 1.58 23.5 2021 14.82 0.26 0.77 1.03 (0.29) (0.35) (0.64) 15.21 6.96 325,983 0.30 (c) 0.30 (d) 1.75 24.8 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) Subject to Manager's voluntary expense limit. (d) Excludes expense reimbursement from Manager. B-17

------

![null017.jpg](ck0000012601-20260427_g54.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate DIVERSIFIED INTERNATIONAL ACCOUNT Class 1 shares 2025 $15.73 $0.31 $4.71 $5.02 ($0.41) ($1.06) ($1.47) $19.28 32.36% $256,291 0.86% 1.74% 33.7% 2024 15.49 0.26 0.49 0.75 (0.51) – (0.51) 15.73 4.71 245,348 0.85 1.56 26.5 2023 13.36 0.25 2.07 2.32 (0.19) – (0.19) 15.49 17.45 256,075 0.93 1.75 36.5 2022 19.17 0.31 (4.21) (3.90) (0.42) (1.49) (1.91) 13.36 (20.00) 236,721 0.92 2.02 46.9 2021 17.77 0.28 1.46 1.74 (0.25) (0.09) (0.34) 19.17 9.75 299,426 0.90 1.49 36.6 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-18

------

![null018.jpg](ck0000012601-20260427_g55.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate DIVERSIFIED INTERNATIONAL ACCOUNT Class 1 shares 2025 $15.73 $0.31 $4.71 $5.02 ($0.41) ($1.06) ($1.47) $19.28 32.36% $256,291 0.86% 1.74% 33.7% 2024 15.49 0.26 0.49 0.75 (0.51) – (0.51) 15.73 4.71 245,348 0.85 1.56 26.5 2023 13.36 0.25 2.07 2.32 (0.19) – (0.19) 15.49 17.45 256,075 0.93 1.75 36.5 2022 19.17 0.31 (4.21) (3.90) (0.42) (1.49) (1.91) 13.36 (20.00) 236,721 0.92 2.02 46.9 2021 17.77 0.28 1.46 1.74 (0.25) (0.09) (0.34) 19.17 9.75 299,426 0.90 1.49 36.6 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-19

------

![null019.jpg](ck0000012601-20260427_g56.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate EQUITY INCOME ACCOUNT Class 1 shares 2025 $30.83 $0.51 $4.17 $4.68 ($0.60) ($3.15) ($3.75) $31.76 15.50% $590,661 0.48% 1.60% 12.7% 2024 27.51 0.56 3.69 4.25 (0.64) (0.29) (0.93) 30.83 15.50 615,060 0.48 1.88 20.3 2023 26.54 0.64 2.20 2.84 (0.58) (1.29) (1.87) 27.51 11.22 598,294 0.49 2.41 12.9 2022 34.25 0.59 (4.25) (3.66) (0.60) (3.45) (4.05) 26.54 (10.50) 625,764 0.48 1.99 19.6 2021 28.54 0.55 5.82 6.37 (0.64) (0.02) (0.66) 34.25 22.47 701,625 0.47 1.73 9.6 Class 2 shares 2025 30.36 0.42 4.11 4.53 (0.53) (3.15) (3.68) 31.21 15.25 88,823 0.73 1.36 12.7 2024 27.11 0.48 3.63 4.11 (0.57) (0.29) (0.86) 30.36 15.23 73,952 0.73 1.63 20.3 2023 26.19 0.57 2.16 2.73 (0.52) (1.29) (1.81) 27.11 10.93 65,603 0.74 2.16 12.9 2022 33.87 0.51 (4.20) (3.69) (0.54) (3.45) (3.99) 26.19 (10.72) 56,495 0.73 1.75 19.6 2021 28.26 0.47 5.75 6.22 (0.59) (0.02) (0.61) 33.87 22.15 53,723 0.72 1.48 9.6 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-20

------

![null020.jpg](ck0000012601-20260427_g57.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate EQUITY INCOME ACCOUNT Class 1 shares 2025 $30.83 $0.51 $4.17 $4.68 ($0.60) ($3.15) ($3.75) $31.76 15.50% $590,661 0.48% 1.60% 12.7% 2024 27.51 0.56 3.69 4.25 (0.64) (0.29) (0.93) 30.83 15.50 615,060 0.48 1.88 20.3 2023 26.54 0.64 2.20 2.84 (0.58) (1.29) (1.87) 27.51 11.22 598,294 0.49 2.41 12.9 2022 34.25 0.59 (4.25) (3.66) (0.60) (3.45) (4.05) 26.54 (10.50) 625,764 0.48 1.99 19.6 2021 28.54 0.55 5.82 6.37 (0.64) (0.02) (0.66) 34.25 22.47 701,625 0.47 1.73 9.6 Class 2 shares 2025 30.36 0.42 4.11 4.53 (0.53) (3.15) (3.68) 31.21 15.25 88,823 0.73 1.36 12.7 2024 27.11 0.48 3.63 4.11 (0.57) (0.29) (0.86) 30.36 15.23 73,952 0.73 1.63 20.3 2023 26.19 0.57 2.16 2.73 (0.52) (1.29) (1.81) 27.11 10.93 65,603 0.74 2.16 12.9 2022 33.87 0.51 (4.20) (3.69) (0.54) (3.45) (3.99) 26.19 (10.72) 56,495 0.73 1.75 19.6 2021 28.26 0.47 5.75 6.22 (0.59) (0.02) (0.61) 33.87 22.15 53,723 0.72 1.48 9.6 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-21

------

![null021.jpg](ck0000012601-20260427_g58.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate GLOBAL EMERGING MARKETS ACCOUNT Class 1 shares 2025 $15.33 $0.22 $5.48 $5.70 ($0.12) ($0.21) ($0.33) $20.70 37.27% $81,605 1.12% 1.23% 51.4% 2024 14.69 0.19 0.76 0.95 (0.31) – (0.31) 15.33 6.51 65,475 1.14 1.22 59.3 2023 13.39 0.21 1.45 1.66 (0.36) – (0.36) 14.69 12.53 67,407 1.16 (c) 1.50 33.0 2022 19.67 0.31 (4.78) (4.47) (0.26) (1.55) (1.81) 13.39 (22.66) 68,015 1.10 (c) 1.98 34.5 2021 19.94 0.21 (0.08) 0.13 (0.09) (0.31) (0.40) 19.67 0.58 90,815 1.18 (c) 1.01 35.7 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) Subject to Manager's contractual expense limit. B-22

------

![null022.jpg](ck0000012601-20260427_g59.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate GLOBAL EMERGING MARKETS ACCOUNT Class 1 shares 2025 $15.33 $0.22 $5.48 $5.70 ($0.12) ($0.21) ($0.33) $20.70 37.27% $81,605 1.12% 1.23% 51.4% 2024 14.69 0.19 0.76 0.95 (0.31) – (0.31) 15.33 6.51 65,475 1.14 1.22 59.3 2023 13.39 0.21 1.45 1.66 (0.36) – (0.36) 14.69 12.53 67,407 1.16 (c) 1.50 33.0 2022 19.67 0.31 (4.78) (4.47) (0.26) (1.55) (1.81) 13.39 (22.66) 68,015 1.10 (c) 1.98 34.5 2021 19.94 0.21 (0.08) 0.13 (0.09) (0.31) (0.40) 19.67 0.58 90,815 1.18 (c) 1.01 35.7 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) Subject to Manager's contractual expense limit. B-23

------

![null023.jpg](ck0000012601-20260427_g60.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate GOVERNMENT & HIGH QUALITY BOND ACCOUNT Class 1 shares 2025 $8.22 $0.33 $0.32 $0.65 ($0.31) ($0.31) $8.56 7.91% $107,117 0.50% 3.91% 240.0% 2024 8.42 0.28 (0.22) 0.06 (0.26) (0.26) 8.22 0.62 111,374 0.52 3.33 249.9 2023 8.24 0.23 0.14 0.37 (0.19) (0.19) 8.42 4.64 121,708 0.53 2.82 173.6 2022 9.48 0.12 (1.24) (1.12) (0.12) (0.12) 8.24 (11.81) 138,346 0.50 1.32 281.4 2021 9.83 0.04 (0.17) (0.13) (0.22) (0.22) 9.48 (1.32) 197,777 0.50 0.40 360.7 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-24

------

![null024.jpg](ck0000012601-20260427_g61.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate GOVERNMENT & HIGH QUALITY BOND ACCOUNT Class 1 shares 2025 $8.22 $0.33 $0.32 $0.65 ($0.31) ($0.31) $8.56 7.91% $107,117 0.50% 3.91% 240.0% 2024 8.42 0.28 (0.22) 0.06 (0.26) (0.26) 8.22 0.62 111,374 0.52 3.33 249.9 2023 8.24 0.23 0.14 0.37 (0.19) (0.19) 8.42 4.64 121,708 0.53 2.82 173.6 2022 9.48 0.12 (1.24) (1.12) (0.12) (0.12) 8.24 (11.81) 138,346 0.50 1.32 281.4 2021 9.83 0.04 (0.17) (0.13) (0.22) (0.22) 9.48 (1.32) 197,777 0.50 0.40 360.7 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-25

------

![null025.jpg](ck0000012601-20260427_g62.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate LARGECAP GROWTH ACCOUNT I Class 1 shares 2025 $48.16 ($0.08) $5.57 $5.49 ($7.97) ($7.97) $45.68 11.39% $617,414 0.67%(c) (0.16)% 50.7% 2024 40.42 (0.04) 10.07 10.03 (2.29) (2.29) 48.16 25.14 645,210 0.67 (c) (0.10) 40.9 2023 30.22 – 12.03 12.03 (1.83) (1.83) 40.42 40.34 580,072 0.69 (c) (0.01) 28.2 2022 52.48 (0.06) (17.54) (17.60) (4.66) (4.66) 30.22 (34.16) 439,493 0.69 (c) (0.16) 28.1 2021 48.46 (0.14) 10.65 10.51 (6.49) (6.49) 52.48 21.89 706,656 0.66 (c) (0.26) 22.1 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) Subject to Manager's contractual expense limit. B-26

------

![null026.jpg](ck0000012601-20260427_g63.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate LARGECAP GROWTH ACCOUNT I Class 1 shares 2025 $48.16 ($0.08) $5.57 $5.49 ($7.97) ($7.97) $45.68 11.39% $617,414 0.67%(c) (0.16)% 50.7% 2024 40.42 (0.04) 10.07 10.03 (2.29) (2.29) 48.16 25.14 645,210 0.67 (c) (0.10) 40.9 2023 30.22 – 12.03 12.03 (1.83) (1.83) 40.42 40.34 580,072 0.69 (c) (0.01) 28.2 2022 52.48 (0.06) (17.54) (17.60) (4.66) (4.66) 30.22 (34.16) 439,493 0.69 (c) (0.16) 28.1 2021 48.46 (0.14) 10.65 10.51 (6.49) (6.49) 52.48 21.89 706,656 0.66 (c) (0.26) 22.1 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) Subject to Manager's contractual expense limit. B-27

------

![null027.jpg](ck0000012601-20260427_g64.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate LARGECAP S&P 500 INDEX ACCOUNT Class 1 shares 2025 $25.09 $0.28 $3.92 $4.20 ($0.37) ($4.62) ($4.99) $24.30 17.62% $2,313,176 0.20% 1.11% 3.4% 2024 21.73 0.29 4.98 5.27 (0.37) (1.54) (1.91) 25.09 24.74 2,564,595 0.21 1.21 2.4 2023 18.24 0.30 4.36 4.66 (0.30) (0.87) (1.17) 21.73 25.97 2,735,181 0.21 1.49 2.3 2022 25.53 0.29 (4.92) (4.63) (0.28) (2.38) (2.66) 18.24 (18.33) 2,516,267 0.24 1.34 9.0 2021 21.94 0.27 5.77 6.04 (0.35) (2.10) (2.45) 25.53 28.33 3,162,615 0.25 1.11 2.6 Class 2 shares 2025 24.54 0.21 3.83 4.04 (0.32) (4.62) (4.94) 23.64 17.31 76,978 0.45 0.86 3.4 2024 21.30 0.23 4.88 5.11 (0.33) (1.54) (1.87) 24.54 24.39 (c) 69,311 0.46 0.96 2.4 2023 17.91 0.25 4.26 4.51 (0.25) (0.87) (1.12) 21.30 25.68 (c) 52,310 0.46 1.24 2.3 2022 25.13 0.23 (4.83) (4.60) (0.24) (2.38) (2.62) 17.91 (18.53) 42,034 0.49 1.10 9.0 2021 21.65 0.21 5.69 5.90 (0.32) (2.10) (2.42) 25.13 28.05 46,634 0.50 0.86 2.6 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) 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. B-28

------

![null028.jpg](ck0000012601-20260427_g65.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate LARGECAP S&P 500 INDEX ACCOUNT Class 1 shares 2025 $25.09 $0.28 $3.92 $4.20 ($0.37) ($4.62) ($4.99) $24.30 17.62% $2,313,176 0.20% 1.11% 3.4% 2024 21.73 0.29 4.98 5.27 (0.37) (1.54) (1.91) 25.09 24.74 2,564,595 0.21 1.21 2.4 2023 18.24 0.30 4.36 4.66 (0.30) (0.87) (1.17) 21.73 25.97 2,735,181 0.21 1.49 2.3 2022 25.53 0.29 (4.92) (4.63) (0.28) (2.38) (2.66) 18.24 (18.33) 2,516,267 0.24 1.34 9.0 2021 21.94 0.27 5.77 6.04 (0.35) (2.10) (2.45) 25.53 28.33 3,162,615 0.25 1.11 2.6 Class 2 shares 2025 24.54 0.21 3.83 4.04 (0.32) (4.62) (4.94) 23.64 17.31 76,978 0.45 0.86 3.4 2024 21.30 0.23 4.88 5.11 (0.33) (1.54) (1.87) 24.54 24.39 (c) 69,311 0.46 0.96 2.4 2023 17.91 0.25 4.26 4.51 (0.25) (0.87) (1.12) 21.30 25.68 (c) 52,310 0.46 1.24 2.3 2022 25.13 0.23 (4.83) (4.60) (0.24) (2.38) (2.62) 17.91 (18.53) 42,034 0.49 1.10 9.0 2021 21.65 0.21 5.69 5.90 (0.32) (2.10) (2.42) 25.13 28.05 46,634 0.50 0.86 2.6 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) 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. B-29

------

![null029.jpg](ck0000012601-20260427_g66.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate MIDCAP ACCOUNT Class 1 shares 2025 $69.22 $0.09 $1.73 $1.82 ($0.19) ($8.80) ($8.99) $62.05 1.78% $533,589 0.53% 0.13% 14.8% 2024 63.02 0.21 12.30 12.51 (0.17) (6.14) (6.31) 69.22 20.27 (c) 645,646 0.53 0.31 20.8 2023 51.25 0.17 13.04 13.21 – (1.44) (1.44) 63.02 26.08 (c) 573,406 0.55 0.30 8.8 2022 74.76 0.11 (17.16) (17.05) (0.11) (6.35) (6.46) 51.25 (22.98) 554,971 0.54 0.19 15.1 2021 63.69 – 15.93 15.93 (0.09) (4.77) (4.86) 74.76 25.53 711,126 0.53 (0.01) 17.1 Class 2 shares 2025 67.94 (0.08) 1.70 1.62 (0.03) (8.80) (8.83) 60.73 1.52 48,474 0.78 (0.12) 14.8 2024 61.99 0.05 12.08 12.13 (0.04) (6.14) (6.18) 67.94 19.98 48,746 0.78 0.07 20.8 2023 50.56 0.04 12.83 12.87 – (1.44) (1.44) 61.99 25.74 41,324 0.80 0.07 8.8 2022 73.89 (0.03) (16.95) (16.98) – (6.35) (6.35) 50.56 (23.16) 32,800 0.79 (0.05) 15.1 2021 63.08 (0.18) 15.76 15.58 – (4.77) (4.77) 73.89 25.20 38,773 0.78 (0.26) 17.1 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) 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. B-30

------

![null030.jpg](ck0000012601-20260427_g67.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate MIDCAP ACCOUNT Class 1 shares 2025 $69.22 $0.09 $1.73 $1.82 ($0.19) ($8.80) ($8.99) $62.05 1.78% $533,589 0.53% 0.13% 14.8% 2024 63.02 0.21 12.30 12.51 (0.17) (6.14) (6.31) 69.22 20.27 (c) 645,646 0.53 0.31 20.8 2023 51.25 0.17 13.04 13.21 – (1.44) (1.44) 63.02 26.08 (c) 573,406 0.55 0.30 8.8 2022 74.76 0.11 (17.16) (17.05) (0.11) (6.35) (6.46) 51.25 (22.98) 554,971 0.54 0.19 15.1 2021 63.69 – 15.93 15.93 (0.09) (4.77) (4.86) 74.76 25.53 711,126 0.53 (0.01) 17.1 Class 2 shares 2025 67.94 (0.08) 1.70 1.62 (0.03) (8.80) (8.83) 60.73 1.52 48,474 0.78 (0.12) 14.8 2024 61.99 0.05 12.08 12.13 (0.04) (6.14) (6.18) 67.94 19.98 48,746 0.78 0.07 20.8 2023 50.56 0.04 12.83 12.87 – (1.44) (1.44) 61.99 25.74 41,324 0.80 0.07 8.8 2022 73.89 (0.03) (16.95) (16.98) – (6.35) (6.35) 50.56 (23.16) 32,800 0.79 (0.05) 15.1 2021 63.08 (0.18) 15.76 15.58 – (4.77) (4.77) 73.89 25.20 38,773 0.78 (0.26) 17.1 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) 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. B-31

------

![null031.jpg](ck0000012601-20260427_g68.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate PRINCIPAL CAPITAL APPRECIATION ACCOUNT Class 1 shares 2025 $42.72 $0.16 $5.53 $5.69 ($0.23) ($3.51) ($3.74) $44.67 13.52% $148,787 0.63% 0.37% 58.0% 2024 35.30 0.23 8.81 9.04 (0.31) (1.31) (1.62) 42.72 25.85 144,682 0.63 0.58 44.9 2023 30.36 0.30 7.12 7.42 (0.28) (2.20) (2.48) 35.30 25.15 134,161 0.65 0.90 49.6 2022 41.87 0.30 (7.16) (6.86) (0.29) (4.36) (4.65) 30.36 (16.42) 121,010 0.63 0.85 53.1 2021 34.30 0.28 9.13 9.41 (0.33) (1.51) (1.84) 41.87 27.82 163,159 0.63 0.73 30.6 Class 2 shares 2025 41.74 0.05 5.38 5.43 (0.15) (3.51) (3.66) 43.51 13.22 97,439 0.88 0.12 58.0 2024 34.55 0.13 8.61 8.74 (0.24) (1.31) (1.55) 41.74 25.54 76,918 0.88 0.32 44.9 2023 29.78 0.21 6.98 7.19 (0.22) (2.20) (2.42) 34.55 24.85 49,164 0.90 0.66 49.6 2022 41.19 0.21 (7.04) (6.83) (0.22) (4.36) (4.58) 29.78 (16.62) 33,069 0.88 0.63 53.1 2021 33.81 0.18 8.99 9.17 (0.28) (1.51) (1.79) 41.19 27.50 31,088 0.88 0.47 30.6 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-32

------

![null032.jpg](ck0000012601-20260427_g69.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate PRINCIPAL CAPITAL APPRECIATION ACCOUNT Class 1 shares 2025 $42.72 $0.16 $5.53 $5.69 ($0.23) ($3.51) ($3.74) $44.67 13.52% $148,787 0.63% 0.37% 58.0% 2024 35.30 0.23 8.81 9.04 (0.31) (1.31) (1.62) 42.72 25.85 144,682 0.63 0.58 44.9 2023 30.36 0.30 7.12 7.42 (0.28) (2.20) (2.48) 35.30 25.15 134,161 0.65 0.90 49.6 2022 41.87 0.30 (7.16) (6.86) (0.29) (4.36) (4.65) 30.36 (16.42) 121,010 0.63 0.85 53.1 2021 34.30 0.28 9.13 9.41 (0.33) (1.51) (1.84) 41.87 27.82 163,159 0.63 0.73 30.6 Class 2 shares 2025 41.74 0.05 5.38 5.43 (0.15) (3.51) (3.66) 43.51 13.22 97,439 0.88 0.12 58.0 2024 34.55 0.13 8.61 8.74 (0.24) (1.31) (1.55) 41.74 25.54 76,918 0.88 0.32 44.9 2023 29.78 0.21 6.98 7.19 (0.22) (2.20) (2.42) 34.55 24.85 49,164 0.90 0.66 49.6 2022 41.19 0.21 (7.04) (6.83) (0.22) (4.36) (4.58) 29.78 (16.62) 33,069 0.88 0.63 53.1 2021 33.81 0.18 8.99 9.17 (0.28) (1.51) (1.79) 41.19 27.50 31,088 0.88 0.47 30.6 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-33

------

![null033.jpg](ck0000012601-20260427_g70.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate PRINCIPAL LIFETIME 2020 ACCOUNT Class 1 shares 2025 $12.89 $0.43 $1.02 $1.45 ($0.41) ($0.56) ($0.97) $13.37 11.33% $139,572 0.01% 3.23% 38.1% 2024 12.50 0.37 0.56 0.93 (0.38) (0.16) (0.54) 12.89 7.43 145,432 0.01 2.84 38.8 2023 11.62 0.34 1.06 1.40 (0.33) (0.19) (0.52) 12.50 12.26 152,073 0.02 2.80 14.0 2022 15.19 0.30 (2.47) (2.17) (0.45) (0.95) (1.40) 11.62 (14.38) 151,551 0.01 2.32 25.4 2021 14.99 0.42 0.94 1.36 (0.26) (0.90) (1.16) 15.19 9.17 196,334 0.00 2.72 23.3 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-34

------

![null034.jpg](ck0000012601-20260427_g71.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate PRINCIPAL LIFETIME 2020 ACCOUNT Class 1 shares 2025 $12.89 $0.43 $1.02 $1.45 ($0.41) ($0.56) ($0.97) $13.37 11.33% $139,572 0.01% 3.23% 38.1% 2024 12.50 0.37 0.56 0.93 (0.38) (0.16) (0.54) 12.89 7.43 145,432 0.01 2.84 38.8 2023 11.62 0.34 1.06 1.40 (0.33) (0.19) (0.52) 12.50 12.26 152,073 0.02 2.80 14.0 2022 15.19 0.30 (2.47) (2.17) (0.45) (0.95) (1.40) 11.62 (14.38) 151,551 0.01 2.32 25.4 2021 14.99 0.42 0.94 1.36 (0.26) (0.90) (1.16) 15.19 9.17 196,334 0.00 2.72 23.3 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-35

------

![null035.jpg](ck0000012601-20260427_g72.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate PRINCIPAL LIFETIME 2030 ACCOUNT Class 1 shares 2025 $13.68 $0.42 $1.37 $1.79 ($0.34) ($0.69) ($1.03) $14.44 13.21% $332,246 0.01% 2.98% 43.1% 2024 12.95 0.34 0.83 1.17 (0.30) (0.14) (0.44) 13.68 9.05 296,715 0.00 2.52 51.1 2023 11.70 0.31 1.42 1.73 (0.22) (0.26) (0.48) 12.95 15.09 276,060 0.01 2.55 14.2 2022 15.60 0.25 (2.87) (2.62) (0.38) (0.90) (1.28) 11.70 (16.84) 227,664 0.00 1.89 25.6 2021 14.51 0.43 1.41 1.84 (0.21) (0.54) (0.75) 15.60 12.79 262,864 0.00 2.78 26.8 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-36

------

![null036.jpg](ck0000012601-20260427_g73.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate PRINCIPAL LIFETIME 2030 ACCOUNT Class 1 shares 2025 $13.68 $0.42 $1.37 $1.79 ($0.34) ($0.69) ($1.03) $14.44 13.21% $332,246 0.01% 2.98% 43.1% 2024 12.95 0.34 0.83 1.17 (0.30) (0.14) (0.44) 13.68 9.05 296,715 0.00 2.52 51.1 2023 11.70 0.31 1.42 1.73 (0.22) (0.26) (0.48) 12.95 15.09 276,060 0.01 2.55 14.2 2022 15.60 0.25 (2.87) (2.62) (0.38) (0.90) (1.28) 11.70 (16.84) 227,664 0.00 1.89 25.6 2021 14.51 0.43 1.41 1.84 (0.21) (0.54) (0.75) 15.60 12.79 262,864 0.00 2.78 26.8 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-37

------

![null037.jpg](ck0000012601-20260427_g74.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate PRINCIPAL LIFETIME 2040 ACCOUNT Class 1 shares 2025 $17.97 $0.50 $2.27 $2.77 ($0.31) ($1.00) ($1.31) $19.43 15.57% $229,305 0.01% 2.64% 46.7% 2024 16.60 0.36 1.56 1.92 (0.31) (0.24) (0.55) 17.97 11.55 175,508 0.01 2.02 42.5 2023 14.59 0.34 2.28 2.62 (0.21) (0.40) (0.61) 16.60 18.27 150,890 0.02 2.17 21.2 2022 19.94 0.25 (3.85) (3.60) (0.55) (1.20) (1.75) 14.59 (18.10) 118,055 0.01 1.52 25.2 2021 18.09 0.62 2.13 2.75 (0.25) (0.65) (0.90) 19.94 15.29 134,172 0.01 3.18 19.9 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-38

------

![null038.jpg](ck0000012601-20260427_g75.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate PRINCIPAL LIFETIME 2040 ACCOUNT Class 1 shares 2025 $17.97 $0.50 $2.27 $2.77 ($0.31) ($1.00) ($1.31) $19.43 15.57% $229,305 0.01% 2.64% 46.7% 2024 16.60 0.36 1.56 1.92 (0.31) (0.24) (0.55) 17.97 11.55 175,508 0.01 2.02 42.5 2023 14.59 0.34 2.28 2.62 (0.21) (0.40) (0.61) 16.60 18.27 150,890 0.02 2.17 21.2 2022 19.94 0.25 (3.85) (3.60) (0.55) (1.20) (1.75) 14.59 (18.10) 118,055 0.01 1.52 25.2 2021 18.09 0.62 2.13 2.75 (0.25) (0.65) (0.90) 19.94 15.29 134,172 0.01 3.18 19.9 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-39

------

![null039.jpg](ck0000012601-20260427_g76.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate PRINCIPAL LIFETIME 2050 ACCOUNT Class 1 shares 2025 $17.73 $0.43 $2.63 $3.06 ($0.26) ($1.24) ($1.50) $19.29 17.50% $100,536 0.02% 2.29% 57.6% 2024 16.11 0.28 1.85 2.13 (0.25) (0.26) (0.51) 17.73 13.29 82,359 0.01 1.59 45.5 2023 13.96 0.28 2.52 2.80 (0.18) (0.47) (0.65) 16.11 20.38 70,704 0.03 1.83 24.8 2022 19.60 0.20 (3.88) (3.68) (0.59) (1.37) (1.96) 13.96 (18.81) 56,830 0.01 1.22 33.0 2021 17.47 0.64 2.32 2.96 (0.22) (0.61) (0.83) 19.60 17.02 68,527 0.01 3.37 28.1 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-40

------

![null040.jpg](ck0000012601-20260427_g77.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate PRINCIPAL LIFETIME 2050 ACCOUNT Class 1 shares 2025 $17.73 $0.43 $2.63 $3.06 ($0.26) ($1.24) ($1.50) $19.29 17.50% $100,536 0.02% 2.29% 57.6% 2024 16.11 0.28 1.85 2.13 (0.25) (0.26) (0.51) 17.73 13.29 82,359 0.01 1.59 45.5 2023 13.96 0.28 2.52 2.80 (0.18) (0.47) (0.65) 16.11 20.38 70,704 0.03 1.83 24.8 2022 19.60 0.20 (3.88) (3.68) (0.59) (1.37) (1.96) 13.96 (18.81) 56,830 0.01 1.22 33.0 2021 17.47 0.64 2.32 2.96 (0.22) (0.61) (0.83) 19.60 17.02 68,527 0.01 3.37 28.1 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-41

------

![null041.jpg](ck0000012601-20260427_g78.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate PRINCIPAL LIFETIME 2060 ACCOUNT Class 1 shares 2025 $17.28 $0.44 $2.58 $3.02 ($0.23) ($1.02) ($1.25) $19.05 17.68% $40,419 0.04% 2.39% 60.6% 2024 15.67 0.29 1.78 2.07 (0.22) (0.24) (0.46) 17.28 13.28 29,544 0.03 1.71 43.1 2023 13.56 0.28 2.42 2.70 (0.16) (0.43) (0.59) 15.67 20.28 21,432 0.09 1.94 21.1 2022 18.81 0.19 (3.71) (3.52) (0.52) (1.21) (1.73) 13.56 (18.78) 15,131 0.04 (c) 1.21 36.5 2021 16.49 0.61 2.33 2.94 (0.18) (0.44) (0.62) 18.81 17.96 17,280 0.03 (c) 3.38 25.3 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) Subject to Manager's contractual expense limit. B-42

------

![null042.jpg](ck0000012601-20260427_g79.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate PRINCIPAL LIFETIME 2060 ACCOUNT Class 1 shares 2025 $17.28 $0.44 $2.58 $3.02 ($0.23) ($1.02) ($1.25) $19.05 17.68% $40,419 0.04% 2.39% 60.6% 2024 15.67 0.29 1.78 2.07 (0.22) (0.24) (0.46) 17.28 13.28 29,544 0.03 1.71 43.1 2023 13.56 0.28 2.42 2.70 (0.16) (0.43) (0.59) 15.67 20.28 21,432 0.09 1.94 21.1 2022 18.81 0.19 (3.71) (3.52) (0.52) (1.21) (1.73) 13.56 (18.78) 15,131 0.04 (c) 1.21 36.5 2021 16.49 0.61 2.33 2.94 (0.18) (0.44) (0.62) 18.81 17.96 17,280 0.03 (c) 3.38 25.3 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) Subject to Manager's contractual expense limit. B-43

------

![null043.jpg](ck0000012601-20260427_g80.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate PRINCIPAL LIFETIME STRATEGIC INCOME ACCOUNT Class 1 shares 2025 $11.44 $0.40 $0.79 $1.19 ($0.37) ($0.32) ($0.69) $11.94 10.45% $54,550 0.03% 3.40% 38.6% 2024 11.03 0.35 0.39 0.74 (0.31) (0.02) (0.33) 11.44 6.71 53,521 0.02 3.04 42.4 2023 10.12 0.33 0.76 1.09 (0.13) (0.05) (0.18) 11.03 10.79 55,858 0.05 3.15 15.3 2022 12.62 0.28 (1.93) (1.65) (0.37) (0.48) (0.85) 10.12 (13.09) 24,133 0.03 2.50 37.6 2021 12.84 0.37 0.21 0.58 (0.25) (0.55) (0.80) 12.62 4.53 30,129 0.02 2.85 35.6 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-44

------

![null044.jpg](ck0000012601-20260427_g81.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate PRINCIPAL LIFETIME STRATEGIC INCOME ACCOUNT Class 1 shares 2025 $11.44 $0.40 $0.79 $1.19 ($0.37) ($0.32) ($0.69) $11.94 10.45% $54,550 0.03% 3.40% 38.6% 2024 11.03 0.35 0.39 0.74 (0.31) (0.02) (0.33) 11.44 6.71 53,521 0.02 3.04 42.4 2023 10.12 0.33 0.76 1.09 (0.13) (0.05) (0.18) 11.03 10.79 55,858 0.05 3.15 15.3 2022 12.62 0.28 (1.93) (1.65) (0.37) (0.48) (0.85) 10.12 (13.09) 24,133 0.03 2.50 37.6 2021 12.84 0.37 0.21 0.58 (0.25) (0.55) (0.80) 12.62 4.53 30,129 0.02 2.85 35.6 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-45

------

![null045.jpg](ck0000012601-20260427_g82.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate REAL ESTATE SECURITIES ACCOUNT Class 1 shares 2025 $18.18 $0.44 ($0.19) $0.25 ($0.29) ($0.66) ($0.95) $17.48 1.24% $152,571 0.78% 2.42% 20.8% 2024 18.12 0.42 0.67 1.09 (0.45) (0.58) (1.03) 18.18 5.59 155,499 0.79 2.31 38.8 2023 16.97 0.44 1.71 2.15 (0.35) (0.65) (1.00) 18.12 13.33 143,715 0.80 2.57 16.2 2022 24.82 0.32 (6.46) (6.14) (0.26) (1.45) (1.71) 16.97 (25.41) 124,969 0.79 1.59 18.5 2021 19.11 0.28 7.26 7.54 (0.33) (1.50) (1.83) 24.82 40.44 174,922 0.82 1.25 23.1 Class 2 shares 2025 18.22 0.40 (0.20) 0.20 (0.29) (0.66) (0.95) 17.47 0.92 95,544 1.03 2.16 20.8 2024 18.15 0.71 0.35 1.06 (0.41) (0.58) (0.99) 18.22 5.41 99,850 1.04 3.88 38.8 2023 17.00 0.40 1.71 2.11 (0.31) (0.65) (0.96) 18.15 13.01 10,644 1.05 2.33 16.2 2022 24.86 0.28 (6.47) (6.19) (0.22) (1.45) (1.67) 17.00 (25.58) 9,358 1.04 1.38 18.5 2021 19.16 0.23 7.26 7.49 (0.29) (1.50) (1.79) 24.86 40.04 11,650 1.07 1.02 23.1 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-46

------

![null046.jpg](ck0000012601-20260427_g83.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate REAL ESTATE SECURITIES ACCOUNT Class 1 shares 2025 $18.18 $0.44 ($0.19) $0.25 ($0.29) ($0.66) ($0.95) $17.48 1.24% $152,571 0.78% 2.42% 20.8% 2024 18.12 0.42 0.67 1.09 (0.45) (0.58) (1.03) 18.18 5.59 155,499 0.79 2.31 38.8 2023 16.97 0.44 1.71 2.15 (0.35) (0.65) (1.00) 18.12 13.33 143,715 0.80 2.57 16.2 2022 24.82 0.32 (6.46) (6.14) (0.26) (1.45) (1.71) 16.97 (25.41) 124,969 0.79 1.59 18.5 2021 19.11 0.28 7.26 7.54 (0.33) (1.50) (1.83) 24.82 40.44 174,922 0.82 1.25 23.1 Class 2 shares 2025 18.22 0.40 (0.20) 0.20 (0.29) (0.66) (0.95) 17.47 0.92 95,544 1.03 2.16 20.8 2024 18.15 0.71 0.35 1.06 (0.41) (0.58) (0.99) 18.22 5.41 99,850 1.04 3.88 38.8 2023 17.00 0.40 1.71 2.11 (0.31) (0.65) (0.96) 18.15 13.01 10,644 1.05 2.33 16.2 2022 24.86 0.28 (6.47) (6.19) (0.22) (1.45) (1.67) 17.00 (25.58) 9,358 1.04 1.38 18.5 2021 19.16 0.23 7.26 7.49 (0.29) (1.50) (1.79) 24.86 40.04 11,650 1.07 1.02 23.1 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-47

------

![null047.jpg](ck0000012601-20260427_g84.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate SAM BALANCED PORTFOLIO Class 1 shares 2025 $15.20 $0.38 $1.71 $2.09 ($0.39) ($1.20) ($1.59) $15.70 14.00% $410,491 0.23% 2.41% 48.2% 2024 13.77 0.33 1.41 1.74 (0.31) – (0.31) 15.20 12.62 435,292 0.23 2.21 19.4 2023 12.71 0.28 1.69 1.97 (0.33) (0.58) (0.91) 13.77 16.00 449,622 0.24 2.09 26.7 2022 18.11 0.33 (3.23) (2.90) (0.38) (2.12) (2.50) 12.71 (16.15) 438,565 0.23 2.17 43.2 2021 16.51 0.35 1.91 2.26 (0.28) (0.38) (0.66) 18.11 13.74 588,703 0.23 2.00 38.9 Class 2 shares 2025 14.92 0.34 1.66 2.00 (0.35) (1.20) (1.55) 15.37 13.65 150,926 0.48 2.20 48.2 2024 13.52 0.29 1.38 1.67 (0.27) – (0.27) 14.92 12.38 149,715 0.48 2.01 19.4 2023 12.50 0.24 1.65 1.89 (0.29) (0.58) (0.87) 13.52 15.65 140,962 0.49 1.87 26.7 2022 17.84 0.29 (3.17) (2.88) (0.34) (2.12) (2.46) 12.50 (16.29) 129,635 0.48 1.98 43.2 2021 16.29 0.32 1.85 2.17 (0.24) (0.38) (0.62) 17.84 13.39 156,241 0.48 1.83 38.9 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-48

------

![null048.jpg](ck0000012601-20260427_g85.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate SAM BALANCED PORTFOLIO Class 1 shares 2025 $15.20 $0.38 $1.71 $2.09 ($0.39) ($1.20) ($1.59) $15.70 14.00% $410,491 0.23% 2.41% 48.2% 2024 13.77 0.33 1.41 1.74 (0.31) – (0.31) 15.20 12.62 435,292 0.23 2.21 19.4 2023 12.71 0.28 1.69 1.97 (0.33) (0.58) (0.91) 13.77 16.00 449,622 0.24 2.09 26.7 2022 18.11 0.33 (3.23) (2.90) (0.38) (2.12) (2.50) 12.71 (16.15) 438,565 0.23 2.17 43.2 2021 16.51 0.35 1.91 2.26 (0.28) (0.38) (0.66) 18.11 13.74 588,703 0.23 2.00 38.9 Class 2 shares 2025 14.92 0.34 1.66 2.00 (0.35) (1.20) (1.55) 15.37 13.65 150,926 0.48 2.20 48.2 2024 13.52 0.29 1.38 1.67 (0.27) – (0.27) 14.92 12.38 149,715 0.48 2.01 19.4 2023 12.50 0.24 1.65 1.89 (0.29) (0.58) (0.87) 13.52 15.65 140,962 0.49 1.87 26.7 2022 17.84 0.29 (3.17) (2.88) (0.34) (2.12) (2.46) 12.50 (16.29) 129,635 0.48 1.98 43.2 2021 16.29 0.32 1.85 2.17 (0.24) (0.38) (0.62) 17.84 13.39 156,241 0.48 1.83 38.9 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-49

------

![null049.jpg](ck0000012601-20260427_g86.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate SAM CONSERVATIVE BALANCED PORTFOLIO Class 1 shares 2025 $11.74 $0.35 $1.01 $1.36 ($0.36) ($0.29) ($0.65) $12.45 11.69% $126,904 0.24% 2.92% 40.4% 2024 11.05 0.31 0.68 0.99 (0.30) – (0.30) 11.74 8.97 131,291 0.24 2.70 23.5 2023 10.23 0.28 0.93 1.21 (0.31) (0.08) (0.39) 11.05 11.97 133,470 0.25 2.60 28.4 2022 13.61 0.30 (2.25) (1.95) (0.30) (1.13) (1.43) 10.23 (14.45) 134,379 0.24 2.57 52.1 2021 12.80 0.29 0.95 1.24 (0.25) (0.18) (0.43) 13.61 9.71 169,338 0.23 2.13 41.2 Class 2 shares 2025 11.53 0.32 0.97 1.29 (0.33) (0.29) (0.62) 12.20 11.28 34,577 0.49 2.70 40.4 2024 10.86 0.28 0.66 0.94 (0.27) – (0.27) 11.53 8.69 32,076 0.49 2.47 23.5 2023 10.05 0.25 0.92 1.17 (0.28) (0.08) (0.36) 10.86 11.80 31,903 0.50 2.41 28.4 2022 13.40 0.27 (2.22) (1.95) (0.27) (1.13) (1.40) 10.05 (14.69) 28,916 0.49 2.35 52.1 2021 12.61 0.26 0.93 1.19 (0.22) (0.18) (0.40) 13.40 9.48 34,318 0.48 1.95 41.2 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-50

------

![null050.jpg](ck0000012601-20260427_g87.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate SAM CONSERVATIVE BALANCED PORTFOLIO Class 1 shares 2025 $11.74 $0.35 $1.01 $1.36 ($0.36) ($0.29) ($0.65) $12.45 11.69% $126,904 0.24% 2.92% 40.4% 2024 11.05 0.31 0.68 0.99 (0.30) – (0.30) 11.74 8.97 131,291 0.24 2.70 23.5 2023 10.23 0.28 0.93 1.21 (0.31) (0.08) (0.39) 11.05 11.97 133,470 0.25 2.60 28.4 2022 13.61 0.30 (2.25) (1.95) (0.30) (1.13) (1.43) 10.23 (14.45) 134,379 0.24 2.57 52.1 2021 12.80 0.29 0.95 1.24 (0.25) (0.18) (0.43) 13.61 9.71 169,338 0.23 2.13 41.2 Class 2 shares 2025 11.53 0.32 0.97 1.29 (0.33) (0.29) (0.62) 12.20 11.28 34,577 0.49 2.70 40.4 2024 10.86 0.28 0.66 0.94 (0.27) – (0.27) 11.53 8.69 32,076 0.49 2.47 23.5 2023 10.05 0.25 0.92 1.17 (0.28) (0.08) (0.36) 10.86 11.80 31,903 0.50 2.41 28.4 2022 13.40 0.27 (2.22) (1.95) (0.27) (1.13) (1.40) 10.05 (14.69) 28,916 0.49 2.35 52.1 2021 12.61 0.26 0.93 1.19 (0.22) (0.18) (0.40) 13.40 9.48 34,318 0.48 1.95 41.2 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-51

------

![null051.jpg](ck0000012601-20260427_g88.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate SAM CONSERVATIVE GROWTH PORTFOLIO Class 1 shares 2025 $22.28 $0.47 $2.94 $3.41 ($0.41) ($1.68) ($2.09) $23.60 15.56% $219,389 0.24% 2.05% 47.2% 2024 19.62 0.37 2.61 2.98 (0.32) – (0.32) 22.28 15.23 213,465 0.23 1.73 20.8 2023 17.65 0.31 3.01 3.32 (0.34) (1.01) (1.35) 19.62 19.37 205,429 0.24 1.66 28.0 2022 24.82 0.36 (4.75) (4.39) (0.45) (2.33) (2.78) 17.65 (17.79) 190,273 0.23 1.75 43.0 2021 21.75 0.44 3.40 3.84 (0.29) (0.48) (0.77) 24.82 17.75 242,713 0.23 1.85 43.6 Class 2 shares 2025 21.80 0.41 2.88 3.29 (0.36) (1.68) (2.04) 23.05 15.31 207,767 0.49 1.80 47.2 2024 19.21 0.32 2.55 2.87 (0.28) – (0.28) 21.80 14.94 194,942 0.48 1.51 20.8 2023 17.31 0.27 2.94 3.21 (0.30) (1.01) (1.31) 19.21 19.05 181,031 0.49 1.45 28.0 2022 24.39 0.31 (4.66) (4.35) (0.40) (2.33) (2.73) 17.31 (17.97) 155,472 0.48 1.52 43.0 2021 21.40 0.39 3.32 3.71 (0.24) (0.48) (0.72) 24.39 17.44 192,114 0.48 1.67 43.6 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-52

------

![null052.jpg](ck0000012601-20260427_g89.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate SAM CONSERVATIVE GROWTH PORTFOLIO Class 1 shares 2025 $22.28 $0.47 $2.94 $3.41 ($0.41) ($1.68) ($2.09) $23.60 15.56% $219,389 0.24% 2.05% 47.2% 2024 19.62 0.37 2.61 2.98 (0.32) – (0.32) 22.28 15.23 213,465 0.23 1.73 20.8 2023 17.65 0.31 3.01 3.32 (0.34) (1.01) (1.35) 19.62 19.37 205,429 0.24 1.66 28.0 2022 24.82 0.36 (4.75) (4.39) (0.45) (2.33) (2.78) 17.65 (17.79) 190,273 0.23 1.75 43.0 2021 21.75 0.44 3.40 3.84 (0.29) (0.48) (0.77) 24.82 17.75 242,713 0.23 1.85 43.6 Class 2 shares 2025 21.80 0.41 2.88 3.29 (0.36) (1.68) (2.04) 23.05 15.31 207,767 0.49 1.80 47.2 2024 19.21 0.32 2.55 2.87 (0.28) – (0.28) 21.80 14.94 194,942 0.48 1.51 20.8 2023 17.31 0.27 2.94 3.21 (0.30) (1.01) (1.31) 19.21 19.05 181,031 0.49 1.45 28.0 2022 24.39 0.31 (4.66) (4.35) (0.40) (2.33) (2.73) 17.31 (17.97) 155,472 0.48 1.52 43.0 2021 21.40 0.39 3.32 3.71 (0.24) (0.48) (0.72) 24.39 17.44 192,114 0.48 1.67 43.6 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-53

------

![null053.jpg](ck0000012601-20260427_g90.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate SAM FLEXIBLE INCOME PORTFOLIO Class 1 shares 2025 $11.13 $0.36 $0.74 $1.10 ($0.42) $– ($0.42) $11.81 9.96% $84,591 0.24% 3.13% 27.7% 2024 10.75 0.35 0.37 0.72 (0.34) – (0.34) 11.13 6.69 93,732 0.24 3.15 21.9 2023 10.17 0.30 0.63 0.93 (0.35) – (0.35) 10.75 9.37 99,003 0.25 2.87 24.8 2022 13.17 0.32 (2.03) (1.71) (0.35) (0.94) (1.29) 10.17 (13.11) 108,390 0.24 2.82 54.1 2021 12.81 0.32 0.55 0.87 (0.31) (0.20) (0.51) 13.17 6.89 148,266 0.23 2.41 44.0 Class 2 shares 2025 10.97 0.33 0.72 1.05 (0.39) – (0.39) 11.63 9.61 31,259 0.50 2.92 27.7 2024 10.59 0.31 0.38 0.69 (0.31) – (0.31) 10.97 6.43 (c) 33,506 0.49 2.86 21.9 2023 10.02 0.28 0.61 0.89 (0.32) – (0.32) 10.59 9.21 (c) 37,028 0.50 2.72 24.8 2022 13.00 0.29 (2.01) (1.72) (0.32) (0.94) (1.26) 10.02 (13.37) 34,633 0.49 2.58 54.1 2021 12.66 0.30 0.53 0.83 (0.29) (0.20) (0.49) 13.00 6.61 45,586 0.48 2.31 44.0 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) 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. B-54

------

![null054.jpg](ck0000012601-20260427_g91.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate SAM FLEXIBLE INCOME PORTFOLIO Class 1 shares 2025 $11.13 $0.36 $0.74 $1.10 ($0.42) $– ($0.42) $11.81 9.96% $84,591 0.24% 3.13% 27.7% 2024 10.75 0.35 0.37 0.72 (0.34) – (0.34) 11.13 6.69 93,732 0.24 3.15 21.9 2023 10.17 0.30 0.63 0.93 (0.35) – (0.35) 10.75 9.37 99,003 0.25 2.87 24.8 2022 13.17 0.32 (2.03) (1.71) (0.35) (0.94) (1.29) 10.17 (13.11) 108,390 0.24 2.82 54.1 2021 12.81 0.32 0.55 0.87 (0.31) (0.20) (0.51) 13.17 6.89 148,266 0.23 2.41 44.0 Class 2 shares 2025 10.97 0.33 0.72 1.05 (0.39) – (0.39) 11.63 9.61 31,259 0.50 2.92 27.7 2024 10.59 0.31 0.38 0.69 (0.31) – (0.31) 10.97 6.43 (c) 33,506 0.49 2.86 21.9 2023 10.02 0.28 0.61 0.89 (0.32) – (0.32) 10.59 9.21 (c) 37,028 0.50 2.72 24.8 2022 13.00 0.29 (2.01) (1.72) (0.32) (0.94) (1.26) 10.02 (13.37) 34,633 0.49 2.58 54.1 2021 12.66 0.30 0.53 0.83 (0.29) (0.20) (0.49) 13.00 6.61 45,586 0.48 2.31 44.0 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) 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. B-55

------

![null055.jpg](ck0000012601-20260427_g92.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate SAM STRATEGIC GROWTH PORTFOLIO Class 1 shares 2025 $26.49 $0.46 $3.94 $4.40 ($0.40) ($2.13) ($2.53) $28.36 16.86% $239,375 0.24% 1.65% 49.8% 2024 22.88 0.37 3.52 3.89 (0.28) – (0.28) 26.49 17.02 225,322 0.23 1.45 20.5 2023 19.76 0.28 3.95 4.23 (0.31) (0.80) (1.11) 22.88 21.86 203,367 0.24 1.31 30.2 2022 28.09 0.33 (5.59) (5.26) (0.52) (2.55) (3.07) 19.76 (18.78) 174,041 0.23 1.45 40.8 2021 24.17 0.53 4.24 4.77 (0.26) (0.59) (0.85) 28.09 19.86 223,578 0.23 1.97 35.9 Class 2 shares 2025 25.94 0.39 3.85 4.24 (0.33) (2.13) (2.46) 27.72 16.61 252,405 0.49 1.43 49.8 2024 22.43 0.31 3.43 3.74 (0.23) – (0.23) 25.94 16.68 225,336 0.48 1.23 20.5 2023 19.39 0.22 3.88 4.10 (0.26) (0.80) (1.06) 22.43 21.58 196,700 0.49 1.07 30.2 2022 27.62 0.27 (5.49) (5.22) (0.46) (2.55) (3.01) 19.39 (18.98) 164,885 0.48 1.22 40.8 2021 23.80 0.46 4.16 4.62 (0.21) (0.59) (0.80) 27.62 19.54 205,369 0.48 1.76 35.9 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-56

------

![null056.jpg](ck0000012601-20260427_g93.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate SAM STRATEGIC GROWTH PORTFOLIO Class 1 shares 2025 $26.49 $0.46 $3.94 $4.40 ($0.40) ($2.13) ($2.53) $28.36 16.86% $239,375 0.24% 1.65% 49.8% 2024 22.88 0.37 3.52 3.89 (0.28) – (0.28) 26.49 17.02 225,322 0.23 1.45 20.5 2023 19.76 0.28 3.95 4.23 (0.31) (0.80) (1.11) 22.88 21.86 203,367 0.24 1.31 30.2 2022 28.09 0.33 (5.59) (5.26) (0.52) (2.55) (3.07) 19.76 (18.78) 174,041 0.23 1.45 40.8 2021 24.17 0.53 4.24 4.77 (0.26) (0.59) (0.85) 28.09 19.86 223,578 0.23 1.97 35.9 Class 2 shares 2025 25.94 0.39 3.85 4.24 (0.33) (2.13) (2.46) 27.72 16.61 252,405 0.49 1.43 49.8 2024 22.43 0.31 3.43 3.74 (0.23) – (0.23) 25.94 16.68 225,336 0.48 1.23 20.5 2023 19.39 0.22 3.88 4.10 (0.26) (0.80) (1.06) 22.43 21.58 196,700 0.49 1.07 30.2 2022 27.62 0.27 (5.49) (5.22) (0.46) (2.55) (3.01) 19.39 (18.98) 164,885 0.48 1.22 40.8 2021 23.80 0.46 4.16 4.62 (0.21) (0.59) (0.80) 27.62 19.54 205,369 0.48 1.76 35.9 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-57

------

![null057.jpg](ck0000012601-20260427_g94.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate SHORT-TERM INCOME ACCOUNT Class 1 shares 2025 $2.54 $0.10 $0.04 $0.14 ($0.12) $– ($0.12) $2.56 5.48% $133,192 0.42% 4.02% 49.3% 2024 2.50 0.10 0.03 0.13 (0.09) – (0.09) 2.54 5.09 133,871 0.41 4.02 47.8 2023 2.41 0.08 0.05 0.13 (0.04) – (0.04) 2.50 5.60 135,924 0.43 3.40 38.7 2022 2.53 0.04 (0.13) (0.09) (0.03) – (0.03) 2.41 (3.45) 134,122 0.46 1.74 57.7 2021 2.60 0.03 (0.05) (0.02) (0.04) (0.01) (0.05) 2.53 (0.72) 140,532 0.47 1.09 56.7 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-58

------

![null058.jpg](ck0000012601-20260427_g95.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate SHORT-TERM INCOME ACCOUNT Class 1 shares 2025 $2.54 $0.10 $0.04 $0.14 ($0.12) $– ($0.12) $2.56 5.48% $133,192 0.42% 4.02% 49.3% 2024 2.50 0.10 0.03 0.13 (0.09) – (0.09) 2.54 5.09 133,871 0.41 4.02 47.8 2023 2.41 0.08 0.05 0.13 (0.04) – (0.04) 2.50 5.60 135,924 0.43 3.40 38.7 2022 2.53 0.04 (0.13) (0.09) (0.03) – (0.03) 2.41 (3.45) 134,122 0.46 1.74 57.7 2021 2.60 0.03 (0.05) (0.02) (0.04) (0.01) (0.05) 2.53 (0.72) 140,532 0.47 1.09 56.7 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. B-59

------

![null059.jpg](ck0000012601-20260427_g96.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate SMALLCAP ACCOUNT Class 1 shares 2025 $15.69 $0.03 $2.31 $2.34 ($0.05) ($0.85) ($0.90) $17.13 15.10% $166,305 0.84% 0.19% 37.0% 2024 15.02 0.07 0.97 1.04 (0.06) (0.31) (0.37) 15.69 6.99 162,112 0.84 0.42 33.5 2023 13.03 0.05 1.98 2.03 (0.04) – (0.04) 15.02 15.53 (c) 166,600 0.85 0.38 24.6 2022 20.05 0.05 (4.08) (4.03) (0.01) (2.98) (2.99) 13.03 (20.63) (c) 156,903 0.84 0.32 18.0 2021 17.26 (0.01) 3.48 3.47 (0.06) (0.62) (0.68) 20.05 20.12 213,890 0.82 (0.04) 36.6 Class 2 shares 2025 15.54 (0.01) 2.28 2.27 (0.01) (0.85) (0.86) 16.95 14.78 9,897 1.10 (0.06) 37.0 2024 14.88 0.03 0.96 0.99 (0.02) (0.31) (0.33) 15.54 6.66 (c) 9,247 1.09 0.18 33.5 2023 12.91 0.02 1.96 1.98 (0.01) – (0.01) 14.88 15.39 (c) 9,225 1.10 0.13 24.6 2022 19.93 0.01 (4.05) (4.04) – (2.98) (2.98) 12.91 (20.88) 8,383 1.09 0.07 18.0 2021 17.17 (0.06) 3.47 3.41 (0.03) (0.62) (0.65) 19.93 19.86 10,497 1.07 (0.29) 36.6 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) 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. B-60

------

![null060.jpg](ck0000012601-20260427_g97.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate SMALLCAP ACCOUNT Class 1 shares 2025 $15.69 $0.03 $2.31 $2.34 ($0.05) ($0.85) ($0.90) $17.13 15.10% $166,305 0.84% 0.19% 37.0% 2024 15.02 0.07 0.97 1.04 (0.06) (0.31) (0.37) 15.69 6.99 162,112 0.84 0.42 33.5 2023 13.03 0.05 1.98 2.03 (0.04) – (0.04) 15.02 15.53 (c) 166,600 0.85 0.38 24.6 2022 20.05 0.05 (4.08) (4.03) (0.01) (2.98) (2.99) 13.03 (20.63) (c) 156,903 0.84 0.32 18.0 2021 17.26 (0.01) 3.48 3.47 (0.06) (0.62) (0.68) 20.05 20.12 213,890 0.82 (0.04) 36.6 Class 2 shares 2025 15.54 (0.01) 2.28 2.27 (0.01) (0.85) (0.86) 16.95 14.78 9,897 1.10 (0.06) 37.0 2024 14.88 0.03 0.96 0.99 (0.02) (0.31) (0.33) 15.54 6.66 (c) 9,247 1.09 0.18 33.5 2023 12.91 0.02 1.96 1.98 (0.01) – (0.01) 14.88 15.39 (c) 9,225 1.10 0.13 24.6 2022 19.93 0.01 (4.05) (4.04) – (2.98) (2.98) 12.91 (20.88) 8,383 1.09 0.07 18.0 2021 17.17 (0.06) 3.47 3.41 (0.03) (0.62) (0.65) 19.93 19.86 10,497 1.07 (0.29) 36.6 (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) 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. B-61

------

![null061.jpg](ck0000012601-20260427_g98.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate U.S. LARGECAP S&P 500 INDEX BUFFER APRIL ACCOUNT(c) Class 2 shares 2025 $10.45 $0.02 $1.22 $1.24 $– ($0.21) ($0.21) $11.48 11.95% $33,827 0.95%(d) 0.15% 25.3% 2024 9.90 0.03 1.82 1.85 (0.06) (1.24) (1.30) 10.45 18.41 (e) 37,944 0.96 (d),(f) 0.31 158.4 2023(g) 10.00 0.03 1.25 1.28 (0.06) (1.32) (1.38) 9.90 12.87 (e),(h) 22,730 0.98 (d),(i),(j) 0.43 (i) 182.4 (i) (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) Effective May 1, 2025, U.S. LargeCap Buffer April Account changed its name to U.S. LargeCap S&P 500 Index Buffer April Account. (d) Subject to Manager's contractual expense limit. (e) 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. (f) Includes 0.01% of interest expense associated with borrowings. The expense is not subject to the Manager's contractual expense limit. (g) Period from March 29, 2023, date operations commenced, through December 31, 2023. (h) Total return amounts have not been annualized. (i) Computed on an annualized basis. (j) Includes 0.03% of interest expense associated with borrowings. The expense is not subject to the Manager's contractual expense limit. B-62

------

![null062.jpg](ck0000012601-20260427_g99.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate U.S. LARGECAP S&P 500 INDEX BUFFER APRIL ACCOUNT(c) Class 2 shares 2025 $10.45 $0.02 $1.22 $1.24 $– ($0.21) ($0.21) $11.48 11.95% $33,827 0.95%(d) 0.15% 25.3% 2024 9.90 0.03 1.82 1.85 (0.06) (1.24) (1.30) 10.45 18.41 (e) 37,944 0.96 (d),(f) 0.31 158.4 2023(g) 10.00 0.03 1.25 1.28 (0.06) (1.32) (1.38) 9.90 12.87 (e),(h) 22,730 0.98 (d),(i),(j) 0.43 (i) 182.4 (i) (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) Effective May 1, 2025, U.S. LargeCap Buffer April Account changed its name to U.S. LargeCap S&P 500 Index Buffer April Account. (d) Subject to Manager's contractual expense limit. (e) 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. (f) Includes 0.01% of interest expense associated with borrowings. The expense is not subject to the Manager's contractual expense limit. (g) Period from March 29, 2023, date operations commenced, through December 31, 2023. (h) Total return amounts have not been annualized. (i) Computed on an annualized basis. (j) Includes 0.03% of interest expense associated with borrowings. The expense is not subject to the Manager's contractual expense limit. B-63

------

![null063.jpg](ck0000012601-20260427_g100.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate U.S. LARGECAP S&P 500 INDEX BUFFER JANUARY ACCOUNT(c) Class 2 shares 2025 $11.87 $0.02 $1.43 $1.45 ($0.05) ($2.79) ($2.84) $10.48 12.74%(d) $61,294 0.96%(e),(f) 0.16% 112.3% 2024 10.07 0.04 1.78 1.82 (0.02) – (0.02) 11.87 18.29 (d) 68,269 0.96 (e),(f) 0.33 182.8 2023 9.99 0.05 1.90 1.95 (0.07) (1.80) (1.87) 10.07 19.42 (d) 58,333 0.98 (e),(g) 0.47 136.3 2022(h) 10.00 – (0.01) (0.01) – – – 9.99 0.00 (d),(i) 26,581 0.95 (e),(j) 3.20 (j) 0.0 (j) (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) Effective May 1, 2025, U.S. LargeCap Buffer January Account changed its name to U.S. LargeCap S&P 500 Index Buffer January Account. (d) 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. (e) Subject to Manager's contractual expense limit. (f) Includes 0.01% of interest expense associated with borrowings. The expense is not subject to the Manager's contractual expense limit. (g) Includes 0.03% of interest expense associated with borrowings. The expense is not subject to the Manager's contractual expense limit. (h) Period from December 28, 2022, date operations commenced, through December 31, 2022. (i) Total return amounts have not been annualized. (j) Computed on an annualized basis. B-64

------

![null064.jpg](ck0000012601-20260427_g101.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate U.S. LARGECAP S&P 500 INDEX BUFFER JANUARY ACCOUNT(c) Class 2 shares 2025 $11.87 $0.02 $1.43 $1.45 ($0.05) ($2.79) ($2.84) $10.48 12.74%(d) $61,294 0.96%(e),(f) 0.16% 112.3% 2024 10.07 0.04 1.78 1.82 (0.02) – (0.02) 11.87 18.29 (d) 68,269 0.96 (e),(f) 0.33 182.8 2023 9.99 0.05 1.90 1.95 (0.07) (1.80) (1.87) 10.07 19.42 (d) 58,333 0.98 (e),(g) 0.47 136.3 2022(h) 10.00 – (0.01) (0.01) – – – 9.99 0.00 (d),(i) 26,581 0.95 (e),(j) 3.20 (j) 0.0 (j) (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) Effective May 1, 2025, U.S. LargeCap Buffer January Account changed its name to U.S. LargeCap S&P 500 Index Buffer January Account. (d) 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. (e) Subject to Manager's contractual expense limit. (f) Includes 0.01% of interest expense associated with borrowings. The expense is not subject to the Manager's contractual expense limit. (g) Includes 0.03% of interest expense associated with borrowings. The expense is not subject to the Manager's contractual expense limit. (h) Period from December 28, 2022, date operations commenced, through December 31, 2022. (i) Total return amounts have not been annualized. (j) Computed on an annualized basis. B-65

------

![null065.jpg](ck0000012601-20260427_g102.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate U.S. LARGECAP S&P 500 INDEX BUFFER JULY ACCOUNT(c) Class 2 shares 2025 $13.64 $0.02 $1.75 $1.77 ($0.02) ($1.20) ($1.22) $14.19 13.26% $45,181 0.97%(d),(e) 0.15% 126.9% 2024 11.67 0.04 2.04 2.08 – (0.11) (0.11) 13.64 17.89 38,893 0.96 (d),(f) 0.29 136.4 2023 10.16 0.07 1.78 1.85 (0.04) (0.30) (0.34) 11.67 18.23 54,229 0.96 (d),(f) 0.61 69.3 2022(g) 10.00 0.04 0.15 0.19 (0.03) – (0.03) 10.16 1.93 (h) 26,247 0.95 (d),(i) 0.72 (i) 20.0 (i) (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) Effective May 1, 2025, U.S. LargeCap Buffer July Account changed its name to U.S. LargeCap S&P 500 Index Buffer July Account. (d) Subject to Manager's contractual expense limit. (e) Includes 0.02% of interest expense associated with borrowings. The expense is not subject to the Manager's contractual expense limit. (f) Includes 0.01% of interest expense associated with borrowings. The expense is not subject to the Manager's contractual expense limit. (g) Period from June 29, 2022, date operations commenced, through December 31, 2022. (h) Total return amounts have not been annualized. (i) Computed on an annualized basis. B-66

------

![null066.jpg](ck0000012601-20260427_g103.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate U.S. LARGECAP S&P 500 INDEX BUFFER JULY ACCOUNT(c) Class 2 shares 2025 $13.64 $0.02 $1.75 $1.77 ($0.02) ($1.20) ($1.22) $14.19 13.26% $45,181 0.97%(d),(e) 0.15% 126.9% 2024 11.67 0.04 2.04 2.08 – (0.11) (0.11) 13.64 17.89 38,893 0.96 (d),(f) 0.29 136.4 2023 10.16 0.07 1.78 1.85 (0.04) (0.30) (0.34) 11.67 18.23 54,229 0.96 (d),(f) 0.61 69.3 2022(g) 10.00 0.04 0.15 0.19 (0.03) – (0.03) 10.16 1.93 (h) 26,247 0.95 (d),(i) 0.72 (i) 20.0 (i) (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) Effective May 1, 2025, U.S. LargeCap Buffer July Account changed its name to U.S. LargeCap S&P 500 Index Buffer July Account. (d) Subject to Manager's contractual expense limit. (e) Includes 0.02% of interest expense associated with borrowings. The expense is not subject to the Manager's contractual expense limit. (f) Includes 0.01% of interest expense associated with borrowings. The expense is not subject to the Manager's contractual expense limit. (g) Period from June 29, 2022, date operations commenced, through December 31, 2022. (h) Total return amounts have not been annualized. (i) Computed on an annualized basis. B-67

------

![null067.jpg](ck0000012601-20260427_g104.jpg)

Financial Highlights Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate U.S. LARGECAP S&P 500 INDEX BUFFER OCTOBER ACCOUNT(c) Class 2 shares 2025 $13.89 $0.03 $1.74 $1.77 ($0.05) ($1.70) ($1.75) $13.91 13.10% $87,092 0.96%(d),(e) 0.19% 89.5% 2024 11.70 0.04 2.20 2.24 (0.01) (0.04) (0.05) 13.89 19.18 59,841 0.96 (d),(e) 0.32 43.9 2023 10.51 0.05 1.98 2.03 (0.05) (0.79) (0.84) 11.70 19.45 18,800 0.97 (d),(f) 0.47 47.4 2022(g) 10.00 0.02 0.51 0.53 (0.02) – (0.02) 10.51 5.29 (h) 17,978 0.99 (d),(i),(j) 0.68 (i) 180.0 (i) (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) Effective May 1, 2025, U.S. LargeCap Buffer October Account changed its name to U.S. LargeCap S&P 500 Index Buffer October Account. (d) Subject to Manager's contractual expense limit. (e) Includes 0.01% of interest expense associated with borrowings. The expense is not subject to the Manager's contractual expense limit. (f) Includes 0.02% of interest expense associated with borrowings. The expense is not subject to the Manager's contractual expense limit. (g) Period from September 29, 2022, date operations commenced, through December 31, 2022. (h) Total return amounts have not been annualized. (i) Computed on an annualized basis. (j) Includes 0.04% of interest expense associated with borrowings. The expense is not subject to the Manager's contractual expense limit. B-68

------

![null068.jpg](ck0000012601-20260427_g105.jpg)

Financial Highlights (Continued) Principal Variable Contracts Funds, Inc. Selected data for a share of Capital Stock outstanding throughout each year ended December 31 (except as noted): Net Asset Value, Beginning of Period Net Investment Income (Loss)(a) Net Realized and Unrealized Gain (Loss) on Investments Total From Investment Operations Dividends from Net Investment Income Distributions from Realized Gains Total Dividends and Distributions Net Asset Value, End of Period Total Return(b) Net Assets, End of Period (in thousands) Ratio of Expenses to Average Net Assets Ratio of Net Investment Income to Average Net Assets Portfolio Turnover Rate U.S. LARGECAP S&P 500 INDEX BUFFER OCTOBER ACCOUNT(c) Class 2 shares 2025 $13.89 $0.03 $1.74 $1.77 ($0.05) ($1.70) ($1.75) $13.91 13.10% $87,092 0.96%(d),(e) 0.19% 89.5% 2024 11.70 0.04 2.20 2.24 (0.01) (0.04) (0.05) 13.89 19.18 59,841 0.96 (d),(e) 0.32 43.9 2023 10.51 0.05 1.98 2.03 (0.05) (0.79) (0.84) 11.70 19.45 18,800 0.97 (d),(f) 0.47 47.4 2022(g) 10.00 0.02 0.51 0.53 (0.02) – (0.02) 10.51 5.29 (h) 17,978 0.99 (d),(i),(j) 0.68 (i) 180.0 (i) (a) Calculated based on average shares outstanding during the period. (b) Total return does not reflect charges attributable to separate accounts. Inclusion of these charges would reduce the amounts shown. (c) Effective May 1, 2025, U.S. LargeCap Buffer October Account changed its name to U.S. LargeCap S&P 500 Index Buffer October Account. (d) Subject to Manager's contractual expense limit. (e) Includes 0.01% of interest expense associated with borrowings. The expense is not subject to the Manager's contractual expense limit. (f) Includes 0.02% of interest expense associated with borrowings. The expense is not subject to the Manager's contractual expense limit. (g) Period from September 29, 2022, date operations commenced, through December 31, 2022. (h) Total return amounts have not been annualized. (i) Computed on an annualized basis. (j) Includes 0.04% of interest expense associated with borrowings. The expense is not subject to the Manager's contractual expense limit. B-69

------

**ADDITIONAL INFORMATION**

Additional information about the Funds is available in the SAI dated May 1, 2026, which is incorporated by reference into this Prospectus. Additional information about each Fund's investments is available in the Registrant's <u>[Annual](https://www.sec.gov/ix?doc=/Archives/edgar/data/12601/000001260126000120/primary-document.htm)[Report to Shareholders](https://www.sec.gov/ix?doc=/Archives/edgar/data/12601/000001260126000120/primary-document.htm)</u> and <u>[Semi-Annual Report](https://www.sec.gov/ix?doc=/Archives/edgar/data/12601/000001260125000163/primary-document.htm)[to Shareholders](https://www.sec.gov/ix?doc=/Archives/edgar/data/12601/000001260125000163/primary-document.htm)</u> filed on Form N-CSR. 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. In Form N-CSR, you will find the Registrant's annual and semi-annual financial statements. The SAI and the Registrant's Annual and Semi-Annual Reports to Shareholders, and other information such as Fund financial statements, are available and can be obtained free of charge by writing Principal Variable Contracts Funds, Inc., 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/PVCProspectuses. 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.

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 Variable Contracts Funds, Inc. SEC File 811-01944

C

------

---

| |
|:---|
| **PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.** |
| ("PVC" or the "Registrant") |
| **Class 1 Shares** |
| **Class 2 Shares** |
| **Statement of Additional Information** |

---

Dated May 1, 2026

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 Registrant's Prospectus dated May 1, 2026.

**Incorporation by Reference:** Certain information included in the Registrant's <u>[Annual Report to Shareholders](https://www.sec.gov/ix?doc=/Archives/edgar/data/12601/000001260126000120/primary-document.htm)[and Form N-CSR](https://www.sec.gov/ix?doc=/Archives/edgar/data/12601/000001260126000120/primary-document.htm)</u> for the fiscal year ended December 31, 2025 is hereby incorporated by reference into and is legally 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 Variable Contracts Funds, Inc.

P.O. Box 219971

Kansas City, MO 64121-9971

The Prospectus may be viewed at www.PrincipalAM.com/PVCProspectuses.

------

---

| | |
|:---|:---|
| **TABLE OF CONTENTS** | |
| | **<u>Page</u>** |
| HISTORY OF THE FUNDS | <u>[3](#idffd27d79917445b84697e0c45298a68_7)</u> |
| DESCRIPTION OF THE FUNDS' INVESTMENTS AND RISKS | <u>[4](#idffd27d79917445b84697e0c45298a68_10)</u> |
| LEADERSHIP STRUCTURE AND BOARD | <u>[41](#idffd27d79917445b84697e0c45298a68_13)</u> |
| INVESTMENT ADVISORY AND OTHER SERVICES | <u>[49](#idffd27d79917445b84697e0c45298a68_16)</u> |
| MULTIPLE CLASS STRUCTURE | <u>[56](#idffd27d79917445b84697e0c45298a68_19)</u> |
| INTERMEDIARY COMPENSATION | <u>[57](#idffd27d79917445b84697e0c45298a68_22)</u> |
| BROKERAGE ALLOCATION AND OTHER PRACTICES | <u>[57](#idffd27d79917445b84697e0c45298a68_25)</u> |
| SHAREHOLDER RIGHTS | <u>[62](#idffd27d79917445b84697e0c45298a68_28)</u> |
| PRICING OF FUND SHARES | <u>[63](#idffd27d79917445b84697e0c45298a68_31)</u> |
| TAX CONSIDERATIONS | <u>[64](#idffd27d79917445b84697e0c45298a68_34)</u> |
| PORTFOLIO HOLDINGS DISCLOSURE | <u>[65](#idffd27d79917445b84697e0c45298a68_37)</u> |
| PROXY VOTING POLICIES AND PROCEDURES | <u>[67](#idffd27d79917445b84697e0c45298a68_40)</u> |
| FINANCIAL STATEMENTS | <u>[67](#idffd27d79917445b84697e0c45298a68_43)</u> |
| INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | <u>[67](#idffd27d79917445b84697e0c45298a68_46)</u> |
| GENERAL INFORMATION | <u>[68](#idffd27d79917445b84697e0c45298a68_49)</u> |
| CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES | <u>[69](#idffd27d79917445b84697e0c45298a68_52)</u> |
| PORTFOLIO MANAGER DISCLOSURE | <u>[91](#idffd27d79917445b84697e0c45298a68_64)</u> |
| APPENDIX A – DESCRIPTION OF BOND RATINGS | <u>A-[1](#idffd27d79917445b84697e0c45298a68_85)</u> |
| APPENDIX B – PROXY VOTING POLICIES | <u>B-[1](#idffd27d79917445b84697e0c45298a68_88)</u> |

---

------

**HISTORY OF THE FUNDS**

Principal Variable Contracts Funds, Inc. ("PVC" or the "Registrant"), a Maryland corporation, was organized as Principal Variable Contracts Fund, Inc. on May 27, 1997. The Registrant changed its name to its current name, Principal Variable Contracts Funds, Inc., effective May 17, 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** |
| **Account/Portfolio** | **1** | **2** |
| Blue Chip |  | X |
| Bond Market Index | X |  |
| Core Plus Bond | X |  |
| Diversified Balanced | X | X |
| Diversified Balanced Adaptive Allocation |  | X |
| Diversified Growth |  | X |
| Diversified Growth Adaptive Allocation |  | X |
| Diversified Income |  | X |
| Diversified International | X |  |
| Equity Income | X | X |
| Global Emerging Markets | X |  |
| Government & High Quality Bond | X |  |
| LargeCap Growth I | X |  |
| LargeCap S&P 500 Index | X | X |
| MidCap | X | X |
| Principal Capital Appreciation | X | X |
| Principal LifeTime Strategic Income | X |  |
| Principal LifeTime 2020 | X |  |
| Principal LifeTime 2030 | X |  |
| Principal LifeTime 2040 | X |  |
| Principal LifeTime 2050 | X |  |
| Principal LifeTime 2060 | X |  |
| Real Estate Securities | X | X |
| SAM (Strategic Asset Management) Balanced | X | X |
| SAM (Strategic Asset Management) Conservative Balanced | X | X |
| SAM (Strategic Asset Management) Conservative Growth | X | X |
| SAM (Strategic Asset Management) Flexible Income | X | X |
| SAM (Strategic Asset Management) Strategic Growth | X | X |
| Short-Term Income | X |  |
| SmallCap | X | X |
| U.S. LargeCap S&P 500 Index Buffer January |  | X |
| U.S. LargeCap S&P 500 Index Buffer April |  | X |
| U.S. LargeCap S&P 500 Index Buffer July |  | X |
| U.S. LargeCap S&P 500 Index Buffer October |  | X |

---

Each class has different expenses. Because of these different expenses, the investment performance of the classes will vary.

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.

------

**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 U.S. Securities and Exchange Commission (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)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;a)The Blue Chip, LargeCap Growth I, and Real Estate Securities Accounts have elected to be non-diversified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)It is anticipated that the LargeCap S&P 500 Index Account will be diversified in approximately the same proportions as the index that the Fund uses to measure its performance. Because the LargeCap S&P 500 Index Account seeks to track the performance of the securities included in its index, it is possible that LargeCap S&P 500 Index Account may change from diversified to non-diversified as a result of a change in relative market capitalization or weighting of one or more constituents of the Fund's index. In such an instance, shareholder approval will not be sought when the LargeCap S&P 500 Index Account crosses from diversified to non-diversified status due solely to a change in the relative market capitalization or index weightings of one or more constituents of the LargeCap S&P 500 Index Account's index.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)The other Funds have each elected to be treated as a "diversified" investment company, as that term is used in the 1940 Act, as amended, and as interpreted, modified, or otherwise permitted by regulatory authority having jurisdiction, from time to time.

7)may not 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.

8)has adopted a concentration policy, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)The Real Estate Securities Account will concentrate its investments in a particular industry or group of industries as described in the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)The Bond Market Index, LargeCap S&P 500 Index, and U.S. LargeCap S&P 500 Index Buffer Accounts will not concentrate their investments in a particular industry or group of industries except to the extent that the 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, their investments in a particular industry or group of industries.

*On or about July 1, 2026, subject to shareholder approval, delete the preceding Fundamental Restriction* 6) a. *and replace with the following:*

6)has adopted a policy regarding diversification, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)The Blue Chip, Global Emerging Markets, LargeCap Growth I, Real Estate Securities, and Principal Capital Appreciation Accounts have elected to be non-diversified.

**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.

The Principal LifeTime, Diversified Balanced, Diversified Balanced Adaptive Allocation, Diversified Growth, Diversified Growth Adaptive Allocation, and Diversified Income Accounts and the Strategic Asset Management ("SAM") Portfolios have not adopted this non-fundamental restriction.

------

2)&nbsp;&nbsp;&nbsp;&nbsp;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, Diversified Balanced, Diversified Balanced Adaptive Allocation, Diversified Growth, Diversified Growth Adaptive Allocation, and Diversified Income Accounts, U.S. LargeCap S&P 500 Index Buffer Accounts, and 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)&nbsp;&nbsp;&nbsp;&nbsp;For all other Accounts, 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, and as interpreted, modified, or otherwise permitted by any regulatory authority having jurisdiction, from time to time, are not deemed to be pledges, mortgages, hypothecations, or other encumbrances.

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

4)&nbsp;&nbsp;&nbsp;&nbsp;Invest more than 25% of its assets in foreign securities, however:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)the Diversified International and Global Emerging Markets Accounts each may invest up to 100% of its assets in foreign securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)the Bond Market Index and LargeCap S&P 500 Index Accounts may invest in foreign securities to the extent that the relevant index is so invested;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)the Government & High Quality Bond Account may not invest in foreign securities; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)the Principal LifeTime, Diversified Balanced, Diversified Balanced Adaptive Allocation, Diversified Growth, Diversified Growth Adaptive Allocation, and Diversified Income Accounts and SAM Portfolios have not adopted this non-fundamental restriction.

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

The Real Estate Securities, Principal LifeTime, Diversified Balanced, Diversified Balanced Adaptive Allocation, Diversified Growth, Diversified Growth Adaptive Allocation, and Diversified Income Accounts and SAM Portfolios have not adopted this non-fundamental restriction.

6)&nbsp;&nbsp;&nbsp;&nbsp;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.

The Principal LifeTime, Diversified Balanced, Diversified Balanced Adaptive Allocation, Diversified Growth, Diversified Growth Adaptive Allocation, and Diversified Income Accounts and SAM Portfolios have not adopted this non-fundamental restriction.

**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:

• <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.

• <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.

In addition, if a Fund's policy is to invest in a certain type of security, the Fund may gain exposure to that type of investment through derivatives or other instruments.

• <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 Diversified Balanced, Diversified Balanced Adaptive Allocation, Diversified Growth, Diversified Growth Adaptive Allocation, Diversified Income, Diversified International, Principal Capital Appreciation, and Short-Term Income Accounts, the Principal LifeTime Accounts, and the SAM Portfolios have not adopted this non-fundamental policy.

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

**Borrowing and Senior Securities**

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

**Commodity-Related Investments and Commodity Interests**

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

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

------

**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.

• 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.

• 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.

• Each Fund views its investments in 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 (i) as permitted by 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**

**Artificial Intelligence** 

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

------

**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>

------

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, including, for example, new or revised laws or regulations, the market price of the securities may decline below the purchase price paid by a fund.

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

**Cyber Security Issues**

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

------

**Derivatives**

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

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

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

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

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

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

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

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

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

------

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

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

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

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

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

*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 a Fund's ability to terminate exchange-traded options and may also involve the risk that broker-dealers participating in such transactions might fail to meet their obligations.

------

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

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

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

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

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

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

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

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

------

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

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

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

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

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

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

------

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

<u>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.

<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 an interest factor. The gross returns to be exchanged or "swapped" between the parties are generally calculated with respect to a "notional amount," i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate, in a particular foreign currency, or in a "basket" of securities or commodities representing a particular index.

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

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

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

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

------

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

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

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

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

------

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

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

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

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

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

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

• the frequency of trades and quotations,

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

• dealer undertakings to make a market,

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

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

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

------

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

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

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

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

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

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

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

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

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

*(Applicable to all or a portion of the following Funds: Blue Chip Account, Core Plus Bond Account, Diversified International Account, Equity Income Account, Global Emerging Markets Account, LargeCap Growth Account I, MidCap Account, Principal Capital Appreciation Account, Real Estate Securities Account, SAM Balanced Portfolio, SAM Conservative Balanced Portfolio, SAM Conservative Growth Portfolio, SAM Flexible Income Portfolio, and SAM Strategic Growth Portfolio)*

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

------

**Fixed-Income Securities**

<u>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 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.

<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.

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.

<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.

------

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:

• 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.

• 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.

• 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.

• 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.

------

• 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 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.

• 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.

• 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.

• 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.

• 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.

• 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. The United Kingdom (the "UK") departed the EU on January 31, 2020 (commonly referred to as "Brexit"). As a result of Brexit, the UK may be less stable than it had been in prior years, and investments in the UK may be more volatile due to economic uncertainty and currency exchange rate fluctuations. The impact of these actions by European countries, 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.

<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 has experienced earthquakes and tsunamis that have significantly affected important elements of its infrastructure. Due to these events, Japan's financial markets can fluctuate dramatically. The full extent of the impact of earthquakes and tsunamis 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 the rating agencies, that rating will determine the bond's rating; if the bond is rated differently by the rating agencies, the highest rating will be used; and if the bond has not been rated by either of the rating agencies, those selecting such investments will determine the bond's quality. Lower-rated bonds involve a higher degree of credit risk, which is the risk that the issuer will not make interest or principal payments when due. In the event of an unanticipated default, a fund would experience a reduction in its income and could expect a decline in the market value of the bonds so affected. Issuers of high yield securities may be involved in restructurings or bankruptcy proceedings that may not be successful. If an issuer defaults, it may not be able to pay all or a portion of interest and principal owed to the fund, it may exchange the high yield securities owned by the fund for other securities, including equities, and/or the fund may incur additional expenses while seeking recovery of its investment. Some funds may also invest in unrated bonds of foreign and domestic issuers. Unrated bonds, while not necessarily of lower quality than rated bonds, may not have as broad a market. Because of the size and perceived demand of the issue, among other factors, certain municipalities may not incur the expense of obtaining a rating. Those managing the fund's investments will analyze the creditworthiness of the issuer, as well as any financial institution or other party responsible for payments on the bond, in determining whether to purchase unrated bonds. Unrated bonds will be included in the limitation each fund has with regard to high yield bonds unless those managing the fund's investments deem such securities to be the equivalent of investment-grade bonds. Some of the high yield securities consist of Rule 144A securities. High yield securities may contain any type of interest rate payment or reset terms, including fixed rate, adjustable rate, zero coupon, contingent, deferred, payment-in-kind, and those with auction rate features.

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

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

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

**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.

**Investment Company Securities**

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

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

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

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

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

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

------

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

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

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

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

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

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

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

------

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

**Municipal Obligations and AMT-Subject Bonds**

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

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

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

<u>Municipal Bonds</u>

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

<u>Municipal Commercial Paper</u>

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

------

<u>Municipal Notes</u>

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

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

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

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

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

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

<u>Other Municipal Obligations</u>

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

<u>Stand-By Commitments</u>

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

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

------

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

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

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

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

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

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

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

<u>Risks of Municipal Obligations</u>

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

------

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

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

**Pay-in-Kind Securities**

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

**Portfolio Turnover (Active Trading)**

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

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

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

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

The following Funds had significant variation in portfolio turnover rates over the two most recently completed fiscal years:

---

| | | | |
|:---|:---|:---|:---|
| **Account/Portfolio** | **2025<br>Turnover** | **2024<br>Turnover** | **Comments** |
| SAM Balanced | 48.2% | 19.4% | Turnover increased in 2025 due to allocation changes over the year. |
| SAM Conservative Growth | 47.2 | 20.8 | Turnover increased in 2025 due to allocation changes over the year. |
| SAM Strategic Growth | 49.8 | 20.5 | Turnover increased in 2025 due to allocation changes over the year. |
| U.S. LargeCap S&P 500 Index Buffer April | 25.3 | 158.4 | Turnover varies due to cash flow activity. |
| U.S. LargeCap S&P 500 Index Buffer October | 89.5 | 43.9 | Turnover varies due to cash flow activity. |

---

------

**Preferred Securities**

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

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

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

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

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

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

------

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

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

REITs are pooled investment vehicles that invest in income producing real estate, real estate related loans, or other types of real estate interests. U.S. REITs are allowed to eliminate corporate level federal tax so long as they meet certain requirements of the Internal Revenue Code. Foreign REITs ("REIT-like") entities may have similar tax treatment in their respective countries. Equity real estate investment trusts own real estate properties, while mortgage real estate investment trusts make and/or invests in construction, development, and long-term mortgage loans. Their value may be affected by changes in the underlying property of the trusts, the creditworthiness of the issuer, property taxes, interest rates, and tax and regulatory requirements, such as those relating to the environment. Both types of trusts are not diversified, are dependent upon management skill, are subject to heavy cash flow dependency, defaults by borrowers, self-liquidation, and the possibility of failing to qualify for tax-free status of income under the Internal Revenue Code and failing to maintain exemption from the 1940 Act. 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 issued by the same agency and be part of the same program; 3) have a similar original stated maturity; 4) have identical net coupon rates; 5) have similar market yields (and therefore price); and 6) satisfy "good delivery" requirements, meaning that the aggregate principal amounts of the securities delivered and received back must be within 0.01% of the initial amount delivered.

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

**Restricted and Illiquid Securities**

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

Illiquid and restricted securities are priced at fair value as determined in good faith by PGI as the Funds' valuation designee, subject to the Board's oversight. As described above, some of the Funds have adopted investment restrictions that limit investments in illiquid securities.

**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.

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

**Short Sales**

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

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

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

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

SPACs are also subject to the following additional risks:

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

------

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

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

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

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

**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**

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

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

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

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

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

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

------

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

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

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

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

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

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

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

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

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

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

------

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

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

**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 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**

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

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

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

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

------

---

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

---

------

Risk oversight forms part of the Board's general oversight of the Principal Funds. The Board has appointed a Chief Compliance Officer who oversees the implementation and testing of the Funds' compliance program and reports to the Board regarding compliance matters for the Principal Funds and principal service providers. As part of its regular oversight functions, the Board, directly or through a committee, interacts with and reviews reports from, among others, management, sub-advisors, the Chief Compliance Officer, the independent registered public accounting firm, and internal auditors for PGI or its affiliates, as appropriate. The Board, with the assistance of management and PGI, reviews investment policies and risks in connection with its review of Principal Funds performance. In addition, as part of the Board's periodic review of advisory, 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> 

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

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

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

**Frances P. Grieb.** Ms. Grieb has served as an Independent Board Member of the Principal Funds since 2023. Ms. Grieb currently serves as a Director of the National Advisory Board of the College of Business at the University of Nebraska at Omaha. She is a member of the American Institute of Certified Public Accountants and the National Association of Corporate Directors. From 2022 to 2025, she served as a Director of First Interstate BancSystem, Inc. and from 2014 to 2022, she served as a Director of Great Western Bancorp, Inc. Ms. Grieb is a retired partner having served in various leadership roles at Deloitte LLP from 1982 to 2010. Ms. Grieb is a retired Certified Public Accountant. Through her education, employment experience, and experience as a board member, Ms. Grieb is experienced with financial, accounting, investment, and regulatory matters.

------

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

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

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

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

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

<u>Interested Board Members</u>

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

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

------

**Additional Information Regarding Board Members and Officers**

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

---

| | | | | |
|:---|:---|:---|:---|:---|
| **INDEPENDENT BOARD MEMBERS** | **INDEPENDENT BOARD MEMBERS** | **INDEPENDENT BOARD MEMBERS** | **INDEPENDENT BOARD MEMBERS** | **INDEPENDENT BOARD MEMBERS** |
| **Name, Address,<br>and Year of Birth** | **Board Positions Held<br>with Principal Funds**  | **Principal Occupation(s)<br>During Past 5 Years** | **Number of<br>Portfolios<br>Overseen<br>in Fund<br>Complex** | **Other Directorships<br>Held During<br>Past 5 Years** |
| Daniel J. Beckman<br>711 High Street<br>Des Moines, IA 50392<br>1962 | Director, PFI and PVC (since 2026)<br>Trustee, PETF (since 2026) | President, Ameriprise Trust Company<br> (2024-2025);<br>President and Principal Executive<br> Officer, Columbia Funds<br> (2021-2025); <br>Vice President, Columbia Management<br> Investment Advisers, LLC<br> (2015-2025); <br>Vice President - Head of North America<br> Product, Columbia Management<br> Investment Advisers, LLC<br> (2015-2023); <br>President and Principal Executive<br> Officer, Columbia Acorn/Wanger<br> Funds (2021-2025) | 124 | Columbia Funds (170<br> Portfolios) (2021-2025);<br>Ameriprise Trust Company<br> (2016-2025);<br>Columbia Management<br> Investment Distributors, Inc.<br> (2018-2025) |
| Craig Damos<br>711 High Street<br>Des Moines, IA 50392<br>1954 | Lead Independent Board Member<br> (since 2020)<br>Director, PFI and PVC (since 2008)<br>Trustee, PETF (since 2014) | President, C.P. Damos Consulting,<br> LLC (consulting services) | 124 | Principal Real Asset Fund<br> (2019-2024) |
| Katharin S. Dyer<br>711 High Street<br>Des Moines, IA 50392<br>1957 | Director, PFI and PVC (since 2023)<br>Trustee, PETF (since 2023) | Founder and Chief Executive Officer,<br> PivotWise (consulting services) | 124 | Liquidity Services, Inc.<br> (2020-present);<br>Principal Real Asset Fund<br> (2023-2024) |
| Frances P. Grieb<br>711 High Street<br>Des Moines, IA 50392<br>1960 | Director, PFI and PVC (since 2023)<br>Trustee, PETF (since 2023) | Retired | 124 | First Interstate BancSystem,<br> Inc. (2022-2025);<br>Principal Real Asset Fund<br> (2023-2024);<br>Great Western Bancorp, Inc.<br> and Great Western Bank <br> (2014-2022) |
| Victor L. Hymes<br>711 High Street<br>Des Moines, IA 50392<br>1957 | Director, PFI and PVC (since 2020) <br>Trustee, PETF (since 2020) | Founder, CEO, CIO, Legato Capital<br> Management, LLC (investment<br> management company) | 124 | Principal Real Asset Fund <br> (2020-2024) |
| Sharmila C. Kassam<br>711 High Street<br>Des Moines, IA 50392<br>1973 | Director, PFI and PVC (since 2025)<br>Trustee, PETF (since 2025) | Founder and Consultant, Aligned<br> Capital Investing, LLC <br> (consulting services);<br>Vice President and Head of Asset<br> Owner Solutions, Nasdaq, Inc.<br> (financial services) from 2021-2023 | 124 | Calamos Aksia Private <br> Market Funds (2023-2025);<br>Greenbacker Energy <br> (GREC II Fund) (2022-2025);<br>GRIID Infrastructure<br> (2024-2024);<br>Foundation Credit<br> Opportunities (2019-2023) |
| Padelford L. Lattimer<br>711 High Street<br>Des Moines, IA 50392<br>1961 | Director, PFI and PVC (since 2020) <br>Trustee, PETF (since 2020) | Managing Partner, TBA Management<br> Consulting LLC (management<br> consulting and staffing company) | 124 | Principal Real Asset Fund <br> (2020-2024) |
| Karen McMillan<br>711 High Street<br>Des Moines, IA 50392<br>1961 | Director, PFI and PVC (since 2014)<br>Trustee, PETF (since 2014) | Founder/Owner, Tyche Consulting<br> LLC (consulting services) <br> from 2021-2024;<br>Managing Director, Patomak Global<br> Partners, LLC (financial services<br> consulting) from 2014-2021 | 124 | Principal Real Asset Fund <br> (2019-2024) |
| Thomas A. Swank<br>711 High Street<br>Des Moines, IA 50392<br>1960 | Director, PFI and PVC (since 2024)<br>Trustee, PETF (since 2024) | Chief Executive Officer and President,<br> Wellabe (formerly, American<br> Enterprise Group, Inc.) (life and<br> health insurance) from 2015-2023 | 124 | Wellabe (formerly, American<br> Enterprise Group, Inc.)<br> (2015-present); <br>Principal Real Asset Fund (2024) |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **INTERESTED BOARD MEMBERS** | **INTERESTED BOARD MEMBERS** | **INTERESTED BOARD MEMBERS** | **INTERESTED BOARD MEMBERS** | **INTERESTED BOARD MEMBERS** |
| **Name, Address,<br>and Year of Birth** | **Positions Held<br>with Fund Complex** | **Principal Occupation(s)<br>During Past 5 Years** | **Number of<br>Portfolios<br>Overseen<br>in Fund<br>Complex** | **Other<br>Directorships<br>Held During<br>Past 5 Years** |
| Kamal Bhatia<br>711 High Street<br>Des Moines, IA 50392<br>1972 | Director and Chair, PFI and PVC<br> (since 2023)<br>Trustee and Chair, PETF<br> (since 2023)<br>Chief Executive Officer and<br> President (since 2019) | <u>Principal Financial Group\*</u><br>President and Chief Executive Officer –<br>&nbsp;&nbsp;&nbsp;&nbsp;Principal Asset Management<sup>SM</sup> <br>&nbsp;&nbsp;&nbsp;&nbsp;(since 2024)<br>Senior Executive Managing Director - <br>&nbsp;&nbsp;&nbsp;&nbsp;Global Head of Investments – <br>&nbsp;&nbsp;&nbsp;&nbsp;Principal Asset Management<sup>SM</sup> (2023)<br>Senior Executive Director and <br>&nbsp;&nbsp;&nbsp;&nbsp;Chief Operating Officer – <br>&nbsp;&nbsp;&nbsp;&nbsp;Principal Asset Management<sup>SM</sup> <br>&nbsp;&nbsp;&nbsp;&nbsp;(2019-2023) | 124 | Principal Real Asset<br> Fund (2023-2024) |
| Kenneth A. McCullum<br>711 High Street<br>Des Moines, IA 50392<br>1964 | Director, PFI and PVC (since 2023)<br>Trustee, PETF (since 2023) | <u>Principal Financial Group\*</u><br>Executive Vice President and <br>&nbsp;&nbsp;&nbsp;&nbsp;Chief Risk Officer (since 2023)<br>Senior Vice President and Chief Risk Officer<br>&nbsp;&nbsp;&nbsp;&nbsp;(2020-2023) | 124 | Principal Real Asset<br> Fund (2023-2024) |

---

---

| | | |
|:---|:---|:---|
| **PRINCIPAL FUNDS OFFICERS** | **PRINCIPAL FUNDS OFFICERS** | **PRINCIPAL FUNDS OFFICERS** |
| **Name, Address,<br>and Year of Birth** | **Position(s) Held<br>with Principal Funds** | **Principal Occupation(s)** <br>**During Past 5 Years** |
| George Djurasovic<br>711 High Street<br>Des Moines, IA 50392<br>1971 | Vice President and General Counsel <br> (since 2023) | <u>Principal Financial Group\*</u><br>Vice President and General Counsel – Principal Asset <br>&nbsp;&nbsp;&nbsp;&nbsp;Management<sup>SM</sup> (since 2022)<br><u>Artisan Partners Limited Partnership</u><br>Global Chief Compliance Officer (2013-2022) |
| Calvin Eib<br>711 High Street<br>Des Moines, IA 50392<br>1963 | Assistant Tax Counsel (since 2023) | <u>Principal Financial Group</u>\*<br>Assistant General Counsel (since 2025)<br>Counsel (2021-2025) |
| Megan Hoffmann<br>711 High Street<br>Des Moines, IA 50392 <br>1979 | Vice President and Treasurer (since 2025)<br>Vice President and Controller (2021-2025) | <u>Principal Financial Group\*</u><br>Senior Director – Fund Accounting and Administration <br>&nbsp;&nbsp;&nbsp;&nbsp;(since 2025)<br>Senior Director – Fund Administration (2024)<br>Director – Accounting (2020-2024) |
| Laura B. Latham<br>711 High Street<br>Des Moines, IA 50392 <br>1986 | Counsel and Assistant Secretary (since 2023)<br>Assistant Counsel and Assistant Secretary<br> (2018-2023) | <u>Principal Financial Group\*</u><br>Assistant General Counsel (since 2025)<br>Counsel (2018-2025) |
| Ann Meiners<br>711 High Street<br>Des Moines, IA 50392 <br>1977 | Vice President and Assistant Treasurer <br> (since 2025)<br>Vice President and Assistant Controller <br> (2025) | <u>Principal Financial Group\*</u><br>Director – Fund Accounting (since 2024)<br>Assistant Director – Fund Accounting (2017-2024) |
| David P. Michalik<br>711 High Street<br>Des Moines, IA 50392 <br>1991 | Counsel and Assistant Secretary (since 2025) | <u>Principal Financial Group\*</u><br>Counsel (since 2025)<br><u>The Northern Trust Company</u><br>Second Vice President (2019-2025) |
| Diane K. Nelson<br>711 High Street<br>Des Moines, IA 50392<br>1965 | AML Officer (since 2016) | <u>Principal Financial Group\*</u><br>Director – Compliance (since 2024) <br>Chief Compliance Officer/AML Officer (2015-2024) |
| Tara Parks<br>711 High Street<br>Des Moines, IA 50392<br>1983 | Vice President and Assistant Treasurer <br>&nbsp;&nbsp;&nbsp;&nbsp;(since 2025)<br>Vice President and Assistant Controller <br>&nbsp;&nbsp;&nbsp;&nbsp;(2021-2025) | <u>Principal Financial Group\*</u><br>Senior Director – Fund Tax (since 2024)<br>Director – Accounting (2019-2024) |

---

------

---

| | | |
|:---|:---|:---|
| **PRINCIPAL FUNDS OFFICERS** | **PRINCIPAL FUNDS OFFICERS** | **PRINCIPAL FUNDS OFFICERS** |
| **Name, Address,<br>and Year of Birth** | **Position(s) Held<br>with Principal Funds** | **Principal Occupation(s)** <br>**During Past 5 Years** |
| Deanna Y. Pellack<br>711 High Street<br>Des Moines, IA 50392<br>1987 | Counsel and Secretary (since 2024)<br>Counsel and Assistant Secretary (2023-2024)<br>Assistant Counsel and Assistant Secretary<br>&nbsp;&nbsp;&nbsp;&nbsp;(2022-2023) | <u>Principal Financial Group\*</u><br>Assistant General Counsel (since 2026)<br>Counsel (2022-2026)<br><u>The Northern Trust Company</u><br>Vice President (2019-2022) |
| Sara L. Reece<br>711 High Street<br>Des Moines, IA 50392 <br>1975 | Vice President and Chief Operating Officer <br> (since 2021) | <u>Principal Financial Group\*</u><br>Managing Director – Global Head of Fund Services (since 2024)<br>Managing Director – Global Fund Ops (2021-2024) |
| Teri R. Root<br>711 High Street<br>Des Moines, IA 50392<br>1979 | Chief Compliance Officer (since 2018) | <u>Principal Financial Group\*</u><br>Chief Compliance Officer – Funds (since 2018)<br>Vice President (since 2015) |
| Michael Scholten<br>711 High Street<br>Des Moines, IA 50392<br>1979 | Chief Financial Officer (since 2021) | <u>Principal Financial Group\*</u><br>Assistant Vice President and Actuary (since 2021) |
| Adam U. Shaikh<br>711 High Street<br>Des Moines, IA 50392<br>1972 | Vice President and Assistant General Counsel<br>&nbsp;&nbsp;&nbsp;&nbsp;(since 2023)<br>Assistant Secretary (since 2022)<br>Assistant Counsel (2006-2023) | <u>Principal Financial Group\*</u><br>Associate General Counsel (since 2024)<br>Assistant General Counsel (2018-2024) |
| John L. Sullivan<br>711 High Street<br>Des Moines, IA 50392<br>1970 | Counsel and Assistant Secretary (since 2023)<br>Assistant Counsel and Assistant Secretary<br>&nbsp;&nbsp;&nbsp;&nbsp;(2019-2023) | <u>Principal Financial Group\*</u><br>Assistant General Counsel (since 2023)<br>Counsel (2019-2023) |
| Barbara Wenig<br>711 High Street<br>Des Moines, IA 50392<br>1972 | Vice President (since 2024) | <u>Principal Financial Group\*</u><br>Executive Managing Director – Chief Business Officer<br>&nbsp;&nbsp;&nbsp;&nbsp;(since 2025)<br>Executive Managing Director – Global Head of Operations and<br>&nbsp;&nbsp;&nbsp;&nbsp;Services - Principal Asset Management<sup>SM</sup> (2021-2024) |
| Brant K. Wong<br>711 High Street<br>Des Moines, IA 50392<br>1976 | Vice President (since 2025) | <u>Principal Financial Group\*</u><br>Head of Retirement Solutions (since 2025)<br><u>J.P. Morgan Asset Management</u><br>Head of Retirement Platforms and Strategy (2022-2025)<br>Head of Retirement Service, Product and National Accounts <br>&nbsp;&nbsp;&nbsp;&nbsp;(2019-2022) |
| Jared A. Yepsen<br>711 High Street<br>Des Moines, IA 50392<br>1981 | Tax Counsel (since 2025)<br>Assistant Tax Counsel (2017-2025) | <u>Principal Financial Group\*</u><br>Assistant General Counsel (since 2023)<br>Counsel (2015-2023) |

---

\*The reference to Principal Financial Group includes positions held by the Interested Board Members / Principal Funds Officers, including as an officer, employee, and/or director, with affiliates or subsidiaries of Principal Financial Group. The titles set forth in this SAI are each Interested Board Member's / Principal Funds Officer's title with Principal Workforce, LLC, an affiliated entity of PGI that is the payroll employer of the Interested Board Members and Principal Funds Officers.

**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, 2025. 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:

---

| | |
|:---|:---|
| 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 |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Independent Board Members** | **Independent Board Members** | **Independent Board Members** | **Independent Board Members** | **Independent Board Members** | **Independent Board Members** | **Independent Board Members** | **Independent Board Members** | **Independent Board Members** | **Independent Board Members** |
| **Account/Portfolio** | **Beckman**<sup>(1)</sup> | **Damos** | **Dyer** | **Grieb** | **Hymes** | **Kassam**<sup>(2)</sup> | **Lattimer** | **McMillan** | **Swank** |
| Accounts/Portfolios in this SAI | A | A | A | A | A | A | A | A | A |
| **Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Overseen by Director in Family of Investment Companies** | **E** | **E** | **E** | **E** | **E** | **A** | **E** | **E** | **E** |

---

<sup>(1)</sup> Appointment effective March 10, 2026.

<sup>(2)</sup> Appointment effective September 10, 2025.

---

| | | |
|:---|:---|:---|
|  | **Interested Board Members** | **Interested Board Members** |
| **Account/Portfolio** | **Bhatia** | **McCullum** |
| Accounts/Portfolios in this SAI | A | A |
| **Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Overseen by Director in Family of Investment Companies** | **E** | **E** |

---

**Board Member and Officer Compensation**

The Principal Funds do not pay any remuneration to officers or to any Board Members listed above as Interested Board Members. The Board annually considers a proposal to reimburse PGI for certain expenses, including a portion of the compensation of the Chief Compliance Officer ("CCO"). If the proposal is adopted, these amounts are allocated across all Funds and the other PGI-sponsored registered investment companies for which the CCO serves as the Chief Compliance Officer.

Each Independent Board Member received compensation for service as a member of the Boards of all investment companies in the Principal Funds based on a schedule that takes into account an annual retainer amount, the number of meetings attended, and expenses incurred. Board Member compensation and related expenses are allocated to each of the Funds based on the net assets of each relative to combined net assets of the Principal Funds.

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 December 31, 2025. The Principal Funds do not provide retirement benefits or pensions to any of the Board Members.

---

| | | |
|:---|:---|:---|
| **Board Member** | **Funds in this SAI** | **Fund Complex**<sup>(3)</sup> |
| Daniel J. Beckman <sup>(1)</sup> | $0 | $0 |
| Craig Damos | 31745 | 461500 |
| Katharin S. Dyer | 27171 | 395000 |
| Frances P. Grieb | 27555 | 400750 |
| Victor L. Hymes | 28340 | 412000 |
| Sharmila C. Kassam <sup>(2)</sup> | 15087 | 226000 |
| Padelford L. Lattimer | 28202 | 410000 |
| Karen McMillan | 28746 | 417500 |
| Thomas A. Swank | 27417 | 398750 |

---

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

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

<sup>(3)</sup> "Fund Complex" includes the Principal Real Asset Fund and the Principal Private Credit Fund, which are not overseen by the Board Members, and the Board Members do not receive compensation from those Funds.

------

**INVESTMENT ADVISORY AND OTHER SERVICES**

**Investment Advisors**

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

**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 Principal Funds Officers tables in the "Leadership Structure and Board" section.

**Sub-Advisors**

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, which is set forth in greater detail below in the "Sub-Advisory Agreements for the Funds" section.

**Sub-Advisor:**&nbsp;&nbsp;&nbsp;&nbsp;**Los Angeles Capital Management LLC ("Los Angeles Capital")** is a California limited liability company. It is owned by key employees through its parent holding companies, LACM Holdings Inc. and LACM Equity LLC (collectively, the "Parent Company"). Thomas D. Stevens, Chairman, holds a controlling equity interest in the Parent Company.

**Fund(s):&nbsp;&nbsp;&nbsp;&nbsp;**a portion of the assets of LargeCap Growth I

**Sub-Advisor:**&nbsp;&nbsp;&nbsp;&nbsp;**Principal Real Estate Investors, LLC** (doing business as Principal Real Estate) **("Principal-REI")** is an indirect subsidiary of Principal Financial Group, Inc.

**Fund(s):&nbsp;&nbsp;&nbsp;&nbsp;**Real Estate Securities

**Sub-Advisor:**&nbsp;&nbsp;&nbsp;&nbsp;**T. Rowe Price Associates, Inc. ("T. Rowe Price")** is a wholly-owned subsidiary of T. Rowe Price Group, Inc., a financial services holding company.

**Fund(s):&nbsp;&nbsp;&nbsp;&nbsp;**a portion of the assets of LargeCap Growth I

**Sub-Advisor:**&nbsp;&nbsp;&nbsp;&nbsp;**Westfield Capital Management Company, L.P. ("Westfield Capital")** is a privately-held Delaware limited partnership. Westfield Capital is employee owned, led by CEO Will Muggia. Monex Group, Inc. has a non-controlling equity interest in the company.

**Fund(s):&nbsp;&nbsp;&nbsp;&nbsp;**a portion of the assets of LargeCap Growth I

**Codes of Ethics**

The Registrant, PGI, PFD (as defined below), 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 each have 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).

---

| | | | |
|:---|:---|:---|:---|
| | **Net Asset Value of Account** | | **Net Asset Value of Account** |
| **Account/Portfolio** | **Overall Fee** | **Account/Portfolio** | **Overall Fee** |
| Diversified Balanced | 0.05% | Principal LifeTime 2040 | 0.00% |
| Diversified Balanced Adaptive Allocation | 0.12% | Principal LifeTime 2050 | 0.00% |
| Diversified Growth Adaptive Allocation | 0.12% | Principal LifeTime 2060 | 0.00% |
| Diversified Income | 0.05% | U.S. LargeCap S&P 500 Index Buffer January | 0.69% |
| Principal LifeTime Strategic Income | 0.00% | U.S. LargeCap S&P 500 Index Buffer April | 0.69% |
| Principal LifeTime 2020 | 0.00% | U.S. LargeCap S&P 500 Index Buffer July | 0.69% |
| Principal LifeTime 2030 | 0.00% | U.S. LargeCap S&P 500 Index Buffer October | 0.69% |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Net Asset Value of Account** | **Net Asset Value of Account** | **Net Asset Value of Account** | **Net Asset Value of Account** | **Net Asset Value of Account** |
| **Account/Portfolio** | **First<br>$100 million** | **Next<br>$100 million** | **Next<br>$100 million** | **Next<br>$100 million** | **Thereafter** |
| Core Plus Bond | 0.50% | 0.45% | 0.40% | 0.35% | 0.30% |
| Government & High Quality Bond | 0.48% | 0.47% | 0.46% | 0.45% | 0.44% |
| LargeCap Growth I | 0.80% | 0.75% | 0.70% | 0.65% | 0.60% |
| Real Estate Securities | 0.79% | 0.77% | 0.73% | 0.70% | 0.68% |
| SmallCap | 0.85% | 0.80% | 0.75% | 0.70% | 0.65% |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Net Asset Value of Account** | **Net Asset Value of Account** | **Net Asset Value of Account** | **Net Asset Value of Account** | **Net Asset Value of Account** | **Net Asset Value of Account** | **Net Asset Value of Account** |
| **Account/Portfolio** | **First<br>$100 million** | **Next<br>$100 million** | **Next<br>$100 million** | **Next<br>$100 million** | **Next<br>$300 million** | **Next<br>$300 million** | **Over<br>$1 billion** |
| Equity Income | 0.60% | 0.55% | 0.50% | 0.45% | 0.40% | 0.39% | 0.38% |
| MidCap | 0.65% | 0.60% | 0.55% | 0.50% | 0.45% | 0.44% | 0.43% |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Net Asset Value of Account** | **Net Asset Value of Account** | **Net Asset Value of Account** | **Net Asset Value of Account** | **Net Asset Value of Account** |
| **Account/Portfolio** | **First<br>$250 million** | **Next<br>$250 million** | **Next<br>$250 million** | **Next<br>$250 million** | **Thereafter** |
| Diversified International | 0.81% | 0.78% | 0.75% | 0.70% | 0.65% |
| Global Emerging Markets | 1.00% | 0.98% | 0.96% | 0.95% | 0.90% |

---

---

| | | |
|:---|:---|:---|
| | **Net Asset Value of Account** | **Net Asset Value of Account** |
| **Account/Portfolio** | **First<br> $500 million** | **Over<br> $500 million** |
| Blue Chip | 0.60% | 0.55% |
| Principal Capital Appreciation | 0.625% | 0.500% |
| Short-Term Income | 0.40% | 0.39% |

---

---

| | | |
|:---|:---|:---|
| | **Net Asset Value of Account** | **Net Asset Value of Account** |
| **Account/Portfolio** | **First<br>$1 billion** | **Over<br>$1 billion** |
| SAM Balanced\* | 0.25% | 0.20% |
| SAM Conservative Balanced\* | 0.25% | 0.20% |
| SAM Conservative Growth\* | 0.25% | 0.20% |
| SAM Flexible Income\* | 0.25% | 0.20% |
| SAM Strategic Growth\* | 0.25% | 0.20% |

---

\* Breakpoints are based on aggregate SAM Portfolio net assets.

------

---

| | | |
|:---|:---|:---|
| | **Net Asset Value of Account** | **Net Asset Value of Account** |
| **Account/Portfolio** | **First<br>$3 billion** | **Over<br>$3 billion** |
| Diversified Growth | 0.05% | 0.04% |
| LargeCap S&P 500 Index | 0.19% | 0.15% |

---

---

| | | | |
|:---|:---|:---|:---|
| | **Net Asset Value of Account** | **Net Asset Value of Account** | **Net Asset Value of Account** |
| **Account/Portfolio** | **First<br>$3 billion** | **Next<br>$3 billion** | **Over<br>$6 billion** |
| Bond Market Index | 0.14% | 0.12% | 0.10% |

---

<u>Fund Operating Expenses</u>

Except for certain Fund expenses set out below, PGI is responsible for expenses, administrative duties, and services, including the following: expenses incurred in connection with the registration of the Funds and the Funds' shares with the SEC; office space, facilities, and costs of keeping the Funds' books; compensation of all personnel who are officers and all Board Members who are affiliated with PGI; fees for auditors and legal counsel; preparing and printing Fund prospectuses; and administration of shareholder accounts, including issuance, maintenance of the open account system, dividend disbursement, reports to shareholders, and redemptions. However, some or all of these expenses may be assumed by Principal Life, and some or all of the administrative duties and services may be delegated by PGI to Principal Life or an affiliate thereof.

Each Fund pays for certain corporate expenses incurred in its operation. Among such expenses, each Fund pays brokerage commissions on portfolio transactions; transfer taxes and other charges and fees attributable to investment transactions; any other local, state, or federal taxes; fees and expenses of all Board Members who are not affiliated with PGI; interest; and fees for the Funds' custodian.

<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.

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** |
| **Account** | **Class 2** | **Expiration** |
| Blue Chip | 0.90% | 04/30/2027 |
| U.S. LargeCap S&P 500 Index Buffer January | 0.95% | 04/30/2027 |
| U.S. LargeCap S&P 500 Index Buffer April | 0.95% | 04/30/2027 |
| U.S. LargeCap S&P 500 Index Buffer July | 0.95% | 04/30/2027 |
| U.S. LargeCap S&P 500 Index Buffer October | 0.95% | 04/30/2027 |

---

<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** |
| **Account** | **Waiver** | **Expiration** |
| LargeCap Growth I | 0.016% | 4/30/2027 |

---

------

<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 December 31 <br>(amounts in thousands)** | **Management Fees Paid for Periods Ended December 31 <br>(amounts in thousands)** | **Management Fees Paid for Periods Ended December 31 <br>(amounts in thousands)** | **Management Fees Paid for Periods Ended December 31 <br>(amounts in thousands)** | **Management Fees Paid for Periods Ended December 31 <br>(amounts in thousands)** | **Management Fees Paid for Periods Ended December 31 <br>(amounts in thousands)** | **Management Fees Paid for Periods Ended December 31 <br>(amounts in thousands)** |
| **Account/Portfolio** | **2025** |  | **2024** |  | **2023** |  |
| Blue Chip | $154 |  | $125 |  | $72 |  |
| Bond Market Index | 2706 |  | 3283 |  | 3305 |  |
| Core Plus Bond | 1022 |  | 972 |  | 917 |  |
| Diversified Balanced | 278 |  | 348 |  | 372 |  |
| Diversified Balanced Adaptive Allocation | 267 |  | 293 | <sup>(1)</sup> | 267 |  |
| Diversified Growth | 1034 |  | 1420 |  | 1531 |  |
| Diversified Growth Adaptive Allocation | 1776 |  | 1841 | <sup>(1)</sup> | 1565 |  |
| Diversified Income | 97 |  | 118 |  | 126 |  |
| Diversified International | 2153 |  | 2127 |  | 2096 |  |
| Equity Income | 3270 |  | 3290 |  | 3076 |  |
| Global Emerging Markets | 737 |  | 689 |  | 679 |  |
| Government & High Quality Bond | 525 |  | 583 |  | 615 |  |
| LargeCap Growth I | 4159 |  | 4284 |  | 3568 |  |
| LargeCap S&P 500 Index | 4743 |  | 5589 |  | 5355 |  |
| MidCap | 3435 |  | 3441 |  | 3113 |  |
| Principal Capital Appreciation | 1450 |  | 1278 |  | 1045 |  |
| Principal LifeTime 2020 |  |  |  |  |  |  |
| Principal LifeTime 2030 |  |  |  |  |  |  |
| Principal LifeTime 2040 |  |  |  |  |  |  |
| Principal LifeTime 2050 |  |  |  |  |  |  |
| Principal LifeTime 2060 |  |  |  |  |  |  |
| Principal LifeTime Strategic Income |  |  |  |  |  |  |
| Real Estate Securities | 1944 |  | 1212 |  | 1093 |  |
| SAM Balanced | 1302 |  | 1371 |  | 1330 |  |
| SAM Conservative Balanced | 363 |  | 381 |  | 376 |  |
| SAM Conservative Growth | 941 |  | 932 |  | 842 |  |
| SAM Flexible Income | 273 |  | 305 |  | 323 |  |
| SAM Strategic Growth | 1061 |  | 1001 |  | 846 |  |
| Short-Term Income | 516 |  | 552 |  | 549 |  |
| SmallCap | 1388 |  | 1461 |  | 1401 |  |
| U.S. LargeCap S&P 500 Index Buffer January | 348 | <sup>(2)</sup> | 244 |  | 126 |  |
| U.S. LargeCap S&P 500 Index Buffer April | 262 | <sup>(2)</sup> | 380 |  | 184 | <sup>(3)</sup> |
| U.S. LargeCap S&P 500 Index Buffer July | 394 | <sup>(2)</sup> | 366 |  | 363 |  |
| U.S. LargeCap S&P 500 Index Buffer October | 472 | <sup>(2)</sup> | 269 |  | 123 |  |

---

<sup>(1)</sup> Effective May 1, 2024, the Diversified Balanced Volatility Control Account changed its name to Diversified Balanced Adaptive Allocation Account and the Diversified Growth Volatility Control Account changed its name to Diversified Growth Adaptive Allocation Account.

<sup>(2)</sup> Effective May 1, 2025, the U.S. LargeCap Buffer January Account changed its name to U.S. LargeCap S&P 500 Index Buffer January Account; the U.S. LargeCap Buffer April Account changed its name to U.S. LargeCap S&P 500 Index Buffer April Account; the U.S. LargeCap Buffer July Account changed its name to U.S. LargeCap S&P 500 Index Buffer July Account; and the U.S. LargeCap Buffer October Account changed its name to U.S. LargeCap S&P 500 Index Buffer October Account.

<sup>(3)</sup> Period from March 29, 2023, date operations commenced, through December 31, 2023.

------

<u>Management Fees Waived</u>

For the following Funds, PGI waived a portion of the management fee during the periods indicated as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Management Fees Waived for Periods Ended December 31<br>(amounts in thousands)** | **Management Fees Waived for Periods Ended December 31<br>(amounts in thousands)** | **Management Fees Waived for Periods Ended December 31<br>(amounts in thousands)** | **Management Fees Waived for Periods Ended December 31<br>(amounts in thousands)** |
| **Account** | **2025** | **2024** | **2023** |
| LargeCap Growth I | $98 | $101 | $82 |

---

<u>Expenses Reimbursed</u> 

For the following Funds, PGI reimbursed certain expenses during the periods indicated as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Expenses Reimbursed for Periods Ended December 31<br>(amounts in thousands)** | **Expenses Reimbursed for Periods Ended December 31<br>(amounts in thousands)** | **Expenses Reimbursed for Periods Ended December 31<br>(amounts in thousands)** | **Expenses Reimbursed for Periods Ended December 31<br>(amounts in thousands)** | **Expenses Reimbursed for Periods Ended December 31<br>(amounts in thousands)** | **Expenses Reimbursed for Periods Ended December 31<br>(amounts in thousands)** |
| **Account** | **2025** |  | **2024** | **2023** |  |
| Blue Chip | $6 |  | $3 | $13 |  |
| LargeCap Growth I |  |  |  | 11 |  |
| U.S. LargeCap S&P 500 Index Buffer January  | 10 | <sup>(1)</sup> | 8 | 10 |  |
| U.S. LargeCap S&P 500 Index Buffer April | 11 | <sup>(1)</sup> | 6 | 5 | <sup>(2)</sup> |
| U.S. LargeCap S&P 500 Index Buffer July | 10 | <sup>(1)</sup> | 4 | 12 |  |
| U.S. LargeCap S&P 500 Index Buffer October | 9 | <sup>(1)</sup> | 6 | 13 |  |

---

<sup>(1)</sup> Effective May 1, 2025, the U.S. LargeCap Buffer January Account changed its name to U.S. LargeCap S&P 500 Index Buffer January Account; the U.S. LargeCap Buffer April Account changed its name to U.S. LargeCap S&P 500 Index Buffer April Account; the U.S. LargeCap Buffer July Account changed its name to U.S. LargeCap S&P 500 Index Buffer July Account; and the U.S. LargeCap Buffer October Account changed its name to U.S. LargeCap S&P 500 Index Buffer October Account.

<sup>(2)</sup> Period from March 29, 2023, date operations commenced, through December 31, 2023.

**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.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Aggregate Fees Paid to Sub-Advisors (other than Wholly-Owned Sub-Advisors)<br>for Fiscal Years Ended December 31 <br>(dollar amounts in thousands)** | **Aggregate Fees Paid to Sub-Advisors (other than Wholly-Owned Sub-Advisors)<br>for Fiscal Years Ended December 31 <br>(dollar amounts in thousands)** | **Aggregate Fees Paid to Sub-Advisors (other than Wholly-Owned Sub-Advisors)<br>for Fiscal Years Ended December 31 <br>(dollar amounts in thousands)** | **Aggregate Fees Paid to Sub-Advisors (other than Wholly-Owned Sub-Advisors)<br>for Fiscal Years Ended December 31 <br>(dollar amounts in thousands)** | **Aggregate Fees Paid to Sub-Advisors (other than Wholly-Owned Sub-Advisors)<br>for Fiscal Years Ended December 31 <br>(dollar amounts in thousands)** | **Aggregate Fees Paid to Sub-Advisors (other than Wholly-Owned Sub-Advisors)<br>for Fiscal Years Ended December 31 <br>(dollar amounts in thousands)** | **Aggregate Fees Paid to Sub-Advisors (other than Wholly-Owned Sub-Advisors)<br>for Fiscal Years Ended December 31 <br>(dollar amounts in thousands)** |
| **Account** | **2025** | **2025** | **2024** | **2024** | **2023** | **2023** |
|  | **Dollar<br>Amount** | **Percent of Average** <br>**Daily Net Assets** | **Dollar<br>Amount** | **Percent of Average** <br>**Daily Net Assets** | **Dollar<br>Amount** | **Percent of Average** <br>**Daily Net Assets** |
| LargeCap Growth I | $1170 | 0.23% | $1225 | 0.22% | $992 | 0.22% |

---

**Distributor**

Principal Funds Distributor, Inc. ("PFD" or the "Distributor"), a Washington corporation, serves as the distributor for the Funds' Classes 1 and 2 shares on a continuous basis. PFD is a registered broker-dealer under the Securities and Exchange Act of 1934, as amended, and is a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"). PFD is located at 711 High Street, Des Moines, IA 50392.

PFD serves as distributor to the Funds pursuant to a Distribution Agreement (the "Distribution Agreement"), which provides that the Registrant will pay all fees and expenses in connection with (1) the preparation and filing of registration statements; (2) necessary state filings; (3) preparation and distribution of prospectuses and shareholder reports to current shareholders, tax information, notices, proxy statements, and proxies; (4) preparation and distribution of dividend and capital gain payments to shareholders; (5) issuance, transfer, registry, and maintenance of open account charges; and (6) communication with shareholders concerning these items. The Registrant will also pay taxes, including, in the case of redeemed shares, any initial transfer taxes unpaid. PFD will assume responsibility for (or will enter into arrangements providing for the payment of) the expense of printing prospectuses used for the solicitation of new accounts of the Funds. PFD will also pay (or will enter into arrangements providing for the payment of) the expenses of other sales literature for the Funds, as well as other expenses in connection with the sale and offering for sale of Fund shares.

Pursuant to the Distribution Agreement, PFD acts as an agent of the Registrant with respect to sales and repurchases of Fund shares in the various states PFD is qualified as a broker-dealer. PFD accepts orders for Fund shares at net asset value. Other than 12b-1 fees paid to PFD with respect to Class 2 shares, no compensation is paid to PFD.

------

**Rule 12b-1 Fees/Distribution Plans and Agreements**

Class 2 shares of the Funds are subject to a Distribution Plan and Agreement (described below), sometimes referred to as a Rule 12b-1 Plan. Rule 12b-1 permits a fund to pay expenses associated with the distribution of its shares and for providing services to shareholders in accordance with a plan adopted by the Board and approved by its shareholders. Pursuant to such rule, the Board and initial shareholders of Class 2 shares have approved and entered into a Distribution Plan and Agreement (each, a "Plan" and together, the "Plans"). The Registrant believes the Plans will be beneficial as they may position the Funds to be able to build and retain assets, which will, in turn, have a beneficial effect on total expense ratios and provide flexibility in the management of the Funds by reducing the need to liquidate portfolio securities to meet redemptions. The Registrant also believes the Plans will encourage registered representatives to provide ongoing servicing to the shareholders.

In adopting and annually approving continuation of the Plans, the Board (including a majority of the Independent Board Members) determined that there was a reasonable likelihood that the Plans would benefit the Funds and the shareholders of the affected classes. Pursuant to Rule 12b-1, information about revenues and expenses under the Plans is presented to the Board each quarter for its consideration in continuing the Plans. Continuance of the Plans must be approved by the Board, including a majority of the Independent Board Members, annually. The Plans may be amended by a vote of the Board, including a majority of the Independent Board Members, except that the Plans may not be amended to materially increase the amount spent for distribution without majority approval of the shareholders of the affected class. The Plans may be terminated upon a vote of a majority of the Independent Board Members or by vote of a majority of the outstanding voting securities of the affected class.

Payments under the Plans will normally be made for accounts that are closed to new investors.

The Plans provide that each Fund makes payments to the Distributor from assets of the Class 2 shares to compensate the Distributor and other selling dealers, various banks, broker-dealers, and other financial intermediaries, for providing certain distribution services and shareholder services. Such services may include, but are not limited to:

• formulation and implementation of marketing and promotional activities;

• preparation, printing, and distribution of sales literature;

• preparation, printing, and distribution of prospectuses and the Fund reports to other than existing shareholders;

• obtaining such information with respect to marketing and promotional activities as the Distributor deems advisable;

• making payments to dealers and others engaged in the sale of shares or who engage in shareholder support services; and

• 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 of 0.25% of the respective daily net asset value of the assets attributable to the Class 2 shares.

The Distributor may remit on a continuous basis up to 0.25% to its registered representatives and other financial intermediaries as a trail fee in recognition of their services and assistance.

If the Distributor's actual expenses are less than the Rule 12b-1 fee it receives, the Distributor is entitled to retain the full amount of the fees.

For the fiscal year ended December 31, 2025, 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 December 31, 2025, the 12b-1-eligible expenses for each Fund were greater than the amount of the Fund's 12b-1 payments to PFD.

------

---

| | | | |
|:---|:---|:---|:---|
| **Account/Portfolio** | **Paid by Fund to PFD<br>(amount in thousands)** | **Paid by PFD to<br> Financial Intermediaries<br> (amount in thousands)** | **Retained by PFD<br>(amounts in thousands)** |
| Blue Chip | $64 | $59 | $5 |
| Bond Market Index |  |  |  |
| Core Plus Bond |  |  |  |
| Diversified Balanced | 1305 | 1302 | 3 |
| Diversified Balanced Adaptive Allocation | 557 | 557 |  |
| Diversified Growth | 5170 | 5164 | 6 |
| Diversified Growth Adaptive Allocation | 3699 | 3698 | 1 |
| Diversified Income | 487 | 486 | 1 |
| Diversified International |  |  |  |
| Equity Income | 210 | 209 | 1 |
| Global Emerging Markets |  |  |  |
| Government & High Quality Bond |  |  |  |
| LargeCap Growth I |  |  |  |
| LargeCap S&P 500 Index | 180 | 180 |  |
| MidCap | 124 | 124 |  |
| Principal Capital Appreciation | 219 | 219 |  |
| Principal LifeTime 2020 |  |  |  |
| Principal LifeTime 2030 |  |  |  |
| Principal LifeTime 2040 |  |  |  |
| Principal LifeTime 2050 |  |  |  |
| Principal LifeTime 2060 |  |  |  |
| Principal LifeTime Strategic Income |  |  |  |
| Real Estate Securities | 243 | 243 |  |
| SAM Balanced | 372 | 372 |  |
| SAM Conservative Balanced | 83 | 83 |  |
| SAM Conservative Growth | 499 | 499 |  |
| SAM Flexible Income | 78 | 78 |  |
| SAM Strategic Growth | 588 | 588 |  |
| Short-Term Income |  |  |  |
| SmallCap | 24 | 24 |  |
| U.S. LargeCap S&P 500 Index Buffer January | 126 | 126 |  |
| U.S. LargeCap S&P 500 Index Buffer April | 95 | 95 |  |
| U.S. LargeCap S&P 500 Index Buffer July | 143 | 143 |  |
| U.S. LargeCap S&P 500 Index Buffer October | 171 | 171 |  |

---

**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.

**Transfer Agent**

Principal Shareholder Services, Inc. ("PSS") (711 High Street, Des Moines, IA 50392) provides transfer agency services for the Registrant. The Registrant currently pays no fee for the services PSS provides to the Classes 1 and 2 shares pursuant to the Transfer Agency Agreement for Classes 1 and 2 shares.

------

**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 December 31, 2024 is as follows:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Account** | **Gross<br>income<br>(including<br>from cash<br>collateral<br>reinvestment)** | **Fees paid<br>to<br>securities<br>lending<br>agent<br>from a<br>revenue split** | **Fees paid <br>for any<br>cash <br>collateral<br>management<br>service that <br>are not <br>included in <br>revenue split** | **Administrative<br>fees not<br>included in<br>revenue<br>split** | **Indemnification<br>fees not<br>included in<br>revenue split** | **Net<br>rebate<br>paid to<br>borrower** | **Other<br>fees not<br>included in<br>revenue split** | **Aggregate<br>fees/<br>compensation** | **Net<br>income<br>from<br>securities<br>lending** |
| Blue Chip | $355 | $7 | $— | $— | $— | $289 | $— | $295 | $59 |
| Bond <br>Market <br>Index | 237283 | 5753 |  |  |  | 179661 |  | 185414 | 51869 |
| Core Plus <br>Bond | 83903 | 2074 |  |  |  | 63139 |  | 65213 | 18690 |
| Diversified <br>International | 34559 | 583 |  |  |  | 28728 |  | 29311 | 5247 |
| Equity <br>Income | 123122 | 2294 |  |  |  | 100179 |  | 102473 | 20649 |
| Global <br>Emerging <br>Markets  | 5363 | 305 |  |  |  | 2308 |  | 2613 | 2750 |
| Government & High <br>Quality Bond |  |  |  |  |  |  |  |  |  |
| LargeCap <br>Growth I | 3573 | 67 |  |  |  | 2889 |  | 2956 | 617 |
| LargeCap <br>S&P 500 <br>Index | 17533 | 5297 |  |  |  | (35439) |  | (30142) | 47674 |
| MidCap | 82821 | 1657 |  |  |  | 66248 |  | 67905 | 14916 |
| Principal <br>Capital <br>Appreciation |  |  |  |  |  |  |  |  |  |
| Short-Term Income | 44168 | 944 |  |  |  | 34715 |  | 35660 | 8508 |
| SmallCap | 33495 | 2715 |  |  |  | 6339 |  | 9053 | 24442 |

---

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.

**MULTIPLE CLASS STRUCTURE**

The Board has adopted a multiple class plan (the "Multiple Class Plan") pursuant to 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 1 and 2 shares, which are available without any front-end sales charge or contingent deferred sales charge.

------

**INTERMEDIARY COMPENSATION**

As of the date of this SAI, the Distributor anticipates that the firms that will receive additional payments for distribution of the applicable variable annuities and variable life insurance contracts that include shares of the Funds as investment options, or for the distribution of the Funds to retirement plans, or for administrative services (other than Rule 12b-1 fees and the reimbursement of costs, such as those associated with education, training and marketing efforts, conferences, ticket charges, and other general marketing expenses) include, but are not necessarily limited to, the following:

American General Life Insurance Company

Equitable Financial Life Insurance Company

Equitable Financial Life Insurance Company of America

Midland National Life Insurance Company

New York Life Insurance and Annuity Corporation

Principal Life Insurance Company

Principal National Life Insurance Company

The United States Life Insurance Company in the City of New York

Thrivent Financial for Lutherans

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.

See the Distribution Plans and Intermediary Compensation section of the Prospectus for additional information.

**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 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 December 31, 2025 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.

---

| | | |
|:---|:---|:---|
| **Account** | **Amount of Transactions<br>Because of Research Services Provided** | **Related<br>Commissions Paid** |
| Blue Chip | $19861095 | $2700 |
| Diversified International | 134897080 | 75245 |
| Equity Income | 215574277 | 63389 |
| Global Emerging Markets | 38178879 | 22814 |
| LargeCap Growth I | 300227935 | 40525 |
| LargeCap S&P 500 Index | 203647307 | 39540 |
| MidCap | 288312225 | 68363 |
| Principal Capital Appreciation | 190477959 | 43475 |
| Real Estate Securities | 85118017 | 44882 |
| SmallCap | 103313576 | 72188 |

---

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.

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.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Total Brokerage Commissions Paid for Periods Ended December 31** | **Total Brokerage Commissions Paid for Periods Ended December 31** | **Total Brokerage Commissions Paid for Periods Ended December 31** | **Total Brokerage Commissions Paid for Periods Ended December 31** | **Total Brokerage Commissions Paid for Periods Ended December 31** | **Total Brokerage Commissions Paid for Periods Ended December 31** | **Total Brokerage Commissions Paid for Periods Ended December 31** |
| **Account/Portfolio** | **2025** |  | **2024** |  | **2023** |  |
| Blue Chip | $3909 |  | $2618 |  | $1411 |  |
| Bond Market Index | 25700 |  | 20200 |  | 7400 |  |
| Core Plus Bond | 4140 |  |  |  |  |  |
| Diversified Balanced |  |  |  |  |  |  |
| Diversified Balanced Adaptive Allocation | 2487 |  | 5292 | <sup>(1)</sup> | 6982 |  |
| Diversified Growth |  |  |  |  |  |  |
| Diversified Growth Adaptive Allocation | 17190 |  | 39053 | <sup>(1)</sup> | 50588 |  |
| Diversified Income |  |  |  |  |  |  |
| Diversified International | 181565 |  | 145412 |  | 176457 |  |
| Equity Income | 100000 |  | 111769 |  | 107213 |  |
| Global Emerging Markets | 91857 |  | 81247 |  | 52622 |  |
| Government & High Quality Bond |  |  |  |  |  |  |
| LargeCap Growth I | 92698 |  | 76305 |  | 52978 |  |
| LargeCap S&P 500 Index | 101619 |  | 152369 |  | 58610 |  |
| MidCap | 104618 |  | 108765 |  | 74010 |  |
| Principal Capital Appreciation | 76495 |  | 52864 |  | 61002 |  |
| Principal LifeTime 2020 |  |  |  |  |  |  |
| Principal LifeTime 2030 |  |  |  |  |  |  |
| Principal LifeTime 2040 |  |  |  |  |  |  |
| Principal LifeTime 2050 |  |  |  |  |  |  |
| Principal LifeTime 2060 |  |  |  |  |  |  |
| Principal LifeTime Strategic Income |  |  |  |  |  |  |
| Real Estate Securities | 78146 |  | 131892 |  | 38247 |  |
| SAM Balanced | 174720 |  | 3860 |  | 7690 |  |
| SAM Conservative Balanced | 32103 |  | 890 |  | 1622 |  |
| SAM Conservative Growth | 140742 |  | 1520 |  | 4880 |  |
| SAM Flexible Income | 24707 |  | 740 |  | 1520 |  |
| SAM Strategic Growth | 210351 |  | 900 |  | 5620 |  |
| Short-Term Income |  |  |  |  |  |  |
| SmallCap | 132645 |  | 114397 |  | 84807 |  |
| U.S. LargeCap S&P 500 Index Buffer January | 6563 | <sup>(2)</sup> | 9536 |  | 4499 |  |
| U.S. LargeCap S&P 500 Index Buffer April | 1878 | <sup>(2)</sup> | 10799 |  | 8055 | <sup>(3)</sup> |
| U.S. LargeCap S&P 500 Index Buffer July | 8380 | <sup>(2)</sup> | 14793 |  | 10588 |  |
| U.S. LargeCap S&P 500 Index Buffer October | 7720 | <sup>(2)</sup> | 5710 |  | 1587 |  |

---

<sup>(1)</sup> Effective May 1, 2024, the Diversified Balanced Volatility Control Account changed its name to Diversified Balanced Adaptive Allocation Account and the Diversified Growth Volatility Control Account changed its name to Diversified Growth Adaptive Allocation Account.

<sup>(2)</sup> Effective May 1, 2025, the U.S. LargeCap Buffer January Account changed its name to U.S. LargeCap S&P 500 Index Buffer January Account; the U.S. LargeCap Buffer April Account changed its name to U.S. LargeCap S&P 500 Index Buffer April Account; the U.S. LargeCap Buffer July Account changed its name to U.S. LargeCap S&P 500 Index Buffer July Account; and the U.S. LargeCap Buffer October Account changed its name to U.S. LargeCap S&P 500 Index Buffer October Account.

<sup>(3)</sup> Period from March 29, 2023, the date operations commenced, through December 31, 2023.

Primary reasons for changes in brokerage commissions for those Funds with relatively greater variations 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.

None of the Funds paid brokerage commissions to brokers affiliated with PGI or such Fund's sub-advisors for the three most recent fiscal years.

------

The following table indicates the value of each Fund's aggregate holdings of the securities of its regular brokers or dealers for the fiscal year ended December 31, 2025.

---

| | | |
|:---|:---|:---|
| **Holdings of Securities of Principal Variable Contracts Funds, Inc. Regular Brokers and Dealers** | **Holdings of Securities of Principal Variable Contracts Funds, Inc. Regular Brokers and Dealers** | **Holdings of Securities of Principal Variable Contracts Funds, Inc. Regular Brokers and Dealers** |
| **Account** | **Broker or Dealer** | **Holdings<br>(in thousands)** |
| Bond Market Index | Bank of America Corp | $10066 |
|  | Bank of Montreal | 1056 |
|  | Barclays PLC | 2746 |
|  | Citigroup Inc | 6901 |
|  | Goldman Sachs Group Inc/The | 7107 |
|  | JPMorgan Chase & Co | 10812 |
|  | Morgan Stanley | 9507 |
|  | UBS Group AG | 232 |
|  | Wells Fargo & Co | 7037 |
| Core Plus Bond | Bank of America Corp | $1003 |
|  | Barclays PLC | 521 |
|  | Citigroup Inc | 926 |
|  | Goldman Sachs Group Inc/The | 1889 |
|  | Jane Street Group LLC | 1362 |
|  | JPMorgan Chase & Co | 1549 |
|  | Morgan Stanley | 2939 |
|  | UBS Group AG | 439 |
| Equity Income | Bank of America Corp | $17743 |
|  | Citigroup Inc | 5355 |
|  | JPMorgan Chase & Co | 24403 |
|  | Morgan Stanley | 19864 |
| LargeCap Growth I | Bank of America Corp | $64 |
|  | Citigroup Inc | 81 |
|  | Goldman Sachs Group Inc/The | 31 |
| LargeCap S&P 500 Index | Bank of America Corp | $14937 |
|  | Citigroup Inc | 8440 |
|  | Goldman Sachs Group Inc/The | 10658 |
|  | JPMorgan Chase & Co | 35460 |
|  | Morgan Stanley | 8668 |
|  | Wells Fargo & Co | 11827 |
| Principal Capital Appreciation | Bank of America Corp | $1224 |
|  | JPMorgan Chase & Co | 8059 |
|  | Morgan Stanley | 2095 |
| Short-Term Income | Bank of America Corp | $718 |
|  | Bank of Montreal | 599 |
|  | Barclays PLC | 492 |
|  | BNP Paribas SA | 408 |
|  | Citigroup Inc | 1963 |
|  | Goldman Sachs Group Inc/The | 2188 |
|  | JPMorgan Chase & Co | 2128 |
|  | Morgan Stanley | 3012 |
|  | UBS Group AG | 746 |
|  | Wells Fargo & Co | 693 |
| SmallCap | Stifel Financial Corp | $2204 |

---

------

**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:

• 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.

• 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.

• A sub-advisor may determine that the asset class PVC 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 PVC may place with the sub-advisor for management. When a sub-advisor for two or more PVC 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:

• 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.

------

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

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

**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.

**SHAREHOLDER RIGHTS**

Each Fund shareholder is eligible to vote, either in person or by proxy, at all shareholder meetings for that Fund. This includes the right to vote on the election of board members, selection of the independent registered public accounting firm, and other matters submitted to meetings of shareholders of the Fund. Each share has equal rights with every other share of the Fund as to dividends, earnings, voting, assets, and redemption. Shares are fully paid, non-assessable, and have no preemptive or appraisal rights. Shares of a Fund are issued as full or fractional shares. Each fractional share has proportionately the same rights including voting as are provided for a full share. Shareholders of the Fund may remove any board member with or without cause by the vote of a majority of the votes entitled to be cast at a meeting of all Fund shareholders.

A quorum must be present at a meeting of shareholders for business to be transacted. PVC's Bylaws 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 PVC 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.

PVC's Bylaws provide that PVC does not need to hold an annual meeting of shareholders unless required by applicable law, including under the 1940 Act if required for the following actions: election of board members, approval of an investment advisory agreement, ratification of the selection of the independent registered public accounting firm, and approval of the distribution agreement. PVC intends to hold shareholder meetings only when required by law and at such other times when the Board deems it to be appropriate.

See the "Control Persons and Principal Holders of Securities" section below for information regarding Principal Life's process for voting shares attributable to variable products.

Shareholder inquiries should be directed to: Principal Variable Contracts Funds, Inc., 711 High Street, Des Moines, IA 50392.

------

**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 the share price is calculated by:

• taking the current market value of the total assets of the Fund,

• subtracting liabilities of the Fund,

• dividing the remainder proportionately into the classes of the Fund,

• subtracting the liability of each class, and

• 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.

------

**TAX CONSIDERATIONS**

**Qualification as a Regulated Investment Company**

Each Fund intends to qualify annually to be treated as a regulated investment company ("RIC") under the Internal Revenue Code of 1986, as amended (the "IRC"), by satisfying certain requirements prescribed by Subchapter M of the IRC. To qualify as a RIC, a Fund must invest in assets that produce types of income specified in the IRC ("Qualifying Income"). Whether the income from derivatives, swaps, commodity-linked derivatives, and other commodity/natural resource-related securities is Qualifying Income is unclear under current law. Accordingly, a Fund's ability to invest in certain derivatives, swaps, commodity-linked derivatives, and other commodity/natural resource-related securities may be restricted. Further, if a Fund does invest in these types of securities and the income is not determined to be Qualifying Income, it may cause the Fund to fail to qualify as a RIC under the IRC for a given year. In addition, a Fund must satisfy certain diversification tests under the IRC to qualify as a RIC. If a Fund fails to qualify as a RIC, it will be liable for taxes, significantly reducing its distributions to shareholders and eliminating shareholders' ability to treat distributions (as long- or short-term capital gains or qualifying dividends) of the Fund in the manner they were received by the Fund.

**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.

------

**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.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. 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 S&P Global, 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:

---

| | | |
|:---|:---|:---|
| Abel Noser | Eagle | Natixis Investment Managers |
| ACA Compliance Alpha | Eagle Investment Systems Corp. | Nordlogic |
| AcadiaSoft | Electra | Northern Trust |
| Accenture | Electra Information Systems | Northern Trust Integrated Trading Solutions |
| Advent Axys | Everest (Allvue Systems) | Omgeo LLC |
| Advent APX | FactSet | Portfolio BI, Inc. |
| Ashland Partners | FactSet Research Systems Inc. | PORTIA (SS&C Technologies) |
| Askia, LLC | Financial Recovery Technologies (FRT) | Qontigo (Axioma Risk System) |
| Assette | FIS Capital Markets US, LLC | Rimes Technologies Corporation |
| Bank of America | FIS Global Asset Management | Russell Investments Implementation |
| Barra | FIS PTA | &nbsp;&nbsp;&nbsp;&nbsp;Services, LLC |
| BlackRock Aladdin | Generic Network Systems | S&P Global Ratings |
| Bloomberg AIM | Global Trading Analytics | S3 |
| Bloomberg LP | Goldman Sachs | SEI Global Services, Inc. |
| Bloomberg Port | Gresham Technologies | SEI Investments Co |
| Bloomberg Professional Services | ICE Data Pricing & Reference Data | SS&C |
| BNY | ICE Liquidity | SS&C Advent |
| Broadridge Business Process Outsourcing | IHS Markit LTD | SS&C Eze |
| &nbsp;&nbsp;&nbsp;&nbsp;Solutions, LLC | INDATA | SS&C Geneva |
| Broadridge (Proxy Edge) | InvestCloud Inc | SS&C Geneva Managed Services |
| Brown Brothers Harriman | Investment Company Institute (ICI) | SS&C Vision FI |
| Charles River | JP Morgan | StarCompliance Operating, LLC |
| Charles River Development | LexisNexis | State Street Bank & Trust |
| Charles River Investment Management Solutions | LiquidNet | SWIFT |
| Charles River Trading System | Loomis, Sayles & Company, LP | TriOptima |
| Clearwater Analytics | Markit WSO Services | TriOptima AB |
| Confluence Technologies | Microsoft Azure | Virtu Americas LLC |
| Consensys Limited | Morgan Stanley | Virtus Shared Services |
| Corporation Service Company | Morningstar, Inc. | Watson Wheatley |
| DTCC OASYS | MSCI |  |
| Dynamo Software | MSCI ESG Risk Metrics |  |

---

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 B to this SAI. Any material changes to the proxy policies and procedures will be submitted to the Board for approval.

The Funds that operate as funds of funds invest in shares of other Funds and shares of funds of PFI or 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, 2025, is available, without charge, upon request, by calling 1-800-222-5852, sending an email request to prospectus@principalfunds.com, or by accessing the Funds' most recently filed Form N-PX on the Funds website at www.PrincipalAM.com/PVCProspectuses and on the SEC website at www.sec.gov.

**FINANCIAL STATEMENTS**

The financial statements of the Funds at December 31, 2025, are incorporated herein by reference to the Funds' most recent <u>[Annual Report to Shareholders](https://www.sec.gov/ix?doc=/Archives/edgar/data/12601/000001260126000120/primary-document.htm)</u> 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 Principal Funds.

------

**GENERAL INFORMATION**

<u>LargeCap S&P 500 Index, U.S. LargeCap S&P 500 Index Buffer January, U.S. LargeCap S&P 500 Index Buffer April, U.S. LargeCap S&P 500 Index Buffer July, and U.S. LargeCap S&P 500 Index Buffer October Accounts</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 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 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 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 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 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 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 March 31, 2026. 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.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Account/Portfolio Name** | **Percentage<br>of Voting<br>Securities<br>Owned of<br>Each<br>Account** | **Control Person – Name and Address** | **Jurisdiction<br>Under<br>Which the<br>Company is<br>Organized<br>(when control<br>person is a<br>company)** | **Parent of Control<br>Person <br>(when control<br>person is a company)** |
| BLUE CHIP | 88.50% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| BOND MARKET INDEX | 35.45% | DIVERSIFIED GROWTH ACCOUNT | MARYLAND | PRINCIPAL |
|  |  | ATTN MUTUAL FUND ACCOUNTING H221 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| BOND MARKET INDEX | 28.78% | DIVERSIFIED GROWTH ADAPTIVE | MARYLAND | PRINCIPAL |
|  |  | ALLOCATION ACCOUNT |  | FINANCIAL GROUP |
|  |  | ATTN MUTUAL FUND ACCOUNTING H221 |  |  |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| CORE PLUS BOND | 98.10% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| DIVERSIFIED BALANCED | 99.51% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| DIVERSIFIED BALANCED | 100.00% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
| ADAPTIVE ALLOCATION |  | ATTN INDIVIDUAL LIFE ACCOUNTING |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| DIVERSIFIED GROWTH | 99.94% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| DIVERSIFIED GROWTH | 100.00% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
| ADAPTIVE ALLOCATION |  | ATTN INDIVIDUAL LIFE ACCOUNTING |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| DIVERSIFIED INCOME | 99.93% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| DIVERSIFIED INTERNATIONAL | 98.52% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| EQUITY INCOME | 51.28% | PRINCIPAL LIFE INSURANCE CO | IOWA | PRINCIPAL |
|  |  | RIS FIN MGMT B&C T-005-W40 |  | FINANCIAL GROUP |
|  |  | PRINCIPAL FINANCIAL GROUP |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Account/Portfolio Name** | **Percentage<br>of Voting<br>Securities<br>Owned of<br>Each<br>Account** | **Control Person – Name and Address** | **Jurisdiction<br>Under<br>Which the<br>Company is<br>Organized<br>(when control<br>person is a<br>company)** | **Parent of Control<br>Person <br>(when control<br>person is a company)** |
| GLOBAL EMERGING | 100.00% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
| MARKETS |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| GOVERNMENT & HIGH | 82.58% | PRINCIPAL LIFE INSURANCE CO | IOWA | PRINCIPAL |
| QUALITY BOND |  | RIS FIN MGMT B&C T-005-W40 |  | FINANCIAL GROUP |
|  |  | PRINCIPAL FINANCIAL GROUP |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| LARGECAP GROWTH I | 97.95% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| LARGECAP S&P 500 INDEX | 38.24% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| LARGECAP S&P 500 INDEX | 32.44% | DIVERSIFIED GROWTH ACCOUNT | MARYLAND | PRINCIPAL |
|  |  | ATTN MUTUAL FUND ACCOUNTING H221 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| MIDCAP | 93.56% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| PRINCIPAL CAPITAL | 56.77% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
| APPRECIATION |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| PRINCIPAL CAPITAL | 29.45% | THRIVENT FINANCIAL FOR LUTHERANS | WISCONSIN | THRIVENT |
| APPRECIATION |  | 901 MARQUETTE AVE STE 2500 |  | FINANCIAL |
|  |  | MINNEAPOLIS MN 55402-3211 |  |  |
| PRINCIPAL LIFETIME 2020 | 100.00% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| PRINCIPAL LIFETIME 2030 | 100.00% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| PRINCIPAL LIFETIME 2040 | 100.00% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| PRINCIPAL LIFETIME 2050 | 100.00% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| PRINCIPAL LIFETIME 2060 | 100.00% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Account/Portfolio Name** | **Percentage<br>of Voting<br>Securities<br>Owned of<br>Each<br>Account** | **Control Person – Name and Address** | **Jurisdiction<br>Under<br>Which the<br>Company is<br>Organized<br>(when control<br>person is a<br>company)** | **Parent of Control<br>Person <br>(when control<br>person is a company)** |
| PRINCIPAL LIFETIME | 100.00% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
| STRATEGIC INCOME |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| REAL ESTATE SECURITIES | 46.32% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| REAL ESTATE SECURITIES | 44.06% | NYLIAC | NEW YORK | NEW YORK LIFE |
|  |  | ATTN ASHESH UPADHYAY |  | INSURANCE |
|  |  | 30 HUDSON ST |  | COMPANY |
|  |  | JERSEY CITY NJ 07302-4804 |  |  |
| SAM BALANCED | 75.01% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| SAM CONSERVATIVE | 87.02% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
| BALANCED |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| SAM CONSERVATIVE | 51.81% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
| GROWTH |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| SAM CONSERVATIVE | 40.58% | FARMERS NEW WORLD LIFE INS CO | CALIFORNIA | FARMER'S |
| GROWTH |  | ATTN SEGREGATED ASSETS |  | INSURANCE GROUP |
|  |  | 3120 139TH AVE SW SUITE 300 |  |  |
|  |  | BELLEVUE WA 98005 |  |  |
| SAM FLEXIBLE INCOME | 90.81% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| SAM STRATEGIC GROWTH | 52.68% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| SAM STRATEGIC GROWTH | 44.89% | FARMERS NEW WORLD LIFE INS CO | CALIFORNIA | FARMER'S |
|  |  | ATTN SEGREGATED ASSETS |  | INSURANCE GROUP |
|  |  | 3120 139TH AVE SW SUITE 300 |  |  |
|  |  | BELLEVUE WA 98005 |  |  |
| SHORT-TERM INCOME | 98.51% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| SMALLCAP | 95.20% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Account/Portfolio Name** | **Percentage<br>of Voting<br>Securities<br>Owned of<br>Each<br>Account** | **Control Person – Name and Address** | **Jurisdiction<br>Under<br>Which the<br>Company is<br>Organized<br>(when control<br>person is a<br>company)** | **Parent of Control<br>Person <br>(when control<br>person is a company)** |
| US LARGECAP S&P 500 INDEX | 100.00% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
| BUFFER JANUARY |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| US LARGECAP S&P 500 INDEX | 100.00% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
| BUFFER APRIL |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |  |  |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| US LARGECAP S&P 500 INDEX | 100.00% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
| BUFFER JULY |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |
| US LARGECAP S&P 500 INDEX | 100.00% | PRINCIPAL LIFE INSURANCE CO CUST | IOWA | PRINCIPAL |
| BUFFER OCTOBER |  | ATTN IND ACCTNG G-12-S41 |  | FINANCIAL GROUP |
|  |  | 711 HIGH ST |  |  |
|  |  | DES MOINES IA 50392-0001 |  |  |

---

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.

Principal Life votes each Fund's shares allocated to each of its registered separate accounts and attributable to variable annuity contracts or variable life insurance policies participating in the separate accounts. The shares are voted in accordance with instructions received from contract holders, policy owners, participants, and annuitants. Other shares of each Fund held by each separate account, including shares for which no timely voting instructions are received, are voted in proportion to the instructions that are received with respect to contracts or policies participating in that separate account. Principal Life will vote the shares based upon the instructions received from contract owners, regardless of the number of contract owners who provide such instructions. A potential effect of this proportional voting is that a small number of contract owners may determine the outcome of a shareholder vote if only a small number of contract owners provide voting instructions. Shares of each of the Funds held in the general account of Principal Life or in the unregistered separate accounts are voted in proportion to the instructions that are received with respect to contracts and policies participating in its registered and unregistered separate accounts. If Principal Life determines, under applicable law, that a Fund's shares held in one or more separate accounts or in its general account need not be voted according to the instructions that are received, it may vote those Fund shares in its own right. Shares held by retirement plans are voted in accordance with the governing documents of the plans.

------

**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 March 31, 2026. The list is presented in alphabetical order by Fund.

---

| | | |
|:---|:---|:---|
| **Fund/Class** | **Percentage <br>of Ownership** | **Name and Address of Owner** |
| BLUE CHIP, Class 2 | 71.53% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL PIVOT SERIES VARIABLE ANNUITY III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| BLUE CHIP, Class 2 | 11.50% | MIDLAND NATIONAL LIFE |
|  |  | 8300 MILLS CIVIC PKWY |
|  |  | WDM IA 50266-3833 |
| BLUE CHIP, Class 2 | 9.12% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| BOND MARKET INDEX, Class 1 | 35.45% | DIVERSIFIED GROWTH ACCOUNT |
|  |  | ATTN MUTUAL FUND ACCOUNTING H221 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| BOND MARKET INDEX, Class 1 | 28.78% | DIVERSIFIED GROWTH ADAPTIVE |
|  |  | ALLOCATION ACCOUNT |
|  |  | ATTN MUTUAL FUND ACCOUNTING H221 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| BOND MARKET INDEX, Class 1 | 13.82% | DIVERSIFIED BALANCED ACCOUNT |
|  |  | ATTN MUTUAL FUND ACCOUNTING H221 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| BOND MARKET INDEX, Class 1 | 6.53% | DIVERSIFIED INCOME ACCOUNT |
|  |  | ATTN MUTUAL FUND ACCOUNTING H221 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| BOND MARKET INDEX, Class 1 | 6.00% | DIVERSIFIED BALANCED ADAPTIVE |
|  |  | ALLOCATION ACCOUNT |
|  |  | ATTN MUTUAL FUND ACCOUNTING H221 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| CORE PLUS BOND, Class 1 | 27.85% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | VUL |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| CORE PLUS BOND, Class 1 | 10.69% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| CORE PLUS BOND, Class 1 | 10.54% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FLEX VARIABLE ANNUITY |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |

---

------

---

| | | |
|:---|:---|:---|
| **Fund/Class** | **Percentage <br>of Ownership** | **Name and Address of Owner** |
| CORE PLUS BOND, Class 1 | 10.53% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| CORE PLUS BOND, Class 1 | 10.20% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INDIVIDUAL - |
|  |  | EXECUTIVE VARIABLE UNIVERSAL LIFE |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| CORE PLUS BOND, Class 1 | 9.16% | PRINCIPAL NATIONAL LIFE INSURANCE |
|  |  | CO CUST FBO |
|  |  | VARIABLE UNIVERSAL LIFE III |
|  |  | ATTN INDIVIDUAL ACCOUNT |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| CORE PLUS BOND, Class 1 | 5.17% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | PRINFLEX LIFE |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| DIVERSIFIED BALANCED ADAPTIVE ALLOCATION, | 100.00% | PRINCIPAL LIFE INSURANCE CO CUST |
| Class 2 |  | FBO PRINCIPAL LIFETIME INSURANCE SOLUTIONS II |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| DIVERSIFIED BALANCED, Class 1 | 39.88% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INDIVIDUAL - |
|  |  | PRINCIPAL FLEXIBLE VARIABLE |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| DIVERSIFIED BALANCED, Class 1 | 31.54% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INDIVIDUAL - PRINFLEX |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| DIVERSIFIED BALANCED, Class 1 | 6.10% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INDIVIDUAL - FLEXIBLE |
|  |  | VARIABLE LIFE INSURANCE |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| DIVERSIFIED BALANCED, Class 1 | 5.57% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INDIVIDUAL - VARIABLE |
|  |  | UNIVERSAL LIFE ACCUMULATOR II |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| DIVERSIFIED BALANCED, Class 2 | 90.49% | PRINCIPAL LIFE INSURANCE CO CUST. |
|  |  | FBO PRINCIPAL INVESTMENT PLUS |
|  |  | VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |

---

------

---

| | | |
|:---|:---|:---|
| **Fund/Class** | **Percentage <br>of Ownership** | **Name and Address of Owner** |
| DIVERSIFIED BALANCED, Class 2 | 5.97% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL LIFETIME |
|  |  | INSURANCE SOLUTIONS II |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| DIVERSIFIED GROWTH ADAPTIVE ALLOCATION, | 100.00% | PRINCIPAL LIFE INSURANCE CO CUST |
| Class 2 |  | FBO PRINCIPAL LIFETIME |
|  |  | INSURANCE SOLUTIONS II |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| DIVERSIFIED GROWTH, Class 2 | 83.09% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS |
|  |  | VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| DIVERSIFIED GROWTH, Class 2 | 15.64% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL LIFETIME |
|  |  | INSURANCE SOLUTIONS II |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| DIVERSIFIED INCOME, Class 2 | 52.90% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS |
|  |  | VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| DIVERSIFIED INCOME, Class 2 | 45.94% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL LIFETIME INSURANCE SOLUTIONS II |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| DIVERSIFIED INTERNATIONAL, Class 1 | 18.45% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FLEX VARIABLE ANNUITY |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| DIVERSIFIED INTERNATIONAL, Class 1 | 17.39% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | PRINFLEX LIFE |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| DIVERSIFIED INTERNATIONAL, Class 1 | 11.03% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INDIVIDUAL - |
|  |  | EXECUTIVE VARIABLE UNIVERSAL LIFE |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| DIVERSIFIED INTERNATIONAL, Class 1 | 9.87% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |

---

------

---

| | | |
|:---|:---|:---|
| **Fund/Class** | **Percentage <br>of Ownership** | **Name and Address of Owner** |
| DIVERSIFIED INTERNATIONAL, Class 1 | 7.84% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | VUL INCOME |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| DIVERSIFIED INTERNATIONAL, Class 1 | 7.19% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | VUL II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| DIVERSIFIED INTERNATIONAL, Class 1 | 6.92% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| EQUITY INCOME, Class 1 | 18.00% | JP MORGAN CHASE BANK NA FBO: |
|  |  | INTELLIGENT VARIABLE UNIV LIFE |
|  |  | TEACHERS INSURANCE & ANNUITY ASSOC. |
|  |  | SEPARATE ACCOUNT VA-5 |
|  |  | 8500 ANDREW CARNEGIE BLVD |
|  |  | CHARLOTTE NC 28262-8500 |
| EQUITY INCOME, Class 1 | 10.49% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| EQUITY INCOME, Class 1 | 10.17% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FLEX VARIABLE ANNUITY |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| EQUITY INCOME, Class 1 | 9.25% | SAM STRATEGIC GROWTH PORTFOLIO PVC |
|  |  | ATTN MUTUAL FUND ACCOUNTING H221 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| EQUITY INCOME, Class 1 | 7.39% | PRINCIPAL LIFE INSURANCE CO |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | PRINCIPAL FINANCIAL GROUP |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| EQUITY INCOME, Class 1 | 6.47% | PRINCIPAL LIFE INSURANCE CO CUST PRINFLEX LIFE |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| EQUITY INCOME, Class 1 | 6.38% | SAM BALANCED PORTFOLIO PVC |
|  |  | ATTN MUTUAL FUND ACCOUNTING H221 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| EQUITY INCOME, Class 1 | 5.06% | SAM CONS GROWTH PORTFOLIO PVC |
|  |  | ATTN MUTUAL FUND ACCOUNTING H221 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| EQUITY INCOME, Class 2 | 49.43% | THRIVENT FINANCIAL FOR LUTHERANS |
|  |  | 901 MARQUETTE AVE STE 2500 |
|  |  | MINNEAPOLIS MN 55402-3211 |

---

------

---

| | | |
|:---|:---|:---|
| **Fund/Class** | **Percentage <br>of Ownership** | **Name and Address of Owner** |
| EQUITY INCOME, Class 2 | 20.32% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL PIVOT SERIES VARIABLE ANNUITY III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| EQUITY INCOME, Class 2 | 12.36% | FARMERS NEW WORLD LIFE INS CO |
|  |  | ATTN SEGREGATED ASSETS |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| EQUITY INCOME, Class 2 | 6.14% | SUNAMERICA ANNUITY & LIFE ASSURANCE CO |
|  |  | VARIABLE SEPARATE ACCOUNT |
|  |  | ATTN LEGAL DEPARTMENT |
|  |  | 21650 OXNARD STREET STE 750 |
|  |  | WOODLAND HILLS CA 91367-4997 |
| EQUITY INCOME, Class 2 | 5.12% | FARMERS NEW WORLD LIFE INS CO |
|  |  | ATTN SEGREGATED ASSETS |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| GLOBAL EMERGING MARKETS, Class 1 | 15.65% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| GLOBAL EMERGING MARKETS, Class 1 | 14.35% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| GLOBAL EMERGING MARKETS, Class 1 | 13.42% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FLEX VARIABLE ANNUITY |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| GLOBAL EMERGING MARKETS, Class 1 | 11.56% | PRINCIPAL LIFE INSURANCE CO CUST VUL INCOME |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| GLOBAL EMERGING MARKETS, Class 1 | 8.85% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INDIVIDUAL - |
|  |  | EXECUTIVE VARIABLE UNIVERSAL LIFE |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| GLOBAL EMERGING MARKETS, Class 1 | 6.81% | PRINCIPAL LIFE INSURANCE CO CUST - VUL II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| GLOBAL EMERGING MARKETS, Class 1 | 6.67% | PRINCIPAL LIFE INSURANCE CO CUST PRINFLEX LIFE |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| GLOBAL EMERGING MARKETS, Class 1 | 6.24% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | VARIABLE UNIVERSAL LIFE INCOME II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |

---

------

---

| | | |
|:---|:---|:---|
| **Fund/Class** | **Percentage <br>of Ownership** | **Name and Address of Owner** |
| GLOBAL EMERGING MARKETS, Class 1 | 5.96% | PRINCIPAL NATIONAL LIFE INS CO |
|  |  | FBO VUL INCOME III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST G-012-S41 |
|  |  | DES MOINES IA 50392-9992 |
| GOVERNMENT & HIGH QUALITY BOND, Class 1 | 17.74% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FLEX VARIABLE ANNUITY |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| GOVERNMENT & HIGH QUALITY BOND, Class 1 | 12.91% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| GOVERNMENT & HIGH QUALITY BOND, Class 1 | 12.36% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INDIVIDUAL - |
|  |  | EXECUTIVE VARIABLE UNIVERSAL LIFE |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| GOVERNMENT & HIGH QUALITY BOND, Class 1 | 9.20% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| GOVERNMENT & HIGH QUALITY BOND, Class 1 | 6.91% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | PRINFLEX LIFE |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| GOVERNMENT & HIGH QUALITY BOND, Class 1 | 6.34% | SAM BALANCED PORTFOLIO PVC |
|  |  | ATTN MUTUAL FUND ACCOUNTING H221 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| LARGECAP GROWTH I, Class 1 | 25.36% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | PRINFLEX LIFE |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| LARGECAP GROWTH I, Class 1 | 18.12% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| LARGECAP GROWTH I, Class 1 | 18.03% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FLEX VARIABLE ANNUITY |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| LARGECAP GROWTH I, Class 1 | 9.31% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INDIVIDUAL - |
|  |  | EXECUTIVE VARIABLE UNIVERSAL LIFE |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |

---

------

---

| | | |
|:---|:---|:---|
| **Fund/Class** | **Percentage <br>of Ownership** | **Name and Address of Owner** |
| LARGECAP GROWTH I, Class 1 | 6.42% | PRINCIPAL NATIONAL LIFE INSURANCE |
|  |  | CO CUST FBO |
|  |  | VARIABLE UNIVERSAL LIFE III |
|  |  | ATTN INDIVIDUAL ACCOUNT |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| LARGECAP S&P 500 INDEX, Class 1 | 33.45% | DIVERSIFIED GROWTH ACCOUNT |
|  |  | ATTN MUTUAL FUND ACCOUNTING H221 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| LARGECAP S&P 500 INDEX, Class 1 | 17.21% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| LARGECAP S&P 500 INDEX, Class 1 | 15.10% | DIVERSIFIED GROWTH ADAPTIVE |
|  |  | ALLOCATION ACCOUNT |
|  |  | ATTN MUTUAL FUND ACCOUNTING H221 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| LARGECAP S&P 500 INDEX, Class 1 | 7.62% | PRINCIPAL NATIONAL LIFE INSURANCE |
|  |  | CO CUST FBO |
|  |  | VARIABLE UNIVERSAL LIFE III |
|  |  | ATTN INDIVIDUAL ACCOUNT |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| LARGECAP S&P 500 INDEX, Class 1 | 7.10% | DIVERSIFIED BALANCED ACCOUNT |
|  |  | ATTN MUTUAL FUND ACCOUNTING H221 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| LARGECAP S&P 500 INDEX, Class 2 | 92.28% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL PIVOT SERIES VARIABLE ANNUITY III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| LARGECAP S&P 500 INDEX, Class 2 | 6.79% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL PIVOT SERIES VARIABLE ANNUITY V2 |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| MIDCAP, Class 1 | 30.28% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FLEX VARIABLE ANNUITY |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| MIDCAP, Class 1 | 18.83% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | PRINFLEX LIFE |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| MIDCAP, Class 1 | 11.36% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS |
|  |  | VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |

---

------

---

| | | |
|:---|:---|:---|
| **Fund/Class** | **Percentage <br>of Ownership** | **Name and Address of Owner** |
| MIDCAP, Class 1 | 5.49% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | VUL II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| MIDCAP, Class 2 | 50.14% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL PIVOT SERIES |
|  |  | VARIABLE ANNUITY III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| MIDCAP, Class 2 | 36.23% | FARMERS NEW WORLD LIFE INS CO |
|  |  | ATTN SEGREGATED ASSETS |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| MIDCAP, Class 2 | 7.90% | FARMERS NEW WORLD LIFE INS CO |
|  |  | ATTN SEGREGATED ASSETS |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| PRINCIPAL CAPITAL APPRECIATION, Class 1 | 26.69% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS |
|  |  | VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL CAPITAL APPRECIATION, Class 1 | 19.69% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FLEX VARIABLE ANNUITY |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL CAPITAL APPRECIATION, Class 1 | 8.71% | SUNAMERICA ANNUITY & LIFE ASSURANCE CO |
|  |  | VARIABLE SEPARATE ACCOUNT |
|  |  | ATTN LEGAL DEPARTMENT |
|  |  | 21650 OXNARD STREET STE 750 |
|  |  | WOODLAND HILLS CA 91367-4997 |
| PRINCIPAL CAPITAL APPRECIATION, Class 1 | 7.71% | AMERICAN GENERAL LIFE INSURANCE CO |
|  |  | VARIABLE PRODUCTS DEPARTMENT |
|  |  | ATTN: DEBORAH KERAI |
|  |  | PO BOX 1591 |
|  |  | HOUSTON TX 77251-1591 |
| PRINCIPAL CAPITAL APPRECIATION, Class 1 | 7.61% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL CAPITAL APPRECIATION, Class 1 | 5.74% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | VUL II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL CAPITAL APPRECIATION, Class 2 | 72.05% | THRIVENT FINANCIAL FOR LUTHERANS |
|  |  | 901 MARQUETTE AVE STE 2500 |
|  |  | MINNEAPOLIS MN 55402-3211 |

---

------

---

| | | |
|:---|:---|:---|
| **Fund/Class** | **Percentage <br>of Ownership** | **Name and Address of Owner** |
| PRINCIPAL CAPITAL APPRECIATION, Class 2 | 17.02% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL PIVOT SERIES VARIABLE ANNUITY III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2020, Class 1 | 31.91% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2020, Class 1 | 24.90% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2020, Class 1 | 13.31% | PRINCIPAL NATIONAL LIFE INSURANCE |
|  |  | CO CUST FBO VARIABLE UNIVERSAL LIFE III |
|  |  | ATTN INDIVIDUAL ACCOUNT |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2020, Class 1 | 13.06% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INDIVIDUAL - |
|  |  | EXECUTIVE VARIABLE UNIVERSAL LIFE |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2030, Class 1 | 38.74% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2030, Class 1 | 21.21% | PRINCIPAL NATIONAL LIFE INSURANCE |
|  |  | CO CUST FBO VARIABLE UNIVERSAL LIFE III |
|  |  | ATTN INDIVIDUAL ACCOUNT |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2030, Class 1 | 11.42% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INDIVIDUAL - |
|  |  | EXECUTIVE VARIABLE UNIVERSAL LIFE |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2030, Class 1 | 7.27% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2030, Class 1 | 7.25% | PRINCIPAL NATIONAL LIFE INSURANCE |
|  |  | CO CUST FBO PRIVATE PLACEMENT VUL |
|  |  | ATTN INDIVIDUAL ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |

---

------

---

| | | |
|:---|:---|:---|
| **Fund/Class** | **Percentage <br>of Ownership** | **Name and Address of Owner** |
| PRINCIPAL LIFETIME 2040, Class 1 | 37.35% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2040, Class 1 | 21.32% | PRINCIPAL NATIONAL LIFE INSURANCE |
|  |  | CO CUST FBO VARIABLE UNIVERSAL LIFE III |
|  |  | ATTN INDIVIDUAL ACCOUNT |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2040, Class 1 | 12.75% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INDIVIDUAL - |
|  |  | EXECUTIVE VARIABLE UNIVERSAL LIFE |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2040, Class 1 | 9.18% | PRINCIPAL NATIONAL LIFE INSURANCE |
|  |  | CO CUST FBO PRIVATE PLACEMENT VUL |
|  |  | ATTN INDIVIDUAL ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2050, Class 1 | 28.89% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2050, Class 1 | 26.01% | PRINCIPAL NATIONAL LIFE INSURANCE |
|  |  | CO CUST FBO VARIABLE UNIVERSAL LIFE III |
|  |  | ATTN INDIVIDUAL ACCOUNT |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2050, Class 1 | 12.32% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INDIVIDUAL - |
|  |  | EXECUTIVE VARIABLE UNIVERSAL LIFE |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2050, Class 1 | 8.10% | PRINCIPAL LIFE INSURANCE CO CUST VUL INCOME |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2050, Class 1 | 5.67% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2060, Class 1 | 34.69% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2060, Class 1 | 31.95% | PRINCIPAL NATIONAL LIFE INSURANCE |
|  |  | CO CUST FBO VARIABLE UNIVERSAL LIFE III |
|  |  | ATTN INDIVIDUAL ACCOUNT |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |

---

------

---

| | | |
|:---|:---|:---|
| **Fund/Class** | **Percentage <br>of Ownership** | **Name and Address of Owner** |
| PRINCIPAL LIFETIME 2060, Class 1 | 10.69% | PRINCIPAL NATIONAL LIFE INS CO |
|  |  | FBO VUL INCOME III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST G-012-S41 |
|  |  | DES MOINES IA 50392-9992 |
| PRINCIPAL LIFETIME 2060, Class 1 | 9.13% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INDIVIDUAL - |
|  |  | EXECUTIVE VARIABLE UNIVERSAL LIFE |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME 2060, Class 1 | 5.01% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INDIVIDUAL - PRIVATE PLACEMENT VUL |
|  |  | ATTN INDIVIDUAL ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME STRATEGIC INCOME, Class 1 | 44.69% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME STRATEGIC INCOME, Class 1 | 15.72% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME STRATEGIC INCOME, Class 1 | 15.12% | PRINCIPAL NATIONAL LIFE INSURANCE |
|  |  | CO CUST FBO VARIABLE UNIVERSAL LIFE III |
|  |  | ATTN INDIVIDUAL ACCOUNT |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| PRINCIPAL LIFETIME STRATEGIC INCOME, Class 1 | 13.92% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INDIVIDUAL - |
|  |  | EXECUTIVE VARIABLE UNIVERSAL LIFE |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| REAL ESTATE SECURITIES, Class 1 | 17.14% | NYLIAC |
|  |  | ATTN ASHESH UPADHYAY |
|  |  | 30 HUDSON ST |
|  |  | JERSEY CITY NJ 07302-4804 |
| REAL ESTATE SECURITIES, Class 1 | 11.04% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FLEX VARIABLE ANNUITY |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| REAL ESTATE SECURITIES, Class 1 | 10.51% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| REAL ESTATE SECURITIES, Class 1 | 8.07% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |

---

------

---

| | | |
|:---|:---|:---|
| **Fund/Class** | **Percentage <br>of Ownership** | **Name and Address of Owner** |
| REAL ESTATE SECURITIES, Class 1 | 7.45% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INDIVIDUAL - |
|  |  | EXECUTIVE VARIABLE UNIVERSAL LIFE |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| REAL ESTATE SECURITIES, Class 1 | 6.52% | SAM BALANCED PORTFOLIO PVC |
|  |  | ATTN MUTUAL FUND ACCOUNTING H221 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| REAL ESTATE SECURITIES, Class 1 | 5.19% | PRINCIPAL NATIONAL LIFE INSURANCE |
|  |  | CO CUST FBO VARIABLE UNIVERSAL LIFE III |
|  |  | ATTN INDIVIDUAL ACCOUNT |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| REAL ESTATE SECURITIES, Class 1 | 5.04% | PRINCIPAL LIFE INSURANCE CO CUST PRINFLEX LIFE |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| REAL ESTATE SECURITIES, Class 1 | 5.01% | SAM CONS GROWTH PORTFOLIO PVC |
|  |  | ATTN MUTUAL FUND ACCOUNTING H221 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| REAL ESTATE SECURITIES, Class 2 | 91.07% | NYLIAC |
|  |  | ATTN ASHESH UPADHYAY |
|  |  | 30 HUDSON ST |
|  |  | JERSEY CITY NJ 07302-4804 |
| REAL ESTATE SECURITIES, Class 2 | 7.50% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL PIVOT SERIES VARIABLE ANNUITY III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM BALANCED, Class 1 | 47.60% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM BALANCED, Class 1 | 7.53% | PRINCIPAL NATIONAL LIFE INS CO FBO VUL INCOME III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST G-012-S41 |
|  |  | DES MOINES IA 50392-9992 |
| SAM BALANCED, Class 1 | 7.35% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FLEX VARIABLE ANNUITY |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM BALANCED, Class 1 | 7.04% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | VARIABLE UNIVERSAL LIFE INCOME II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM BALANCED, Class 1 | 6.28% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |

---

------

---

| | | |
|:---|:---|:---|
| **Fund/Class** | **Percentage <br>of Ownership** | **Name and Address of Owner** |
| SAM BALANCED, Class 1 | 5.20% | SUNAMERICA ANNUITY & LIFE ASSURANCE CO |
|  |  | VARIABLE SEPARATE ACCOUNT |
|  |  | ATTN LEGAL DEPARTMENT |
|  |  | 21650 OXNARD STREET STE 750 |
|  |  | WOODLAND HILLS CA 91367-4997 |
| SAM BALANCED, Class 2 | 34.71% | FARMERS NEW WORLD LIFE INS CO |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| SAM BALANCED, Class 2 | 22.34% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL PIVOT SERIES VARIABLE ANNUITY III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM BALANCED, Class 2 | 12.53% | FARMERS NEW WORLD LIFE INS CO |
|  |  | ATTN SEGREGATED ASSETS |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| SAM BALANCED, Class 2 | 11.42% | FARMERS NEW WORLD LIFE INS CO |
|  |  | ATTN SEGREGATED ASSETS |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| SAM BALANCED, Class 2 | 10.33% | SUNAMERICA ANNUITY & LIFE ASSURANCE CO |
|  |  | VARIABLE SEPARATE ACCOUNT |
|  |  | ATTN LEGAL DEPARTMENT |
|  |  | 21650 OXNARD STREET STE 750 |
|  |  | WOODLAND HILLS CA 91367-4997 |
| SAM CONSERVATIVE BALANCED, Class 1 | 37.01% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM CONSERVATIVE BALANCED, Class 1 | 32.20% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM CONSERVATIVE BALANCED, Class 1 | 5.75% | PRINCIPAL NATIONAL LIFE INS CO |
|  |  | FBO VUL INCOME III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST G-012-S41 |
|  |  | DES MOINES IA 50392-9992 |
| SAM CONSERVATIVE BALANCED, Class 1 | 5.53% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FLEX VARIABLE ANNUITY |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM CONSERVATIVE BALANCED, Class 1 | 5.41% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | VARIABLE UNIVERSAL LIFE INCOME II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM CONSERVATIVE BALANCED, Class 2 | 43.85% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL PIVOT SERIES VARIABLE ANNUITY III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |

---

------

---

| | | |
|:---|:---|:---|
| **Fund/Class** | **Percentage <br>of Ownership** | **Name and Address of Owner** |
| SAM CONSERVATIVE BALANCED, Class 2 | 28.06% | FARMERS NEW WORLD LIFE INS CO |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| SAM CONSERVATIVE BALANCED, Class 2 | 10.74% | FARMERS NEW WORLD LIFE INS CO |
|  |  | ATTN SEGREGATED ASSETS |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| SAM CONSERVATIVE BALANCED, Class 2 | 8.17% | FARMERS NEW WORLD LIFE INS CO |
|  |  | ATTN SEGREGATED ASSETS |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| SAM CONSERVATIVE GROWTH, Class 1 | 20.86% | PRINCIPAL NATIONAL LIFE INS CO |
|  |  | FBO VUL INCOME III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST G-012-S41 |
|  |  | DES MOINES IA 50392-9992 |
| SAM CONSERVATIVE GROWTH, Class 1 | 18.25% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM CONSERVATIVE GROWTH, Class 1 | 13.47% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | VARIABLE UNIVERSAL LIFE INCOME II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM CONSERVATIVE GROWTH, Class 1 | 10.76% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM CONSERVATIVE GROWTH, Class 1 | 6.39% | PRINCIPAL LIFE INSURANCE CO CUST VUL INCOME |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM CONSERVATIVE GROWTH, Class 1 | 6.37% | AMERICAN GENERAL LIFE INSURANCE CO |
|  |  | VARIABLE PRODUCTS DEPARTMENT |
|  |  | ATTN: DEBORAH KERAI |
|  |  | PO BOX 1591 |
|  |  | HOUSTON TX 77251-1591 |
| SAM CONSERVATIVE GROWTH, Class 1 | 5.22% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | PRINFLEX LIFE |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM CONSERVATIVE GROWTH, Class 2 | 41.82% | FARMERS NEW WORLD LIFE INS CO |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| SAM CONSERVATIVE GROWTH, Class 2 | 27.44% | FARMERS NEW WORLD LIFE INS CO |
|  |  | ATTN SEGREGATED ASSETS |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| SAM CONSERVATIVE GROWTH, Class 2 | 10.69% | FARMERS NEW WORLD LIFE INS CO |
|  |  | ATTN SEGREGATED ASSETS |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |

---

------

---

| | | |
|:---|:---|:---|
| **Fund/Class** | **Percentage <br>of Ownership** | **Name and Address of Owner** |
| SAM CONSERVATIVE GROWTH, Class 2 | 9.70% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL PIVOT SERIES VARIABLE ANNUITY III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM FLEXIBLE INCOME, Class 1 | 43.45% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM FLEXIBLE INCOME, Class 1 | 18.24% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM FLEXIBLE INCOME, Class 1 | 12.70% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FLEX VARIABLE ANNUITY |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM FLEXIBLE INCOME, Class 1 | 5.52% | PRINCIPAL NATIONAL LIFE INS CO |
|  |  | FBO VUL INCOME III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST G-012-S41 |
|  |  | DES MOINES IA 50392-9992 |
| SAM FLEXIBLE INCOME, Class 2 | 60.39% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL PIVOT SERIES VARIABLE ANNUITY III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM FLEXIBLE INCOME, Class 2 | 10.89% | FARMERS NEW WORLD LIFE INS CO |
|  |  | ATTN SEGREGATED ASSETS |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| SAM FLEXIBLE INCOME, Class 2 | 6.70% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL PIVOT SERIES VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM FLEXIBLE INCOME, Class 2 | 6.42% | SUNAMERICA ANNUITY & LIFE ASSURANCE CO |
|  |  | VARIABLE SEPARATE ACCOUNT |
|  |  | ATTN LEGAL DEPARTMENT |
|  |  | 21650 OXNARD STREET STE 750 |
|  |  | WOODLAND HILLS CA 91367-4997 |
| SAM FLEXIBLE INCOME, Class 2 | 6.38% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL PIVOT SERIES VARIABLE ANNUITY V2 |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM FLEXIBLE INCOME, Class 2 | 5.41% | FARMERS NEW WORLD LIFE INS CO |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| SAM STRATEGIC GROWTH, Class 1 | 33.01% | PRINCIPAL NATIONAL LIFE INS CO FBO VUL INCOME III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST G-012-S41 |
|  |  | DES MOINES IA 50392-9992 |

---

------

---

| | | |
|:---|:---|:---|
| **Fund/Class** | **Percentage <br>of Ownership** | **Name and Address of Owner** |
| SAM STRATEGIC GROWTH, Class 1 | 14.07% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | VARIABLE UNIVERSAL LIFE INCOME II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM STRATEGIC GROWTH, Class 1 | 10.34% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM STRATEGIC GROWTH, Class 1 | 8.08% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM STRATEGIC GROWTH, Class 1 | 7.82% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | VUL INCOME |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM STRATEGIC GROWTH, Class 2 | 46.58% | FARMERS NEW WORLD LIFE INS CO |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| SAM STRATEGIC GROWTH, Class 2 | 29.89% | FARMERS NEW WORLD LIFE INS CO |
|  |  | ATTN SEGREGATED ASSETS |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| SAM STRATEGIC GROWTH, Class 2 | 10.30% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL PIVOT SERIES VARIABLE ANNUITY III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SAM STRATEGIC GROWTH, Class 2 | 6.96% | FARMERS NEW WORLD LIFE INS CO |
|  |  | ATTN SEGREGATED ASSETS |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| SHORT-TERM INCOME, Class 1 | 36.65% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SHORT-TERM INCOME, Class 1 | 19.20% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SHORT-TERM INCOME, Class 1 | 8.79% | PRINCIPAL NATIONAL LIFE INSURANCE |
|  |  | CO CUST FBO VARIABLE UNIVERSAL LIFE III |
|  |  | ATTN INDIVIDUAL ACCOUNT |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SHORT-TERM INCOME, Class 1 | 7.37% | PRINCIPAL LIFE INSURANCE CO CUST - VUL |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |

---

------

---

| | | |
|:---|:---|:---|
| **Fund/Class** | **Percentage <br>of Ownership** | **Name and Address of Owner** |
| SHORT-TERM INCOME, Class 1 | 6.90% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INDIVIDUAL - |
|  |  | EXECUTIVE VARIABLE UNIVERSAL LIFE |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SMALLCAP, Class 1 | 21.53% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FLEX VARIABLE ANNUITY |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SMALLCAP, Class 1 | 21.02% | PRINCIPAL LIFE INSURANCE CO CUST PRINFLEX LIFE |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SMALLCAP, Class 1 | 12.70% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SMALLCAP, Class 1 | 6.57% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | EXEC VAR UNIVERSAL LIFE II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SMALLCAP, Class 1 | 6.50% | PRINCIPAL LIFE INSURANCE CO CUST FBO PRINCIPAL |
|  |  | INDIVIDUAL - EXECUTIVE VARIABLE UNIVERSAL LIFE |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SMALLCAP, Class 1 | 5.45% | PRINCIPAL LIFE INSURANCE CO CUST VUL INCOME |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SMALLCAP, Class 1 | 5.15% | PRINCIPAL LIFE INSURANCE CO CUST VUL II |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SMALLCAP, Class 2 | 46.46% | PRINCIPAL LIFE INSURANCE CO CUST |
|  |  | FBO PRINCIPAL PIVOT SERIES VARIABLE ANNUITY III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| SMALLCAP, Class 2 | 27.79% | FARMERS NEW WORLD LIFE INS CO |
|  |  | ATTN SEGREGATED ASSETS |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| SMALLCAP, Class 2 | 16.34% | FARMERS NEW WORLD LIFE INS CO |
|  |  | ATTN SEGREGATED ASSETS |
|  |  | 3120 139TH AVE SW SUITE 300 |
|  |  | BELLEVUE WA 98005 |
| US LARGECAP S&P 500 INDEX BUFFER APRIL, | 60.78% | PRINCIPAL LIFE INSURANCE CO CUST |
| Class 2 |  | FBO PRINCIPAL PIVOT SERIES VARIABLE ANNUITY III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |

---

------

---

| | | |
|:---|:---|:---|
| **Fund/Class** | **Percentage <br>of Ownership** | **Name and Address of Owner** |
| US LARGECAP S&P 500 INDEX BUFFER APRIL, | 31.84% | PRINCIPAL LIFE INSURANCE CO CUST |
| Class 2 |  | FBO PRINCIPAL LIFETIME INSURANCE SOLUTIONS II |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| US LARGECAP S&P 500 INDEX BUFFER JANUARY, | 85.91% | PRINCIPAL LIFE INSURANCE CO CUST |
| Class 2 |  | FBO PRINCIPAL PIVOT SERIES |
|  |  | VARIABLE ANNUITY III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| US LARGECAP S&P 500 INDEX BUFFER JANUARY, | 8.50% | PRINCIPAL LIFE INSURANCE CO CUST |
| Class 2 |  | FBO PRINCIPAL LIFETIME |
|  |  | INSURANCE SOLUTIONS II |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| US LARGECAP S&P 500 INDEX BUFFER JULY, | 59.87% | PRINCIPAL LIFE INSURANCE CO CUST |
| Class 2 |  | FBO PRINCIPAL PIVOT SERIES |
|  |  | VARIABLE ANNUITY III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| US LARGECAP S&P 500 INDEX BUFFER JULY, | 33.73% | PRINCIPAL LIFE INSURANCE CO CUST |
| Class 2 |  | FBO PRINCIPAL LIFETIME INSURANCE SOLUTIONS II |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| US LARGECAP S&P 500 INDEX BUFFER OCTOBER, | 60.11% | PRINCIPAL LIFE INSURANCE CO CUST |
| Class 2 |  | FBO PRINCIPAL PIVOT SERIES |
|  |  | VARIABLE ANNUITY III |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| US LARGECAP S&P 500 INDEX BUFFER OCTOBER, | 22.50% | PRINCIPAL LIFE INSURANCE CO CUST |
| Class 2 |  | FBO PRINCIPAL LIFETIME INSURANCE SOLUTIONS II |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| US LARGECAP S&P 500 INDEX BUFFER OCTOBER, | 11.17% | PRINCIPAL LIFE INSURANCE CO CUST |
| Class 2 |  | FBO PRINCIPAL INVESTMENT PLUS |
|  |  | VARIABLE ANNUITY |
|  |  | ATTN INDIVIDUAL LIFE ACCOUNTING |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |
| US LARGECAP S&P 500 INDEX BUFFER OCTOBER, | 5.93% | PRINCIPAL LIFE INSURANCE CO CUST |
| Class 2 |  | FLEX VARIABLE ANNUITY |
|  |  | ATTN IND ACCTNG G-12-S41 |
|  |  | 711 HIGH ST |
|  |  | DES MOINES IA 50392-0001 |

---

**Management Ownership**

As of March 31, 2026, 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 variable life insurance and variable annuity contracts. 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, which is provided by the sub-advisors.

Information in this section is as of December 31, 2025, unless otherwise noted.

------

**Advisor: Principal Global Investors, LLC (Principal Asset Allocation Portfolio Managers)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** |
| | **Total Number** <br>**of Accounts** | **Total Assets<br>in the Accounts** | **Number of<br>Accounts that base the Advisory Fee on Performance** | **Total Assets of the Accounts that base the Advisory Fee on Performance** |
| **Brody Dass:** Diversified Balanced, Diversified Balanced Adaptive Allocation, Diversified Growth, Diversified Growth Adaptive Allocation, and Diversified Income Accounts; and SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic Growth Portfolios | **Brody Dass:** Diversified Balanced, Diversified Balanced Adaptive Allocation, Diversified Growth, Diversified Growth Adaptive Allocation, and Diversified Income Accounts; and SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic Growth Portfolios | **Brody Dass:** Diversified Balanced, Diversified Balanced Adaptive Allocation, Diversified Growth, Diversified Growth Adaptive Allocation, and Diversified Income Accounts; and SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic Growth Portfolios | **Brody Dass:** Diversified Balanced, Diversified Balanced Adaptive Allocation, Diversified Growth, Diversified Growth Adaptive Allocation, and Diversified Income Accounts; and SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic Growth Portfolios | **Brody Dass:** Diversified Balanced, Diversified Balanced Adaptive Allocation, Diversified Growth, Diversified Growth Adaptive Allocation, and Diversified Income Accounts; and SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic Growth Portfolios |
| Registered investment companies | 8 | $15.2 billion | 0 | $0  |
| Other pooled investment vehicles | 0 | $0 | 0 | $0 |
| Other accounts | 24 | $166.5 million | 0 | $0  |
| **James W. Fennessey:** LargeCap Growth I and Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts  | **James W. Fennessey:** LargeCap Growth I and Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts  | **James W. Fennessey:** LargeCap Growth I and Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts  | **James W. Fennessey:** LargeCap Growth I and Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts  | **James W. Fennessey:** LargeCap Growth I and Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts  |
| Registered investment companies | 32 | $65.0 billion | 0 | $0  |
| Other pooled investment vehicles | 39 | $77.8 billion | 0 | $0  |
| Other accounts | 26 | $4.2 billion | 0 | $0  |
| **Todd A. Jablonski:** Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, 2060 Accounts; and SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic Growth Portfolios | **Todd A. Jablonski:** Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, 2060 Accounts; and SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic Growth Portfolios | **Todd A. Jablonski:** Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, 2060 Accounts; and SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic Growth Portfolios | **Todd A. Jablonski:** Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, 2060 Accounts; and SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic Growth Portfolios | **Todd A. Jablonski:** Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, 2060 Accounts; and SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic Growth Portfolios |
| Registered investment companies | 31 | $47.1 billion | 0 | $0 |
| Other pooled investment vehicles | 38 | $77.8 billion | 0 | $0 |
| Other accounts | 2 | $62.9 million | 0 | $0 |
| **Michael Messina:** LargeCap Growth Account I | **Michael Messina:** LargeCap Growth Account I | **Michael Messina:** LargeCap Growth Account I | **Michael Messina:** LargeCap Growth Account I | **Michael Messina:** LargeCap Growth Account I |
| Registered investment companies | 6 | $32.6 billion | 0 | $0 |
| Other pooled investment vehicles | 0 | $0 | 0 | $0 |
| Other accounts | 0 | $0 | 0 | $0 |
| **Tyler O'Donnell**<sup>(1)</sup>**:** Diversified Balanced Adaptive Allocation and Diversified Growth Adaptive Allocation Accounts | **Tyler O'Donnell**<sup>(1)</sup>**:** Diversified Balanced Adaptive Allocation and Diversified Growth Adaptive Allocation Accounts | **Tyler O'Donnell**<sup>(1)</sup>**:** Diversified Balanced Adaptive Allocation and Diversified Growth Adaptive Allocation Accounts | **Tyler O'Donnell**<sup>(1)</sup>**:** Diversified Balanced Adaptive Allocation and Diversified Growth Adaptive Allocation Accounts | **Tyler O'Donnell**<sup>(1)</sup>**:** Diversified Balanced Adaptive Allocation and Diversified Growth Adaptive Allocation Accounts |
| Registered investment companies | 10 | $19.7 billion | 0 | $0  |
| Other pooled investment vehicles | 4 | $62.7 billion | 0 | $0  |
| Other accounts | 3 | $3.1 billion | 0 | $0  |
| **Chad Severin:** Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts | **Chad Severin:** Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts | **Chad Severin:** Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts | **Chad Severin:** Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts | **Chad Severin:** Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts |
| Registered investment companies | 26 | $32.4 billion | 0 | $0 |
| Other pooled investment vehicles | 38 | $77.8 billion | 0 | $0 |
| Other accounts | 0 | $0 | 0 | $0 |
| **Aaron J. Siebel**<sup>(1)</sup>**:** Diversified Balanced Adaptive Allocation and Diversified Growth Adaptive Allocation Accounts | **Aaron J. Siebel**<sup>(1)</sup>**:** Diversified Balanced Adaptive Allocation and Diversified Growth Adaptive Allocation Accounts | **Aaron J. Siebel**<sup>(1)</sup>**:** Diversified Balanced Adaptive Allocation and Diversified Growth Adaptive Allocation Accounts | **Aaron J. Siebel**<sup>(1)</sup>**:** Diversified Balanced Adaptive Allocation and Diversified Growth Adaptive Allocation Accounts | **Aaron J. Siebel**<sup>(1)</sup>**:** Diversified Balanced Adaptive Allocation and Diversified Growth Adaptive Allocation Accounts |
| Registered investment companies | 14 | $24.7 billion | 0 | $0  |
| Other pooled investment vehicles | 4 | $62.7 billion | 0 | $0  |
| Other accounts | 3 | $3.1 billion | 0 | $0  |
| **Scott Smith:** Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts | **Scott Smith:** Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts | **Scott Smith:** Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts | **Scott Smith:** Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts | **Scott Smith:** Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts |
| Registered investment companies | 26 | $32.4 billion | 0 | $0  |
| Other pooled investment vehicles | 51 | $78.0 billion | 0 | $0  |
| Other accounts | 26 | $4.2 billion | 0 | $0  |
| **Yesim Tokat-Acikel:** Diversified Balanced, Diversified Balanced Adaptive Allocation, Diversified Growth, Diversified Growth Adaptive Allocation, and Diversified Income Accounts; and SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic Growth Portfolios | **Yesim Tokat-Acikel:** Diversified Balanced, Diversified Balanced Adaptive Allocation, Diversified Growth, Diversified Growth Adaptive Allocation, and Diversified Income Accounts; and SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic Growth Portfolios | **Yesim Tokat-Acikel:** Diversified Balanced, Diversified Balanced Adaptive Allocation, Diversified Growth, Diversified Growth Adaptive Allocation, and Diversified Income Accounts; and SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic Growth Portfolios | **Yesim Tokat-Acikel:** Diversified Balanced, Diversified Balanced Adaptive Allocation, Diversified Growth, Diversified Growth Adaptive Allocation, and Diversified Income Accounts; and SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic Growth Portfolios | **Yesim Tokat-Acikel:** Diversified Balanced, Diversified Balanced Adaptive Allocation, Diversified Growth, Diversified Growth Adaptive Allocation, and Diversified Income Accounts; and SAM Balanced, SAM Conservative Balanced, SAM Conservative Growth, SAM Flexible Income, and SAM Strategic Growth Portfolios |
| Registered investment companies | 9 | $15.3 billion | 0 | $0  |
| Other pooled investment vehicles | 4 | $193.5 million | 0 | $0 |
| Other accounts | 30 | $259.3 million | 0 | $0  |
| **May Tong:** LargeCap Growth I; and Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts | **May Tong:** LargeCap Growth I; and Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts | **May Tong:** LargeCap Growth I; and Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts | **May Tong:** LargeCap Growth I; and Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts | **May Tong:** LargeCap Growth I; and Principal LifeTime Strategic Income, 2020, 2030, 2040, 2050, and 2060 Accounts |
| Registered investment companies | 36 | $74.8 billion | 0 | $0 |
| Other pooled investment vehicles | 39 | $80.9 billion | 0 | $0 |
| Other accounts | 0 | $0 | 0 | $0 |

---

<sup>(1)</sup> For more information regarding Tyler O'Donnell's and Aaron J. Siebel's Other Accounts Managed, see Advisor: Principal Global Investors, LLC (Principal Equities Portfolio Managers).

------

**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 for purposes of the variable component 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 incentive delivered in the form of deferred compensation depends on the size of an individual's incentive award as it relates to a tiered deferral schedule. Deferred compensation is required to be invested into Principal Financial Group ("PFG") restricted stock units and funds managed by the team via a co-investment program. Both payment vehicles are subject to a three-year vesting schedule. The overall measurement framework and the deferred component are well aligned with our desired focus on clients' objectives (e.g., co-investment), alignment with PFG stakeholders, and talent retention.

In addition to deferred compensation obtained through their compensation programming, team members have investments acquired through their participation in PFG's employee stock purchase plan, retirement plans, and direct personal investments. It should be noted that PFG's retirement plans and deferred compensation plans generally utilize its non-registered group separate accounts or commingled vehicles rather than the traditional mutual funds. However, in each instance these vehicles are managed in lockstep alignment with the mutual funds (i.e., "clones").

**Ownership of Securities** 

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | **PVC Accounts/Portfolios Managed<br>by Portfolio Manager** | **Dollar Range of Securities Owned by the Portfolio Manager** |
| Brody Dass | Diversified Balanced  |  |
| Brody Dass | Diversified Balanced Adaptive Allocation |  |
| Brody Dass | Diversified Growth  |  |
| Brody Dass | Diversified Growth Adaptive Allocation |  |
| Brody Dass | Diversified Income |  |
| 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 | LargeCap Growth I |  |
| James W. Fennessey | Principal LifeTime Strategic Income |  |
| James W. Fennessey | Principal LifeTime 2020 |  |
| James W. Fennessey | Principal LifeTime 2030 |  |
| James W. Fennessey | Principal LifeTime 2040 |  |
| James W. Fennessey | Principal LifeTime 2050 |  |
| James W. Fennessey | Principal LifeTime 2060 |  |
| Todd A. Jablonski | Principal LifeTime Strategic Income |  |
| Todd A. Jablonski | Principal LifeTime 2020 |  |
| Todd A. Jablonski | Principal LifeTime 2030 |  |
| Todd A. Jablonski | Principal LifeTime 2040 |  |
| Todd A. Jablonski | Principal LifeTime 2050 |  |
| Todd A. Jablonski | Principal LifeTime 2060 |  |

---

------

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | **PVC Accounts/Portfolios Managed<br>by Portfolio Manager** | **Dollar Range of Securities Owned by the Portfolio Manager** |
| Todd A. Jablonski | SAM Balanced |  |
| Todd A. Jablonski | SAM Conservative Balanced |  |
| Todd A. Jablonski | SAM Conservative Growth |  |
| Todd A. Jablonski | SAM Flexible Income |  |
| Todd A. Jablonski | SAM Strategic Growth |  |
| Michael Messina | LargeCap Growth I |  |
| Tyler O'Donnell<sup>(1)</sup> | Diversified Balanced Adaptive Allocation |  |
| Tyler O'Donnell<sup>(1)</sup> | Diversified Growth Adaptive Allocation |  |
| Chad Severin | Principal LifeTime Strategic Income |  |
| Chad Severin | Principal LifeTime 2020 |  |
| Chad Severin | Principal LifeTime 2030 |  |
| Chad Severin | Principal LifeTime 2040 |  |
| Chad Severin | Principal LifeTime 2050 |  |
| Chad Severin | Principal LifeTime 2060 |  |
| Aaron J. Siebel<sup>(1)</sup> | Diversified Balanced Adaptive Allocation |  |
| Aaron J. Siebel<sup>(1)</sup> | Diversified Growth Adaptive Allocation |  |
| Scott Smith | Principal LifeTime Strategic Income |  |
| Scott Smith  | Principal LifeTime 2020 |  |
| Scott Smith  | Principal LifeTime 2030 |  |
| Scott Smith  | Principal LifeTime 2040 |  |
| Scott Smith  | Principal LifeTime 2050 |  |
| Scott Smith  | Principal LifeTime 2060 |  |
| Yesim Tokat-Acikel | Diversified Balanced  |  |
| Yesim Tokat-Acikel | Diversified Balanced Adaptive Allocation |  |
| Yesim Tokat-Acikel | Diversified Growth  |  |
| Yesim Tokat-Acikel | Diversified Growth Adaptive Allocation |  |
| Yesim Tokat-Acikel | Diversified Income |  |
| Yesim Tokat-Acikel | SAM Balanced |  |
| Yesim Tokat-Acikel | SAM Conservative Balanced |  |
| Yesim Tokat-Acikel | SAM Conservative Growth |  |
| Yesim Tokat-Acikel | SAM Flexible Income |  |
| Yesim Tokat-Acikel | SAM Strategic Growth |  |
| May Tong | LargeCap Growth I |  |
| May Tong | Principal LifeTime Strategic Income |  |
| May Tong | Principal LifeTime 2020 |  |
| May Tong | Principal LifeTime 2030 |  |
| May Tong | Principal LifeTime 2040 |  |
| May Tong | Principal LifeTime 2050 |  |
| May Tong | Principal LifeTime 2060 |  |

---

<sup>(1)</sup> For more information regarding Tyler O'Donnell's and Aaron J. Siebel's Ownership of Securities, see Advisor: Principal Global Investors, LLC (Principal Equities Portfolio Managers).

------

**Advisor: Principal Global Investors, LLC (Principal Edge Portfolio Managers)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** |
| | **Total Number** <br>**of Accounts** | **Total Assets<br>in the Accounts** | **Number of<br>Accounts that base the Advisory Fee on Performance** | **Total Assets of the Accounts that base the Advisory Fee on Performance** |
| **Daniel R. Coleman:** Equity Income and Principal Capital Appreciation Accounts | **Daniel R. Coleman:** Equity Income and Principal Capital Appreciation Accounts | **Daniel R. Coleman:** Equity Income and Principal Capital Appreciation Accounts | **Daniel R. Coleman:** Equity Income and Principal Capital Appreciation Accounts | **Daniel R. Coleman:** Equity Income and Principal Capital Appreciation Accounts |
| Registered investment companies | 0 | $0 | 0 | $0  |
| Other pooled investment vehicles | 9 | $14.7 billion | 0 | $0  |
| Other accounts | 15 | $2.1 billion | 0 | $0  |
| **Theodore Jayne:** Principal Capital Appreciation Account | **Theodore Jayne:** Principal Capital Appreciation Account | **Theodore Jayne:** Principal Capital Appreciation Account | **Theodore Jayne:** Principal Capital Appreciation Account | **Theodore Jayne:** Principal Capital Appreciation Account |
| Registered investment companies | 0 | $0 | 0 | $0  |
| Other pooled investment vehicles | 5 | $5.1 billion | 0 | $0  |
| Other accounts | 1 | $826.0 million | 0 | $0  |
| **Sarah E. Radecki:** Equity Income Account | **Sarah E. Radecki:** Equity Income Account | **Sarah E. Radecki:** Equity Income Account | **Sarah E. Radecki:** Equity Income Account | **Sarah E. Radecki:** Equity Income Account |
| Registered investment companies | 0 | $0 | 0 | $0  |
| Other pooled investment vehicles | 4 | $9.6 billion | 0 | $0  |
| Other accounts | 13 | $1.2 billion | 0 | $0  |
| **Nedret Vidinli:** Equity Income Account | **Nedret Vidinli:** Equity Income Account | **Nedret Vidinli:** Equity Income Account | **Nedret Vidinli:** Equity Income Account | **Nedret Vidinli:** Equity Income Account |
| Registered investment companies | 0 | $0 | 0 | $0  |
| Other pooled investment vehicles | 2 | $8.0 billion | 0 | $0  |
| Other accounts | 5 | $92.8 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 for purposes of the variable component 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 incentive delivered in the form of deferred compensation depends on the size of an individual's incentive award as it relates to a tiered deferral schedule. Deferred compensation is required to be invested into Principal Financial Group ("PFG") restricted stock units and funds managed by the team via a co-investment program. Both payment vehicles are subject to a three-year vesting schedule. The overall measurement framework and the deferred component are well aligned with our desired focus on clients' objectives (e.g., co-investment), alignment with PFG stakeholders, and talent retention.

In addition to deferred compensation obtained through their compensation programming, team members have investments acquired through their participation in PFG's employee stock purchase plan, retirement plans, and direct personal investments. It should be noted that PFG's retirement plans and deferred compensation plans generally utilize its non-registered group separate accounts or commingled vehicles rather than the traditional mutual funds. However, in each instance these vehicles are managed in lockstep alignment with the mutual funds (i.e., "clones").

------

**Ownership of Securities**

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | **PVC Accounts/Portfolios Managed<br>by Portfolio Manager** | **Dollar Range of Securities Owned by the Portfolio Manager** |
| Daniel R. Coleman | Equity Income  | None |
| Daniel R. Coleman | Principal Capital Appreciation | None |
| Theodore Jayne | Principal Capital Appreciation | None |
| Sarah E. Radecki  | Equity Income  | None |
| Nedret Vidinli | Equity Income | None |

---

------

**Advisor: Principal Global Investors, LLC (Principal Equities Portfolio Managers)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** |
| | **Total Number** <br>**of Accounts** | **Total Assets<br>in the Accounts** | **Number of<br>Accounts that base the Advisory Fee on Performance** | **Total Assets of the Accounts that base the Advisory Fee on Performance** |
| **Paul H. Blankenhagen:** Diversified International Account | **Paul H. Blankenhagen:** Diversified International Account | **Paul H. Blankenhagen:** Diversified International Account | **Paul H. Blankenhagen:** Diversified International Account | **Paul H. Blankenhagen:** Diversified International Account |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 9 | $28.8 billion | 0 | $0 |
| Other accounts | 13 | $2.5 billion | 1 | $284.1 million |
| **Emily Foshag:** SmallCap Account | **Emily Foshag:** SmallCap Account | **Emily Foshag:** SmallCap Account | **Emily Foshag:** SmallCap Account | **Emily Foshag:** SmallCap Account |
| Registered investment companies | 2 | $2.4 billion | 0 | $0 |
| Other pooled investment vehicles | 3 | $573.0 million | 0 | $0 |
| Other accounts | 11 | $2.0 billion | 2 | $529.2 million |
| **Daniel Graña:** Global Emerging Markets Account | **Daniel Graña:** Global Emerging Markets Account | **Daniel Graña:** Global Emerging Markets Account | **Daniel Graña:** Global Emerging Markets Account | **Daniel Graña:** Global Emerging Markets Account |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 5 | $6.1 billion | 0 | $0 |
| Other accounts | 0 | $0 | 0 | $0 |
| **John Paul Lech:** Global Emerging Markets Account | **John Paul Lech:** Global Emerging Markets Account | **John Paul Lech:** Global Emerging Markets Account | **John Paul Lech:** Global Emerging Markets Account | **John Paul Lech:** Global Emerging Markets Account |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 5 | $6.1 billion | 0 | $0 |
| Other accounts | 0 | $0 | 0 | $0 |
| **George P. Maris:** Diversified International Account | **George P. Maris:** Diversified International Account | **George P. Maris:** Diversified International Account | **George P. Maris:** Diversified International Account | **George P. Maris:** Diversified International Account |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 9 | $28.8 billion | 0 | $0 |
| Other accounts | 13 | $2.5 billion | 1 | $284.1 million |
| **K. William Nolin:** Blue Chip and MidCap Accounts | **K. William Nolin:** Blue Chip and MidCap Accounts | **K. William Nolin:** Blue Chip and MidCap Accounts | **K. William Nolin:** Blue Chip and MidCap Accounts | **K. William Nolin:** Blue Chip and MidCap Accounts |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 7 | $44.6 billion | 0 | $0 |
| Other accounts | 33 | $7.2 billion | 0 | $0 |
| **Phil Nordhus:** SmallCap Account | **Phil Nordhus:** SmallCap Account | **Phil Nordhus:** SmallCap Account | **Phil Nordhus:** SmallCap Account | **Phil Nordhus:** SmallCap Account |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 2 | $2.7 billion | 0 | $0 |
| Other accounts | 11 | $2.0 billion | 2 | $529.2 million |
| **Tyler O'Donnell**<sup>(1)</sup>**:** LargeCap S&P 500 Index, U.S. LargeCap S&P 500 Index Buffer January, U.S. LargeCap S&P 500 Index Buffer April, U.S. LargeCap S&P 500 Index Buffer July, and U.S. LargeCap S&P 500 Index Buffer October Accounts | **Tyler O'Donnell**<sup>(1)</sup>**:** LargeCap S&P 500 Index, U.S. LargeCap S&P 500 Index Buffer January, U.S. LargeCap S&P 500 Index Buffer April, U.S. LargeCap S&P 500 Index Buffer July, and U.S. LargeCap S&P 500 Index Buffer October Accounts | **Tyler O'Donnell**<sup>(1)</sup>**:** LargeCap S&P 500 Index, U.S. LargeCap S&P 500 Index Buffer January, U.S. LargeCap S&P 500 Index Buffer April, U.S. LargeCap S&P 500 Index Buffer July, and U.S. LargeCap S&P 500 Index Buffer October Accounts | **Tyler O'Donnell**<sup>(1)</sup>**:** LargeCap S&P 500 Index, U.S. LargeCap S&P 500 Index Buffer January, U.S. LargeCap S&P 500 Index Buffer April, U.S. LargeCap S&P 500 Index Buffer July, and U.S. LargeCap S&P 500 Index Buffer October Accounts | **Tyler O'Donnell**<sup>(1)</sup>**:** LargeCap S&P 500 Index, U.S. LargeCap S&P 500 Index Buffer January, U.S. LargeCap S&P 500 Index Buffer April, U.S. LargeCap S&P 500 Index Buffer July, and U.S. LargeCap S&P 500 Index Buffer October Accounts |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 23 | $82.4 billion | 0 | $0 |
| Other accounts | 3 | $3.4 billion | 0 | $0 |
| **Brian W. Pattinson:** SmallCap Account  | **Brian W. Pattinson:** SmallCap Account  | **Brian W. Pattinson:** SmallCap Account  | **Brian W. Pattinson:** SmallCap Account  | **Brian W. Pattinson:** SmallCap Account  |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 5 | $4.3 billion | 0 | $0 |
| Other accounts | 21 | $3.4 billion | 2 | $529.2 million |
| **Matthew Peron:** Diversified International Account | **Matthew Peron:** Diversified International Account | **Matthew Peron:** Diversified International Account | **Matthew Peron:** Diversified International Account | **Matthew Peron:** Diversified International Account |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 9 | $28.8 billion | 0 | $0 |
| Other accounts | 13 | $2.5 billion | 1 | $284.1 million |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** |
| | **Total Number** <br>**of Accounts** | **Total Assets<br>in the Accounts** | **Number of<br>Accounts that base the Advisory Fee on Performance** | **Total Assets of the Accounts that base the Advisory Fee on Performance** |
| **Tom Rozycki:** Blue Chip and MidCap Accounts | **Tom Rozycki:** Blue Chip and MidCap Accounts | **Tom Rozycki:** Blue Chip and MidCap Accounts | **Tom Rozycki:** Blue Chip and MidCap Accounts | **Tom Rozycki:** Blue Chip and MidCap Accounts |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 7 | $44.6 billion | 0 | $0 |
| Other accounts | 33 | $7.2 billion | 0 | $0 |
| **Aaron J. Siebel**<sup>(1)</sup>**:** LargeCap S&P 500 Index, U.S. LargeCap S&P 500 Index Buffer January, U.S. LargeCap S&P 500 Index Buffer April, U.S. LargeCap S&P 500 Index Buffer July, and U.S. LargeCap S&P 500 Index Buffer October Accounts | **Aaron J. Siebel**<sup>(1)</sup>**:** LargeCap S&P 500 Index, U.S. LargeCap S&P 500 Index Buffer January, U.S. LargeCap S&P 500 Index Buffer April, U.S. LargeCap S&P 500 Index Buffer July, and U.S. LargeCap S&P 500 Index Buffer October Accounts | **Aaron J. Siebel**<sup>(1)</sup>**:** LargeCap S&P 500 Index, U.S. LargeCap S&P 500 Index Buffer January, U.S. LargeCap S&P 500 Index Buffer April, U.S. LargeCap S&P 500 Index Buffer July, and U.S. LargeCap S&P 500 Index Buffer October Accounts | **Aaron J. Siebel**<sup>(1)</sup>**:** LargeCap S&P 500 Index, U.S. LargeCap S&P 500 Index Buffer January, U.S. LargeCap S&P 500 Index Buffer April, U.S. LargeCap S&P 500 Index Buffer July, and U.S. LargeCap S&P 500 Index Buffer October Accounts | **Aaron J. Siebel**<sup>(1)</sup>**:** LargeCap S&P 500 Index, U.S. LargeCap S&P 500 Index Buffer January, U.S. LargeCap S&P 500 Index Buffer April, U.S. LargeCap S&P 500 Index Buffer July, and U.S. LargeCap S&P 500 Index Buffer October Accounts |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 26 | $87.2 billion | 0 | $0 |
| Other accounts | 4 | $4.5 billion | 0 | $0 |

---

<sup>(1)</sup> For more information regarding Tyler O'Donnell's and Aaron J. Siebel's Other Accounts Managed, see Advisor: Principal Global Investors, LLC (Principal Equities Portfolio Managers).

**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 for purposes of the variable component 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 incentive delivered in the form of deferred compensation depends on the size of an individual's incentive award as it relates to a tiered deferral schedule. Deferred compensation is required to be invested into Principal Financial Group ("PFG") restricted stock units and funds managed by the team via a co-investment program. Both payment vehicles are subject to a three-year vesting schedule. The overall measurement framework and the deferred component are well aligned with our desired focus on clients' objectives (e.g., co-investment), alignment with PFG stakeholders, and talent retention.

In addition to deferred compensation obtained through their compensation programming, team members have investments acquired through their participation in PFG's employee stock purchase plan, retirement plans, and direct personal investments. It should be noted that PFG's retirement plans and deferred compensation plans generally utilize its non-registered group separate accounts or commingled vehicles rather than the traditional mutual funds. However, in each instance these vehicles are managed in lockstep alignment with the mutual funds (i.e., "clones").

------

**Ownership of Securities**

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | **PVC Accounts/Portfolios Managed<br>by Portfolio Manager** | **Dollar Range of Securities Owned by the Portfolio Manager** |
| Paul H. Blankenhagen | Diversified International  |  |
| Emily Foshag | SmallCap  |  |
| Daniel Graña | Global Emerging Markets |  |
| John Paul Lech | Global Emerging Markets |  |
| George P. Maris | Diversified International |  |
| K. William Nolin | Blue Chip |  |
| K. William Nolin | MidCap  |  |
| Phil Nordhus | SmallCap  |  |
| Tyler O'Donnell<sup>(1)</sup> | LargeCap S&P 500 Index  |  |
| Tyler O'Donnell<sup>(1)</sup> | U.S. LargeCap S&P 500 Index Buffer January |  |
| Tyler O'Donnell<sup>(1)</sup> | U.S. LargeCap S&P 500 Index Buffer April |  |
| Tyler O'Donnell<sup>(1)</sup> | U.S. LargeCap S&P 500 Index Buffer July |  |
| Tyler O'Donnell<sup>(1)</sup> | U.S. LargeCap S&P 500 Index Buffer October |  |
| Brian W. Pattinson | SmallCap  |  |
| Matthew Peron | Diversified International |  |
| Tom Rozycki | Blue Chip |  |
| Tom Rozycki | MidCap |  |
| Aaron J. Siebel<sup>(1)</sup> | LargeCap S&P 500 Index  |  |
| Aaron J. Siebel<sup>(1)</sup> | U.S. LargeCap S&P 500 Index Buffer January |  |
| Aaron J. Siebel<sup>(1)</sup> | U.S. LargeCap S&P 500 Index Buffer April |  |
| Aaron J. Siebel<sup>(1)</sup> | U.S. LargeCap S&P 500 Index Buffer July |  |
| Aaron J. Siebel<sup>(1)</sup> | U.S. LargeCap S&P 500 Index Buffer October |  |

---

<sup>(1)</sup> For more information regarding Tyler O'Donnell's and Aaron J. Siebel's Ownership of Securities, see Advisor: Principal Global Investors, LLC (Principal Equities Portfolio Managers).

------

**Advisor: Principal Global Investors, LLC (Principal Fixed Income Portfolio Managers)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** |
| | **Total Number** <br>**of Accounts** | **Total Assets<br>in the Accounts** | **Number of<br>Accounts that base the Advisory Fee on Performance** | **Total Assets of the Accounts that base the Advisory Fee on Performance** |
| **Scott Brustkern**<sup>(1)</sup>**:** Bond Market Index Account | **Scott Brustkern**<sup>(1)</sup>**:** Bond Market Index Account | **Scott Brustkern**<sup>(1)</sup>**:** Bond Market Index Account | **Scott Brustkern**<sup>(1)</sup>**:** Bond Market Index Account | **Scott Brustkern**<sup>(1)</sup>**:** Bond Market Index Account |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 0 | $0 | 0 | $0 |
| Other accounts | 27 | $376.2 million | 0 | $0 |
| **Jeff Callahan:** Bond Market Index and Short-Term Income Accounts | **Jeff Callahan:** Bond Market Index and Short-Term Income Accounts | **Jeff Callahan:** Bond Market Index and Short-Term Income Accounts | **Jeff Callahan:** Bond Market Index and Short-Term Income Accounts | **Jeff Callahan:** Bond Market Index and Short-Term Income Accounts |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 13 | $13.3 billion | 0 | $0 |
| Other accounts | 19 | $948.1 million | 1 | $401.0 million |
| **Bryan C. Davis:** Core Plus Bond and Government & High Quality Bond Accounts | **Bryan C. Davis:** Core Plus Bond and Government & High Quality Bond Accounts | **Bryan C. Davis:** Core Plus Bond and Government & High Quality Bond Accounts | **Bryan C. Davis:** Core Plus Bond and Government & High Quality Bond Accounts | **Bryan C. Davis:** Core Plus Bond and Government & High Quality Bond Accounts |
| Registered investment companies | 3 | $11.9 billion | 0 | $0 |
| Other pooled investment vehicles | 12 | $9.6 billion | 0 | $0 |
| Other accounts | 26 | $5.9 billion | 1 | $1.7 million |
| **John R. Friedl:** Core Plus Bond Account | **John R. Friedl:** Core Plus Bond Account | **John R. Friedl:** Core Plus Bond Account | **John R. Friedl:** Core Plus Bond Account | **John R. Friedl:** Core Plus Bond Account |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 29 | $16.5 billion | 0 | $0 |
| Other accounts | 11 | $351.7 million | 0 | $0 |
| **Zach Gassmann:** Government & High Quality Bond Account | **Zach Gassmann:** Government & High Quality Bond Account | **Zach Gassmann:** Government & High Quality Bond Account | **Zach Gassmann:** Government & High Quality Bond Account | **Zach Gassmann:** Government & High Quality Bond Account |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 21 | $7.1 billion | 0 | $0 |
| Other accounts | 11 | $3.0 billion | 0 | $0 |
| **Michael Goosay:** Core Plus Bond and Short-Term Income Accounts | **Michael Goosay:** Core Plus Bond and Short-Term Income Accounts | **Michael Goosay:** Core Plus Bond and Short-Term Income Accounts | **Michael Goosay:** Core Plus Bond and Short-Term Income Accounts | **Michael Goosay:** Core Plus Bond and Short-Term Income Accounts |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 1 | $149.3 million | 0 | $0 |
| Other accounts | 10 | $741.6 million | 1 | $401.0 million |
| **Tina Paris:** Core Plus Bond Account | **Tina Paris:** Core Plus Bond Account | **Tina Paris:** Core Plus Bond Account | **Tina Paris:** Core Plus Bond Account | **Tina Paris:** Core Plus Bond Account |
| Registered investment companies | 0 | $0 | 0 | $0 |
| Other pooled investment vehicles | 10 | $1.6 billion | 0 | $0 |
| Other accounts | 11 | $739.3 million | 0 | $0 |

---

<sup>(1)</sup> Information as of January 31, 2026.

**Compensation**

PGI offers the Funds' investment team a competitive compensation structure that is evaluated annually relative to other global asset management firms to ensure its continued competitiveness and alignment with industry best practices. The objective of the structure is to offer market competitive compensation that aligns individual and team contributions with firm and client performance objectives in a manner that is consistent with industry standards and business results.

Compensation for each Fund's investment team is comprised of base salary and variable incentive components. As team members advance in their careers, the variable component increases in its proportion commensurate with responsibility levels. The variable component is designed to reinforce delivery of investment performance, firm performance, team collaboration, regulatory compliance, operational excellence, client retention, and client satisfaction. Investment performance for purposes of the variable component 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 incentive delivered in the form of deferred compensation depends on the size of an individual's incentive award as it relates to a tiered deferral schedule. Deferred compensation is required to be invested into Principal Financial Group ("PFG") restricted stock units and funds managed by the team via a co-investment program. Both payment vehicles are subject to a three-year vesting schedule. The overall measurement framework and the deferred component are well aligned with our desired focus on clients' objectives (e.g., co-investment), alignment with PFG stakeholders, and talent retention.

In addition to deferred compensation obtained through their compensation programming, team members have investments acquired through their participation in PFG's employee stock purchase plan, retirement plans, and direct personal investments. It should be noted that PFG's retirement plans and deferred compensation plans generally utilize its non-registered group separate accounts or commingled vehicles rather than the traditional mutual funds. However, in each instance these vehicles are managed in lockstep alignment with the mutual funds (i.e., "clones").

**Ownership of Securities**

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | **PVC Accounts/Portfolios Managed<br>by Portfolio Manager** | **Dollar Range of Securities Owned by the Portfolio Manager** |
| Scott Brustkern<sup>(1)</sup> | Bond Market Index |  |
| Jeff Callahan | Bond Market Index  |  |
| Jeff Callahan | Short-Term Income |  |
| Bryan C. Davis | Core Plus Bond  |  |
| Bryan C. Davis | Government & High Quality Bond  |  |
| John R. Friedl | Core Plus Bond |  |
| Zach Gassmann | Government & High Quality Bond  |  |
| Michael Goosay  | Core Plus Bond |  |
| Michael Goosay | Short-Term Income |  |
| Tina Paris | Core Plus Bond |  |

---

<sup>(1)</sup> Information as of February 28, 2026.

------

**Sub-Advisor: Principal Real Estate Investors, LLC**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** | **Other Accounts Managed** |
| | **Total Number** <br>**of Accounts** | **Total Assets<br>in the Accounts** | **Number of<br>Accounts that base the Advisory Fee on Performance** | **Total Assets of the Accounts that base the Advisory Fee on Performance** |
| **Keith Bokota:** Real Estate Securities Account | **Keith Bokota:** Real Estate Securities Account | **Keith Bokota:** Real Estate Securities Account | **Keith Bokota:** Real Estate Securities Account | **Keith Bokota:** Real Estate Securities Account |
| Registered investment companies | 3 | $6.5 billion | 0 | $0 |
| Other pooled investment vehicles | 2 | $1.7 billion | 0 | $0 |
| Other accounts | 28 | $2.7 billion | 1 | $116.2 million |
| **Anthony Kenkel:** Real Estate Securities Account | **Anthony Kenkel:** Real Estate Securities Account | **Anthony Kenkel:** Real Estate Securities Account | **Anthony Kenkel:** Real Estate Securities Account | **Anthony Kenkel:** Real Estate Securities Account |
| Registered investment companies | 6 | $8.2 billion | 0 | $0 |
| Other pooled investment vehicles | 7 | $3.8 billion | 0 | $0 |
| Other accounts | 66 | $7.5 billion | 3 | $287.7 million |
| **Kelly D. Rush:** Real Estate Securities Account | **Kelly D. Rush:** Real Estate Securities Account | **Kelly D. Rush:** Real Estate Securities Account | **Kelly D. Rush:** Real Estate Securities Account | **Kelly D. Rush:** Real Estate Securities Account |
| Registered investment companies | 6 | $8.2 billion | 0 | $0 |
| Other pooled investment vehicles | 7 | $3.8 billion | 0 | $0 |
| Other accounts | 66 | $7.5 billion | 3 | $287.7 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 for purposes of the variable component 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 incentive delivered in the form of deferred compensation depends on the size of an individual's incentive award as it relates to a tiered deferral schedule. Deferred compensation is required to be invested into Principal Financial Group ("PFG") restricted stock units and funds managed by the team via a co-investment program. Both payment vehicles are subject to a three-year vesting schedule. The overall measurement framework and the deferred component are well aligned with our desired focus on clients' objectives (e.g., co-investment), alignment with PFG stakeholders, and talent retention.

In addition to deferred compensation obtained through their compensation programming, team members have investments acquired through their participation in PFG's employee stock purchase plan, retirement plans, and direct personal investments. It should be noted that PFG's retirement plans and deferred compensation plans generally utilize its non-registered group separate accounts or commingled vehicles rather than the traditional mutual funds. However, in each instance these vehicles are managed in lockstep alignment with the mutual funds (i.e., "clones").

**Ownership of Securities**

---

| | | |
|:---|:---|:---|
| **Portfolio Manager** | **PVC Accounts/Portfolios Managed<br>by Portfolio Manager** | **Dollar Range of Securities Owned by the Portfolio Manager** |
| Keith Bokota | Real Estate Securities  | None |
| Anthony Kenkel | Real Estate Securities | None |
| Kelly D. Rush | Real Estate Securities | None |

---

------

**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: | Obligations rated Baa are subject to moderate credit risk. They are considered medium-grade and as such may possess certain speculative characteristics. |
| 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: | Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest. |
| C: | Obligations rated C are the lowest rated class of bonds and are typically in default, with little prospect for recovery of principal or interest. |

---

---

| | |
|:---|:---|
| **NOTE:** | Moody's appends numerical modifiers, 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category, the modifier 2 indicates a mid-range ranking, and the modifier 3 indicates a ranking in the lower end of that generic rating category. Additionally, a "(hyb)" indicator is appended to all ratings of hybrid securities issued by banks, issuers, financial companies, and securities firms.\* |

---

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 three 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 established cash flows, 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:

• 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;

• Nature of and provisions of the financial obligation;

• 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: | Obligations rated 'AAA' have the highest rating assigned by S&P Global Ratings. The obligor's capacity to meet its financial commitment on the obligation is extremely strong. |
| AA: | Obligations rated 'AA' differ from the highest-rated issues only in small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong. |
| A: | Obligations rated 'A' have a strong capacity to meet financial commitment on the obligation although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. |
| BBB: | Obligations rated 'BBB' exhibit adequate protection parameters; however, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to meet financial commitment on the obligation. |
| BB, B, CCC,<br>CC and C: | Obligations rated 'BB', 'B', 'CCC', 'CC', and 'C' are regarded, on balance, as having significant speculative characteristics. 'BB' indicates the lowest degree of speculation and 'C' the highest degree of speculation. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major risk exposures to adverse conditions.  |
| BB: | Obligations rated 'BB' are less vulnerable to nonpayment than other speculative issues. However it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation. |
| B: | Obligations rated 'B' are more vulnerable to nonpayment than 'BB' but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair this capacity. |
| CCC: | Obligations rated 'CCC' are currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. If adverse business, financial, or economic conditions occur, the obligor is not likely to have the capacity to meet its financial commitment on the obligation. |
| CC: | Obligations rated 'CC' are currently highly vulnerable to nonpayment. The 'CC' rating is used when a default has not yet occurred but S&P Global Ratings expects default to be a virtual certainty, regardless of anticipated time to default. |
| C: | The rating 'C' is highly vulnerable to nonpayment, the obligation is expected to have lower relative seniority or lower ultimate recovery compared to higher rated obligations.  |
| D: | Obligations rated 'D' are in default, or in breach of an imputed promise. For non-hybrid capital instruments, the 'D' rating category is used when payments on an obligation are not made on the date due, unless S&P Global Ratings believes that such payments will be made within five business days in the absence of a stated grace period or within the earlier of the stated grace period or 30 calendar days. The rating will also be used upon filing for bankruptcy petition or the taking of similar action and where default is a virtual certainty. If an obligation is subject to a distressed exchange offer the rating is lowered to 'D'. |

---

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 a rating has not been assigned or is no longer assigned.

------

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: | This is the highest category. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong. |
| A-2: | Issues carrying this designation are somewhat more susceptible to the adverse effects of the changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory. |
| A-3: | Issues carrying this designation exhibit adequate capacity to meet their financial obligations. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet it financial commitment on the obligation. |
| B: | Issues rated 'B' are regarded as vulnerable and have significant speculative characteristics. The obligor has capacity to meet financial commitments; however, it faces major ongoing uncertainties which could lead to obligor's inadequate capacity to meet its financial obligations. |
| C: | This rating is assigned to short-term debt obligations that are currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions to meet its financial commitment on the obligation. |
| D: | This rating indicates that the issue is either in default or in breach of an imputed promise. For non-hybrid capital instruments, the 'D' rating category is used when payments on an obligation are not made on the date due, unless S&P Global Ratings believes that such payments will be made within any stated grace period. However, any stated grace period longer than five business days will be treated as five business days. The rating will also be used upon filing for bankruptcy petition or the taking of similar action and where default is a virtual certainty. If an obligation is subject to a distressed debt restructuring the rating is lowered to 'D'. |

---

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: | A strong capacity to pay principal and interest. Issues that possess a very strong capacity to pay debt service is given a "+" designation. |
| SP-2: | A satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the terms of the notes. |
| SP-3: | A speculative capacity to pay principal and interest. |
| D: | Assigned upon failure to pay the note when due, completion of a distressed debt restructuring, or the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty.  |

---

------

**APPENDIX B – PROXY VOTING POLICIES**

The proxy voting policies applicable to each Fund appear in the following order:

The proxy voting policy for the Principal Funds is first, followed by PGI's proxy voting policy, and followed by the proxy voting policies for the sub-advisors, alphabetically.

------

**Proxy Voting Policies and Procedures For**

**Principal Funds, Inc. ("PFI")**

**Principal Variable Contracts Funds, Inc.("PVC")**

**Principal Exchange-Traded Funds ("PETF")**

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

The Board has delegated responsibility for decisions regarding proxy voting for securities held by each Fund to Principal Global Investors ("PGI") or to the Fund's sub-advisor, as appropriate. PGI and each sub-advisor will vote such proxies in accordance with its proxy policies and procedures, which have been reviewed by the Fund's Board. Any material changes to the proxy policies and procedures will be submitted to the Board for approval.

Funds that operate as funds of funds invest in shares of other Funds of PFI and PETF. PGI is authorized to vote proxies related to the underlying funds. If an underlying fund holds a shareholder meeting, in order to avoid any potential conflict of interest, PGI will vote shares of such fund on any proposal submitted to the fund's shareholders in the same proportion as the votes of other shareholders of the underlying fund.

For Funds that participate in a securities lending program, the voting rights for securities that are loaned are transferred to the borrower. Therefore, the lender (i.e., a Fund) is not entitled to vote the loaned securities, unless it recalls those securities. Those managing the Fund's investments may recall securities for voting purposes when they reasonably believe the ability to vote such securities outweighs the additional revenue received if such securities were not recalled.

The Funds have a policy prohibiting investment in PFG securities except for those Funds that track an index and are permitted to do so under SEC no-action relief. If any such securities are owned in any of the Funds' portfolios, the Investment Adviser will vote according to third-party guidelines. PGI has a policy to not buy securities of affiliated entities in the portfolios they manage.

Further, for PVC, Principal Life votes each Fund's shares allocated to each of its registered separate accounts and attributable to variable annuity contracts or variable life insurance policies participating in the separate accounts. The shares are voted in accordance with instructions received from contract holders, policy owners, participants, and annuitants. Other shares of each Fund held by each separate account, including shares for which no timely voting instructions are received, are voted in proportion to the instructions that are received with respect to contracts or policies participating in that separate account. Principal Life will vote the shares based upon the instructions received from contract owners, regardless of the number of contract owners who provide such instructions. A potential effect of this proportional voting is that a small number of contract owners may determine the outcome of a shareholder vote if only a small number of contract owners provide voting instructions. Shares of each of the Funds held in the general account of Principal Life or in the unregistered separate accounts are voted in proportion to the instructions that are received with respect to contracts and policies participating in its registered and unregistered separate accounts. If Principal Life determines, under applicable law, that a Fund's shares held in one or more separate accounts or in its general account need not be voted according to the instructions that are received, it may vote those Fund shares in its own right. Shares held by retirement plans are voted in accordance with the governing documents of the plans.

Each quarter, the adviser or sub-adviser must provide to the Principal Funds:

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Written notification of any material changes to the adviser's or sub-adviser's proxy voting policies and procedures made during the preceding calendar quarter.

Annually, the adviser or sub-adviser must provide to the Principal Funds, no later than July 31, their proxy voting data for each vote cast during the 12-month period ended June 30 for each Fund portfolio or portion of Fund portfolio for which it serves as investment adviser, in a format acceptable to Fund management.

------

**Principal Global Investors, LLC** 

Proxy Voting Policies and Procedures

March 2025

------

**Introduction**

Principal Global Investors, LLC (doing business as Principal Asset Management) is an investment adviser registered with the U.S. Securities and Exchange Commission ("SEC") pursuant to the Investment Advisers Act of 1940 (the "Advisers Act"). As a registered investment adviser, Principal Asset Management has a fiduciary duty to act in the best interests of its clients. Principal Asset Management recognizes that this duty requires it to vote client securities, for which it has voting power on the applicable record date, in a timely manner and make voting decisions that are in the best interests of its clients. This document, the Principal Asset Management Proxy Voting Policies and Procedures (the "Policy"), is intended to comply with the requirements of the Investment Advisers Act of 1940, the Investment Company Act of 1940 and the Employee Retirement Income Security Act of 1974 applicable to the voting of the proxies of both US and non- US issuers on behalf of clients of Principal Asset Management who have delegated such authority and discretion.

**Relationship between Investment Strategy, Sustainable Investing and Proxy Voting**

Principal Asset Management has a fiduciary duty to make investment decisions that are in its clients' best interests to maximize the value of their shares. Proxy voting is an important part of the process through which Principal Asset Management can support strong corporate governance structures, shareholder rights and transparency. Principal Asset Management also believes a company's positive environmental and social practices may reduce risk and, in turn, influence the value of a company. Principal Asset Management may take these factors into consideration, alongside other non-sustainability factors, when voting proxies in its effort to seek the best economic outcome for its clients. Shareholder proposals often address matters that are in direct conflict with the opinions of company management. As a result, we believe additional scrutiny is required and, therefore, all shareholder proposals are escalated to the investment teams for a final voting decision.

**Roles and Responsibilities**

*<u>Role of the Proxy Voting Committee</u>*

Principal Asset Management Proxy Voting Committee (the "Proxy Voting Committee") shall (i) oversee the voting of proxies and the Proxy Advisory Firm, (ii) where necessary, make determinations as to how to instruct the vote on certain specific proxies, (iii) verify ongoing compliance with the Policy, (iv) review the business practices of the Proxy Advisory Firm and (v) evaluate, maintain, and review the Policy on an annual basis. The Proxy Voting Committee is comprised of representatives of each investment team and a representative from Principal Asset Management Risk, Legal, Operations, and Compliance will be available to advise the Proxy Voting Committee but are non-voting members. The Proxy Voting Committee may designate one or more of its members to oversee specific, ongoing compliance with respect to the Policy and may designate personnel to instruct the vote on proxies on behalf the Principal Asset Management clients (collectively, "Authorized Persons").

The Proxy Voting Committee shall meet at least four times per year, and as necessary to address special situations.

*Principal Global Investors, LLC ("PGI") began using Principal Asset Management ("Principal AM") as a DBA (doing business as) name and PGI will be referenced throughout this document as Principal AM (or "the Firm"). While Principal AM may include other entities, this Charter refers specifically to PGI and Principal Real Estate Investors, LLC*.

------

*<u>Role of Portfolio Management</u>*

While the Proxy Voting Committee establishes the Guidelines and Procedures, the Proxy Voting Committee does not direct votes for any client except in certain cases where a conflict of interest exists. Each investment team is responsible for determining how to vote proxies for those securities held in the portfolios their team manages. While investment teams generally vote consistently with the Guidelines, there may be instances where their vote deviates from the Guidelines. In those circumstances, the investment team will work within the Exception Process. In some instances, the same security may be held by more than one investment team. In these cases, Principal Asset Management may vote differently on the same matter for different accounts as determined by each investment team.

**Proxy Voting Guidelines**

The Proxy Voting Committee and Chief Investment Officer, on an annual basis, or more frequently as needed, will establish a working group to review draft proxy voting guidelines recommended to the Committee ("Draft Guidelines"). The Guidelines Working Group will collect feedback and propose Draft Guidelines for adoption by the Committee. Each investment team maintains autonomy to select the most correlated Guidelines for their strategies. Collectively, these guidelines will constitute the current Proxy Voting Guidelines of Principal Asset Management and may change from time to time (the "Guidelines"). The Proxy Voting Committee has the obligation to determine that, in general, voting proxies pursuant to the Guidelines is in the best interests of clients. Exhibit A (Proxy Voting Philosophy Summary) provides an overview of our current philosophy underlying our three core Guidelines; Base, Sustainable and Board Aligned. Full overviews of each of these custom Guidelines are maintained and available.

There may be instances where proxy votes will not be in accordance with the Guidelines. Clients may instruct Principal Asset Management to utilize a different set of guidelines, request specific deviations, or directly assume responsibility for the voting of proxies. In addition, Principal Asset Management may deviate from the Guidelines on an exception basis if the investment team or Principal Asset Management has determined that it is the best interest of clients in a particular strategy to do so, or where the Guidelines do not direct a particular response and instead list relevant factors. Any such a deviation will comply with the Exception Process which shall include a written record setting out the rationale for the deviation.

The subject of the proxy vote may not be covered in the Guidelines. In situations where the Guidelines do not provide a position, Principal Asset Management will consider the relevant facts and circumstances of a particular vote and then vote in a manner Principal Asset Management believes to be in the clients' bests interests. In such circumstance, the analysis will be documented in writing and periodically presented to the Proxy Voting Committee. To the extent that the Guidelines do not cover potential voting issues, Principal Asset Management may consider the spirit of the Guidelines and instruct the vote on such issues believed to be in the best interests of the client.

**Use of Proxy Advisory Firms**

Principal Asset Management has retained one or more third-party proxy service provider(s) (the "Proxy Advisory Firm") to provide recommendations for proxy voting guidelines, information on shareholder meeting dates and proxy materials, translate proxy materials printed in a foreign language, provide research on proxy proposals, operationally process votes in accordance with the Guidelines on behalf of the clients for whom Principal Asset Management has proxy voting responsibility, and provide reports concerning the proxies voted ("Proxy Voting Services"). Although Principal Asset Management has retained the Proxy Advisory Firm for Proxy Voting Services, the entity remains responsible for proxy voting decisions. Principal Asset Management has designed the Policy to oversee and evaluate the Proxy Advisory Firm, including with respect to the matters described below, to support its voting in accordance with this Policy.

------

*<u>Oversight of Proxy Advisory Firms</u>*

Prior to the selection of any new Proxy Advisory Firm and annually thereafter or more frequently if deemed necessary by Principal Asset Management, the Proxy Voting Committee will consider whether the Proxy Advisory Firm: (a) has the capacity and competency to adequately analyze proxy issues and provide the Proxy Voting Services the Proxy Advisory Firm has been engaged to provide and (b) can make its recommendations in an impartial manner, in consideration of the best interests of Principal Asset Management's clients, and consistent with its voting policies. Such considerations may include, depending on the Proxy Voting Services provided, the following: (i) periodic sampling of votes pre-populated by the Proxy Advisory Firm's systems as well as votes cast by the Proxy Advisory Firm to review that the Guidelines adopted by Principal Asset Management are being followed; (ii) onsite visits to the Proxy Advisory Firm office and/or discussions with the Proxy Advisory Firm to determine whether the Proxy Advisory Firm continues to have the capacity and competency to carry out its proxy obligations to Principal Asset Management (iii) a review of those aspects of the Proxy Advisory Firm's policies, procedures, and methodologies for formulating voting recommendations that Principal Asset Management considers material to Proxy Voting Services, including factors considered, with a particular focus on those relating to identifying, addressing and disclosing potential conflicts of interest (including potential conflicts related to the provision of Proxy Voting Services, activities other than Proxy Voting Services, and those presented by affiliation such as a controlling shareholder of the Proxy Advisory Firm) and monitoring that materially current, accurate, and complete information is used in creating recommendations and research; (iv) requiring the Proxy Advisory Firm to notify Principal Asset Management if there is a substantive change in the Proxy Advisory Firm's policies and procedures or otherwise to business practices, including with respect to conflicts, information gathering and creating voting recommendations and research, and reviewing any such change(s); (v) a review of how and when the Proxy Advisory Firm engages with, and receives and incorporates input from, issuers, the Proxy Advisory Firm's clients and other third-party information sources; (vi) assessing how the Proxy Advisory Firm considers factors unique to a specific issuer or proposal when evaluating a matter subject to a shareholder vote; (vii) in case of an error made by the Proxy Advisory Firm, discussing the error with the Proxy Advisory Firm and determining whether appropriate corrective and preventive action is being taken; and (viii) assessing whether the Proxy Advisory Firm appropriately updates its methodologies, guidelines, and voting recommendations on an ongoing basis and incorporates input from issuers and Proxy Advisory Firm clients in the update process. In evaluating the Proxy Advisory Firm, Principal Asset Management may also consider the adequacy and quality of the Proxy Advisory Firm's staffing, personnel, and/or technology.

**Procedures for Voting Proxies**

To increase the efficiency of the voting process, Principal Asset Management utilizes the Proxy Advisory Firm to act as its voting agent for its clients' holdings. Issuers initially send proxy information to the clients' custodians.

Principal Asset Management instructs these custodians to direct proxy related materials to the Proxy Advisory Firm. The Proxy Advisory Firm provides Principal Asset Management with research related to each resolution. Principal Asset Management analyzes relevant proxy materials on behalf of their clients and seek to instruct the vote (or refrain from voting) proxies in accordance with the Guidelines. A client may direct Principal Asset Management to vote for such client's account differently than what would occur in applying the Policy and the Guidelines. Principal Asset Management may also agree to follow a client's individualized proxy voting guidelines or otherwise agree with a client on particular voting considerations. Principal Asset Management seeks to vote (or refrain from voting) proxies for its clients in a manner determined to be in their best financial interests. In some cases, Principal Asset Management may determine that it is in the best interests of clients to refrain from exercising the clients' proxy voting rights. Principal Asset Management may determine that voting is not in the best interests of a client and refrain from voting if the costs, including the opportunity costs, of voting would, in the view of Principal Asset Management, exceed the expected benefits of voting to the client.

------

**Procedures for Proxy Issues within the Guidelines**

Where the Guidelines address the proxy matter being voted on, the Proxy Advisory Firm will generally process all proxy votes in accordance with the Guidelines. In the case of Shareholder Proposals for actively held securities, all ballots will be escalated to the applicable investment team to make a case-by-case determination of the vote decision. The applicable investment team may provide instructions to vote contrary to the Guidelines in their discretion and with sufficient rationale documented in writing to seek to maximize the value of the client's investments or is otherwise in the client's best interest. This rationale will be submitted to Principal Asset Management Compliance to approve and once approved administered by Principal Asset Management Operations. This process will follow the Exception Process. The Proxy Voting Committee will receive and review a quarterly report summarizing all proxy votes for securities for which Principal Asset Management exercises voting authority. In certain cases, a client may have elected to have Principal Asset Management administer a custom policy which is unique to the Client. If Principal Asset Management is also responsible for the administration of such a policy, in general, except for the specific policy differences, the procedures documented here will also be applicable, excluding reporting and disclosure procedures.

**Procedures for Proxy Issues Outside the Guidelines**

To the extent that the Guidelines do not cover potential voting issues, the Proxy Advisory Firm will seek direction from Principal Asset Management. Principal Asset Management may consider the spirit of the Guidelines and instruct the vote on such issues in a manner believed to be in the best interests of the client. Although this not an exception to the Guidelines, this process will also follow the Exception Process. The Proxy Voting Committee will receive and review a quarterly report summarizing all proxy votes for securities for which Principal Asset Management exercises voting discretion, which shall include instances where issues fall outside the Guidelines.

**Securities Lending**

Some clients may have entered into securities lending arrangements with agent lenders to generate additional revenue. If a client participates in such lending, the client will need to inform Principal Asset Management as part of their contract with Principal Asset Management if they require Principal Asset Management to take actions in regard to voting securities that have been lent. If not commemorated in such agreement nor dictated by regulatory requirements, Principal Asset Management will not recall securities and as such, they will not have an obligation to direct the proxy voting of lent securities.

In the case of lending, Principal Asset Management maintains one share for each company security out on loan by the client. Principal Asset Management will vote the remaining share in these circumstances.

In cases where Principal Asset Management does not receive a solicitation or enough information within a sufficient time (as reasonably determined by Principal Asset Management) prior to the proxy-voting deadline, Principal Asset Management or the Proxy Advisory Firm may be unable to vote.

**Regional Variances in Proxy Voting**

Principal Asset Management utilizes the Policy and Guidelines for both US and non-US clients, and there are some significant differences between voting U.S. company proxies and voting non-U.S. company proxies. For U.S. companies, it is usually relatively easy to vote proxies, as the proxies are typically received automatically and may be voted by mail or electronically. In most cases, the officers of a U.S. company soliciting a proxy act as proxies for the company's shareholders.

------

With respect to non-U.S. companies, we make reasonable efforts to vote most proxies and follow a similar process to those in the U.S. However, in some cases it may be both difficult and costly to vote proxies due to local regulations, customs or other requirements or restrictions, and such circumstances and expected costs may outweigh any anticipated economic benefit of voting. The major difficulties and costs may include: (i) appointing a proxy; (ii) obtaining reliable information about the time and location of a meeting; (iii) obtaining relevant information about voting procedures for foreign shareholders; (iv) restrictions on trading securities that are subject to proxy votes (share-blocking periods); (v) arranging for a proxy to vote locally in person; (vi) fees charged by custody banks for providing certain services with regard to voting proxies; and (vii) foregone income from securities lending programs. In certain instances, it may be determined by Principal Asset Management that the anticipated economic benefit outweighs the expected cost of voting. Principal Asset Management intends to make their determination on whether to vote proxies of non-U.S. companies on a case- by-case basis. In doing so, Principal Asset Management shall evaluate market requirements and impediments, including the difficulties set forth above, for voting proxies of companies in each country. Principal Asset Management periodically reviews voting logistics, including costs and other voting difficulties, on a client by client and country by country basis, in order to determine if there have been any material changes that would affect Principal Asset Management's determinations and procedures.

**Conflicts of Interest**

Principal Asset Management recognizes that, from time to time, potential conflicts of interest may exist. In order to avoid any perceived or actual conflict of interest, the procedures set forth below have been established for use when Principal Asset Management encounters a potential conflict to ensure that its voting decisions are based on maximizing shareholder value and are not the product of a conflict.

*<u>Addressing Conflicts of Interest – Exception Process</u>*

Prior to voting contrary to the Guidelines, the relevant investment team must complete and submit a report to Principal Asset Management Compliance setting out the name of the security, the issue up for vote, a summary of the Guidelines' recommendation, the vote changes requested and the rational for voting against the Guidelines' recommendation. The member of the investment team requesting the exception must attest to compliance with Principal's Code of Conduct and the has an affirmative obligation to disclose any known personal or business relationship that could affect the voting of the applicable proxy. Principal Asset Management Compliance will approve or deny the exception in consultation, if deemed necessary, with the Legal.

If Principal Asset Management Compliance determines that there is no potential material conflict exists, the Guidelines may be overridden. If Principal Asset Management Compliance determines that there exists or may exist a material conflict, it will refer the issue to the Proxy Voting Committee. The Proxy Voting Committee will consider the facts and circumstances of the pending proxy vote and the potential or actual material conflict and decide by a majority vote as to how to vote the proxy – i.e., whether to permit or deny the exception.

In considering the proxy vote and potential material conflict of interest, the Proxy Voting Committee may review the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The percentage of outstanding securities of the issuer held on behalf of clients by Principal Asset Management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The nature of the relationship of the issuer with the Principal Asset Management, its affiliates or its executive officers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Whether there has been any attempt to directly or indirectly influence the investment team's decision;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Whether the direction of the proposed vote would appear to benefit Principal Asset Management or a related party; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Whether an objective decision to vote in a certain way will still create a strong appearance of a conflict.

------

To further address potential conflicts of interest for any proxy votes specific to Principal Financial Group common stock, the exception process is not applicable. In the case of any proprietary electronically traded funds ("ETF"s), mutual funds or other comingled proprietary vehicles, PGI will vote in the same proportion as all other voting shareholders of the underlying fund/vehicle, which is referred to as echo voting, and the exception process is not applicable If echo voting is not available or operationally feasible, Principal Asset Management may abstain from voting.

In the event that the Proxy Advisor Firm itself has a conflict and thus is unable to provide a recommendation, the investment team may vote in accordance with the recommendation of another independent service provider, if available. If a recommendation from an independent service provider other than the Proxy Advisor Firm is not available, the investment team will follow the Exception Process. Principal Asset Management Compliance will review the form and if it determines that there is no potential material conflict mandating a voting recommendation from the Proxy Voting Committee, the investment team may instruct the Proxy Advisory Firm to vote the proxy issue as it determines is in the best interest of clients. If Principal Asset Management Compliance determines that there exists or may exist a material conflict, it will refer the issue to the Proxy Voting Committee for consideration as outlined above.

**Availability of Proxy Voting Information and Recordkeeping**

*<u>Disclosure</u>*

Principal Asset Management publicly discloses on our website <u>Principal Asset Management Vote Disclosure</u> The interactive voting dashboard, allows for dynamic disclosure of the manner in which votes were cast, including details related to (i) votes against management, (ii) abstentions, (iii) vote rationale, and (iii) voting metrics. For more information, Clients may contact Principal Asset Management for details related to how Principal Asset Management has voted with respect to securities held in the Client's account. On request, Principal Asset Management will provide clients with a summary of Principal Asset Management's proxy voting guidelines, process and policies and will inform the clients how they can obtain a copy of the complete Proxy Voting Policies and Procedures upon request. Principal Asset Management will also include such information described in the preceding two sentences in Part 2A of its Form ADV.

*<u>Recordkeeping</u>*

Principal Asset Management will keep records of the following items: (i) the Guidelines, (ii) the Proxy Voting Policies and Procedures; (iii) proxy statements received regarding client securities (unless such statements are available on the SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system); (iv) records of votes they cast on behalf of clients, which may be maintained by a Proxy Advisory Firm if it undertakes to provide copies of those records promptly upon request; (v) records of written client requests for proxy voting information and responses from Principal Asset Management (whether a client's request was oral or in writing); (vi) any documents prepared by Principal Asset Management that were material to making a decision how to vote, or that memorialized the basis for the decision; (vii) a record of any testing conducted on any Proxy Advisory Firm's votes; (viii) materials collected and reviewed by Principal Asset Management as part of its due diligence of the Proxy Advisory Firm; (ix) a copy of each version of the Proxy Advisory Firm's policies and procedures provided to Principal Asset Management; and (x) the minutes of the Proxy Voting Committee meetings. All of the records referenced above will be kept in an easily accessible place for at least the length of time required by local regulation and custom, and, if such local regulation requires that records are kept for less than six years from the end of the fiscal year during which the last entry was made on such record, we will follow the US rule of six years. If the local regulation requires that records are kept for more than six years, we will comply with the local regulation. We maintain the vast majority of these records electronically.

------

**Appendix**

**Proxy Voting Philosophy**

Principal Asset Management's Proxy Voting Philosophy is built on an unwavering commitment of creating long- term value for our shareholders and investing in businesses sharing this commitment. While we think setting and executing corporate policies should generally rest with a company's board of directors and executive management, we also think shareholders play a critical role in holding these parties accountable. We take this responsibility seriously. Our policy is implemented globally, taking into consideration the relevant legal and regulatory requirements in each region.

Our philosophy is structured around four key themes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Board Structure and Composition

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Board Oversight of Risk and Strategy

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Board Oversight of Executive Selection and Compensation

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Shareholder Rights and Protections

The positions described below should be understood as principles underlying our general philosophy and not as strict requirements to be followed with respect to each and every proxy vote.

**Board Structure, Composition, and Accountability**

The philosophy of our active investment teams: Our clients, as shareholders, own the corporation. Boards of directors are accountable to them. Corporate management, in turn, is accountable to its board. As investors, we need to be comfortable delegating trust and responsibility to these parties – and these parties should have the appropriate discretion to manage a company's affairs with an awareness of the company's particular circumstances. We guide our proxy voting in this area to help ensure our clients are invested in companies with trustworthy and effective boards. Examples of relevant principals underlying this philosophy include but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Independence</u> – A majority of board members are expected to be substantially independent from the company – not company executives, not key customers or suppliers, and not executives who sit on one another's boards. Non-independent board members should be prohibited from serving on key board committees such as audit, compensation, nominating and governance. In addition, board leadership should be independent of company management either through an independent chair or lead independent director with sufficient authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Board composition and selection</u> – A board must possess the fully array of skills and experience necessary to oversee and guide the company it serves. We expect boards to curate an inventory of necessary skills and experiences and ensure full representation across the board. For new board members, boards should recruit unbiased slates of candidates who reflect the skills needed by the board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Board size</u> – A board should bring a wide range of relevant perspectives, incorporate skills aligning with business needs, and include enough members to ensure sufficient levels of independence for key committees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Capacity and commitments of board members</u> – Board members should demonstrate a capacity to fulfill their roles and a commitment to the responsible discharge of their duties. This includes attendance of at least 75% of board meetings and participation in no more than four other public company boards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Accountability</u> – As shareholder representatives, board members should be held to a high standard with their performance assessed on a regular basis. As such, shareholders should have the right to vote on the entire slate of directors on an annual basis.

------

**Board Oversight of Risk and Strategy**

The philosophy of our active investment teams: The oversight, guidance, and support a board of directors provides to a management team is critical to the execution of its long-term corporate strategy and ultimately, the creation of shareholder value. We expect boards to assist in identifying material risks to the company's strategy, disclosure practices, and execution and to provide risk mitigation insight and monitoring. Examples of relevant principles underlying this philosophy include but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Capital Structure</u> – Increases in authorized shares outstanding are generally accepted if the proposed authorization results in an increase in shares authorized of 10% or less over a 2-year period. Proposals to create, modify, or issue common and preferred stock are generally accepted if the rights of the issuance are not superior to the rights of the current shareholders, subject to the principal that the authorization increase is limited to 10% of less over a 2-year period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Mergers and Acquisitions</u> – We expect boards to actively review potential targets and offers, assessing all such activities with shareholder value creation as the primary consideration. As investors, we recognize all merger and acquisition proposals are unique and should be assessed on their individual merit, including the deal premium, strategic rationale and possibility of competing offers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Auditors</u> – A board of directors should oversee the company's third-party auditor to ensure an independent and accurate assessment of the company's financial position is being portrayed. This should include a regular review of auditor qualifications, independence and competency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Climate Reporting</u> – We expect boards and managements to assess financially material climate risks to the business and, when relevant, provide the disclosure necessary for a reasonable investor to make informed decisions regarding potential impacts upon shareholder value.

**Board Oversight of Executive Selection and Compensation**

The philosophy of our active investment teams: A key aspect of a board of directors' governance responsibility is the support, selection and assessment of the management team. Boards should hold executives to clear value creation and be willing to make changes to management when shareholder value creation falls short of reasonable potential. Boards should also create and maintain formal succession plans to ensure continuity and minimize key person risk. Examples of relevant principles underlying this philosophy include but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Executive Pay</u> – A board should have a clear philosophy on executive pay and maintain an independent compensation committee focused on attracting and retaining executives who will drive shareholder value over time. Executives' pay and long-term performance should align executives with shareholders through measures of financial performance relative to financial targets aligned with value generation, and the performance of relevant peers. Likewise, we expect the board of directors to be aligned with shareholders through financial incentives and share ownership.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Stock Based Compensation</u> – We support the use of share-based incentive plans intended to increase the share ownership by management and align shareholder interests with management. Such plans should take into consideration the dollar cost of the plans to shareholders and the appropriateness of financial targets included in the plans. However, we believe that retroactive re-pricing of underwater options is indicative of poor corporate governance and will generally vote in opposition to a repricing scheme.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Say on Pay Frequency</u> – In order to ensure alignment between pay and performance, we support annual advisory votes to approve executive compensation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Executive Selection and Succession</u> – We expect a board of directors to carry out a thorough executive selection process considering a range of qualified candidates with a variety of skills and backgrounds. It is ultimately the responsibility of a board to select the candidate they think will best generate long-term value for shareholders.

------

**Shareholder Rights and Protections**

The philosophy of our active investment teams: As investors, we view the protection of shareholder rights as integral to proper corporate governance and think major corporate changes require prior shareholder approval. We also recognize there are costs associated with shareholder proposals and think ownership thresholds are appropriate in many circumstances. We oppose all structural impediments to increasing shareholder value.

Examples of relevant principles underlying this philosophy include but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Shareholder Rights Plans "Poison Pills"</u> – We generally oppose the use of poison pills unless a "pill" is approved by shareholders and does not hamper value creation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Supermajority Voting</u> – A majority vote of shareholders should be sufficient to approve items such as bylaws and acquisitions. Supermajority requirements have the potential to erode the rights of minority shareholders and are viewed negatively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Unequal Voting Rights</u> – We support equal voting rights and think voting power should be allocated in direct proportion to the shareholders' equity ownership. Accordingly, we believe that dual share classes generally present more disadvantages than advantages to long-term investors and will generally vote against proposals to create or continue such structures. Notable exceptions include Real Estate Investment Trusts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Shareholder Rights</u> – We think shareholders generally have the right to nominate directors, call special meetings and act without holding a meeting in certain circumstances. However, we also recognize there is potential for abuse and therefore support reasonable ownership thresholds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Capital Structure</u> – The decision to issue or repurchase stock, issue debt or split shares is made by a board presumably with the intent of improving the overall capital structure, investing in growth, reaching a broader investment audience, enhancing shareholder value, and/or managing challenging liquidity/leverage circumstances. As such, we review these decisions on a case-by-case basis taking into consideration the degree of dilution and impact on liquidity. Proposals to create, modify or issue common and preferred stock are generally accepted if the rights of the issuance are not superior to the rights of current shareholders subject to the principal that an authorization increase is limited to 10% or less over a 2-year period.

**A Note on Shareholder Proposals**

Shareholder Proposals are often company specific making a one-size fits all approach to voting suboptimal. For that reason, shareholder proposals are escalated to the active investment teams for case-by-case analysis and decision making. Voting decisions are made by weighing the financial materiality of the proposal against any opposing rationale from company management, with the ultimate determination driven by the economic best interest of shareholders. While votes are generally cast consistently across the investment teams, there may be situations where portfolio managers holding the same security disagree on what is in the best interests of their shareholders.

**Passive Strategy Voting**

Our passively managed strategies follow the same voting philosophy as our actively managed strategies. In the absence of a determination by our active investment teams, our passive strategies will typically vote in alignment with management. We think managements and boards of directors should have comprehensive insights into the company's long-term strategy and operations. This insight puts them in a sound position to determine the financial materiality of proposals and their alignment with the economic interest of shareholders in the absence of an evaluation by our active teams.

We execute this philosophy through our Proxy Voting Guidelines as overseen by our Proxy Voting committee. Strategies are aligned to one of our custom Guidelines - Base, Sustainable and Board Aligned. We provide clients with transparency into our voting history and rationale via our interactive website. In most strategies, clients may also choose to vote their own shares or request a custom set of vote guidelines aligning with their own specific requirements.

------

**LOS ANGELES CAPITAL** 

Proxy Policy

Rev. February 20, 2025

------

---

| | | | |
|:---|:---|:---|:---|
| **Table of Contents** | **Table of Contents** | **Table of Contents** | **Table of Contents** |
| ***I.*** |  | ***Introduction*** | ***3*** |
| ***II.*** |  | ***Proxy Policy Statement*** | ***3*** |
|  | A. | Proxy Voting Guidelines | 3 |
|  | B. | Limitations | 4 |
|  | C. | Special Considerations | 4 |
| ***III.*** |  | ***Responsibility and Oversight*** | ***5*** |
| ***IV.*** |  | ***Proxy Voting Procedures*** | ***5*** |
|  | A. | Materiality | 5 |
|  | B. | Conflicts of Interest | 5 |
|  | C. | Disclosure | 6 |
|  | D. | Recordkeeping | 6 |

---

------

**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 agreements.

**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 and administration, recordkeeping, and manages other operational and reporting matters of the proxy voting process. If at any time a material conflict arises in connection with the Firm voting proxies for a client account, 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' market-based U.S. and Global guidelines<sup>1</sup>, as may be modified from time to time (the "Firm's Guidelines"). Clients with specific proxy voting goals may direct the Firm to apply a thematic set of proxy guidelines developed by Glass Lewis or provide the Firm with an alternative set of custom guidelines for use in voting proxies for the client's account.

**A.Proxy Voting Guidelines**

On an annual basis, the Committee reviews the Firm's Guidelines. Members of the Committee also selectively review a sampling of the voting recommendations and the related proxy materials in determining whether to modify the approved Firm Guidelines.

Where the Firm has proxy voting authority, 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 the specific 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. Management of issuers, as well as other interested parties, will sometimes release supplemental information to the proxy statement that relates to a pending proxy vote. Glass Lewis and the Firm will not always be able to consider such additional information depending on the timing of its release and voting deadlines.

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 recommendation 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 such approved guideline(s).

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 or managing 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.

<sup>1</sup> https://www.glasslewis.com/voting-policies-current/

------

**B.Limitations**

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;• 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;• 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, subject to the Special Considerations outlined below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;• 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Where in the Firm's judgement the ***unjustifiable costs***<sup>2</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;• Where a required ***Power of Attorney*** is not on file or it is not feasible to get one on file.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Where a meeting involves an issuer or transaction with a relevant U.S. or non U.S. ***sanctioned entity or individual****.*

**C.Special Considerations** 

Certain accounts may warrant specialized treatment in voting proxies. Contractual stipulations, individual client direction, and special guideline arrangements will dictate how voting will be done in these cases.

**Mutual Funds**

Where the Firm votes proxies for a mutual fund that it sub-advises, unless otherwise directed and agreed with such fund and its adviser, the proxies typically will be voted in accordance with the Firm's proxy guidelines. Proxies of a mutual fund's portfolio companies may be voted in accordance with resolutions or other instructions from an authorized person of the fund.

**ERISA Accounts**

The Department of Labor ("DOL") rules emphasize that a fiduciary's duties extend to management of shareholder rights including with respect to proxy voting. Responsibilities for voting ERISA accounts include: the duty of loyalty, prudence, compliance with the plan, as well as a duty to avoid prohibited transactions. The DOL rules require voting with a focus on relevant risk-return factors and not voting in a manner that sacrifices investment returns or takes on risks that promote benefits or goals unrelated to the interests of participants and beneficiaries. Where the Firm has authority to vote proxies for an ERISA account, the Firm employs the Firm's Guidelines unless otherwise specifically directed by the ERISA plan fiduciary. Where the Firm has authority to vote proxies for a commingled fund that is an ERISA plan asset fund, the Firm employs the Firm's Guidelines.

**Securities Lending Program**

Certain situations where Los Angeles Capital may recall securities on loan to vote proxies, if operationally feasible, include: (i) where Los Angeles Capital deems a holding materially significant, (ii) where Los Angeles Capital is directing the securities lending, or (iii) where a client has made arrangements with its custodian to permit standing instructions for the recall of securities out on loan and Los Angeles Capital has agreed to implement the standing instructions.

<sup>2</sup> The Department of Labor 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.

------

**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 such 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, Trust Agreement 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 or delegated to a sub-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.

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 voting authority.

**A.Materiality**

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.

**B.Conflicts of Interest**

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 proxy paper research report. In these situations, members of the Committee will review the proxy paper research report and vote the proxy in accordance with the Committee charter.

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 research report and abstaining from making a voting recommendation 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 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 whose account holds the shares of such issuer will be notified. If no directive on how to vote 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.

**C.Disclosure** 

Los Angeles Capital will provide 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 operations@lacapm.com.

Los Angeles Capital generally will not disclose how it has voted or 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 voting information. Los Angeles Capital will not disclose past votes or share amounts voted except: (i) for a valid business purpose as determined in the discretion of the Chief Compliance Officer or Chief Legal Officer, (ii) to the respective client for such client's account, (iii) as required on Form N-PX related to Say-on-Pay votes, or (iv) as otherwise required by law.

**D.Recordkeeping**

**ERISA Accounts**

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.

**Duration**

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.

------

**T. ROWE PRICE ASSOCIATES, INC.** 

**AND CERTAIN OF ITS INVESTMENT ADVISER AFFILIATES**

PROXY VOTING POLICIES AND PROCEDURES

February 2026

------

**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.

<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.

------

**ADMINISTRATION OF POLICIES AND PROCEDURES**

**Environmental, Social and Governance Investing Committee.** T. Rowe Price's Environmental, Social and Governance Investing Committee ("**TRPA ESG Investing Committee**" or the "**Committee**") is responsible for establishing positions with respect to corporate governance and other proxy issues. Certain delegated members of the Committee also review questions and respond to inquiries from clients and mutual fund shareholders pertaining to proxy issues. While the 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 Committee is also responsible for the oversight of third-party proxy services firms that T. Rowe Price engages to facilitate the proxy voting process.

**Global Proxy Operations Team.** The Global Proxy Operations 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 consults with the appropriate sector analyst from the Responsible Investment team, as appropriate.

**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 Investing 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. For meetings with complex ballot items in certain international markets, research may be consulted from local domestic proxy research providers. 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 Investing 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 Global Proxy Operations 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 Guidelines**

Specific proxy voting guidelines have been adopted by the TRPA ESG Investing Committee for all regularly occurring categories of management and shareholder proposals. The guidelines include regional voting guidelines as well as the guidelines for investment strategies with objectives other than purely financial returns, such as Impact and Net Zero. A detailed set of proxy voting guidelines is available on the T. Rowe Price website, www.troweprice.com/esg.

**Global Portfolio Companies**

The TRPA ESG Investing Committee has developed custom international proxy voting guidelines based on our proxy advisor's general global policies, regional codes of corporate governance, and our own views as investors in these markets. We apply a two-tier approach to determining and applying global proxy voting policies. The first tier establishes baseline policy guidelines for the most fundamental issues, which span the corporate governance spectrum without regard to a company's domicile. The second tier takes into account various idiosyncrasies of different countries, making allowances for standard market practices, as long as they do not violate the fundamental goals of good corporate governance. The goal is to enhance shareholder value through effective use of the shareholder franchise, recognizing that application of a single set of policies is not appropriate for all markets.

**Fixed Income and Passively Managed Strategies**

Proxy voting for our fixed income and indexed portfolios is administered by the Global Proxy Operations team using T. Rowe Price's guidelines as set by the TRPA ESG Investing 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 temporary 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 for the Price Funds in order to cast a vote at an upcoming shareholder meeting. A monthly monitoring process is in place to review securities on loan for the Price Funds and how they may affect proxy voting.

------

**Monitoring and Resolving Conflicts of Interest**

The TRPA ESG Investing 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 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 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 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 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 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 Global Code of 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 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. Shares of the Price Funds that are held by other Price Funds will generally be voted in the same proportion as shares for which voting instructions from other shareholders are timely received. If voting instructions from other shareholders are not received, or if a T. Rowe Price Fund is only held by other T. Rowe Price Funds or other accounts for which T. Rowe Price has proxy voting authority, the fund will vote in accordance with its Board's instruction.

For shares of the Price Funds that are series of T. Rowe Price Equity Series, Inc., T. Rowe Price Fixed Income Series, Inc., and T. Rowe Price International Series, Inc. (collectively, the "Variable Insurance Portfolios") held by insurance company separate accounts for which the insurance company has not received timely voting instructions, as well as shares the insurance company owns, those shares shall be voted in the same proportion as shares for which voting instructions from contract holders are timely received.

**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>

<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.

------

**REPORTING, RECORD RETENTION AND OVERSIGHT**

The TRPA ESG Investing Committee, and certain personnel under the direction of the 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, Committee meeting materials, and other internal research relating to voting decisions are maintained in accordance with applicable requirements.

------

**WESTFIELD CAPITAL MANAGEMENT**

**Proxy Voting**

March 2025

**<u>Introduction</u>**

Westfield will offer to vote proxies for all client accounts. Westfield believes that the voting of proxies can be an important tool for investors to promote best practices in corporate governance. Therefore, Westfield seeks to vote all proxies in the best interest of clients which includes ERISA plan participants and beneficiaries, as applicable. Westfield also recognizes that the voting of proxies with respect to securities held in client accounts is an investment responsibility having economic value. Based on this, Westfield votes all ballots received for client accounts and covers all costs associated with voting proxy ballots.

In accordance with Rule 206(4)-6 under the Investment Advisers Act of 1940 (the "Act"), Westfield has adopted and implemented policies and procedures that they believe are reasonably designed to ensure that proxies are voted in the best interest of clients. Westfield's authority to vote proxies for their clients is established in writing, usually by the investment advisory contract. Clients can change such authority at any time with prior written notice to Westfield. Clients can also contact their Marketing representative or the Operations Department (wcmops@wcmgmt.com) for a report of how their accounts' securities were voted.

**<u>Oversight</u> <u>of</u> <u>Proxy</u> <u>Voting</u> <u>Function</u>**

Westfield has engaged a third-party service provider, Institutional Shareholder Services, Inc. (the "vendor"), to assist with proxy voting. The Operation's Proxy team will:

&nbsp;&nbsp;&nbsp;&nbsp;▪ oversee the vendor; this includes working with the Compliance team in performing annual audits of the proxy votes and conducting annual due diligence;

&nbsp;&nbsp;&nbsp;&nbsp;▪ ensure required proxy records are retained according to applicable rules and regulations and internal policy;

&nbsp;&nbsp;&nbsp;&nbsp;▪ distribute proxy reports prepared by the vendor for internal and external requests;

&nbsp;&nbsp;&nbsp;&nbsp;▪ review the proxy policy and voting guidelines at least annually; and

&nbsp;&nbsp;&nbsp;&nbsp;▪ identify material conflicts of interest that may impair Westfield's ability to vote shares in clients' best interest.

**<u>Proxy</u> <u>Voting</u> <u>Guidelines</u>**

Westfield utilizes the vendor's proxy voting guidelines, which consider market-specific best practices,

transparency, and disclosure when addressing shareholder matters. Westfield does not select a client's voting policy. Clients must choose the policy that best fits their requirements. Clients may choose to vote in accordance with the vendor's U.S. proxy voting guidelines (i.e., Standard Guidelines), Taft-Hartley guidelines which are in full conformity with the AFL-CIO's proxy voting guidelines, Socially Responsible Investing Guidelines ("SRI") or Sustainability Guidelines. A summary of ISS' voting guidelines is located at the end of this policy.

The vendor reviews the above listed policies annually to ensure they are still considering market-specific best practices, transparency, and disclosure when addressing shareholder matters. Westfield reviews these changes annually to ensure they are in clients' best interests.

Generally, information on Westfield's proxy voting decisions or status of votes will not be communicated or distributed to external solicitors. On occasion, Westfield may provide such information to solicitors if it is believed that a response will benefit clients, or a response is requested from the Westfield security analyst or portfolio manager. Westfield is required to disclose all say-on-pay votes on an annual basis in its Form N-PX filing to the SEC.

------

**<u>Proxy</u> <u>Voting</u> <u>Process</u>**

The vendor tracks proxy meetings and reconciles proxy ballots received for each meeting. Westfield will use best efforts in obtaining any missing ballots; however, only those proxy ballots the vendor has received will be voted. For any missing ballots, the vendor and/or Westfield will contact custodians to locate such ballots. Since there can be many factors affecting proxy ballot retrieval, it is possible that Westfield will not receive a ballot in time to place a vote. Clients who participate in securities lending programs should be aware that Westfield will not call back any shares on loan for proxy voting purposes. However, Westfield could request a client call back shares if they determine there is the potential for a material benefit in doing so.

For each meeting, the vendor reviews the agenda and applies a vote recommendation for each proposal based on the written guidelines assigned to the applicable accounts. Proxies will be voted in accordance with the guidelines, unless the Westfield analyst or portfolio manager believes that following the vendor's guidelines would not be in the clients' best interests.

With limited exceptions, an analyst or portfolio manager may request to override the Standard or the Sustainability Guidelines at any time on or before the meeting cutoff date. When there is an upcoming material meeting (also referred to as "significant votes"), the Proxy team will bring the identified ballots to the analyst's or portfolio manager's attention. Westfield utilizes the vendor's classification to determine materiality (e.g. mergers, acquisitions, proxy contests). If the analyst or portfolio manager chooses to vote against the vendor's stated guidelines in any instance, he/she must make the request in writing and provide a rationale for the vote against the stated guidelines. No analyst or portfolio manager overrides are permitted in the Taft-Hartley and SRI guidelines.

**<u>Conflicts</u> <u>of</u> <u>Interest</u>**

Compliance and the Proxy team are responsible for identifying conflicts of interest that could arise when voting proxy ballots on behalf of Westfield's clients. Per Westfield's Code of Ethics and other internal policies, all employees should avoid situations where potential conflicts may exist. Westfield has put in place certain reviews to ensure proxies are voted solely on the investment merits of the proposal. In identifying potential conflicts, Compliance will review many factors, including, but not limited to existing relationships with Westfield or an employee, and the vendor's disclosed conflicts. If an actual conflict of interest is identified, it is reviewed by the Compliance and/or Proxy teams. If it is determined that the conflict is material in nature, the analyst or portfolio manager may not override the vendor's recommendation. Westfield's material conflicts are coded within the vendor's system. These meetings are flagged within the system to ensure Westfield does not override the vendor's recommendations.

Annually, Westfield will review the vendor's policies regarding their disclosure of their significant relationships to determine if there are conflicts that would impact Westfield. Westfield will also review their Code of Ethics which specifically identifies their actual or potential conflicts. During the annual due diligence meeting, Westfield ensures that the vendor has firewalls in place to separate the staff that performs proxy analyses and research from the members of ISS Corporate Solutions, Inc.

**<u>Proxy</u> <u>Reports</u>**

Westfield can provide account specific proxy reports to clients upon request or at scheduled time periods (e.g., quarterly). Client reporting requirements typically are established during the initial account set-up stage, but clients may modify this reporting schedule at any time with prior written notice to Westfield. The reports will contain at least the following information:

&nbsp;&nbsp;&nbsp;&nbsp;▪ company name

&nbsp;&nbsp;&nbsp;&nbsp;▪ meeting agenda

&nbsp;&nbsp;&nbsp;&nbsp;▪ how the account voted on each agenda item

&nbsp;&nbsp;&nbsp;&nbsp;▪ how management recommended the vote to be cast on each agenda item

&nbsp;&nbsp;&nbsp;&nbsp;▪ rationale for any votes against the established guidelines (rationale is not always provided for votes that are in-line with guidelines since these are set forth in the written guidelines)

------

**<u>Recordkeeping</u>**

In accordance with Rule 204-2 of the Investment Advisers Act of 1940, proxy voting records will be maintained for at least five years. The following records will be retained by either Westfield or the proxy vendor:

&nbsp;&nbsp;&nbsp;&nbsp;• a copy of the Proxy Voting Polices and Guidelines and amendments that were in effect during the required time period;

&nbsp;&nbsp;&nbsp;&nbsp;• electronic or paper copies of each proxy statement received by Westfield or the vendor with respect to securities in client accounts (Westfield may also rely on obtaining copies of proxy statements from the SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system);

&nbsp;&nbsp;&nbsp;&nbsp;• records of each vote cast for eachclient;

&nbsp;&nbsp;&nbsp;&nbsp;• written reports to clients on proxy voting and all client requests for information and Westfield's response;

&nbsp;&nbsp;&nbsp;&nbsp;• disclosure documentation to clients on how they may obtain information on how Westfield voted their securities

------

**ISS**

**UNITED STATES**

**Concise Proxy Voting Guidelines**

**Benchmark Policy Recommendations**

Effective for Meetings on or after February 1, 2025

Published January 15, 2025

WWW.ISSGOVERNANCE.COM

------

**The policies contained herein are a sampling only of selected key Taft-Hartley Advisory Services U.S. proxy voting guidelines, and are not intended to be exhaustive. The complete guidelines can be found at:**

**<u>https://www.issgovernance.com/policy-gateway/voting-policies/</u>**

**Board of Directors**

Voting on Director Nominees in Uncontested Elections

**General Recommendation:** Generally vote for director nominees, except under the following circumstances (with new nominees<sup>1</sup> considered on case-by-case basis):

**Independence**

Vote against<sup>2</sup> or withhold from non-independent directors (Executive Directors and Non-Independent Non- Executive Directors per ISS' Classification of Directors) when:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Independent directors comprise 50 percent or less of the board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The non-independent director serves on the audit, compensation, or nominating committee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company lacks an audit, compensation, or nominating committee so that the full board functions as that committee; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company lacks a formal nominating committee, even if the board attests that the independent directors fulfill the functions of such a committee.

**Composition**

**Attendance at Board and Committee Meetings:** Generally vote against or withhold from directors (except nominees who served only part of the fiscal year<sup>3</sup>) who attend less than 75 percent of the aggregate of their board and committee meetings for the period for which they served, unless an acceptable reason for absences is disclosed in the proxy or another SEC filing. Acceptable reasons for director absences are generally limited to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Medical issues/illness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Family emergencies; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Missing only one meeting (when the total of all meetings is three or fewer).

In cases of chronic poor attendance without reasonable justification, in addition to voting against the director(s) with poor attendance, generally vote against or withhold from appropriate members of the nominating/governance committees or the full board.

If the proxy disclosure is unclear and insufficient to determine whether a director attended at least 75 percent of the aggregate of his/her board and committee meetings during his/her period of service, vote against or withhold from the director(s) in question.

_______________________

<sup>1</sup> A "new nominee" is a director who is being presented for election by shareholders for the first time. Recommendations on new nominees who have served for less than one year are made on a case-by-case basis depending on the timing of their appointment and the problematic governance issue in question.

<sup>2</sup> In general, companies with a plurality vote standard use "Withhold" as the contrary vote option in director elections; companies with a majority vote standard use "Against". However, it will vary by company and the proxy must be checked to determine the valid contrary vote option for the particular company.

<sup>3</sup> Nominees who served for only part of the fiscal year are generally exempted from the attendance policy.

------

**Overboarded Directors: Generally vote against or withhold from individual directors who:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Sit on more than five public company boards; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Are CEOs of public companies who sit on the boards of more than two public companies besides their own - withhold only at their outside boards<sup>4</sup>.

**Gender Diversity:** Generally vote against or withhold from the chair of the nominating committee (or other directors on a case-by-case basis) at companies where there are no women on the company's board. An exception will be made if there was at least one woman on the board at the preceding annual meeting and the board makes a firm commitment to return to a gender-diverse status within a year.

**Racial and/or Ethnic Diversity:** For companies in the Russell 3000 or S&P 1500 indices, generally vote against or withhold from the chair of the nominating committee (or other directors on a case-by-case basis) where the board has no apparent racially or ethnically diverse members.5 An exception will be made if there was racial and/or ethnic diversity on the board at the preceding annual meeting and the board makes a firm commitment to appoint at least one racial and/or ethnic diverse member within a year.

**Responsiveness**

Vote case-by-case on individual directors, committee members, or the entire board of directors as appropriate if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The board failed to act on a shareholder proposal that received the support of a majority of the shares cast in the previous year or failed to act on a management proposal seeking to ratify an existing charter/bylaw provision that received opposition of a majority of the shares cast in the previous year. Factors that will be considered are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Disclosed outreach efforts by the board to shareholders in the wake of the vote;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Rationale provided in the proxy statement for the level of implementation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The subject matter of the proposal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The level of support for and opposition to the resolution in past meetings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Actions taken by the board in response to the majority vote and its engagement with shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The continuation of the underlying issue as a voting item on the ballot (as either shareholder or management proposals); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Other factors as appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The board failed to act on takeover offers where the majority of shares are tendered;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ At the previous board election, any director received more than 50 percent withhold/against votes of the shares cast and the company has failed to address the issue(s) that caused the high withhold/against vote.

Vote case-by-case on Compensation Committee members (or, in exceptional cases, the full board) and the Say on Pay proposal if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's previous say-on-pay received the support of less than 70 percent of votes cast. Factors that will be considered are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's response, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Disclosure of engagement efforts with major institutional investors, including the frequency and timing of engagements and the company participants (including whether independent directors participated);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Disclosure of the specific concerns voiced by dissenting shareholders that led to the say-on-pay opposition; 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;▪ Disclosure of specific and meaningful actions taken to address shareholders' concerns;

_______________________

<sup>4</sup> Although all of a CEO's subsidiary boards with publicly-traded common stock will be counted as separate boards, ISS will not recommend a withhold vote for the CEO of a parent company board or any of the controlled (>50 percent ownership) subsidiaries of that parent but may do so at subsidiaries that are less than 50 percent controlled and boards outside the parent/subsidiary relationships.

<sup>5</sup> Aggregate diversity statistics provided by the board will only be considered if specific to racial and/or ethnic diversity.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Other recent compensation actions taken by the company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the issues raised are recurring or isolated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's ownership structure; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the support level was less than 50 percent, which would warrant the highest degree of responsiveness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The board implements an advisory vote on executive compensation on a less frequent basis than the frequency that received the plurality of votes cast.

**Accountability**

***Problematic Takeover Defenses, Capital Structure, and Governance Structure***

**Poison Pills:** Generally vote against or withhold from all nominees (except new nominees1, who should be considered case-by-case) if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company has a poison pill with a deadhand or slowhand feature5F ;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The board makes a material adverse modification to an existing pill, including, but not limited to, extension, renewal, or lowering the trigger, without shareholder approval; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company has a long-term poison pill (with a term of over one year) that was not approved by the public shareholders.<sup>7</sup>

Vote case-by-case on nominees if the board adopts an initial short-term pill6 (with a term of one year or less) without shareholder approval, taking into consideration:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The trigger threshold and other terms of the pill;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The disclosed rationale for the adoption;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The context in which the pill was adopted, (e.g., factors such as the company's size and stage of development, sudden changes in its market capitalization, and extraordinary industry-wide or macroeconomic events);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A commitment to put any renewal to a shareholder vote;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The company's overall track record on corporate governance and responsiveness to shareholders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Other factors as relevant.

**Unequal Voting Rights:** Generally vote withhold or against directors individually, committee members, or the entire board (except new nominees1, who should be considered case-by-case), if the company employs a common stock structure with unequal voting rights 7F .

Exceptions to this policy will generally be limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Newly-public companies8F with a sunset provision of no more than seven years from the date of going public;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Limited Partnerships and the Operating Partnership (OP) unit structure of REITs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Situations where the super-voting shares represent less than 5% of total voting power and therefore considered to be de minimis; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company provides sufficient protections for minority shareholders, such as allowing minority shareholders a regular binding vote on whether the capital structure should be maintained.

**Classified Board Structure:** The board is classified, and a continuing director responsible for a problematic governance issue at the board/committee level that would warrant a withhold/against vote recommendation is not up for election. All appropriate nominees (except new) may be held accountable.

_______________________

<sup>6</sup> If a short-term pill with a deadhand or slowhand feature is enacted but expires before the next shareholder vote, ISS will generally still recommend withhold/against nominees at the next shareholder meeting following its adoption.

<sup>7</sup> Approval prior to, or in connection, with a company's becoming publicly-traded, or in connection with a de-SPAC transaction, is insufficient.

------

**Removal of Shareholder Discretion on Classified Boards:** The company has opted into, or failed to opt out of, state laws requiring a classified board structure.

**Problematic Governance Structure:** For companies that hold or held their first annual meeting9 of public shareholders after Feb. 1, 2015, generally vote against or withhold from directors individually, committee members, or the entire board (except new nominees1, who should be considered case-by-case) if, prior to or in connection with the company's public offering, the company or its board adopted the following bylaw or charter provisions that are considered to be materially adverse to shareholder rights:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Supermajority vote requirements to amend the bylaws or charter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ A classified board structure; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Other egregious provisions.

A provision which specifies that the problematic structure(s) will be sunset within seven years of the date of going public will be considered a mitigating factor.

Unless the adverse provision is reversed or removed, vote case-by-case on director nominees in subsequent years.

**Unilateral Bylaw/Charter Amendments:** Generally vote against or withhold from directors individually, committee members, or the entire board (except new nominees1, who should be considered case-by-case) if the board amends the company's bylaws or charter without shareholder approval in a manner that materially diminishes shareholders' rights or that could adversely impact shareholders, considering the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The board's rationale for adopting the bylaw/charter amendment without shareholder ratification;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Disclosure by the company of any significant engagement with shareholders regarding the amendment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The level of impairment of shareholders' rights caused by the board's unilateral amendment to the bylaws/charter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The board's track record with regard to unilateral board action on bylaw/charter amendments or other entrenchment provisions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's ownership structure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's existing governance provisions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The timing of the board's amendment to the bylaws/charter in connection with a significant business development; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Other factors, as deemed appropriate, that may be relevant to determine the impact of the amendment on shareholders.

Unless the adverse amendment is reversed or submitted to a binding shareholder vote, in subsequent years vote case-by-case on director nominees. Generally vote against (except new nominees1, who should be considered case-by-case) if the directors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Classified the board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Adopted supermajority vote requirements to amend the bylaws or charter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Eliminated shareholders' ability to amend bylaws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Adopted a <u>fee-shifting provision</u>; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Adopted another provision deemed egregious.

_______________________

<sup>8</sup> This generally includes classes of common stock that have additional votes per share than other shares; classes of shares that are not entitled to vote on all the same ballot items or nominees; or stock with time-phased voting rights ("loyalty shares").

<sup>9</sup> Includes companies that emerge from bankruptcy, SPAC transactions, spin-offs, direct listings, and those who complete a traditional initial public offering.

------

**Restricting Binding Shareholder Proposals:** Generally vote against or withhold from the members of the governance committee if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's governing documents impose undue restrictions on shareholders' ability to amend the bylaws. Such restrictions include but are not limited to: outright prohibition on the submission of binding shareholder proposals or share ownership requirements, subject matter restrictions, or time holding requirements in excess of SEC Rule 14a-8. Vote against or withhold on an ongoing basis.

Submission of management proposals to approve or ratify requirements in excess of SEC Rule 14a-8 for the submission of binding bylaw amendments will generally be viewed as an insufficient restoration of shareholders' rights. Generally continue to vote against or withhold on an ongoing basis until shareholders are provided with an unfettered ability to amend the bylaws or a proposal providing for such unfettered right is submitted for shareholder approval.

**Director Performance Evaluation:** The board lacks mechanisms to promote accountability and oversight, coupled with sustained poor performance relative to peers. Sustained poor performance is measured by one-, three-, and five-year total shareholder returns in the bottom half of a company's four-digit GICS industry group (Russell 3000 companies only). Take into consideration the company's operational metrics and other factors as warranted. Problematic provisions include but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ A classified board structure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ A supermajority vote requirement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Either a plurality vote standard in uncontested director elections, or a majority vote standard in contested elections;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The inability of shareholders to call special meetings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The inability of shareholders to act by written consent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ A multi-class capital structure; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ A non-shareholder-approved poison pill.

**Management Proposals to Ratify Existing Charter or Bylaw Provisions:** Vote against/withhold from individual directors, members of the governance committee, or the full board, where boards ask shareholders to ratify existing charter or bylaw provisions considering the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The presence of a shareholder proposal addressing the same issue on the same ballot;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The board's rationale for seeking ratification;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Disclosure of actions to be taken by the board should the ratification proposal fail;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Disclosure of shareholder engagement regarding the board's ratification request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The level of impairment to shareholders' rights caused by the existing provision;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The history of management and shareholder proposals on the provision at the company's past meetings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the current provision was adopted in response to the shareholder proposal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's ownership structure; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Previous use of ratification proposals to exclude shareholder proposals.

**Problematic Audit-Related Practices**

Generally vote against or withhold from the members of the Audit Committee if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The non-audit fees paid to the auditor are <u>excessive</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company receives an adverse opinion on the company's financial statements from its auditor; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ There is persuasive evidence that the Audit Committee entered into an inappropriate indemnification agreement with its auditor that limits the ability of the company, or its shareholders, to pursue legitimate legal recourse against the audit firm.

------

Vote case-by-case on members of the Audit Committee and potentially the full board if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Poor accounting practices are identified that rise to a level of serious concern, such as: fraud; misapplication of GAAP; and material weaknesses identified in Section 404 disclosures. Examine the severity, breadth, chronological sequence, and duration, as well as the company's efforts at remediation or corrective actions, in determining whether withhold/against votes are warranted.

**Problematic Compensation Practices**

In the absence of an Advisory Vote on Executive Compensation (Say on Pay) ballot item or in egregious situations, vote against or withhold from the members of the Compensation Committee and potentially the full board if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ There is an unmitigated misalignment between CEO pay and company performance (<u>pay</u> <u>for performance</u>);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company maintains significant <u>problematic pay</u> <u>practices</u>; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The board exhibits a significant level of <u>poor</u> <u>communication</u> <u>and</u> <u>responsiveness</u> to shareholders.

Generally vote against or withhold from the Compensation Committee chair, other committee members, or potentially the full board if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company fails to include a Say on Pay ballot item when required under SEC provisions, or under the company's declared frequency of say on pay; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company fails to include a Frequency of Say on Pay ballot item when required under SEC provisions.

Generally vote against members of the board committee responsible for approving/setting non-employee director compensation if there is a pattern (i.e. two or more years) of awarding excessive non-employee director compensation without disclosing a compelling rationale or other mitigating factors.

**Problematic Pledging of Company Stock:** Vote against the members of the committee that oversees risks related to pledging, or the full board, where a significant level of pledged company stock by executives or directors raises concerns. The following factors will be considered:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The presence of an anti-pledging policy, disclosed in the proxy statement, that prohibits future pledging activity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The magnitude of aggregate pledged shares in terms of total common shares outstanding, market value, and trading volume;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Disclosure of progress or lack thereof in reducing the magnitude of aggregate pledged shares over time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Disclosure in the proxy statement that shares subject to stock ownership and holding requirements do not include pledged company stock; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Any other relevant factors.

**Climate Accountability**

For companies that are significant greenhouse gas (GHG) emitters, through their operations or value chain<sup>10</sup> generally vote against or withhold from the incumbent chair of the responsible committee (or other directors on a case-by-case basis) in cases where ISS determines that the company is not taking the minimum steps needed to understand, assess, and mitigate risks related to climate change to the company and the larger economy.

_______________________

<sup>10</sup> Companies defined as "significant GHG emitters" will be those on the current Climate Action 100+ Focus Group list.

------

Minimum steps to understand and mitigate those risks are considered to be the following. Both minimum criteria will be required to be in alignment with the policy :

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Detailed disclosure of climate-related risks, such as according to the framework established by the Task Force on Climate-related Financial Disclosures (TCFD), including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Board governance measures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Corporate strategy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Risk management analyses; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Metrics and targets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Appropriate GHG emissions reduction targets.

At this time, "appropriate GHG emissions reductions targets" will be medium-term GHG reduction targets or Net Zero-by-2050 GHG reduction targets for a company's operations (Scope 1) and electricity use (Scope 2). Targets should cover the vast majority of the company's direct emissions.

**Governance Failures**

Under extraordinary circumstances, vote against or withhold from directors individually, committee members, or the entire board, due to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Material failures of governance, stewardship, risk oversight<sup>11</sup>, or fiduciary responsibilities at the company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Failure to replace management as appropriate; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Egregious actions related to a director's service on other boards that raise substantial doubt about his or her ability to effectively oversee management and serve the best interests of shareholders at any company.

Voting on Director Nominees in Contested Elections

**Vote-No Campaigns**

**General Recommendation:** In cases where companies are targeted in connection with public "vote-no" campaigns, evaluate director nominees under the existing governance policies for voting on director nominees in uncontested elections. Take into consideration the arguments submitted by shareholders and other publicly available information.

**Proxy Contests/Proxy Access**

**General Recommendation:** Vote case-by-case on the election of directors in contested elections, considering the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Long-term financial performance of the company relative to its industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Management's track record;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Background to the contested election;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Nominee qualifications and any compensatory arrangements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Strategic plan of dissident slate and quality of the critique against management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Likelihood that the proposed goals and objectives can be achieved (both slates); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Stock ownership positions.

In the case of candidates nominated pursuant to proxy access, vote case-by-case considering any applicable factors listed above or additional factors which may be relevant, including those that are specific to the company, to the nominee(s) and/or to the nature of the election (such as whether there are more candidates than board seats).

_______________________

<sup>11</sup> Examples of failure of risk oversight include but are not limited to: bribery; large or serial fines or sanctions from regulatory bodies; demonstrably poor risk oversight of environmental and social issues, including climate change; significant adverse legal judgments or settlement; or hedging of company stock.

------

Other Board-Related Proposals

**Independent Board Chair**

**General Recommendation:** Generally vote for shareholder proposals requiring that the board chair position be filled by an independent director, taking into consideration the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The scope and rationale of the proposal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's current board leadership structure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's governance structure and practices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Company performance; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Any other relevant factors that may be applicable.

The following factors will increase the likelihood of a "for" recommendation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ A majority non-independent board and/or the presence of non-independent directors on key board committees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ A weak or poorly-defined lead independent director role that fails to serve as an appropriate counterbalance to a combined CEO/chair role;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The presence of an executive or non-independent chair in addition to the CEO, a recent recombination of the role of CEO and chair, and/or departure from a structure with an independent chair;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Evidence that the board has failed to oversee and address material risks facing the company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ A material governance failure, particularly if the board has failed to adequately respond to shareholder concerns or if the board has materially diminished shareholder rights; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Evidence that the board has failed to intervene when management's interests are contrary to shareholders' interests.

**Shareholder Rights & Defenses**

**Shareholder Ability to Act by Written Consent**

**General Recommendation:** Generally vote against management and shareholder proposals to restrict or prohibit shareholders' ability to act by written consent.

Generally vote for management and shareholder proposals that provide shareholders with the ability to act by written consent, taking into account the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Shareholders' current right to act by written consent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The consent threshold;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The inclusion of exclusionary or prohibitive language;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Investor ownership structure; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Shareholder support of, and management's response to, previous shareholder proposals.

Vote case-by-case on shareholder proposals if, in addition to the considerations above, the company has the following governance and antitakeover provisions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ An unfettered<sup>12</sup> right for shareholders to call special meetings at a 10 percent threshold;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ A majority vote standard in uncontested director elections;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ No non-shareholder-approved pill; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ An annually elected board.

_______________________

<sup>12</sup> "Unfettered" means no restrictions on agenda items, no restrictions on the number of shareholders who can group together to reach the 10 percent threshold, and only reasonable limits on when a meeting can be called: no greater than 30 days after the last annual meeting and no greater than 90 prior to the next annual meeting.

------

**Shareholder Ability to Call Special Meetings**

**General Recommendation:** Vote against management or shareholder proposals to restrict or prohibit

shareholders' ability to call special meetings.

Generally vote for management or shareholder proposals that provide shareholders with the ability to call special meetings taking into account the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Shareholders' current right to call special meetings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Minimum ownership threshold necessary to call special meetings (10 percent preferred);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The inclusion of exclusionary or prohibitive language;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Investor ownership structure; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Shareholder support of, and management's response to, previous shareholder proposals.

**Virtual Shareholder Meetings**

**General Recommendation:** Generally vote for management proposals allowing for the convening of shareholder meetings by electronic means, so long as they do not preclude in-person meetings. Companies are encouraged to disclose the circumstances under which virtual-only<sup>13</sup> meetings would be held, and to allow for comparable rights and opportunities for shareholders to participate electronically as they would have during an in-person meeting.

Vote case-by-case on shareholder proposals concerning virtual-only meetings, considering:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Scope and rationale of the proposal; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Concerns identified with the company's prior meeting practices.

**Capital/Restructuring**

**Common Stock Authorization**

**General Authorization Requests**

**General Recommendation:** Vote case-by-case on proposals to increase the number of authorized shares of common stock that are to be used for general corporate purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ If share usage (outstanding plus reserved) is less than 50% of the current authorized shares, vote for an increase of up to 50% of current authorized shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ If share usage is 50% to 100% of the current authorized, vote for an increase of up to 100% of current authorized shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ If share usage is greater than current authorized shares, vote for an increase of up to the current share usage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ In the case of a stock split, the allowable increase is calculated (per above) based on the post-split adjusted authorization.

Generally vote against proposed increases, even if within the above ratios, if the proposal or the company's prior or ongoing use of authorized shares is problematic, including, but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The proposal seeks to increase the number of authorized shares of the class of common stock that has superior voting rights to other share classes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ On the same ballot is a proposal for a reverse split for which support is warranted despite the fact that it would result in an excessive increase in the share authorization;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company has a non-shareholder approved poison pill (including an NOL pill); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company has previous sizeable placements (within the past 3 years) of stock with insiders at prices substantially below market value, or with problematic voting rights, without shareholder approval.

_______________________

<sup>13</sup> Virtual-only shareholder meeting" refers to a meeting of shareholders that is held exclusively using technology without a corresponding in-person meeting.

------

However, generally vote for proposed increases beyond the above ratios or problematic situations when there is disclosure of specific and severe risks to shareholders of not approving the request, such as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ In, or subsequent to, the company's most recent 10-K filing, the company discloses that there is substantial doubt about its ability to continue as a going concern;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company states that there is a risk of imminent bankruptcy or imminent liquidation if shareholders do not approve the increase in authorized capital; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ A government body has in the past year required the company to increase its capital ratios.

For companies incorporated in states that allow increases in authorized capital without shareholder approval, generally vote withhold or against all nominees if a unilateral capital authorization increase does not conform to the above policies.

**Specific Authorization Requests**

**General Recommendation:** Generally vote for proposals to increase the number of authorized common shares where the primary purpose of the increase is to issue shares in connection with transaction(s) (such as acquisitions, SPAC transactions, private placements, or similar transactions) on the same ballot, or disclosed in the proxy statement, that warrant support. For such transactions, the allowable increase will be the greater of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ twice the amount needed to support the transactions on the ballot, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ the allowable increase as calculated for general issuances above.

**Share Issuance Mandates at U.S. Domestic Issuers Incorporated Outside the U.S.**

**General Recommendation:** For U.S. domestic issuers incorporated outside the U.S. and listed solely on a U.S. exchange, generally vote for resolutions to authorize the issuance of common shares up to 20 percent of currently issued common share capital, where not tied to a specific transaction or financing proposal.

For pre-revenue or other early-stage companies that are heavily reliant on periodic equity financing, generally vote for resolutions to authorize the issuance of common shares up to 50 percent of currently issued common share capital. The burden of proof will be on the company to establish that it has a need for the higher limit.

Renewal of such mandates should be sought at each year's annual meeting.

Vote case-by-case on share issuances for a specific transaction or financing proposal.

**Mergers and Acquisitions**

**General Recommendation:** Vote case-by-case on mergers and acquisitions. Review and evaluate the merits and drawbacks of the proposed transaction, balancing various and sometimes countervailing factors including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ *Valuation* - Is the value to be received by the target shareholders (or paid by the acquirer) reasonable? While the fairness opinion may provide an initial starting point for assessing valuation reasonableness, emphasis is placed on the offer premium, market reaction, and strategic rationale.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ *Market reaction* - How has the market responded to the proposed deal? A negative market reaction should cause closer scrutiny of a deal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ *Strategic rationale* - Does the deal make sense strategically? From where is the value derived? Cost and revenue synergies should not be overly aggressive or optimistic, but reasonably achievable. Management should also have a favorable track record of successful integration of historical acquisitions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ *Negotiations and process* - Were the terms of the transaction negotiated at arm's-length? Was the process fair and equitable? A fair process helps to ensure the best price for shareholders. Significant negotiation "wins" can also signify the deal makers' competency. The comprehensiveness of the sales process (e.g., full auction, partial auction, no auction) can also affect shareholder value.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ *Conflicts of interest* - Are insiders benefiting from the transaction disproportionately and inappropriately as compared to non-insider shareholders? As the result of potential conflicts, the directors and officers of the company may be more likely to vote to approve a merger than if they did not hold these interests. Consider whether these interests may have influenced these directors and officers to support or recommend the merger. The CIC figure presented in the "ISS Transaction Summary" section of this report is an aggregate figure that can in certain cases be a misleading indicator of the true value transfer from shareholders to insiders. Where such figure appears to be excessive, analyze the underlying assumptions to determine whether a potential conflict exists.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ *Governance* - Will the combined company have a better or worse governance profile than the current governance profiles of the respective parties to the transaction? If the governance profile is to change for the worse, the burden is on the company to prove that other issues (such as valuation) outweigh any deterioration in governance.

**Special Purpose Acquisition Corporations (SPACs) - Proposals for Extensions**

The main purpose of SPACs is to identify and acquire a viable target within a specified timeframe, and failure to achieve this objective within the allotted time calls into question management's ability to execute its primary objective. The end of that timeframe is generally referred to as the termination date.

**General Recommendation:** Generally support requests to extend the termination date by up to one year from the SPAC's original termination date (inclusive of any built-in extension options, and accounting for prior extension requests).

Other factors that may be considered include: any added incentives, business combination status, other amendment terms, and, if applicable, use of money in the trust fund to pay excise taxes on redeemed shares.

**Compensation**

Executive Pay Evaluation

Underlying all evaluations are five global principles that most investors expect corporations to adhere to in designing and administering executive and director compensation programs:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Maintain appropriate pay-for-performance alignment, with emphasis on long-term shareholder value: This principle encompasses overall executive pay practices, which must be designed to attract, retain, and appropriately motivate the key employees who drive shareholder value creation over the long term. It will take into consideration, among other factors, the link between pay and performance; the mix between fixed and variable pay; performance goals; and equity-based plan costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Avoid arrangements that risk "pay for failure": This principle addresses the appropriateness of long or indefinite contracts, excessive severance packages, and guaranteed compensation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Maintain an independent and effective compensation committee: This principle promotes oversight of executive pay programs by directors with appropriate skills, knowledge, experience, and a sound process for compensation decision-making (*e.g.*, including access to independent expertise and advice when needed);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Provide shareholders with clear, comprehensive compensation disclosures: This principle underscores the importance of informative and timely disclosures that enable shareholders to evaluate executive pay practices fully and fairly;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.Avoid inappropriate pay to non-executive directors: This principle recognizes the interests of shareholders in ensuring that compensation to outside directors is reasonable and does not compromise their independence and ability to make appropriate judgments in overseeing managers' pay and performance. At the market level, it may incorporate a variety of generally accepted best practices.

------

**Advisory Votes on Executive Compensation—Management Proposals (Say- on-Pay)**

**General Recommendation:** Vote case-by-case on ballot items related to executive pay and practices, as well as certain aspects of outside director compensation.

Vote against Advisory Votes on Executive Compensation (Say-on-Pay or "SOP") if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ There is an unmitigated misalignment between CEO pay and company performance (<u>pay for performance</u>);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company maintains significant <u>problematic pay practices</u>; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The board exhibits a significant level of <u>poor communication and responsiveness</u> to shareholders.

Vote against or withhold from the members of the Compensation Committee and potentially the full board if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ There is no SOP on the ballot, and an against vote on an SOP would otherwise be warranted due to pay-for- performance misalignment, problematic pay practices, or the lack of adequate responsiveness on compensation issues raised previously, or a combination thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The board fails to respond adequately to a previous SOP proposal that received less than 70 percent support of votes cast;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company has recently practiced or approved problematic pay practices, such as option repricing or option backdating; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The situation is egregious.

Primary Evaluation Factors for Executive Pay

**Pay-for-Performance Evaluation**

ISS annually conducts a pay-for-performance analysis to identify strong or satisfactory alignment between pay and performance over a sustained period. With respect to companies in the S&P1500, Russell 3000, or Russell 3000E Indices<sup>14</sup>, this analysis considers the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Peer Group.<sup>15</sup> Alignment:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The degree of alignment between the company's annualized TSR rank and the CEO's annualized total pay rank within a peer group, each measured over a three-year period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The rankings of CEO total pay and company financial performance within a peer group, each measured over a three-year period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The multiple of the CEO's total pay relative to the peer group median in the most recent fiscal year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Absolute Alignment<sup>16</sup> – the absolute alignment between the trend in CEO pay and company TSR over the prior five fiscal years – i.e., the difference between the trend in annual pay changes and the trend in annualized TSR during the period.

_______________________

<sup>14</sup> The <u>Russell</u> <u>3000E</u> Index includes approximately 4,000 of the largest U.S. equity securities.

<sup>15</sup> The revised peer group is generally comprised of 14-24 companies that are selected using market cap, revenue (or assets for certain financial firms), GICS industry group, and company's selected peers' GICS industry group, with size constraints, via a process designed to select peers that are comparable to the subject company in terms of revenue/assets and industry, and also within a market-cap bucket that is reflective of the company's market cap. For Oil, Gas & Consumable Fuels companies, market cap is the only size determinant.

<sup>16</sup> Only Russell 3000 Index companies are subject to the Absolute Alignment analysis.

------

If the above analysis demonstrates significant unsatisfactory long-term pay-for-performance alignment or, in the case of companies outside the Russell indices, a misalignment between pay and performance is otherwise suggested, our analysis may include any of the following qualitative factors, as relevant to an evaluation of how various pay elements may work to encourage or to undermine long-term value creation and alignment with shareholder interests:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The ratio of performance- to time-based incentive awards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The overall ratio of performance-based compensation to fixed or discretionary pay;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The rigor of performance goals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The complexity and risks around pay program design;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The transparency and clarity of disclosure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's peer group benchmarking practices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Financial/operational results, both absolute and relative to peers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Special circumstances related to, for example, a new CEO in the prior FY or anomalous equity grant practices (e.g., bi-annual awards);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Realizable pay<sup>17</sup> compared to grant pay; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Any other factors deemed relevant.

**Problematic Pay Practices**

Problematic pay elements are generally evaluated case-by-case considering the context of a company's overall pay program and demonstrated pay-for-performance philosophy. The focus is on executive compensation practices that contravene the global pay principles, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Problematic practices related to non-performance-based compensation elements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Incentives that may motivate excessive risk-taking or present a windfall risk; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Pay decisions that circumvent pay-for-performance, such as options backdating or waiving performance requirements.

The list of examples below highlights certain problematic practices that carry significant weight in this overall consideration and may result in adverse vote recommendations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Repricing or replacing of underwater stock options/SARs without prior shareholder approval (including cash buyouts and voluntary surrender of underwater options);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Extraordinary perquisites or tax gross-ups;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ New or materially amended agreements that provide for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Excessive termination or CIC severance payments (generally exceeding 3 times base salary and average/target/most recent bonus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ CIC severance payments without involuntary job loss or substantial diminution of duties ("single" or "modified single" triggers) or in connection with a problematic Good Reason definition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ CIC excise tax gross-up entitlements (including "modified" gross-ups);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Multi-year guaranteed awards that are not at risk due to rigorous performance conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Liberal CIC definition combined with any single-trigger CIC benefits;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Insufficient executive compensation disclosure by externally-managed issuers (EMIs) such that a reasonable assessment of pay programs and practices applicable to the EMI's executives is not possible;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Severance payments made when the termination is not clearly disclosed as involuntary (for example, a termination without cause or resignation for good reason); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Any other provision or practice deemed to be egregious and present a significant risk to investors.

_______________________

<sup>17</sup> ISS research reports include realizable pay for S&P1500 companies.

------

The above examples are not an exhaustive list. Please refer to <u>ISS' U.S. Compensation Policies FAQ</u> document for additional detail on specific pay practices that have been identified as problematic and may lead to negative vote recommendations.

**Options Backdating**

The following factors should be examined case-by-case to allow for distinctions to be made between "sloppy" plan administration versus deliberate action or fraud:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Reason and motive for the options backdating issue, such as inadvertent vs. deliberate grant date changes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Duration of options backdating;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Size of restatement due to options backdating;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Corrective actions taken by the board or compensation committee, such as canceling or re-pricing backdated options, the recouping of option gains on backdated grants; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Adoption of a grant policy that prohibits backdating and creates a fixed grant schedule or window period for equity grants in the future.

**Compensation Committee Communications and Responsiveness**

Consider the following factors case-by-case when evaluating ballot items related to executive pay on the board's responsiveness to investor input and engagement on compensation issues:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Failure to respond to majority-supported shareholder proposals on executive pay topics; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Failure to adequately respond to the company's previous say-on-pay proposal that received the support of less than 70 percent of votes cast, taking into account:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Disclosure of engagement efforts with major institutional investors, including the frequency and timing of engagements and the company participants (including whether independent directors participated);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Disclosure of the specific concerns voiced by dissenting shareholders that led to the say-on-pay opposition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Disclosure of specific and meaningful actions taken to address shareholders' concerns;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Other recent compensation actions taken by the company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the issues raised are recurring or isolated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's ownership structure; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the support level was less than 50 percent, which would warrant the highest degree of responsiveness.

Equity-Based and Other Incentive Plans

Please refer to <u>ISS' U.S. Equity Compensation Plans FAQ</u> document for additional details on the Equity Plan Scorecard policy.

**General Recommendation:** Vote case-by-case on certain equity-based compensation plans18 depending on a combination of certain plan features and equity grant practices, where positive factors may counterbalance negative factors, and vice versa, as evaluated using an "Equity Plan Scorecard" (EPSC) approach with three pillars:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ **Plan Cost:** The total estimated cost of the company's equity plans relative to industry/market cap peers, measured by the company's estimated Shareholder Value Transfer (SVT) in relation to peers and considering both:

SVT based on new shares requested plus shares remaining for future grants, plus outstanding unvested/unexercised grants; and

SVT based only on new shares requested plus shares remaining for future grants.

_______________________

<sup>18</sup> Proposals evaluated under the EPSC policy generally include those to approve or amend (1) stock option plans for employees and/or employees and directors, (2) restricted stock plans for employees and/or employees and directors, and (3) omnibus stock incentive plans for employees and/or employees and directors; amended plans will be further evaluated case-by-case.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**▪ Plan Features:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Quality of disclosure around vesting upon a change in control (CIC);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Discretionary vesting authority;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Liberal share recycling on various award types;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Lack of minimum vesting period for grants made under the plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Dividends payable prior to award vesting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**▪ Grant Practices:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's three-year burn rate relative to its industry/market cap peers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Vesting requirements in CEO's recent equity grants (3-year look-back);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The estimated duration of the plan (based on the sum of shares remaining available and the new shares requested, divided by the average annual shares granted in the prior three years);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The proportion of the CEO's most recent equity grants/awards subject to performance conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the company maintains a sufficient claw-back policy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the company maintains sufficient post-exercise/vesting share-holding requirements.

Generally vote against the plan proposal if the combination of above factors indicates that the plan is not, overall, in shareholders' interests, or if any of the following egregious factors ("overriding factors") apply:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Awards may vest in connection with a liberal change-of-control definition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The plan would permit repricing or cash buyout of underwater options without shareholder approval (either by expressly permitting it – for NYSE and Nasdaq listed companies – or by not prohibiting it when the company has a history of repricing – for non-listed companies);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The plan is a vehicle for problematic pay practices or a significant pay-for-performance disconnect under certain circumstances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The plan is excessively dilutive to shareholders' holdings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The plan contains an evergreen (automatic share replenishment) feature; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Any other plan features are determined to have a significant negative impact on shareholder interests.

**Social and Environmental Issues**

Global Approach – E&S Shareholder Proposals

ISS applies a common approach globally to evaluating social and environmental proposals which cover a wide range of topics, including consumer and product safety, environment and energy, labor standards and human rights, workplace and board diversity, and corporate political issues. While a variety of factors goes into each analysis, the overall principle guiding all vote recommendations focuses on how the proposal may enhance or protect shareholder value in either the short or long term.

**General Recommendation:** Generally vote case-by-case, examining primarily whether implementation of the proposal is likely to enhance or protect shareholder value. The following factors will be considered:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ If the issues presented in the proposal are being appropriately or effectively dealt with through legislation or government regulation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ If the company has already responded in an appropriate and sufficient manner to the issue(s) raised in the proposal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the proposal's request is unduly burdensome (scope or timeframe) or overly prescriptive;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's approach compared with any industry standard practices for addressing the issue(s) raised by the proposal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether there are significant controversies, fines, penalties, or litigation associated with the company's practices related to the issue(s) raised in the proposal;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ If the proposal requests increased disclosure or greater transparency, whether reasonable and sufficient information is currently available to shareholders from the company or from other publicly available sources; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ If the proposal requests increased disclosure or greater transparency, whether implementation would reveal proprietary or confidential information that could place the company at a competitive disadvantage.

Climate Change

**Say on Climate (SoC) Management Proposals**

**General Recommendation:** Vote case-by-case on management proposals that request shareholders to approve

the company's climate transition action plan19 taking into account the completeness and rigor of the plan.

Information that will be considered where available includes the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The extent to which the company's climate related disclosures are in line with TCFD recommendations and meet other market standards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Disclosure of its operational and supply chain GHG emissions (Scopes 1, 2, and 3);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The completeness and rigor of company's short-, medium-, and long-term targets for reducing operational and supply chain GHG emissions (Scopes 1, 2, and 3 if relevant);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the company has sought and received third-party approval that its targets are science-based;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the company has made a commitment to be "net zero" for operational and supply chain emissions (Scopes 1, 2, and 3) by 2050;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the company discloses a commitment to report on the implementation of its plan in subsequent years;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the company's climate data has received third-party assurance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Disclosure of how the company's lobbying activities and its capital expenditures align with company strategy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether there are specific industry decarbonization challenges; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's related commitment, disclosure, and performance compared to its industry peers.

**Say on Climate (SoC) Shareholder Proposals**

**General Recommendation:** Vote case-by-case on shareholder proposals that request the company to disclose a report providing its GHG emissions levels and reduction targets and/or its upcoming/approved climate transition action plan and provide shareholders the opportunity to express approval or disapproval of its GHG emissions reduction plan, taking into account information such as the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The completeness and rigor of the company's climate-related disclosure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's actual GHG emissions performance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the company has been the subject of recent, significant violations, fines, litigation, or controversy related to its GHG emissions; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the proposal's request is unduly burdensome (scope or timeframe) or overly prescriptive.

**Climate Change/Greenhouse Gas (GHG) Emissions**

**General Recommendation:** Generally vote for resolutions requesting that a company disclose information on the financial, physical, or regulatory risks it faces related to climate change on its operations and investments or on how the company identifies, measures, and manages such risks, considering:

_______________________

<sup>19</sup> Variations of this request also include climate transition related ambitions, or commitment to reporting on the implementation of a climate plan.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the company already provides current, publicly-available information on the impact that climate change may have on the company as well as associated company policies and procedures to address related risks and/or opportunities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's level of disclosure compared to industry peers; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether there are significant controversies, fines, penalties, or litigation associated with the company's climate change-related performance.

Generally vote for proposals requesting a report on greenhouse gas (GHG) emissions from company operations and/or products and operations, unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company already discloses current, publicly-available information on the impacts that GHG emissions may have on the company as well as associated company policies and procedures to address related risks and/or opportunities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's level of disclosure is comparable to that of industry peers; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ There are no significant, controversies, fines, penalties, or litigation associated with the company's GHG emissions.

Vote case-by-case on proposals that call for the adoption of GHG reduction goals from products and operations, taking into account:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the company provides disclosure of year-over-year GHG emissions performance data;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether company disclosure lags behind industry peers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's actual GHG emissions performance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's current GHG emission policies, oversight mechanisms, and related initiatives; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the company has been the subject of recent, significant violations, fines, litigation, or controversy related to GHG emissions.

**Racial Equity and/or Civil Rights Audit Guidelines**

**General Recommendation:** Vote case-by-case on proposals asking a company to conduct an independent racial equity and/or civil rights audit, taking into account:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's established process or framework for addressing racial inequity and discrimination internally;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the company adequately discloses workforce diversity and inclusion metrics and goals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the company has issued a public statement related to its racial justice efforts in recent years, or has committed to internal policy review;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the company has engaged with impacted communities, stakeholders, and civil rights experts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's track record in recent years of racial justice measures and outreach externally; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the company has been the subject of recent controversy, litigation, or regulatory actions related to racial inequity or discrimination.

**ESG Compensation-Related Proposals**

**General Recommendation:** Vote case-by-case on proposals seeking a report or additional disclosure on the company's approach, policies, and practices on incorporating environmental and social criteria into its executive compensation strategy, considering:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The scope and prescriptive nature of the proposal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The company's current level of disclosure regarding its environmental and social performance and governance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The degree to which the board or compensation committee already discloses information on whether it has considered related E&S criteria; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Whether the company has significant controversies or regulatory violations regarding social or environmental issues.

------

We empower investors and companies to build for long-term and sustainable growth by providing high-quality data, analytics, and insight.

**G E T S T A RT E D W I TH IS S S O L U TI O N S**

Email <u>sales@issgovernance.com</u> or visit <u>www.issgovernance.com</u> for more information.

Founded in 1985, Institutional Shareholder Services group of companies (ISS) empowers investors and companies to build for long-term and sustainable growth by providing high-quality data, analytics and insight. ISS, which is majority owned by Deutsche Bourse Group, along with Genstar Capital and ISS management, is a leading provider of corporate governance and responsible investment solutions, market intelligence, fund services, and events and editorial content for institutional investors and corporations, globally. ISS' 2,600 employees operate worldwide across 29 global locations in 15 countries. Its approximately 3,400 clients include many of the world's leading institutional investors who rely on ISS' objective and impartial offerings, as well as public companies focused on ESG and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS' expertise to help them make informed investment decisions. This document and all of the information contained in it, including without limitation all text, data, graphs, and charts (collectively, the "Information") is the property of Institutional Shareholder Services Inc. (ISS), its subsidiaries, or, in some cases third party suppliers.

The Information has not been submitted to, nor received approval from, the United States Securities and Exchange Commission or any other regulatory body. None of the Information constitutes an offer to sell (or a solicitation of an offer to buy), or a promotion or recommendation of, any security, financial product or other investment vehicle or any trading strategy, and ISS does not endorse, approve, or otherwise express any opinion regarding any issuer, securities, financial products or instruments or trading strategies.

The user of the Information assumes the entire risk of any use it may make or permit to be made of the Information.

ISS MAKES NO EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE INFORMATION AND EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF ORIGINALITY, ACCURACY, TIMELINESS, NON-INFRINGEMENT, COMPLETENESS, MERCHANTABILITY, AND FITNESS for A PARTICULAR PURPOSE) WITH RESPECT TO ANY OF THE INFORMATION.

Without limiting any of the foregoing and to the maximum extent permitted by law, in no event shall ISS have any liability regarding any of the Information for any direct, indirect, special, punitive, consequential (including lost profits), or any other damages even if notified of the possibility of such damages. The foregoing shall not exclude or limit any liability that may not by applicable law be excluded or limited.© 2025 \| Institutional Shareholder Services and/or its affiliates

------

**ISS**

**UNITED STATES**

**TAFT-HARTLEY PROXY VOTING GUIDELINES**

**2025 Executive Summary**

Published January 17, 2025

WWW.ISSGOVERNANCE.COM

------

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| **Introduction** | **3** |
| Board of Directors | **4** |
| Voting on Director Nominees in Uncontested Elections | 4 |
| Board Size | 5 |
| Board Diversity | 5 |
| Majority Threshold Voting Requirement for Director Elections | 5 |
| Cumulative Voting | 5 |
| Shareholder Access to the Proxy | 6 |
| Takeover Defenses / Shareholder Rights | 6 |
| Poison Pills | 6 |
| Proxy Contests — Voting for Director Nominees in Contested Elections | 6 |
| **Capital Structure** | **7** |
| Increase Authorized Common Stock | 7 |
| Reverse Stock Splits | 7 |
| Dual Class Structures | 7 |
| Preferred Stock Authorization | 7 |
| Share Repurchase Programs | 8 |
| **Auditor Ratification** | 9 |
| Auditor Independence | 9 |
| **Mergers, Acquisitions, and Restructurings** | 10 |
| Mergers and Acquisitions | 10 |
| Reincorporation | 10 |
| **Executive Compensation** | 11 |
| Equity Incentive Plans | 11 |
| Options Backdating | 11 |
| Advisory Votes on Executive Compensation – Management Say-on-Pay Proposals (MSOP) | 11 |
| Golden Parachutes | 12 |
| Proposals to Limit Executive and Director Pay | 12 |
| **Corporate Responsibility & Accountability** | 13 |
| Corporate and Supplier Codes of Conduct | 13 |
| Greenhouse Gas Emissions | 13 |
| Sustainability Reporting and Planning | 13 |
| Hydraulic Fracturing | 14 |
| Workplace Practices and Human Rights | 14 |
| Environmental Justice | 14 |
| Just Transition | 14 |

---

------

**Introduction**

The proxy voting policy of ISS' Taft-Hartley Advisory Services is based upon the AFL-CIO Proxy Voting Guidelines, which comply with all the fiduciary standards delineated by the U.S. Department of Labor.

Taft-Hartley client accounts are governed by the Employee Retirement Income Security Act (ERISA). ERISA sets forth the tenets under which pension fund assets must be managed and invested. Proxy voting rights have been declared by the Department of Labor to be valuable plan assets and therefore must be exercised in accordance with the fiduciary duties of loyalty and prudence. The duty of loyalty requires that the voting fiduciary exercise proxy voting authority solely in the economic interest of participants and plan beneficiaries. The duty of prudence requires that decisions be made based on financial criteria and that a clear process exists for evaluating proxy issues.

The Taft-Hartley Advisory Services voting policy was carefully crafted to meet those requirements by promoting long-term shareholder value, emphasizing the "economic best interests" of plan participants and beneficiaries. Taft-Hartley Advisory Services will assess the short-term and long-term impact of a vote and will promote a position that is consistent with the long-term economic best interests of plan members embodied in the principle of a "worker-owner view of value."

The Taft-Hartley Advisory Services guidelines address a broad range of issues, including election of directors, executive compensation, proxy contests, auditor ratification, and tender offer defenses – all significant voting items that affect long-term shareholder value. In addition, these guidelines delve deeper into workplace issues that may have an impact on corporate performance, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Corporate policies that affect job security and wage levels;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Corporate policies that affect local economic development and stability;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Corporate responsibility to employees, communities, and the environment; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Workplace safety and health issues.

Taft-Hartley Advisory Services shall analyze each proxy on a case-by-case basis, informed by the guidelines outlined in the following pages. Taft-Hartley Advisory Services does not intend for these guidelines to be exhaustive. It is neither practical nor productive to fashion voting guidelines and policies which attempt to address every eventuality. Rather, Taft-Hartley Advisory Services' guidelines are intended to cover the most significant and frequent proxy issues that arise. Issues not covered by the guidelines shall be voted in the interest of plan participants and beneficiaries of the plan based on a worker-owner view of long-term corporate value. Taft-Hartley Advisory Services shall revise its guidelines as events warrant and will remain in conformity with the AFL-CIO proxy voting policy.

------

**The policies contained herein are a sampling only of selected key Taft-Hartley Advisory Services U.S. proxy voting guidelines, and are not intended to be exhaustive. The complete guidelines can be found at:**

**<u>https://www.issgovernance.com/policy-gateway/voting-policies/</u>**

**Board of Directors**

Voting on Director Nominees in Uncontested Elections

Electing directors is the single most important stock ownership right that shareholders can exercise. The board of directors is responsible for holding management accountable to performance standards on behalf of the shareholders. Taft-Hartley Advisory Services supports annually elected boards and holds directors to a high standard when voting on their election, qualifications, and compensation.

Taft-Hartley Advisory Services believes votes should be cast in a manner that will encourage the independence of boards. In particular, the Taft-Hartley guidelines board independence standards require a two-thirds majority independent board. The Taft-Hartley guidelines also employ a higher bar on director independence classifications and consider directors who have been on the board for a period exceeding 10 years as non-independent directors. Furthermore, key board committees should be composed entirely of independent directors. Taft-Hartley Advisory Services supports shareholders proposals requesting the separation of the chairman and CEO positions and opposes the election of a non-independent chair.

Taft-Hartley Advisory Services takes into account the attendance records of directors, using a benchmark attendance rate of 75 percent of board and committee meetings. Cases of chronic poor attendance without reasonable justification may also warrant adverse recommendations for nominating/governance committees or the full board. Taft-Hartley Advisory Services will also vote against a director nominee who serves on an excessive number of boards. A non-CEO director will be deemed "overboarded" if he/she sits on more than four public company boards while CEO directors will be considered as such if they serve on more than one public company board besides their own. Furthermore, adverse recommendations for directors may be warranted at companies where problematic pay practices exist, and where boards have not been accountable or responsive to their shareholders.

For companies that are significant greenhouse gas (GHG) emitters, through their operations or value chain<sup>1</sup>, Taft-Hartley Advisory Services will generally vote against or withhold from the incumbent chair of the responsible committee (or other directors on a case-by-case basis) in cases where it is determined that the company is not taking the minimum steps needed to understand, assess, and mitigate risks related to climate change to the company and the larger economy.

------

Board Size

While there is no hard and fast rule among institutional investors as to what may be an optimal board size, a board that is too large may function inefficiently. Conversely, a board that is too small may allow the CEO to exert disproportionate influence or may stretch the time requirements of individual directors too thin. Given that the preponderance of boards in the U.S. range between five and fifteen directors, many institutional investors believe this benchmark is a useful standard for evaluating such proposals. Taft-Hartley Advisory Services will generally vote against any proposal seeking to amend the company's board size to fewer than five seats or more than fifteen seats.

Board Diversity

Taft-Hartley Advisory Services will generally vote against or withhold from the chair of the nominating committee (or other directors on a case-by-case basis) for companies where there are no women on the company's board or for companies in the Russell 3000 or S&P 1500 indices where the board has no apparent racially or ethnically diverse members<sup>2</sup>.

Taft-Hartley Advisory Services will support shareholder proposals asking the board to make greater efforts to search for qualified female and minority candidates for nomination to the board of director. Taft-Hartley fiduciaries generally believe that increasing diversity in the boardroom better reflects a company's workforce, customers and community, and enhances shareholder value.

Majority Threshold Voting Requirement for Director Elections

Taft-Hartley fiduciaries believe shareholders should have a greater voice regarding the election of directors and view majority threshold voting as a viable alternative to the current deficiencies of the plurality system in the U.S. Shareholders have expressed strong support for resolutions on majority threshold voting. Taft-Hartley Advisory Services supports proposals calling for directors to be elected with an affirmative majority of votes cast and/or the elimination of the plurality standard for electing directors, provided the proposal includes a carve-out for a plurality voting standard in contested director elections.

Cumulative Voting

Under a cumulative voting scheme, shareholders are permitted to have one vote per share for each director to be elected and may apportion these votes among the director candidates in any manner they wish. This voting method allows minority shareholders to influence the outcome of director contests by "cumulating" their votes for one nominee, thereby creating a measure of independence from management control. Taft-Hartley Advisory Services will generally vote against proposals to eliminate cumulative voting, and for proposals to allow cumulative voting.

_______________________

<sup>1</sup> Companies defined as "significant GHG emitters" will be those on the current Climate Action 100+ Focus Group list.

------

Shareholder Access to the Proxy

Many investors view proxy access as an important shareholder right, one that is complementary to other best- practice corporate governance features. Taft-Hartley Advisory Services is generally supportive of reasonably crafted shareholder proposals advocating for the ability of long-term shareholders to cost-effectively nominate director candidates that represent their interests on management's proxy card. Shareholder proposals that have the potential to result in abuse of the proxy access right by way of facilitating hostile takeovers will generally not be supported.

Takeover Defenses / Shareholder Rights

Topics evaluated in this category include shareholders' ability to call a special meeting or act by written consent, the adoption or redemption of poison pills, unequal voting rights, fair price provisions, greenmail, supermajority vote requirements, and confidential voting.

Taft-Hartley Advisory Services generally opposes takeover defenses, as they limit shareholder value by eliminating the takeover or control premium for the company. As owners of the company, shareholders should be given the opportunity to decide on the merits of takeover offers. Further, takeover devices can be used to entrench a board that is unresponsive to shareholders on both governance and corporate social responsibility issues.

Taft-Hartley Advisory Services will generally vote for management proposals allowing for the convening of shareholder meetings by electronic means, so long as they do not preclude in-person meetings. Companies are encouraged to disclose the circumstances under which virtual-only meetings would be held, and to allow for comparable rights and opportunities for shareholders to participate electronically as they would have during an in- person meeting.

Poison Pills

Shareholder rights plans, more commonly known as poison pills, are warrants issued to shareholders allowing them to purchase shares from the company at a price far below market value when a certain ownership threshold has been reached, thereby effectively preventing a takeover. Poison pills can entrench management and give the board veto power over takeover bids, thereby altering the balance of power between shareholders and management. While poison pills are evaluated on a case-by-case basis depending on a company's particular set of circumstances, Taft-Hartley Advisory Services will generally vote for proposals to submit a company's poison pill to shareholder vote and/or eliminate or redeem poison pills.

Proxy Contests — Voting for Director Nominees in Contested Elections

Contested elections of directors frequently occur when a board candidate or "dissident slate" seeks election for the purpose of achieving a significant change in corporate policy or control of seats on the board. Competing slates will be evaluated on a case-by-case basis with several considerations in mind. These include, but are not limited to, the following: personal qualifications of each candidate; the economic impact of the policies advanced by the dissident slate of nominees; and their expressed and demonstrated commitment to the interests of the shareholders of the company.

_______________________

<sup>2</sup> Aggregate diversity statistics provided by the board will only be considered if specific to racial and/or ethnic diversity.

------

**Capital Structure**

Increase Authorized Common Stock

Corporations seek shareholder approval to increase their supply of common stock for a variety of business reasons. Taft-Hartley Advisory Services will vote for proposals to increase authorized common stock when management has provided a specific justification for the increase, evaluating proposals on a case-by-case basis. An increase of up to 50 percent is enough to allow a company to meet its capital needs. Taft-Hartley Advisory Services will vote against proposals to increase an authorization by more than 50 percent unless management provides compelling reasons for the increase. Adverse recommendations would be considered warranted if the proposal or the company's prior or ongoing use of authorized shares is problematic (e.g., the company has a non-shareholder approved poison pill).

Reverse Stock Splits

Reverse splits exchange multiple shares for a lesser amount to increase share price. Evaluation of management proposals to implement a reverse stock split will take into account whether there is a corresponding proportional decrease in authorized shares. Without a corresponding decrease, a reverse stock split is effectively an increase in authorized shares by way of reducing the number of shares outstanding, while leaving the number of authorized shares to be issued at the pre-split level. Taft-Hartley Advisory Services also considers if the reverse stock split is necessary to maintain listing of a company's stock on the national stock exchanges, or if there is substantial doubt about the company's ability to continue as a going concern without additional financing.

Taft-Hartley Advisory Services generally supports a reverse stock split if the number of authorized shares will be reduced proportionately. When there is not a proportionate reduction of authorized shares, Taft-Hartley trustees should oppose such proposals unless a stock exchange has provided notice to the company of a potential delisting.

Dual Class Structures

Taft-Hartley Advisory Services does not support dual share class structures. Incumbent management can use a dual class structure to gain unequal voting rights. A separate class of shares with superior voting rights can allow management to concentrate its power and insulate itself from the majority of its shareholders. An additional drawback is the added cost and complication of maintaining the two-class system. Taft-Hartley Advisory Services will vote for a one share, one vote capital structure, and vote against the creation or continuation of dual class structures.

Preferred Stock Authorization

Preferred stock is an equity security which has certain features similar to debt instruments- such as fixed dividend payments and seniority of claims to common stock - and usually carries little to no voting rights. The terms of blank check preferred stock give the board of directors the power to issue shares of preferred stock at their discretion with voting, conversion, distribution, and other rights to be determined by the board at time of issue. Taft-Hartley Advisory Services will generally vote for proposals to authorize preferred stock in cases where the company specifies the voting, dividend, conversion, and other rights of such stock and the terms of the preferred stock appear reasonable. Taft-Hartley Advisory Services will also consider company-specific factors including the company's prior or ongoing use of authorized shares, disclosure on specific reasons/rationale for the proposed increase, the dilutive impact of the request, disclosure of specific risks to shareholders of not approving the request, and whether the shares requested are blank check preferred shares that can be used for antitakeover purposes.

------

Share Repurchase Programs

While most U.S. companies can and do implement share buyback programs via board resolutions without shareholder votes, there are exceptions to this rule. Certain financial institutions, for example, are required by their regulators to receive shareholder approval for buyback programs. In addition, certain U.S.-listed cross-market companies are required by the law of their country of incorporation to receive shareholder approval to grant the board the authority to repurchase shares.

For U.S.-incorporated companies, and foreign-incorporated U.S. Domestic Issuers that are traded solely on U.S. exchanges, Taft-Hartley Advisory Services will vote for management proposals to institute open-market share repurchase plans in which all shareholders may participate on equal terms, or to grant the board authority to conduct open-market repurchases, in the absence of company-specific concerns. Taft-Hartley Advisory Services will vote case-by-case on proposals to repurchase shares directly from specified shareholders, balancing the stated rationale against the possibility for the repurchase authority to be misused, such as to repurchase shares from executives at a premium to market price.

------

**Auditor Ratification**

Auditor Independence

Auditors are the backbone upon which a company's financial health is measured, and auditor independence is essential for rendering objective opinions upon which investors then rely. When an auditor is paid more in consulting fees than for auditing, its relationship with the company is left open to conflicts of interest. Because accounting scandals evaporate shareholder value, any proposal to ratify auditors is examined for potential conflicts of interest, with particular attention to the fees paid to the auditor, auditor tenure, as well as whether the ratification of auditors has been put up for shareholder vote. Failure by a company to present its selection of auditors for shareholder ratification should be discouraged as it undermines good governance and disenfranchises shareholders.

Taft-Hartley Advisory Services will vote against the ratification of a company's auditor if it receives more than one- quarter of its total fees for consulting or if auditor tenure has exceeded seven years. A vote against the election of Audit Committee members will also be recommended when auditor ratification is not included on the proxy ballot and/or when consulting fees exceed audit fees. Taft-Hartley Advisory Services supports shareholder proposals to ensure auditor independence and effect mandatory auditor ratification.

------

**Mergers, Acquisitions, and Restructurings**

Taft-Hartley Advisory Services votes for corporate transactions that take the high road to competitiveness and company growth. Taft-Hartley Advisory Services believes that structuring merging companies to build long-term relationships with a stable and quality work force and preserving good jobs creates long-term company value. Taft- Hartley Advisory Services opposes corporate transactions which indiscriminately lay off workers and shed valuable competitive resources.

Mergers and Acquisitions

Mergers, acquisitions, spinoffs, reincorporations, and other corporate restructuring plans are evaluated on a case- by-case basis, given the potential for significant impact on shareholder value and on shareholders' economic interests. In addition, these corporate actions can have a significant impact on community stakeholders and the workforce, and may affect the levels of employment, community lending, equal opportunity, and impact on the environment.

Reincorporation

For a company that seeks to reincorporate, Taft-Hartley Advisory Services evaluates the merits of the move on a case-by-case basis, taking into consideration both financial and corporate governance concerns including the reasons for reincorporation, a comparison of both the company's governance practices and provisions prior to and following the reincorporation, and corporation laws of original state and destination state.

------

**Executive Compensation**

Equity Incentive Plans

Taft-Hartley Advisory Services supports compensating executives at a reasonable rate and believes that executive compensation should be strongly correlated to sustained performance. Stock options and other forms of equity compensation should be performance-based with an eye toward improving shareholder value. Well-designed stock option plans align the interests of executives and shareholders by providing that executives benefit when stock prices rise as the company— and shareholders— prosper together. Poorly designed equity award programs can encourage excessive risk-taking behavior and incentivize executives to pursue corporate strategies that promote short-term stock price to the ultimate detriment of long-term shareholder value.

Many plans sponsored by management provide goals so easily attained that executives can realize massive rewards even though shareholder value is not necessarily created. Stock options that are awarded selectively and excessively can dilute shareholders' share value and voting power. In general, Taft-Hartley Advisory Services supports plans that are offered at fair terms to executives who satisfy well-defined performance goals. Option plans are evaluated on a case-by-case basis, taking into consideration factors including: exercise price, voting power dilution, equity burn rate, executive concentration ratios, pay-for-performance, and the presence of any repricing provisions.

Options Backdating

Options backdating has serious implications and has resulted in financial restatements, delisting of companies, and/or the termination of executives or directors. When options backdating has taken place, Taft-Hartley Advisory Services may consider recommending against or withholding votes from the compensation committee, depending on the severity of the practices and the subsequent corrective actions taken by the board. Taft-Hartley Advisory Services adopts a case-by-case approach to the options backdating issue to differentiate companies that had sloppy administration versus those that had committed fraud, as well as those companies that have since taken corrective action. Instances in which companies have committed fraud are more disconcerting, and Taft-Hartley Advisory Services will look to them to adopt formal policies to ensure that such practices will not re-occur in the future.

Advisory Votes on Executive Compensation – Management Say-on-Pay Proposals (MSOP)

The Dodd-Frank Wall Street Reform and Consumer Protection Act requires advisory shareholder votes on executive compensation (management "Say on Pay"), an advisory vote on the frequency of Say on Pay, as well as a shareholder advisory vote on golden parachute compensation. Taft-Hartley Advisory Services believes that executive pay programs should be fair, competitive, reasonable, and appropriate, and that pay for performance should be a central tenet in executive compensation philosophy. Taft-Hartley Advisory Services will vote against MSOP proposals if there is a misalignment between CEO pay and company performance, the company maintains problematic pay practices, or the board exhibits a significant level of poor communication and responsiveness to shareholders.

Taft-Hartley Advisory Services also supports annual advisory votes on compensation, which provide the most consistent and clear communication channel for shareholder concerns about companies' executive pay programs.

------

Golden Parachutes

Golden parachutes are designed to protect the senior level employees of a corporation in the event of a change-in- control. Under most golden parachute agreements, senior level management employees receive a lump sum pay- out triggered by a change-in-control at usually two to three times base salary. These severance agreements can grant extremely generous benefits to well-paid executives and most often offer no value to shareholders. Taft- Hartley Advisory Services will evaluate golden parachutes compensation and shareholder proposals to have all golden parachute agreements submitted for shareholder ratification on a case-by-case basis, consistent with Taft- Hartley Advisory Services' policies on problematic pay practices related to severance packages.

Proposals to Limit Executive and Director Pay

Taft-Hartley Advisory Services will vote for shareholder proposals that seek additional disclosure of executive and director pay information. Taft-Hartley Advisory Services will also vote for shareholder proposals that seek to

eliminate outside directors' retirement benefits. Taft-Hartley Advisory Services reviews on a case-by-case basis all other shareholder proposals that seek to limit executive and director pay. This includes shareholder proposals that seek to link executive compensation to non-financial factors such as corporate downsizing, customer/employee satisfaction, community involvement, human rights, social and environmental goals, and performance.

------

**Corporate Responsibility & Accountability**

Taft-Hartley Advisory Services generally supports social, workforce, and environmental shareholder-sponsored resolutions if they seek to create responsible corporate citizens while at the same time attempting to enhance long-term shareholder value. Taft-Hartley Advisory Services typically supports proposals that ask for disclosure reporting of information that is not available outside the company and not proprietary in nature. Such reporting is particularly most vital when it appears that a company has not adequately addressed shareholder concerns regarding social, workplace, environmental and/or other issues.

Corporate and Supplier Codes of Conduct

Taft-Hartley Advisory Services generally supports proposals that call for the adoption and/or enforcement of clear principles or codes of conduct relating to countries in which there are systematic violations of human rights. These conditions include the use of slave, child, or prison labor, undemocratically elected governments, widespread reports by human rights advocates, fervent pro-democracy protests, or economic sanctions and boycotts.

Many proposals refer to the seven core conventions, commonly referred to as the "Declaration on Fundamental Principles and Rights At Work," ratified by the International Labor Organization (ILO). The seven conventions fall under four broad categories: i) right to organize and bargain collectively; ii) non-discrimination in employment; iii) abolition of forced labor; and iv) end of child labor. Each member nation of the ILO body is bound to respect and promote these rights to the best of their abilities.

Taft-Hartley Advisory Services supports the implementation and reporting on ILO codes of conduct. Taft-Hartley Advisory Services also votes in favor of requests for an assessment of the company's human rights risks in its operation or in its supply chain, or report on its human rights risk assessment process.

Greenhouse Gas Emissions

Shareholder proposals asking a company to issue a report to shareholders – at reasonable cost and omitting proprietary information – on greenhouse gas emissions ask that the report include descriptions of efforts within companies to reduce emissions, their financial exposure and potential liability from operations that contribute to global warming, and their direct or indirect efforts to promote the view that global warming is not a threat.

Proponents argue that there is scientific proof that the burning of fossil fuels causes global warming, that future legislation may make companies financially liable for their contributions to global warming, and that a report on the company's role in global warming can be assembled at reasonable cost. Taft-Hartley Advisory Services generally supports greater disclosure on climate change-related proposals.

Sustainability Reporting and Planning

The concept of sustainability is commonly understood as meeting the needs of the present generation without compromising the ability of future generations to meet their own needs. Indeed, the term sustainability is complex and poses significant challenges for companies on many levels. Many in the investment community have termed this broader responsibility the "triple bottom line," referring to the triad of performance goals related to economic prosperity, social responsibility, and environmental quality. In essence, the concept requires companies to balance the needs and interests of their various stakeholders while operating in a manner that sustains business growth for the long-term, supports local communities and protects the environment and natural capital for future generations.

Taft-Hartley Advisory Services generally supports shareholder proposals seeking greater disclosure on the company's environmental and social practices, and/or associated risks and liabilities.

------

Hydraulic Fracturing

Shareholder proponents have elevated concerns on the use of hydraulic fracturing, an increasingly controversial process in which water, sand, and a mix of chemicals is blasted horizontally into tight layers of shale rock to extract natural gas. As this practice has gained more widespread use, environmentalists have raised concerns that the chemicals mixed with sand and water to aid the fracturing process can contaminate ground water supplies.

Proponents of resolutions at companies that employ hydraulic fracturing are also concerned that wastewater produced by the process could overload the waste treatment plants to which it is shipped. Shareholders have asked companies that utilize hydraulic fracturing to report on the environmental impact of the practice and to disclose policies aimed at reducing hazards from the process.

Taft-Hartley Advisory Services generally supports shareholder requests seeking greater transparency on the practice of hydraulic fracturing and its associated risks.

Workplace Practices and Human Rights

Taft-Hartley Advisory Services supports shareholder requests for workplace safety reports, including reports on accident risk reduction effort. In addition, Taft-Hartley Advisory Services will generally support proposals calling for action on equal employment opportunity and anti-discrimination, and requests to conduct an independent racial equity and/or civil rights audit.

Environmental Justice

Companies have faced proposals addressing environmental justice concerns, focused on vulnerable stakeholders – particularly communities of color and low-income communities – who are disproportionately impacted by environmental pollution. These heightened risks can be exacerbated by climate change. Taft-Hartley Advisory Services generally supports shareholder proposals requesting disclosure of an environmental justice report, as well as a third-party environmental justice assessment.

Just Transition

Companies have faced proposals requesting disclosure on the just transition – addressing stakeholder concerns within a company's value chain with regards to the effects of climate change and the energy transition. Relevant stakeholder groups can include employees, suppliers (and workers in supply chains), communities impacted by operations, and other vulnerable groups potentially affected by a company's climate change strategy. Just transition disclosure should adequately assess, consult on, and address impacts on affected stakeholders regarding climate change risks. Taft-Hartley Advisory Services generally supports shareholder proposals requesting just transition and labor protection disclosure, in alignment with the International Labour Organization, the World Benchmarking Alliance, and other generally accepted guidelines and indicators.

------

We empower investors and companies to build for long-term and sustainable growth by providing high-quality data, analytics, and insight.

**G E T S T A RT E D W I TH IS S S O L U TI O N S**

Email <u>sales@issgovernance.com</u> or visit <u>www.issgovernance.com</u> for more information.

Founded in 1985, Institutional Shareholder Services group of companies (ISS) empowers investors and companies to build for long-term and sustainable growth by providing high-quality data, analytics and insight. ISS, which is majority owned by Deutsche Bourse Group, along with Genstar Capital and ISS management, is a leading provider of corporate governance and responsible investment solutions, market intelligence, fund services, and events and editorial content for institutional investors and corporations, globally. ISS' 2,600 employees operate worldwide across 29 global locations in 15 countries. Its approximately 3,400 clients include many of the world's leading institutional investors who rely on

ISS' objective and impartial offerings, as well as public companies focused on ESG and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS' expertise to help them make informed investment decisions. This document and all of the information contained in it, including without limitation all text, data, graphs, and charts (collectively, the "Information") is the property of Institutional Shareholder Services Inc. (ISS), its subsidiaries, or, in some cases third party suppliers.

The Information has not been submitted to, nor received approval from, the United States Securities and Exchange Commission or any other regulatory body. None of the Information constitutes an offer to sell (or a solicitation of an offer to buy), or a promotion or recommendation of, any security, financial product or other investment vehicle or any trading strategy, and ISS does not endorse, approve, or otherwise express any opinion regarding any issuer, securities, financial products or instruments or trading strategies.

The user of the Information assumes the entire risk of any use it may make or permit to be made of the Information.

ISS MAKES NO EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE INFORMATION AND EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF ORIGINALITY, ACCURACY, TIMELINESS, NON-INFRINGEMENT, COMPLETENESS, MERCHANTABILITY, AND FITNESS for A PARTICULAR PURPOSE) WITH RESPECT TO ANY OF THE INFORMATION.

Without limiting any of the foregoing and to the maximum extent permitted by law, in no event shall ISS have any liability regarding any of the Information for any direct, indirect, special, punitive, consequential (including lost profits), or any other damages even if notified of the possibility of such damages. The foregoing shall not exclude or limit any liability that may not by applicable law be excluded or limited.© 2025 \| Institutional Shareholder Services and/or its affiliates

SRI PROXY VOTING GUIDELINES

2025 Executive Summary

------

**ISS**

**UNITED STATES**

**SRI PROXY VOTING GUIDELINES**

**2025 Executive Summary**

Published January 17, 2025

WWW.ISSGOVERNANCE.COM

------

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| **Introduction** | **3** |
| **Management Proposals** | **4** |
| Board of Directors | 4 |
| Board Responsiveness | 5 |
| Auditors | 5 |
| Takeover Defenses / Shareholder Rights | 5 |
| Miscellaneous Governance Provisions | 5 |
| Capital Structures | 6 |
| Executive and Director Compensation | 6 |
| Mergers and Corporate Restructurings | 6 |
| Mutual Fund Proxies | 7 |
| **Shareholder Proposals** | **7** |
| Shareholder Proposals on Corporate Governance and Executive Compensation | 7 |
| Shareholder Proposals on Social and Environmental Topics | 7 |

---

------

**Introduction**

ISS' Social Advisory Services division recognizes that socially responsible investors have dual objectives: financial and social. Socially responsible investors invest for economic gain, as do all investors, but they also require that the companies in which they invest conduct their business in a socially and environmentally responsible manner.

These dual objectives carry through to socially responsible investors' proxy voting activity once the security selection process is completed. In voting their shares, socially responsible institutional shareholders are concerned not only with sustainable economic returns to shareholders and good corporate governance but also with the ethical behavior of corporations and the social and environmental impact of their actions.

Social Advisory Services has, therefore, developed proxy voting guidelines that are consistent with the dual objectives of socially responsible shareholders. On matters of social and environmental import, the guidelines seek to reflect a broad consensus of the socially responsible investing community. Generally, we take policies that have been developed by groups such as the Interfaith Center on Corporate Responsibility, the General Board of Pension and Health Benefits of the United Methodist Church, Domini Social Investments, and other leading church shareholders and socially responsible mutual fund companies as our frame of reference. Additionally, we incorporate the active ownership and investment philosophies of leading globally recognized initiatives such as the United Nations Environment Programme Finance Initiative (UNEP FI), the United Nations Principles for Responsible Investment (UNPRI), the United Nations Global Compact, and environmental and social European Union Directives.

On matters of corporate governance, executive compensation, and corporate structure, Social Advisory Services guidelines are based on a commitment to create and preserve economic value and to advance principles of good corporate governance consistent with responsibilities to society as a whole.

The guidelines provide an overview of how Social Advisory Services recommends that its clients vote. We note that there may be cases in which the final vote recommendation on a particular company varies from the vote guideline due to the fact that we closely examine the merits of each proposal and consider relevant information and company-specific circumstances in arriving at our decisions. Where Social Advisory Services acts as a voting agent for its clients, it follows each client's voting policy, which may differ in some cases from the policies outlined in this document. Social Advisory Services updates its guidelines on an annual basis to take into account emerging issues and trends on environmental, social, and corporate governance topics, in addition to evolving market standards, regulatory changes, and client feedback.

------

**The policies contained herein are a sampling only of selected key Taft-Hartley Advisory Services U.S. proxy voting guidelines, and are not intended to be exhaustive. The complete guidelines can be found at:**

**<u>https://www.issgovernance.com/policy-gateway/voting-policies/</u>**

**Management Proposals**

Board of Directors

Social Advisory Services considers director elections to be one of the most important voting decisions that shareholders make. Boards should be composed of a majority of independent directors and key board committees should be composed entirely of independent directors. The independent directors are expected to organize much of the board's work, even if the chief executive officer also serves as chairman of the board. It is expected that boards will engage in critical self-evaluation of themselves and of individual members. Directors are ultimately responsible to the corporation's shareholders. The most direct expression of this responsibility is the requirement that directors be elected to their positions by the shareholders.

Social Advisory Services will generally oppose all director nominees if the board is not majority independent and will vote against or withhold from non-independent directors who sit on key board committees. Social Advisory Services will also vote against or withhold from incumbent members of the nominating committee, or other directors on a case-by-case basis, where the board is not comprised of at least 40 percent underrepresented gender identities1 or at least 20 percent racially or ethnically diverse directors. The election of directors who have failed to attend a minimum of 75 percent of board and committee meetings held during the year will be opposed. Furthermore, Social Advisory Services will vote against or withhold from a director nominee who serves on an excessive number of boards. A non-CEO director will be deemed "overboarded" if they sit on more than five public company boards while CEO directors will be considered as such if they serve on more than two public company boards besides their own.

In addition, Social Advisory Services will generally vote against or withhold from directors individually, committee members, or potentially the entire board, for failure to adequately guard against or manage ESG risks or for lack of sustainability reporting in the company's public documents and/or website in conjunction with a failure to adequately manage or mitigate ESG risks. For companies that are significant greenhouse gas (GHG) emitters, through their operations or value chain2 Social Advisory Services will generally vote against or withhold from the incumbent chair of the responsible committee (or other directors on a case-by-case basis) in cases where it has been determined that the company is not taking the minimum steps needed to be aligned with a Net Zero by 2050 trajectory.

Social Advisory Services supports requests asking for the separation of the positions of chairman and CEO, opposes the creation of classified boards, and reviews proposals to change board size on a case-by-case basis. Social Advisory Services also generally supports shareholder proposals calling for greater access to the board, affording shareholders the ability to nominate directors to corporate boards. Social Advisory Services may vote against or withhold from directors at companies where problematic pay practices exist and where boards have not been accountable or responsive to their shareholders.

_______________________

<sup>1</sup> Underrepresented gender identities include directors who identify as women or as non-binary.

<sup>2</sup> Companies defined as "significant GHG emitters" will be those on the current Climate Action 100+ Focus Group list.

------

Board Responsiveness

Social Advisory Services will vote case-by-case on individual directors, committee members, or the entire board of directors as appropriate if the board fails to act on a shareholder proposal that received the support of a majority of the shares in the previous year. When evaluating board responsiveness issues, Social Advisory Services takes into account other factors, including the board's failure to act on takeover offers where the majority of shares are tendered; if at the previous board election, any director received more than 50 percent withhold/against votes of the shares cast and the company has failed to address the issue(s) that caused the high withhold/against vote; or if the board implements an advisory vote on executive compensation on a less frequent basis than the frequency that received the plurality of votes cast.

Auditors

While it is recognized that the company is in the best position to evaluate the competence of the outside accountants, Social Advisory Services believes that outside accountants must ultimately be accountable to shareholders. Given the rash of accounting irregularities that were not detected by audit panels or auditors, shareholder ratification is an essential step in restoring investor confidence. A Blue Ribbon Commission concluded that audit committees must improve their current level of oversight of independent accountants. Social Advisory Services will vote against the ratification of the auditor in cases where non-audit fees represent more than 25 percent of the total fees paid to the auditor in the previous year. Social Advisory Services supports requests asking for the rotation of the audit firm if the request includes a timetable of five years or more.

Takeover Defenses / Shareholder Rights

Topics evaluated in this category include shareholders' ability to call a special meeting or act by written consent, the adoption or redemption of poison pills, unequal voting rights, fair price provisions, greenmail, supermajority vote requirements, and confidential voting.

Social Advisory Services will generally vote for management proposals allowing for the convening of shareholder meetings by electronic means, so long as they do not preclude in-person meetings. Companies are encouraged to disclose the circumstances under which virtual-only meetings would be held, and to allow for comparable rights and opportunities for shareholders to participate electronically as they would have during an in-person meeting.

Social Advisory Services generally opposes takeover defenses, as they limit shareholder value by eliminating the takeover or control premium for the company. As owners of the company, shareholders should be given the opportunity to decide on the merits of takeover offers. Further, takeover devices can be used to entrench a board that is unresponsive to shareholders on both governance and corporate social responsibility issues.

Miscellaneous Governance Provisions

Social Advisory Services evaluates proposals that concern governance issues such as shareholder meeting adjournments, quorum requirements, corporate name changes, and bundled or conditional proposals on a case- by-case basis, taking into account the impact on shareholder rights.

------

Capital Structures

Capital structure related topics include requests for increases in authorized stock, stock splits and reverse stock splits, issuances of blank check preferred stock, debt restructurings, and share repurchase plans.

Social Advisory Services supports a one-share, one-vote policy and opposes mechanisms that skew voting rights. Social Advisory Services supports capital requests that provide companies with adequate financing flexibility while protecting shareholders from excessive dilution of their economic and voting interests. Proposals to increase common stock are evaluated on a case-by-case basis, taking into account the company's prior or ongoing use of share authorizations and elements of the current request.

Executive and Director Compensation

The global financial crisis resulted in significant erosion of shareholder value and highlighted the need for greater assurance that executive compensation is principally performance-based, fair, reasonable, and not designed in a manner that would incentivize excessive risk-taking by management. The crisis raised questions about the role of pay incentives in influencing executive behavior and motivating inappropriate or excessive risk-taking and other unsustainable practices that could threaten a corporation's long-term viability. The safety lapses that led to the disastrous explosions at BP's Deepwater Horizon oil rig and Massey Energy's Upper Big Branch mine, and the resulting unprecedented losses in shareholder value; a) underscore the importance of incorporating meaningful economic incentives around social and environmental considerations in compensation program design, and; b) exemplify the costly liabilities of failing to do so.

Social Advisory Services evaluates executive and director compensation by considering the presence of appropriate pay-for-performance alignment with long-term shareholder value, compensation arrangements that risk "pay for failure," and an assessment of the clarity and comprehensiveness of compensation disclosures.

Shareholder proposals calling for additional disclosure on compensation issues or the alignment of executive compensation with social or environmental performance criteria are supported, while shareholder proposals calling for other changes to a company's compensation programs are reviewed on a case-by-case basis.

The Dodd-Frank Wall Street Reform and Consumer Protection Act requires advisory shareholder votes on executive compensation (Say on Pay), an advisory vote on the frequency of say on pay, as well as a shareholder advisory vote on golden parachute compensation. Social Advisory Services will vote against Say on Pay proposals if there is a misalignment between CEO pay and company performance, the company maintains problematic pay practices, and the board exhibits a significant level of poor communication and responsiveness to shareholders.

Social Advisory Services will evaluate whether pay quantum is in alignment with company performance, and consideration will also be given to whether the proportion of performance-contingent pay elements is sufficient in light of concerns with a misalignment between executive pay and company performance.

Social Advisory Services will vote case-by-case on certain equity-based compensation plans depending on a combination of certain plan features and equity grant practices, where positive factors may counterbalance negative factors, and vice versa, as evaluated using an "equity plan scorecard" (EPSC) approach.

Mergers and Corporate Restructurings

Mergers, acquisitions, spinoffs, reincorporations, and other corporate restructuring plans are evaluated on a case- by-case basis, given the potential for significant impact on shareholder value and on shareholders' economic interests. In addition, these corporate actions can have a significant impact on community stakeholders and the workforce, and may affect the levels of employment, community lending, equal opportunity, and impact on the environment.

------

Mutual Fund Proxies

There are a number of proposals that are specific to mutual fund proxies, including the election of trustees, investment advisory agreements, and distribution agreements. Social Advisory Services evaluates these proposals on a case-by-case basis taking into consideration recent trends and best practices at mutual funds.

**Shareholder Proposals**

Shareholder Proposals on Corporate Governance and Executive Compensation

Shareholder proposals topics include board-related issues, shareholder rights and board accountability issues, as well as compensation matters. Each year, shareholders file numerous proposals that address key issues regarding corporate governance and executive compensation. Social Advisory Services evaluates these proposals from the perspective that good corporate governance practices can have positive implications for a company and its ability to maximize shareholder value. Proposals that seek to improve a board's accountability to its shareholders and other stakeholders are supported. Social Advisory Services supports initiatives that seek to strengthen the link between executive pay and performance, including performance elements related to corporate social responsibility.

Shareholder Proposals on Social and Environmental Topics

Shareholder resolutions on social and environmental topics include workplace diversity and safety topics, codes of conduct, labor standards and human rights, the environment and energy, sustainability and climate, weapons, consumer welfare, animal welfare, and public safety.

Socially responsible shareholder resolutions are receiving a great deal more attention from institutional shareholders today than they have in the past. In addition to the moral and ethical considerations intrinsic to many of these proposals, there is a growing recognition of their potential impact on the economic performance of the company. Among the reasons for this change are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The number and variety of shareholder resolutions on social and environmental issues has increased;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Many of the sponsors and supporters of these resolutions are large institutional shareholders with significant holdings, and therefore, greater direct influence on the outcomes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The proposals are more sophisticated – better written, more focused, and more sensitive to the feasibility of implementation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Investors now understand that a company's response to social and environmental issues can have serious economic consequences for the company and its shareholders.

Social Advisory Services generally supports requests for additional disclosures that would allow shareholders to better assess the board and management's oversight of risks in the company's operations. Social Advisory Services will closely evaluate proposals that ask the company to cease certain actions that the proponent believes are harmful to society or some segment of society with special attention to the company's legal and ethical obligations, its ability to remain profitable, and potential negative publicity if the company fails to honor the request. Social Advisory Services supports shareholder proposals that seek to improve a company's public image or reduce its exposure to liabilities and risks.

------

We empower investors and companies to build for long-term and sustainable growth by providing high-quality data, analytics, and insight.

**G E T S T A RT E D W I TH IS S S O L U TI O N S**

Email <u>sales@issgovernance.com</u> or visit <u>www.issgovernance.com</u> for more information.

Founded in 1985, Institutional Shareholder Services group of companies (ISS) empowers investors and companies to build for long-term and sustainable growth by providing high-quality data, analytics and insight. ISS, which is majority owned by Deutsche Bourse Group, along with Genstar Capital and ISS management, is a leading provider of corporate governance and responsible investment solutions, market intelligence, fund services, and events and editorial content for institutional investors and corporations, globally. ISS' 2,600 employees operate worldwide across 29 global locations in 15 countries. Its approximately 3,400 clients include many of the world's leading institutional investors who rely on

ISS' objective and impartial offerings, as well as public companies focused on ESG and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS' expertise to help them make informed investment decisions. This document and all of the information contained in it, including without limitation all text, data, graphs, and charts (collectively, the "Information") is the property of Institutional Shareholder Services Inc. (ISS), its subsidiaries, or, in some cases third party suppliers.

The Information has not been submitted to, nor received approval from, the United States Securities and Exchange Commission or any other regulatory body. None of the Information constitutes an offer to sell (or a solicitation of an offer to buy), or a promotion or recommendation of, any security, financial product or other investment vehicle or any trading strategy, and ISS does not endorse, approve, or otherwise express any opinion regarding any issuer, securities, financial products or instruments or trading strategies.

The user of the Information assumes the entire risk of any use it may make or permit to be made of the Information.

ISS MAKES NO EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE INFORMATION AND EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF ORIGINALITY, ACCURACY, TIMELINESS, NON-INFRINGEMENT, COMPLETENESS, MERCHANTABILITY, AND FITNESS for A PARTICULAR PURPOSE) WITH RESPECT TO ANY OF THE INFORMATION.

Without limiting any of the foregoing and to the maximum extent permitted by law, in no event shall ISS have any liability regarding any of the Information for any direct, indirect, special, punitive, consequential (including lost profits), or any other damages even if notified of the possibility of such damages. The foregoing shall not exclude or limit any liability that may not by applicable law be excluded or limited.© 2025 \| Institutional Shareholder Services and/or its affiliates

SUSTAINABILITY PROXY VOTING GUIDELINES

------

**ISS**

**UNITED STATES**

**SUSTAINABILITY PROXY VOTING GUIDELINES**

**2025 Executive Summary**

Published January 17, 2025

WWW.ISSGOVERNANCE.COM

------

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| **Introduction** | **3** |
| **Management Proposals** | **4** |
| Board of Directors | 4 |
| Board Responsiveness | 5 |
| Auditors | 5 |
| Takeover Defenses / Shareholder Rights | 5 |
| Miscellaneous Governance Provisions | 5 |
| Capital Structures | 6 |
| Executive and Director Compensation | 6 |
| Mergers and Corporate Restructurings | 6 |
| Mutual Fund Proxies | 6 |
| **Shareholder Proposals** | **7** |
| Shareholder Proposals on Corporate Governance and Executive Compensation | 7 |
| Shareholder Proposals on Social and Environmental Topics | 7 |

---

------

**Introduction**

ISS' Sustainability Advisory Services recognizes the growing view among investment professionals that sustainability or environmental, social, and corporate governance (ESG) factors could present material risks to portfolio investments. Whereas investment managers have traditionally analyzed topics such as board accountability and executive compensation to mitigate risk, greater numbers are incorporating ESG performance into their investment decision making in order to have a more comprehensive understanding of the overall risk profile of the companies in which they invest to ensure sustainable long-term profitability for their beneficiaries.

Investors concerned with portfolio value preservation and enhancement through the incorporation of sustainability factors can also carry out this active ownership approach through their proxy voting activity. In voting their shares, sustainability-minded investors are concerned not only with economic returns to shareholders and good corporate governance, but also with ensuring corporate activities and practices are aligned with the broader objectives of society. These investors seek standardized reporting on ESG issues, request information regarding an issuer's adoption of, or adherence to, relevant norms, standards, codes of conduct or universally recognized international initiatives including affirmative support for related shareholder resolutions advocating enhanced disclosure and transparency.

Sustainability Advisory Services has, therefore, developed proxy voting guidelines that are consistent with the objectives of sustainability-minded investors and fiduciaries. On matters of ESG import, ISS' Sustainability Policy seeks to promote support for recognized global governing bodies promoting sustainable business practices advocating for stewardship of environment, fair labor practices, non-discrimination, and the protection of human rights. Generally, ISS' Sustainability Policy will take as its frame of reference internationally recognized sustainability-related initiatives such as the United Nations Environment Programme Finance Initiative (UNEP FI), United Nations Principles for Responsible Investment (UNPRI), United Nations Global Compact, Global Reporting Initiative (GRI), Carbon Principles, International Labour Organization Conventions (ILO), Ceres Roadmap 2030, Global Sullivan Principles, MacBride Principles, and environmental and social European Union Directives. Each of these efforts promote a fair, unified and productive reporting and compliance environment which advances positive corporate ESG actions that promote practices that present new opportunities or that mitigate related financial and reputational risks.

On matters of corporate governance, executive compensation, and corporate structure, the Sustainability Policy guidelines are based on a commitment to create and preserve economic value and to advance principles of good corporate governance.

These guidelines provide an overview of how ISS approaches proxy voting issues for subscribers of the Sustainability Policy. Sustainability Advisory Services notes there may be cases in which the final vote recommendation at a particular company varies from the voting guidelines due to the fact that Sustainability Advisory Services closely examines the merits of each proposal and consider relevant information and company-specific circumstances in arriving at decisions. To that end, ISS engages with both interested shareholders as well as issuers to gain further insight into contentious issues facing the company. Where ISS acts as voting agent for clients, it follows each client's voting policy, which may differ in some cases from the policies outlined in this document. Sustainability Advisory Services updates its guidelines on an annual basis to take into account emerging issues and trends on environmental, social and corporate governance topics, as well as the evolution of market standards, regulatory changes and client feedback.

------

**The policies contained herein are a <u>sampling</u> only of selected key Sustainability Advisory Services U.S. proxy voting guidelines, and are not intended to be exhaustive. The complete guidelines can be found at:**

**<u>https://www.issgovernance.com/policy-gateway/voting-policies/</u>**

**Management Proposals**

Board of Directors

ISS' Sustainability Advisory Services considers director elections to be one of the most important voting decisions that shareholders make. Boards should be sufficiently independent from management (and significant shareholders) so as to ensure that they are able and motivated to effectively supervise management's performance for the benefit of all shareholders, including in setting and monitoring the execution of corporate strategy, with appropriate use of shareholder capital, and in setting and monitoring executive compensation programs that support that strategy. The chair of the board should ideally be an independent director, and all boards should have an independent leadership position or a similar role in order to help provide appropriate counterbalance to executive management, as well as having sufficiently independent committees that focus on key governance concerns such as audit, compensation, and nomination of directors.

Sustainability Advisory Services will generally oppose non-independent director nominees if the board is not composed of a majority of independent directors and will vote against or withhold from non-independent directors who sit on key board committees. Sustainability Advisory Services will also vote against or withhold from the chair of the nominating committee, or other nominees on a case-by-case basis, if the board lacks at least one director of an underrepresented gender identity1 or where the board has no apparent racially or ethnically diverse members. The election of directors who have failed to attend a minimum of 75 percent of board and committee meetings held during the year will be opposed. Furthermore, Sustainability Advisory Services will vote against or withhold from a director nominee who serves on an excessive number of boards. A non-CEO director will be deemed "overboarded" if they sit on more than five public company boards while CEO directors will be considered as such if they serve on more than two public company boards besides their own.

In addition, Sustainability Advisory Services will generally vote against or withhold from directors individually, committee members, or potentially the entire board, for failure to adequately guard against or manage ESG risks or for lack of sustainability reporting in the company's public documents and/or website in conjunction with a failure to adequately manage or mitigate ESG risks. For companies that are significant greenhouse gas (GHG) emitters, through their operations or value chain2, Sustainability Advisory Services will generally vote against or withhold from the incumbent chair of the responsible committee (or other directors on a case-by-case basis) in cases where it is determined that the company is not taking the minimum steps needed to be aligned with a Net Zero by 2050 trajectory.

Sustainability Advisory Services generally supports requests asking for the separation of the positions of chairman and CEO, and shareholder proposals calling for greater access to the board, affording shareholders the ability to nominate directors to corporate boards. Sustainability Advisory Services may vote against or withhold from directors at companies where problematic pay practices exist, and where boards have not been accountable or responsive to their shareholders.

_______________________

<sup>1</sup> Underrepresented gender identities include directors who identify as women or as non-binary.

<sup>2</sup> Companies defined as "significant GHG emitters" will be those on the current Climate Action 100+ Focus Group list.

------

Board Responsiveness

Sustainability Advisory Services will vote case-by-case on individual directors, committee members, or the entire board of directors as appropriate if the board fails to act on a shareholder proposal that received the support of a majority of the shares in the previous year. When evaluating board responsiveness issues, Sustainability Advisory Services takes into account other factors including the board's failure to act on takeover offers where the majority of shares are tendered; if at the previous board election, any director received more than 50 percent withhold/against votes of the shares cast and the company has failed to address the issue(s) that caused the high withhold/against vote; or if the board implements an advisory vote on executive compensation on a less frequent basis than the frequency that received the plurality of votes cast.

Auditors

While it is recognized that the company is in the best position to evaluate the competence of the outside accountants, Sustainability Advisory Services believes that outside accountants must ultimately be accountable to shareholders.

Given the rash of accounting irregularities that were not detected by audit panels or auditors, shareholder ratification is an essential step in restoring investor confidence. A Blue Ribbon Commission concluded that audit committees must improve their current level of oversight of independent accountants. Sustainability Advisory Services will vote against the ratification of the auditor in cases where fees for non-audit services are excessive.

Takeover Defenses / Shareholder Rights

Topics evaluated in this category include shareholders' ability to call a special meeting or act by written consent, the adoption or redemption of poison pills, unequal voting rights, fair price provisions, greenmail, supermajority vote requirements, and confidential voting.

Sustainability Advisory Services will generally vote for management proposals allowing for the convening of shareholder meetings by electronic means, so long as they do not preclude in-person meetings. Companies are encouraged to disclose the circumstances under which virtual-only meetings would be held, and to allow for comparable rights and opportunities for shareholders to participate electronically as they would have during an in-person meeting.

Sustainability Advisory Services generally opposes takeover defenses, as they limit shareholder value by eliminating the takeover or control premium for the company. As owners of the company, shareholders should be given the opportunity to decide on the merits of takeover offers. Further, takeover devices can be used to entrench a board that is unresponsive to shareholders on both governance and corporate social responsibility issues.

Miscellaneous Governance Provisions

Sustainability Advisory Services evaluates proposals that concern governance issues such as shareholder meeting adjournments, quorum requirements, corporate name changes, and bundled or conditional proposals on a case-by-case basis, taking into account the impact on shareholder rights.

------

Capital Structures

Capital structure related topics include requests for increases in authorized stock, stock splits and reverse stock splits, issuances of blank check preferred stock, debt restructurings, and share repurchase plans.

Sustainability Advisory Services supports a one-share, one-vote policy and opposes mechanisms that skew voting rights. Sustainability Advisory Services supports capital requests that provide companies with adequate financing flexibility while protecting shareholders from excessive dilution of their economic and voting interests. Proposals to increase common stock are evaluated on a case-by-case basis, taking into account the company's past use of share authorizations and elements of the current request.

Executive and Director Compensation

The Dodd-Frank Wall Street Reform and Consumer Protection Act requires advisory shareholder votes on executive compensation (Say on Pay), an advisory vote on the frequency of say on pay, as well as a shareholder advisory vote on golden parachute compensation. Sustainability Advisory Services will vote against Say on Pay proposals if there is an unmitigated misalignment between CEO pay and company performance, the company maintains problematic pay practices, and the board exhibits a significant level of poor communication and responsiveness to shareholders.

Sustainability Advisory Services will vote case-by-case on certain equity-based compensation plans depending on a combination of certain plan features and equity grant practices, where positive factors may counterbalance negative factors, and vice versa, as evaluated using an "equity plan scorecard" (EPSC) approach.

Mergers and Corporate Restructurings

Mergers, acquisitions, spinoffs, reincorporations, and other corporate restructuring plans are evaluated on a case-by- case basis, given the potential for significant impact on shareholder value and on shareholders' economic interests. In addition, these corporate actions can have a significant impact on community stakeholders and the workforce, and may affect the levels of employment, community lending, equal opportunity, and impact on the environment.

Mutual Fund Proxies

There are a number of proposals that are specific to mutual fund proxies, including the election of trustees, investment advisory agreements, and distribution agreements. Sustainability Advisory Services evaluates these proposals on a case- by-case basis taking into consideration recent trends and best practices at mutual funds.

------

**Shareholder Proposals**

Shareholder Proposals on Corporate Governance and Executive Compensation

Shareholder proposals topics include board-related issues, shareholder rights and board accountability issues, as well as compensation matters. Each year, shareholders file numerous proposals that address key issues regarding corporate governance and executive compensation. Sustainability Advisory Services evaluates these proposals from the perspective that good corporate governance practices can have positive implications for a company and its ability to maximize shareholder value. Proposals that seek to improve a board's accountability to its shareholders and other stakeholders are supported.

Shareholder Proposals on Social and Environmental Topics

Shareholder resolutions on social and environmental topics include workplace diversity and safety topics, codes of conduct, labor standards and human rights, the environment and energy, sustainability and climate, weapons, consumer welfare, and public safety.

Socially responsible shareholder resolutions are receiving a great deal more attention from institutional shareholders today than they have in the past. In addition to the moral and ethical considerations intrinsic to many of these proposals, there is a growing recognition of their potential impact on the economic performance of the company.

Among the reasons for this change are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The number and variety of shareholder resolutions on social and environmental issues has increased;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Many of the sponsors and supporters of these resolutions are large institutional shareholders with significant holdings, and therefore, greater direct influence on the outcomes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The proposals are more sophisticated – better written, more focused, and more sensitive to the feasibility of implementation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Investors now understand that a company's response to social and environmental issues can have serious economic consequences for the company and its shareholders.

While focusing on value enhancement through risk mitigation and exposure to new sustainability-related opportunities, these resolutions also seek standardized reporting on ESG issues, request information regarding an issuer's adoption of, or adherence to, relevant norms, standards, codes of conduct or universally recognized international initiatives to promote disclosure and transparency. Sustainability Advisory Services generally supports standards-based ESG shareholder proposals that enhance long-term shareholder and stakeholder value while aligning the interests of the company with those of society at large. In particular, the policy will focus on resolutions seeking greater transparency and/or adherence to internationally recognized standards and principles.

------

We empower investors and companies to build for long-term and sustainable growth by providing high-quality data, analytics, and insight.

**G E T S T A RT E D W I TH IS S S O L U TI O N S**

Email <u>sales@issgovernance.com</u> or visit <u>www.issgovernance.com</u> for more information.

Founded in 1985, Institutional Shareholder Services group of companies (ISS) empowers investors and companies to build for long-term and sustainable growth by providing high-quality data, analytics and insight. ISS, which is majority owned by Deutsche Bourse Group, along with Genstar Capital and ISS management, is a leading provider of corporate governance and responsible investment solutions, market intelligence, fund services, and events and editorial content for institutional investors and corporations, globally. ISS' 2,600 employees operate worldwide across 29 global locations in 15 countries. Its approximately 3,400 clients include many of the world's leading institutional investors who rely on

ISS' objective and impartial offerings, as well as public companies focused on ESG and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS' expertise to help them make informed investment decisions. This document and all of the information contained in it, including without limitation all text, data, graphs, and charts (collectively, the "Information") is the property of Institutional Shareholder Services Inc. (ISS), its subsidiaries, or, in some cases third party suppliers.

The Information has not been submitted to, nor received approval from, the United States Securities and Exchange Commission or any other regulatory body. None of the Information constitutes an offer to sell (or a solicitation of an offer to buy), or a promotion or recommendation of, any security, financial product or other investment vehicle or any trading strategy, and ISS does not endorse, approve, or otherwise express any opinion regarding any issuer, securities, financial products or instruments or trading strategies.

The user of the Information assumes the entire risk of any use it may make or permit to be made of the Information.

ISS MAKES NO EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE INFORMATION AND EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF ORIGINALITY, ACCURACY, TIMELINESS, NON-INFRINGEMENT, COMPLETENESS, MERCHANTABILITY, AND FITNESS for A PARTICULAR PURPOSE) WITH RESPECT TO ANY OF THE INFORMATION.

Without limiting any of the foregoing and to the maximum extent permitted by law, in no event shall ISS have any liability regarding any of the Information for any direct, indirect, special, punitive, consequential (including lost profits), or any other damages even if notified of the possibility of such damages. The foregoing shall not exclude or limit any liability that may not by applicable law be excluded or limited.© 2025 \| Institutional Shareholder Services and/or its affiliates

------

**PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.**

**PART C. OTHER INFORMATION**

**Item 28. Exhibits.**

Unless otherwise noted, documents containing Accession Numbers below have previously been filed with the Securities and Exchange Commission and are incorporated herein by reference.

---

| | | | |
|:---|:---|:---|:---|
| (a) | Articles of Incorporation | Articles of Incorporation | Articles of Incorporation |
|  | (1) | <u>[Articles of Restatement dated 02/14/2019 - Filed as Ex-99(a) on 02/28/2019 (Accession No. 0000012601-19-000024)](https://www.sec.gov/Archives/edgar/data/12601/000001260119000024/pvcarticlesofrestatementdt.htm)</u> | <u>[Articles of Restatement dated 02/14/2019 - Filed as Ex-99(a) on 02/28/2019 (Accession No. 0000012601-19-000024)](https://www.sec.gov/Archives/edgar/data/12601/000001260119000024/pvcarticlesofrestatementdt.htm)</u> |
|  | (2) | <u>[Articles Supplementary dated 05/08/2025 \*](articlessupplementaryclass.htm)</u> | <u>[Articles Supplementary dated 05/08/2025 \*](articlessupplementaryclass.htm)</u> |
| (b) | By-laws | By-laws | By-laws |
|  | (1) | <u>[Amended and Restated By-laws effective 06/09/2020 - Filed as Ex-99(b) on 09/25/2020 (Accession No. 0000012601-20-000205)](https://www.sec.gov/Archives/edgar/data/12601/000001260120000205/ex99b-pvcarbylaws060920.htm)</u> | <u>[Amended and Restated By-laws effective 06/09/2020 - Filed as Ex-99(b) on 09/25/2020 (Accession No. 0000012601-20-000205)](https://www.sec.gov/Archives/edgar/data/12601/000001260120000205/ex99b-pvcarbylaws060920.htm)</u> |
| (c) | Instruments Defining Rights of Security Holders: None other than those included in response to Items 28(a) and 28(b). | Instruments Defining Rights of Security Holders: None other than those included in response to Items 28(a) and 28(b). | Instruments Defining Rights of Security Holders: None other than those included in response to Items 28(a) and 28(b). |
| (d) | Investment Advisory Agreements | Investment Advisory Agreements | Investment Advisory Agreements |
|  | (1) | <u>[Amended and Restated Management Agreement dated 01/01/2025 - Filed as Ex-99(d)(1) on 03/04/2025 (Accession No. 0000012601-25-000024)](https://www.sec.gov/Archives/edgar/data/12601/000001260125000024/pvcarmanagementagreement01.htm)</u> | <u>[Amended and Restated Management Agreement dated 01/01/2025 - Filed as Ex-99(d)(1) on 03/04/2025 (Accession No. 0000012601-25-000024)](https://www.sec.gov/Archives/edgar/data/12601/000001260125000024/pvcarmanagementagreement01.htm)</u> |
|  | (2) | a. | <u>[Los Angeles Capital Management LLC Sub-Advisory Agreement dated 04/14/2026](pvclacapitalsub-advagmt041.htm)</u> \* |
|  |  | b. | <u>[Principal Real Estate Investors, LLC Amended & Restated Sub-Advisory Agreement dated 01/01/2024 - Filed as Ex-99(d)(2)b on 04/25/2024 (Accession No. 0000012601-24-000085)](https://www.sec.gov/Archives/edgar/data/12601/000001260124000085/pvcprincipal-reiarsubxadva.htm)</u> |
|  |  | c. | <u>[T. Rowe Price Associates, Inc. Amended & Restated Sub-Advisory Agreement dated 04/01/2026](pvctrowearsub-advagmt040126.htm)</u> \* |
|  |  | d. | <u>[W](pvcwestfieldsub-advagmt041.htm)[estfield Capital Management Company](pvcwestfieldsub-advagmt041.htm)[, L.P. Sub-Advisory Agreement dated 04/15/2026](pvcwestfieldsub-advagmt041.htm)</u> \* |
| (e) | Underwriting Contracts | Underwriting Contracts | Underwriting Contracts |
|  | (1) | <u>[Distribution Agreement dated 12/14/2009](https://www.sec.gov/Archives/edgar/data/12601/000089874511000061/ex99e3-distagrmt121409.htm)[-](https://www.sec.gov/Archives/edgar/data/12601/000089874511000061/ex99e3-distagrmt121409.htm)[Filed as Ex-99(e)(3) on 03/02/2011 (Accession No. 0000898745-11-000061)](https://www.sec.gov/Archives/edgar/data/12601/000089874511000061/ex99e3-distagrmt121409.htm)</u> | <u>[Distribution Agreement dated 12/14/2009](https://www.sec.gov/Archives/edgar/data/12601/000089874511000061/ex99e3-distagrmt121409.htm)[-](https://www.sec.gov/Archives/edgar/data/12601/000089874511000061/ex99e3-distagrmt121409.htm)[Filed as Ex-99(e)(3) on 03/02/2011 (Accession No. 0000898745-11-000061)](https://www.sec.gov/Archives/edgar/data/12601/000089874511000061/ex99e3-distagrmt121409.htm)</u> |
| (f) | Bonus or Profit Sharing Contracts - Not Applicable | Bonus or Profit Sharing Contracts - Not Applicable | Bonus or Profit Sharing Contracts - Not Applicable |
| (g) | Custodian Agreements | Custodian Agreements | Custodian Agreements |
|  | (1) | a. | <u>[Custody Agreement between The Bank of New York Mellon and Principal Variable Contracts Funds, Inc. dated 11/11/2011](https://www.sec.gov/Archives/edgar/data/12601/000114420413008876/v334151_ex99-g.htm)[-](https://www.sec.gov/Archives/edgar/data/12601/000114420413008876/v334151_ex99-g.htm)[Filed as Ex-99(g) on 02/14/2013 (Accession No. 0001144204-13-008876)](https://www.sec.gov/Archives/edgar/data/12601/000114420413008876/v334151_ex99-g.htm)</u> |
|  |  | b. | <u>[Amendment to Schedule II to the Custody Agreement between The Bank of New York Mellon and Principal Variable Contracts Funds, Inc. effective 11/11/2011 dated 01/11/2023 - Filed as Ex-99(g)(1)b on 04/27/2023 (Accession No. 0001683863-23-003889)](https://www.sec.gov/Archives/edgar/data/12601/000168386323003889/f23908d3.htm)</u> |
|  |  | c. | <u>[Supplement to the Global Custody Agreement Hong Kong - China - Connect Service between The Bank of New York Mellon and Principal Variable Contracts Funds, Inc. dated 04/16/2018 - Filed as Ex-99(g)(3) on 02/28/2020 (Accession No. 0000012601-20-000026)](https://www.sec.gov/Archives/edgar/data/12601/000001260120000026/pvcsupplglobalcustodyagmt-.htm)</u> |
| (h) | Other Material Contracts | Other Material Contracts | Other Material Contracts |
|  | (1) | <u>[Transfer Agency Agreement dated 05/01/2025 - Filed as Ex-99(h)(1) on 04/25/2025 (Accession No. 0000012601-25-000106)](https://www.sec.gov/Archives/edgar/data/12601/000001260125000106/pvctransferagencyagmtcl1cl.htm)</u>  | <u>[Transfer Agency Agreement dated 05/01/2025 - Filed as Ex-99(h)(1) on 04/25/2025 (Accession No. 0000012601-25-000106)](https://www.sec.gov/Archives/edgar/data/12601/000001260125000106/pvctransferagencyagmtcl1cl.htm)</u>  |
|  | (2) | <u>[Principal Variable Contracts Funds, Inc. Contractual Fee Waiver Agreement dated 05/01/2026 \*](https://www.sec.gov/Archives/edgar/data/12601/000001260125000106/pvccontractualfeewaiveragm.htm)</u>  | <u>[Principal Variable Contracts Funds, Inc. Contractual Fee Waiver Agreement dated 05/01/2026 \*](https://www.sec.gov/Archives/edgar/data/12601/000001260125000106/pvccontractualfeewaiveragm.htm)</u>  |
|  | (3) | <u>[Principal Variable Contracts Funds, Inc. Interfund Lending Agreement dated 03/02/2026](pvcpfiinterfundlendingagre.htm)</u> \* | <u>[Principal Variable Contracts Funds, Inc. Interfund Lending Agreement dated 03/02/2026](pvcpfiinterfundlendingagre.htm)</u> \* |
|  | (4) | <u>[Form of Rule 12d1-4 Fund of Funds Investment Agreement - Filed as Ex-99(h)(7) on 02/11/2022 (Accession No. 0001683863-22-000622)](https://www.sec.gov/Archives/edgar/data/12601/000168386322000622/f10913d6.htm)</u> | <u>[Form of Rule 12d1-4 Fund of Funds Investment Agreement - Filed as Ex-99(h)(7) on 02/11/2022 (Accession No. 0001683863-22-000622)](https://www.sec.gov/Archives/edgar/data/12601/000168386322000622/f10913d6.htm)</u> |
|  | (5) | <u>[Powers of Attorney for Beckman, Bhatia, Damos, Dyer, Grieb, Hymes, Kassam, Lattimer, McCullum, McMillan, and Swank dated 03/10/2026](pvc-powerofattorneyall0310.htm)</u> \* | <u>[Powers of Attorney for Beckman, Bhatia, Damos, Dyer, Grieb, Hymes, Kassam, Lattimer, McCullum, McMillan, and Swank dated 03/10/2026](pvc-powerofattorneyall0310.htm)</u> \* |
| (i) | <u>[Legal Opinion](pvc485blegalopinion042726.htm)</u> \* | <u>[Legal Opinion](pvc485blegalopinion042726.htm)</u> \* | <u>[Legal Opinion](pvc485blegalopinion042726.htm)</u> \* |
| (j) | Other Opinions | Other Opinions | Other Opinions |
|  | (1) | <u>[Consent of Independent Registered Public Accounting Firm](pvcconsentofauditors050126.htm)</u> \* | <u>[Consent of Independent Registered Public Accounting Firm](pvcconsentofauditors050126.htm)</u> \* |
| (k) | Omitted Financial Statements - Not Applicable | Omitted Financial Statements - Not Applicable | Omitted Financial Statements - Not Applicable |
| (l) | Initial Capital Agreements | Initial Capital Agreements | Initial Capital Agreements |
|  | (1-11) | <u>[Initial Capital Agreements 1987 – Filed as Ex-99(l)(1-11) on 4/27/2001 (Accession No. 0000012601-01-500015)](https://www.sec.gov/Archives/edgar/data/12601/000001260101500015/incagr1987.txt)</u> | <u>[Initial Capital Agreements 1987 – Filed as Ex-99(l)(1-11) on 4/27/2001 (Accession No. 0000012601-01-500015)](https://www.sec.gov/Archives/edgar/data/12601/000001260101500015/incagr1987.txt)</u> |
|  | (12-19) | <u>[Initial Capital Agreements 1998 – Filed as Ex-99(l)(12-19) on 4/27/2001 (Accession No. 0000012601-01-500015)](https://www.sec.gov/Archives/edgar/data/12601/000001260101500015/incagr1998.txt)</u> | <u>[Initial Capital Agreements 1998 – Filed as Ex-99(l)(12-19) on 4/27/2001 (Accession No. 0000012601-01-500015)](https://www.sec.gov/Archives/edgar/data/12601/000001260101500015/incagr1998.txt)</u> |
|  | (20-23) | <u>[Initial Capital Agreements 1999 – Filed as Ex-99(l)(20-23) on 4/27/2001 (Accession No. 0000012601-01-500015)](https://www.sec.gov/Archives/edgar/data/12601/000001260101500015/incagr1999.txt)</u> | <u>[Initial Capital Agreements 1999 – Filed as Ex-99(l)(20-23) on 4/27/2001 (Accession No. 0000012601-01-500015)](https://www.sec.gov/Archives/edgar/data/12601/000001260101500015/incagr1999.txt)</u> |
|  | (24-26) | <u>[Initial Capital Agreements 2000 – Filed as Ex-99(l)(24-26) on 4/27/2001 (Accession No. 0000012601-01-500015)](https://www.sec.gov/Archives/edgar/data/12601/000001260101500015/incagr2000.txt)</u> | <u>[Initial Capital Agreements 2000 – Filed as Ex-99(l)(24-26) on 4/27/2001 (Accession No. 0000012601-01-500015)](https://www.sec.gov/Archives/edgar/data/12601/000001260101500015/incagr2000.txt)</u> |
|  | (27) | <u>[Initial Capital Agreements 5/01/2002 - Filed as Ex-99(l)(27) on 12/14/2016 (Accession No. 0000012601-16-000514)](https://www.sec.gov/Archives/edgar/data/12601/000001260116000514/pvcinvltrs-050102.htm)</u> | <u>[Initial Capital Agreements 5/01/2002 - Filed as Ex-99(l)(27) on 12/14/2016 (Accession No. 0000012601-16-000514)](https://www.sec.gov/Archives/edgar/data/12601/000001260116000514/pvcinvltrs-050102.htm)</u> |
|  | (28) | <u>[Initial Capital Agreements 5/01/2003 – Filed as Ex-99L on 2/26/2004 (Accession No. 0000870786-04-000042)](https://www.sec.gov/Archives/edgar/data/12601/000087078604000042/plt-invltr.txt)</u> | <u>[Initial Capital Agreements 5/01/2003 – Filed as Ex-99L on 2/26/2004 (Accession No. 0000870786-04-000042)](https://www.sec.gov/Archives/edgar/data/12601/000087078604000042/plt-invltr.txt)</u> |
|  | (29) | <u>[Initial Capital Agreements 8/30/2004 – Filed as Ex-99(l)(28) on 2/24/2005 (Accession No. 000087086-05-000028)](https://www.sec.gov/Archives/edgar/data/12601/000087078605000028/invltr-0804.txt)</u> | <u>[Initial Capital Agreements 8/30/2004 – Filed as Ex-99(l)(28) on 2/24/2005 (Accession No. 000087086-05-000028)](https://www.sec.gov/Archives/edgar/data/12601/000087078605000028/invltr-0804.txt)</u> |
|  | (30) | <u>[Initial Capital Agreement 1/03/2007 – Filed as Ex-99(l)(29) on 2/29/2008 (Accession No. 0000950137-08-003049)](https://www.sec.gov/Archives/edgar/data/12601/000095013708003049/c24207apexv99wxlyx29y.htm)</u> | <u>[Initial Capital Agreement 1/03/2007 – Filed as Ex-99(l)(29) on 2/29/2008 (Accession No. 0000950137-08-003049)](https://www.sec.gov/Archives/edgar/data/12601/000095013708003049/c24207apexv99wxlyx29y.htm)</u> |

---

------

---

| | | |
|:---|:---|:---|
| | (31) | <u>[Initial Capital Agreement 12/30/2009 - Filed as Ex-99(l)(31) on 12/14/2016 (Accession No. 0000012601-16-000514)](https://www.sec.gov/Archives/edgar/data/12601/000001260116000514/pvcinvltr-123009.htm)</u> |
| | (32) | <u>[Initial Capital Agreement 5/15/2012 – Filed as Ex-99(l)(30) on 2/14/2013 (Accession No. 0001144204-13-008876)](https://www.sec.gov/Archives/edgar/data/12601/000114420413008876/v334151_ex99-l30.htm)</u> |
| | (33) | <u>[Initial Capital Agreement 5/01/2013 – Filed as Ex-99(l)(31) on 8/16/2013 (Accession No. 0000012601-13-000132)](https://www.sec.gov/Archives/edgar/data/12601/000001260113000132/l31-initialcapitalagreemen.htm)</u> |
| | (34) | <u>[Initial Capital Agreement 10/31/2013 - Filed as Ex-99(l)(32) on 2/27/2014 (Accession No. 0000012601-14-000039)](https://www.sec.gov/Archives/edgar/data/12601/000001260114000039/l32pvc-lcsp500xmvaxdated10.htm)</u> |
| | (35) | <u>[Initial Capital Agreement 10/31/2013 - Filed as Ex-99(l)(33) on 2/27/2014 (Accession No. 0000012601-14-000039)](https://www.sec.gov/Archives/edgar/data/12601/000001260114000039/l33pvc-divgroxbalmvax103113.htm)</u> |
| | (36) | <u>[Initial Capital Agreement dated 02/17/2015 - Filed as Exhibit-99(l)(25) on 3/02/2015 (Accession No. 0000012601-15-000059)](https://www.sec.gov/Archives/edgar/data/12601/000001260115000059/l35invlettersmblclass20217.htm)</u> |
| | (37) | <u>[Initial Capital Agreement dated 05/01/2015 - Filed as Ex-99(l)(35) on 05/14/2015 (Accession No. 0000012601-15-000163)](https://www.sec.gov/Archives/edgar/data/12601/000001260115000163/ex99l35-initialcapitalagmt.htm)</u> |
| | (38) | <u>[Initial Capital Agreement dated 03/30/2017 (Diversified Balanced Volatility Control and Diversified Growth Volatility Control Accounts) - Filed as Ex-99(L)(39) on 04/26/2017 (Accession No. 0000012601-17-000115)](https://www.sec.gov/Archives/edgar/data/12601/000001260117000115/initialcapitalagmt033017pv.htm)</u> |
| | (39) | <u>[Initial Capital Agreement dated 05/01/2017 (Diversified Balanced Class 1) - Filed as Ex-99(I)(40) on 03/01/2018 (Accession No. 0000012601-18-000015)](https://www.sec.gov/Archives/edgar/data/12601/000001260118000015/ex99l40-pvcxinitialcapital.htm)</u> |
| | (40) | <u>[Initial Capital Agreement dated 12/09/2020 (Blue Chip Account) - Filed as Ex-99(l)(40) on 02/25/2021 (Accession No. 0000012601-21-000017)](https://www.sec.gov/Archives/edgar/data/12601/000001260121000017/pvc-pfsiinvestmentletterbl.htm)</u> |
| | (41) | <u>[Initial Capital Agreement dated 06/29/2022 (Class 2 for U.S. LargeCap Buffer July Account) - Filed as Ex-99(l)(42) on 09/14/2022 (Accession No. 0001683863-22-005890)](https://www.sec.gov/Archives/edgar/data/12601/000168386322005890/f22884d11.htm)</u> |
| | (42) | <u>[Initial Capital Agreement dated 09/28/2022 (Class 2 for U.S. LargeCap Buffer October Account) - Filed as Ex-99(l)(43) on 04/27/2023 (Accession No. 0001683863-23-003889)](https://www.sec.gov/Archives/edgar/data/12601/000168386323003889/f23908d13.htm)</u> |
| | (43) | <u>[Initial Capital Agreement dated 12/28/2022 (Class 2 for U.S. LargeCap Buffer January Account) - Filed as Ex-99(l)(44) on 04/27/2023 (Accession No. 0001683863-23-003889)](https://www.sec.gov/Archives/edgar/data/12601/000168386323003889/f23908d14.htm)</u> |
| | (44) | <u>[Initial Capital Agreement dated 03/29/2023 (Class 2 for U.S. LargeCap Buffer April Account) - Filed as Ex-99(l)(45) on 04/27/2023 (Accession No. 0001683863-23-003889)](https://www.sec.gov/Archives/edgar/data/12601/000168386323003889/f23908d15.htm)</u> |
| | (45) | <u>[Initial Capital Agreement dated](pvc-pgiinvestmentletterblu.htm)[04/30/2025](pvc-pgiinvestmentletterblu.htm)[(Class 2 for](pvc-pgiinvestmentletterblu.htm)[Blue Chip](pvc-pgiinvestmentletterblu.htm)[Account](pvc-pgiinvestmentletterblu.htm)[)](pvc-pgiinvestmentletterblu.htm)</u> \* |
| (m) | Rule 12b-1 Plan | Rule 12b-1 Plan |
|  | (1) | <u>[Amended Distribution Plan and Agreement - Class 2 Shares dated 05/01/2025 - Filed as Ex-99(m)(1) on 04/25/2025 (Accession No. 0000012601-25-000106)](https://www.sec.gov/Archives/edgar/data/12601/000001260125000106/pvc12b-1cl2xbluechip050125.htm)</u> |
| (n) | Rule 18f-3 Plan | Rule 18f-3 Plan |
|  | (1) | <u>[Plan pursuant to Rule 18f-3(d) under the Investment Company Act of 1940 dated 05/01/2025 - Filed as Ex-99(n)(1) on 04/25/2025 (Accession No. 0000012601-25-000106)](https://www.sec.gov/Archives/edgar/data/12601/000001260125000106/pvcmultipleshareclassplan-.htm)</u> |
| (o) | Reserved. | Reserved. |
| (p) | Codes of Ethics | Codes of Ethics |
|  | (1) | <u>[Los Angeles Capital Management LLC Code of Ethics dated 07/16/2024](lacapital-codeofethicsjuly.htm)</u> \* |
|  | (2) | <u>[Registrant, Principal Global Investors, LLC, and Principal Real Estate Investors, LLC Code of Ethics dated 10/01/2025](pgi-principalxreicodeofeth.htm)</u> \* |
|  | (3) | <u>[T. Rowe Price Group, Inc. and its Affiliates Code of Ethics dated 07/01/2025](trowepricecodeofethics0701.htm)</u> \* |
|  | (4) | <u>[Westfield Capital Management Company, L.P. Code of Ethics dated 10/21/2025](westfield-codeofethicsoct2.htm)</u> \* |

---

\*&nbsp;&nbsp;&nbsp;&nbsp;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;&nbsp;&nbsp;&nbsp;&nbsp;&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;&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Was the result of active and deliberate dishonesty; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)The corporate representative actually received an improper personal benefit in money, property, or services; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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"), Principal Real Asset Fund ("PRA"), and Principal Private Credit Fund ("PPCF"). 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, and asset allocation. 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)** |
| | Patricio Abal | Counsel |
| | Christopher K. Agbe-Davies | Vice President, Associate General Counsel, and Assistant Secretary |
| \* | Kamal Bhatia | Director, President and Chief Executive Officer - Principal Asset Management |
| | Suzanne Cohrs | Managing Director - Public Markets Strategy |
| | Daniel R. Coleman | Chief Investment Officer - Edge Asset Management |
| | Anne R. Cook | Associate General Counsel |
| | Ramona Dessouki | Executive Director and Chief Marketing Officer and Digital Sales |
| \* | George Djurasovic | Vice President - Principal Asset Management General Counsel |
| | Jen Dulski | Counsel |
| | Todd E. Everett | Executive Managing Director and Global Head of Private Markets - Principal Asset Management |
| | Michael J. Goosay | Executive Managing Director and Chief Investment Officer and Global Head of Fixed Income |
| | Melinda L. Hanrahan | Managing Director - Global Equities |
| | Angela Harrison | Counsel |
| | Corrin Hatala | Counsel |
| | Maggie Hibbs | Counsel |
| | Jill M. Hittner | Director and Executive Managing Director/Chief Financial Officer - Principal Asset Management |
| | Todd A. Jablonski | Executive Managing Director - Global Head of Multi-Asset & Quant - Principal Asset Management |
| | Jaime M. Kiehn | Managing Director - Product Specialist |
| | Chester Knight | Managing Director - Financial Analysis and Planning |
| | Justin T. Lange | Vice President and Chief Compliance Officer - Principal Asset Management |
| \* | Laura B. Latham | Assistant General Counsel |
| | Steve Lempa | Chief Risk Officer - Principal Asset Management |
| | Ming Lodh | Director - Investment Risk Management |
| | George P. Maris | Executive Managing Director - Chief Investment Officer/Global Head of Equities |
| | Kenneth A. McCullum | Director |
| | Adrienne L. McFarland | Associate General Counsel and Secretary |
| | Amy M. McNally | Global Head Risk Management - PGI |
| | Terri Messina | Managing Director, Global Investment Operations |
| \* | David P. Michalik | Counsel |
| | Everett S. Miles | Vice President - Corporate Strategy and Development |
| | Karl (Bill) W. Nolin | Chief Investment Officer - Aligned Investors |
| | Mike Oppold | Senior Director - Accounting and Finance |
| \* | Deanna Y. Pellack | Assistant General Counsel |
| | Colin D. Pennycooke | Assistant General Counsel |
| | J. Markham Penrod | Chief Compliance Officer - North America |
| | Matt Peron | Managing Director - Deputy Chief Investment Officer - Equities |
| | Darshini Reddivari | Counsel |
| \* | Teri R. Root | Chief Compliance Officer - Funds |
| | Kelly D. Rush | Chief Investment Officer - Global Real Estate Securities |
| | Scott M. Sailer | Vice President - Treasurer and Corporate Chief Financial Officer |
| | Charles M. Schneider | Assistant General Counsel |
| | Brenda Scholten | Assistant Vice President and Chief Accounting Officer |
| \* | Michael Scholten | Assistant Vice President and Actuary |
| \* | Adam U. Shaikh | Associate General Counsel |
| | Jennifer Shields | Assistant General Counsel |
| \* | John L. Sullivan | Assistant General Counsel |
| | Rob Susman | Managing Director - Global Head of Equities Research |
| \* | Barbara Wenig | Executive Managing Director - Chief Business Officer - Principal Asset Management |
| \* | Brant K. Wong | Executive Managing Director - Head of Retirement Solutions |

---

------

**Item 32.&nbsp;&nbsp;&nbsp;&nbsp;Principal Underwriters**

(a)Principal Funds Distributor, Inc. ("PFD") acts as principal underwriter for PFI, PVC, PRA, and PPCF. 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** | **Positions and Offices with** | **Positions and Offices** |
| **Business Address** | **Principal Underwriter (PFD)** | **with the Registrant** |
| Christopher K. Agbe-Davies | Vice President, Associate General Counsel, |  |
| Principal Funds Distributors, Inc.<sup>(1)</sup> | &nbsp;&nbsp;&nbsp;&nbsp;and Assistant Secretary |  |
| John T. Berg | Director |  |
| The Principal Financial Group <sup>(1)</sup> |  |  |
| Sean Clines | Chief Financial Officer |  |
| Principal Funds Distributors, Inc.<sup>(1)</sup> |  |  |
| Ramona Dessouki | Chief Marketing Officer |  |
| Principal Funds Distributors, Inc.<sup>(2)</sup> |  |  |
| Dina Hoeske | Senior Director - Fund Shareholder Services |  |
| Principal Funds Distributors, Inc.<sup>(1)</sup> |  |  |
| Michael F. Murray | Director |  |
| Principal Securities, Inc.<sup>(1)</sup> |  |  |
| Brian S. Ness | Senior Vice President and Chief Information Officer |  |
| Principal Funds Distributors, Inc.<sup>(1)</sup> |  |  |
| Scott M. Sailer | Vice President - Treasurer and Corporate |  |
| Principal Funds Distributors, Inc.<sup>(1)</sup> | &nbsp;&nbsp;&nbsp;&nbsp;Chief Financial Officer |  |
| Michael Scholten | Chief Operations Officer | Chief Financial Officer |
| Principal Funds Distributors, Inc.<sup>(1)</sup> |  |  |
| Dina Sullivan | Assistant Vice President |  |
| Principal Funds Distributor, Inc. <sup>(3)</sup> |  |  |
| Jeff Trier | AML Compliance Officer |  |
| Principal Funds Distributors, Inc.<sup>(1)</sup> |  |  |
| Brant K. Wong | President and Chair of the Board | Vice President |
| Principal Funds Distributor, Inc. <sup>(2)</sup> |  |  |
| <sup>(1)</sup> Des Moines, IA 50392 | <sup>(1)</sup> Des Moines, IA 50392 |  |
| <sup>(2)</sup> 888 7th Avenue, 25th Floor, New York, NY 10019 | <sup>(2)</sup> 888 7th Avenue, 25th Floor, New York, NY 10019 |  |
| <sup>(3)</sup> 1478 Stone Point Drive, Ste 390, Roseville, CA 95661  | <sup>(3)</sup> 1478 Stone Point Drive, Ste 390, Roseville, CA 95661  |  |

---

(c)&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.

**Item 33.&nbsp;&nbsp;&nbsp;&nbsp;Location of Accounts and Records**

The location of 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 is provided in the most recent report on Form N-CEN filed by the Registrant.

**Item 34.&nbsp;&nbsp;&nbsp;&nbsp;Management Services**

Not applicable.

**Item 35.&nbsp;&nbsp;&nbsp;&nbsp;Undertakings**

Not applicable.

------

---

| | |
|:---|:---|
| **EXHIBIT INDEX** | **EXHIBIT INDEX** |
| Articles Supplementary | Exhibit (a)(2) |
| Sub-Advisory Agreements | Exhibits (d)(2)a, (d)(2)c, (d)(2)d |
| Contractual Fee Waiver Agreement | Exhibit (h)(2) |
| Interfund Lending Agreement | Exhibit (h)(3) |
| Powers of Attorney | Exhibit (h)(5) |
| Legal Opinion | Exhibit (i) |
| Consent of Independent Registered Public Accounting Firm | Exhibit (j)(1) |
| Initial Capital Agreement dated 04/30/2025 (Class 2 for Blue Chip Account) | Exhibit (l)(45) |
| Code of Ethics | Exhibits (p)(1), (p)(2), (p)(3), (p)(4) |

---

------

---

| |
|:---|
| **SIGNATURES** |
| Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Fund certifies that it meets all of the requirements for effectiveness of this registration statement under rule 485(b) under the Securities Act and has duly caused this registration statement to be signed on its behalf by the undersigned, duly authorized, in the city of Des Moines and State of Iowa, on the 27th day of April, 2026. |
| Principal Variable Contracts Funds, Inc. |
| (Registrant) |
| <br>/s/ Kamal Bhatia<br>__________________________________<br>Kamal Bhatia<br>Director, President, and Chief Executive Officer |

---

------

---

| | | |
|:---|:---|:---|
| Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. | Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. | Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. |
| **Signature** | **Title** | **Date** |
| /s/ Kamal Bhatia<br>__________________________<br>Kamal Bhatia | Director, President, and Chief Executive Officer <br>(Principal Executive Officer) | April 27, 2026 |
| /s/ Michael Scholten <br>__________________________<br>Michael Scholten | Chief Financial Officer<br>(Principal Financial Officer) | April 27, 2026 |
| /s/ Megan Hoffmann<br>__________________________<br>Megan Hoffmann | Vice President and Treasurer<br>(Principal Accounting Officer) | April 27, 2026 |
| (Daniel J. Beckman)\* <br>__________________________<br>Daniel J. Beckman | Director | April 27, 2026 |
| (Craig Damos)\* <br>__________________________<br>Craig Damos | Director | April 27, 2026 |
| (Katharin S. Dyer)\* <br>__________________________<br>Katharin S. Dyer  | Director | April 27, 2026 |
| (Frances P. Grieb)\* <br>__________________________<br>Frances P. Grieb | Director | April 27, 2026 |
| (Victor L. Hymes)\* <br>__________________________<br>Victor L. Hymes | Director | April 27, 2026 |
| (Sharmila C. Kassam)\*<br>__________________________<br>Sharmila C. Kassam | Director | April 27, 2026 |
| (Padelford L. Lattimer)\*<br>__________________________<br>Padelford L. Lattimer | Director | April 27, 2026 |
| (Kenneth A. McCullum)\*<br>__________________________<br>Kenneth A. McCullum | Director | April 27, 2026 |
| (Karen McMillan)\*<br>__________________________<br>Karen McMillan | Director | April 27, 2026 |
| (Thomas A. Swank)\* <br>__________________________<br>Thomas A. Swank | Director | April 27, 2026 |
|  | /s/ Kamal Bhatia<br>______________________________________<br>Kamal Bhatia | April 27, 2026 |
|  | Attorney-in-Fact |  |
| \* Pursuant to Powers of Attorney filed herewith | \* Pursuant to Powers of Attorney filed herewith | \* Pursuant to Powers of Attorney filed herewith |

---

## Ex-99.(A)(2)

**ARTICLES SUPPLEMENTARY**

**OF**

**PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.**

Principal Variable Contracts Funds, Inc., a Maryland corporation having its principal office in this State in Baltimore, Maryland (the "Corporation"), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

FIRST: On December 11, 2024, pursuant to authority granted to it in the Charter of the Corporation, resolutions were approved by the Board of Directors of the Corporation, in accordance with Sections 2-105(a)(10), 2-105(c), and 2-605 of Maryland General Corporation Law, authorizing a reclassification of an aggregate of one billion eight hundred million (1,800,000,000) shares, representing all Class 3 shares of the series of the Corporation in the table below. These shares are reclassified as Class 2 shares of each respective series of the Corporation, as follows:

---

| | | |
|:---|:---|:---|
| **Series** | **Aggregate Class 3 Shares Reclassified into <br>Class 2 Shares** | **Total Class 2 Shares following Reclassification** |
| Blue Chip Account | 200000000 | 400000000 |
| Diversified Balanced Account | 200000000 | 450000000 |
| Diversified Balanced Adaptive Allocation Account | 200000000 | 400000000 |
| Diversified Balanced Strategic Allocation Account | 200000000 | 400000000 |
| Diversified Growth Account | 200000000 | 500000000 |
| Diversified Growth Adaptive Allocation Account | 200000000 | 400000000 |
| Diversified Growth Strategic Allocation Account | 200000000 | 400000000 |
| Diversified Income Account | 200000000 | 250000000 |
| Equity Income Account | 200000000 | 300000000 |

---

The total number of authorized shares of stock of the Corporation will stay at ten billion seven hundred fifteen million (10,715,000,000) shares of stock, with a par value of one cent ($0.01) per share. The aggregate par value of all the authorized shares is one hundred seven million one hundred fifty thousand dollars ($107,150,000).

Article V shall be stricken in its entirety and replaced by the following:

**<u>ARTICLE V</u>**

**<u>Capital Stock Allocation</u>**

**Section 5.1. Authorized Shares**: The total number of shares of stock which the Corporation shall have authority to issue is ten billion seven hundred fifteen million (10,715,000,000) shares of stock, with a par value of one cent ($0.01) per share. The aggregate par value of all the authorized shares is one hundred seven million one hundred fifty thousand dollars ($107,150,000). The shares may be issued by the Board of Directors in such separate and distinct series and classes of series as the Board of Directors shall from time to time create and establish. The Board of Directors shall have full power and authority, in its sole discretion, to establish and designate series and classes of series, and to classify or reclassify any unissued shares in separate series or classes having such preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption as shall be fixed and determined from time to time by the Board of Directors. Unless otherwise provided in these Articles of Incorporation or by the Board of Directors when establishing a class, each class of a series shall represent interests in the assets belonging to that series and have identical voting, dividend, liquidation and other rights and the same terms and conditions as any other class of the series, except that expenses allocated to the class of a series may be borne solely by such class as shall be determined by the Board of Directors. Expenses related to the distribution of, and other identified expenses that should

------

properly be allocated to, the shares of a particular series or class may be charged to and borne solely by such series or class, and the bearing of expenses solely by a series or class may be appropriately reflected (in a manner determined by the Board of Directors) and cause differences in the net asset value attributable to, and the dividend, redemption and liquidation rights of, the shares of each series or class. Subject to the authority of the Board of Directors to increase and decrease the number of, and to reclassify the shares of any series or class, there are hereby established thirty-seven series of common stock, each comprising the number of shares and having the share class designations indicated:

---

| | | |
|:---|:---|:---|
| **FUND** | **CLASS** | **NUMBER OF SHARES** |
| Blue Chip Account | Class 2 | 400000000 |
| Bond Market Index Account | Class 1 | 300000000 |
| Core Plus Bond Account | Class 1 | 400000000 |
| Diversified Balanced Account | Class 1 | 200000000 |
|  | Class 2 | 450000000 |
| Diversified Balanced Adaptive Allocation Account | Class 2 | 400000000 |
| Diversified Balanced Strategic Allocation Account | Class 2  | 400000000 |
| Diversified Growth Account | Class 2 | 500000000 |
| Diversified Growth Adaptive Allocation Account | Class 2 | 400000000 |
| Diversified Growth Strategic Allocation Account | Class 2 | 400000000 |
| Diversified Income Account | Class 2 | 250000000 |
| Diversified International Account | Class 1 | 300000000 |
| Equity Income Account | Class 1 | 100000000 |
|  | Class 2 | 300000000 |
| Global Emerging Markets Account | Class 1 | 200000000 |
| Government & High Quality Bond Account | Class 1 | 200000000 |
| LargeCap Growth Account I | Class 1 | 200000000 |
| LargeCap S&P 500 Index Account | Class 1 | 200000000 |
|  | Class 2 | 100000000 |
| LargeCap S&P 500 Managed Volatility Index Account | Class 1 | 100000000 |
| MidCap Account | Class 1 | 100000000 |
|  | Class 2 | 5000000 |
| Principal Capital Appreciation Account | Class 1 | 100000000 |
|  | Class 2 | 100000000 |
| Principal LifeTime 2020 Account | Class 1 | 200000000 |
| Principal LifeTime 2030 Account | Class 1 | 200000000 |
| Principal LifeTime 2040 Account | Class 1 | 200000000 |
| Principal LifeTime 2050 Account | Class 1 | 200000000 |
| Principal LifeTime 2060 Account | Class 1 | 100000000 |
| Principal LifeTime Strategic Income Account | Class 1 | 200000000 |
| Real Estate Securities Account | Class 1 | 200000000 |
|  | Class 2 | 100000000 |
| Short-Term Income Account | Class 1 | 400000000 |
| SmallCap Account | Class 1 | 100000000 |
|  | Class 2 | 100000000 |

---

------

---

| | | |
|:---|:---|:---|
| **FUND** | **CLASS** | **NUMBER OF SHARES** |
| Strategic Asset Management Balanced Portfolio | Class 1 | 200000000 |
|  | Class 2 | 100000000 |
| Strategic Asset Management Conservative Balanced Portfolio | Class 1 | 100000000 |
|  | Class 2 | 100000000 |
| Strategic Asset Management Conservative Growth Portfolio | Class 1 | 100000000 |
|  | Class 2 | 100000000 |
| Strategic Asset Management Flexible Income Portfolio  | Class 1 | 100000000 |
|  | Class 2 | 100000000 |
| Strategic Asset Management Strategic Growth Portfolio  | Class 1 | 100000000 |
|  | Class 2 | 100000000 |
| U.S. LargeCap S&P 500 Index Buffer January Account | Class 2 | 200000000 |
| U.S. LargeCap S&P 500 Index Buffer April Account | Class 2 | 200000000 |
| U.S. LargeCap S&P 500 Index Buffer July Account | Class 2 | 200000000 |
| U.S. LargeCap S&P 500 Index Buffer October Account | Class 2 | 200000000 |

---

A total of seven hundred ten million (710,000,000) shares remain authorized but un-classified shares.

In addition, the Board of Directors is hereby expressly granted authority to change the designation of any series or class, to increase or decrease the number of shares of any series or class, provided that the number of authorized shares of any series or class shall not be decreased by the Board of Directors below the number of shares thereof then outstanding, and to reclassify any unissued shares into one or more series or classes that may be established and designated from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Corporation may issue shares of stock in fractional denominations to the same extent as its whole shares, and shares in fractional denominations shall be shares of stock having proportionately, to the respective fractions represented thereby, all the rights of whole shares, including without limitation, the right to vote, the right to receive dividends and distributions and the right to participate upon liquidation of the Corporation, but excluding the right to receive a stock certificate representing fractional shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The holder of each share of stock of the Corporation shall be entitled to one vote for each full share, and a fractional vote for each fractional share, of stock, irrespective of the series or class, then standing in the holder's name on the books of the Corporation. On any matter submitted to a vote of stockholders, all shares of the Corporation then issued and outstanding and entitled to vote shall be voted in the aggregate and not by series or class except that (1) when otherwise expressly required by the Maryland General Corporation Law or the Investment Company Act of 1940, shares shall be voted by individual series or class, and (2) if the Board of Directors, in its sole discretion, determines that a matter (including an amendment to these Articles of Incorporation) affects the interests of only one or more particular series or class or classes then only the holders of shares of such affected series or class or classes shall be entitled to vote thereon.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Unless otherwise provided in the resolution of the Board of Directors providing for the establishment and designation of any new series or class or classes, each series and class of stock of the Corporation shall have the following powers, preferences and rights, and qualifications, restrictions, and limitations thereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Assets Belonging to a Series. All consideration received by the Corporation for the issue or sale of shares of a particular series, together with all assets in which such consideration is invested or reinvested, all income, earnings, profits and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be, shall irrevocably belong to that series for all purposes, subject only to the rights of creditors, and shall be so recorded upon the books and accounts of the Corporation. Such consideration, assets, income, earnings, profits and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds, in whatever form the same may be, together with any General Items allocated to that series as provided in the following sentence, are herein referred to as "assets belonging to" that series. In the event that there are any assets, income, earnings, profits, proceeds thereof, funds or payments which are not readily identifiable as belonging to any particular series (collectively "General Items"), such General Items shall be allocated by or under the supervision of the Board of Directors to and among any one or more of the series established and designated from time to time in such manner and on such basis as the Board of Directors, in its sole discretion, deems fair and equitable, and any General Items so allocated to a particular series shall belong to that series. Each such allocation by the Board of Directors shall be conclusive and binding for all purposes. The foregoing provisions of this Section 5.1(c)(1) shall apply to each class to the extent provided by the Board of Directors and consistent with applicable laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Liabilities Belonging to a Series. The assets belonging to each particular series shall be charged with the liabilities of the Corporation in respect of that series and all expenses, costs, charges and reserves attributable to that series, and any general liabilities, expenses, costs, charges or reserves of the Corporation which are not readily identifiable as belonging to any particular series shall be allocated and charged by or under the supervision of the Board of Directors to and among any one or more of the series established and designated from time to time in such manner and on such basis as the Board of Directors, in its sole discretion, deems fair and equitable. The liabilities, expenses, costs, charges and reserves allocated and so charged to a series are herein referred to as "liabilities belonging to" that series. Expenses related to the shares of a series may be borne solely by that series (as determined by the Board of Directors). Each allocation of liabilities, expenses, costs, charges and reserves by the Board of Directors shall be conclusive and binding for all purposes. The foregoing provisions of this Section 5.1(c)(2) shall apply to each class to the extent provided by the Board of Directors and consistent with applicable laws and regulations.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Dividends and Distributions. The Board of Directors may from time to time declare and pay dividends or distributions, in stock, property or cash, on any or all series of stock, the amount of such dividends and property distributions and the payment of them being wholly in the discretion of the Board of Directors. Dividends may be declared daily or otherwise pursuant to a standing resolution or resolutions adopted only once or with such frequency as the Board of Directors may determine, after providing for actual and accrued liabilities belonging to that series. All dividends or distributions on shares of a particular series shall be paid only out of surplus or other lawfully available assets determined by the Board of Directors as belonging to such series. Dividends and distributions may vary between the classes of a series to reflect differing allocations of the expense of each class of that series to such extent and for such purposes as the Board of Directors may deem appropriate. The Board of Directors shall have the power, in its sole discretion, to distribute in any fiscal year as dividends, including dividends designated in whole or in part as capital gains distributions, amounts sufficient, in the opinion of the Board of Directors, to enable the Corporation, or where applicable each series of shares to qualify as a regulated investment company under the Internal Revenue Code of 1986, as amended, or any successor or comparable statute thereto, and regulations promulgated thereunder, and to avoid liability for the Corporation, or each series of shares, for Federal income and excise taxes in respect of that or any other year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Liquidation. In the event of the liquidation of the Corporation or of the assets attributable to a particular series or class, the stockholders of each series or class that has been established and designated and is being liquidated shall be entitled to receive, as a series or class, when and as declared by the Board of Directors, the excess of the assets belonging to that series or class over the liabilities belonging to that series or class. The holders of shares of any series or class shall not be entitled thereby to any distribution upon liquidation of any other series or class. The assets so distributable to the stockholders of any particular series or class shall be distributed among such stockholders according to their respective rights taking into account the proper allocation of expenses being borne by that series or class. The liquidation of assets attributable to any particular series or class in which there are shares then outstanding and the termination of the series or the class may be authorized by vote of a majority of the Board of Directors then in office, without action or approval of the stockholders, to the extent consistent with applicable laws and regulations. In the event that there are any general assets not belonging to any particular series or class of stock and available for distribution, such distribution shall be made to holders of stock of various series or classes in such proportion as the Board of Directors determines to be fair and equitable, and such determination by the Board of Directors shall be conclusive and binding for all purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Redemption. All shares of stock of the Corporation shall be subject to the redemption, repurchase and conversion provisions set forth in Sections 5.6 through 5.11 of this Article V.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The Corporation's shares of stock are issued and sold, and all persons who shall acquire stock of the Corporation shall do so, subject to the condition and understanding that the provisions of the Corporation's Articles of Incorporation, as from time to time amended, shall be binding upon them.

**Section 5.2. Quorum Requirements and Voting Rights**: Except as otherwise expressly provided by the Maryland General Corporation Law, the presence in person or by proxy of the holders of one-third of the shares of capital stock of the Corporation outstanding and entitled to vote thereat shall constitute a quorum at any meeting of the stockholders, except that where the holders of any series or class are required or permitted to vote as a series or class, one-third of the aggregate number of shares of that series or class outstanding and entitled to vote shall constitute a quorum.

------

Notwithstanding any provision of Maryland General Corporation Law requiring a greater proportion than a majority of the votes of all series or classes or of any series or class of the Corporation's stock entitled to be cast in order to take or authorize any action, any such action may be taken or authorized upon the concurrence of a majority of the aggregate number of votes entitled to be cast thereon subject to applicable laws and regulations. All shares of stock of this Corporation shall have the voting rights provided for in Section 5.1(b) of this Article V.

The Board of Directors from time to time, subject to such procedures as may be adopted by the Board of Directors, and consistent with applicable laws and regulations, may authorize the holders of shares of any series or class to take action or consent to any action by delivering a consent, in writing or by electronic transmission, of the holders entitled to cast not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting of the holders of shares of such series or class.

**Section 5.3. No Preemptive or Appraisal Rights**: No holder of shares of capital stock of the Corporation shall, as such holder, have any right to purchase or subscribe for any shares of the capital stock of the Corporation which the Corporation may issue or sell (whether consisting of shares of capital stock authorized by these Articles of Incorporation, or shares of capital stock of the Corporation acquired by it after the issue thereof, or other shares) other than any right which the Board of Directors of the Corporation, in its discretion, may determine.

No holder of shares of capital stock of the Corporation shall be entitled to exercise the rights of an objecting stockholder under Subtitle 2 of Title 3 of the Maryland General Corporation Law or any successor provision.

**Section 5.4. Determination of Net Asset Value**: The net asset value of each share of each series or class of each series of the Corporation shall be the quotient obtained by dividing the value of the net assets of the Corporation, or if applicable of the series or class (being the value of the assets of the Corporation or of the particular series or class or attributable to the particular series or class less its actual and accrued liabilities exclusive of capital stock and surplus), by the total number of outstanding shares of the Corporation or the series or class, as applicable. Such determination may be made on a series-by-series basis or made or adjusted on a class-by-class basis, as appropriate, and shall include any expenses allocated to a specific series or class thereof. The Board of Directors may adopt procedures for determination of net asset value consistent with the requirements of applicable laws and regulations and, so far as accounting matters are concerned, with generally accepted accounting principles. The procedures may include, without limitation, procedures for valuation of the Corporation's portfolio securities and other assets, for accrual of expenses or creation of reserves and for the determination of the number of shares issued and outstanding at any given time.

**Section 5.5. Stable Net Asset Value**: With respect to any money market, stable value or other series or class that seeks to maintain a stable net asset value per share, and pursuant to procedures established by the Board of Directors, the Corporation shall be entitled, without the payment of monetary compensation but in consideration of the interest of the Corporation and its stockholders in maintaining a stable net asset value per share of such series or class, to redeem pro rata from all holders of record of such series or class at the time of such redemption (in proportion to their respective holdings of such shares) sufficient outstanding shares (or fractional shares) of such series or class, or to take such other measures as are not prohibited by the Investment Company Act of 1940, as shall maintain for such series or class a stable net asset value.

**Section 5.6. Redemption by Stockholders**: Any stockholder may redeem shares of the Corporation for the net asset value of each series or class thereof, less such fees and charges, if any, as may be established by the Board of Directors from time to time, by presentation of an appropriate request, together with the certificates, if any, for such shares, duly endorsed, at the office or agency designated by the Corporation. Redemptions as aforesaid, shall be made in the manner and subject to the conditions contained in the bylaws or approved by the Board of Directors.

------

**Section 5.7. Redemption at the Option of the Corporation**: Subject to the provisions of the Investment Company Act of 1940, each share of the Corporation and each share of each series and class shall be redeemable from any stockholder at the option of the Corporation. In that regard, the Board of Directors may from time to time authorize the Corporation to redeem all or any part of the shares of the Corporation or of any series or class upon such terms and conditions as the Board of Directors may determine in its sole discretion. The Corporation's right to redeem shares includes, without limitation, the right to redeem shares when required for the payment of account fees or other fees, charges and expenses as set by the Board of Directors, including without limitation any small account fees permitted by Section 5.9 of this Article V.

**Section 5.8. Purchase of Shares**: The Corporation shall be entitled to purchase all or any part of the shares of the Corporation or of any series or class of its capital stock, to the extent that the Corporation may lawfully effect such purchase under Maryland General Corporation Law, upon such terms and conditions and for such consideration as the Board of Directors shall deem advisable.

**Section 5.9. Redemption of Minimum Amounts**: The Board of Directors may establish, from time to time, one or more minimum investment amounts for stockholder accounts, which may be different for each series or class and within each series or class, and may impose account fees on, and/or require the involuntary redemption of, those accounts the net asset value of which for any reason falls below such established minimum amounts, or may take any other action with respect to minimum investment amounts as may be deemed appropriate by the Board of Directors, in each case upon such terms as shall be established by the Board of Directors. Any such account fee may be satisfied by the Corporation by redeeming the requisite number of shares in any such account in the amount of such fee.

**Section 5.10. Conversion of Shares by Stockholders and by the Corporation:** Subject to compliance with the Investment Company Act of 1940 and applicable laws and regulations, the Board of Directors shall have authority, without stockholder approval, to provide that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)the holders of any series or class of shares shall have the right to convert or exchange such shares into shares of one or more other series or classes in accordance with such terms and conditions as may be established by the Board of Directors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)the Corporation may automatically convert some or all of the shares of a particular series or class into shares of another series or class, at such times as may be determined by the Board of Directors, based on the relative net asset values of such series or class at time of conversion and otherwise in accordance with such terms and conditions as may be established by the Board of Directors and which may vary within and among the series and classes and within and among the holders of the series or classes to the extent determined by the Board of Directors.

**Section 5.11. Mode of Payment**: Payment by the Corporation for shares of any series or class of the capital stock of the Corporation surrendered to it for redemption shall be made by the Corporation within seven days of such surrender out of the funds legally available therefor, provided that the Corporation may suspend the right of the holders of capital stock of the Corporation to redeem shares of capital stock and may postpone the right of such holders to receive payment for any shares when permitted or required to do so by law. Payment of the redemption or purchase price may be made in cash or, at the option of the Corporation, wholly or partly in such portfolio securities or other assets of the Corporation as the Corporation may select in its sole discretion. The composition of any such payments may be different among stockholders, including those of the same series or class, as the Corporation may determine in its sole discretion.

------

**Section 5.12. Rights of Holders of Shares Purchased or Redeemed**: The right of any holder of any series or class of capital stock of the Corporation purchased or redeemed by the Corporation as provided in this Article V to receive dividends thereon and all other rights of such holder with respect to such shares shall terminate at the time as of which the purchase or redemption price of such shares is determined, except the right of such holder to receive (i) the purchase or redemption price of such shares from the Corporation or its designated agent and (ii) any dividend or distribution or voting rights to which such holder has previously become entitled as the record holder of such shares on the record date for the determination of the stockholders entitled to receive such dividend or distribution or to vote at the meeting of stockholders.

**Section 5.13. Status of Shares Purchased or Redeemed**: In the absence of any specification as to the purpose for which such shares of any series or class of capital stock of the Corporation are redeemed or purchased by it, all shares so redeemed or purchased shall be deemed to be retired in the sense contemplated by the laws of the State of Maryland and may be reissued. The number of authorized shares of capital stock of the Corporation shall not be reduced by the number of any shares redeemed or purchased by it.

**Section 5.14. Additional Limitations and Powers**: The following provisions are inserted for the purpose of defining, limiting and regulating the powers of the Corporation and of the Board of Directors and stockholders:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Any determination made in good faith and, so far as accounting matters are involved, in accordance with generally accepted accounting principles by or pursuant to the direction of the Board of Directors, as to the amount of the assets, debts, obligations or liabilities of the Corporation, as to the amount of any reserves or charges set up and the propriety thereof, as to the time of or purpose for creating such reserves or charges, as to the use, alteration or cancellation of any reserves or charges (whether or not any debt, obligation or liability for which such reserves or charges shall have been created shall have been paid or discharged or shall be then or thereafter required to be paid or discharged), as to the establishment or designation of procedures or methods to be employed for valuing any investment or other assets of the Corporation and as to the value of any investment or other asset, as to the allocation of any asset of the Corporation to a particular series or class or classes of the Corporation's stock, as to the funds available for the declaration of dividends and as to the declaration of dividends, as to the charging of any liability of the Corporation to a particular series or class or classes of the Corporation's stock, as to the number of shares of any series or class or classes of the Corporation's outstanding stock, as to the estimated expense to the Corporation in connection with purchases or redemptions of its shares, as to the ability to liquidate investments in orderly fashion, or as to any other matters relating to the issue, sale, purchase or redemption or other acquisition or disposition of investments or shares of the Corporation, or in the determination of the net asset value per share of shares of any series or class of the Corporation's stock shall be conclusive and binding for all purposes.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Except to the extent prohibited by the Investment Company Act of 1940, or rules, regulations or orders thereunder promulgated by the Securities and Exchange Commission or any successor thereto or by the bylaws of the Corporation, a director, officer or employee of the Corporation shall not be disqualified by his position from dealing or contracting with the Corporation, nor shall any transaction or contract of the Corporation be void or voidable by reason of the fact that any director, officer or employee or any firm of which any director, officer or employee is a member, or any corporation of which any director, officer or employee is a stockholder, officer or director, is in any way interested in such transaction or contract; provided that in case a director, or a firm or corporation of which a director is a member, stockholder, officer or director is so interested, such fact shall be disclosed to or shall have been known by the Board of Directors or a majority thereof. Nor shall any director or officer of the Corporation be liable to the Corporation or to any stockholder or creditor thereof or to any person for any loss incurred by it or him or for any profit realized by such director or officer under or by reason of such contract or transaction; provided that nothing herein shall protect any director or officer of the Corporation against any liability to the Corporation or to its security holders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office; and provided always that such contract or transaction shall have been on terms that were unfair to the Corporation at the time at which it was entered into. Any director of the Corporation who is so interested, or who is a member, stockholder, officer or director of such firm or corporation, may be counted in determining the existence of a quorum at any meeting of the Board of Directors of the Corporation which shall authorize any such transaction or contract, with like force and effect as if he were not such director, or member, stockholder, officer or director of such firm or corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Specifically and without limitation of the foregoing paragraph (b) but subject to the exception therein prescribed, the Corporation may enter into management or advisory, underwriting, distribution and administration contracts, custodian contracts and such other contracts as may be appropriate.

**Section 5.15. Reorganization**: The Board of Directors may merge or consolidate one of more series of shares with, and may sell, convey and transfer the assets belonging to any one or more series of shares to, another corporation, trust, partnership, association or other organization, or to the Corporation to be held as assets belonging to another series of shares, in exchange for cash, securities or other consideration (including, in the case of a transfer to another series of shares of the Corporation, shares of such other series of shares) with such transfer being made subject to, or with the assumption by the transferee of, the liabilities belonging to each transferor series of shares if deemed appropriate by the Board of Directors. The Board of Directors shall have the authority to effect any such merger, consolidation or transfer of assets, without action or approval of the stockholders, to the extent consistent with applicable laws and regulations.

**Section 5.16. Classes of Shares**: The Board of Directors shall also have the authority, subject to applicable laws and regulations and without action or approval of the stockholders, from time to time to designate any class of shares of a series of shares as a separate series of shares as it deems necessary or desirable. The designation of any class of shares of a series of shares as a separate series of shares shall be effective at the time specified by the Board of Directors. The Board of Directors shall allocate the assets, liabilities and expenses attributable to any class of shares designated as a separate series of shares to such separate series of shares and shall designate the relative rights and preferences of such series of shares, provided that such relative rights and preferences may not be materially adversely different from the relative rights and preferences of the class of shares designated as a separate series of shares.

------

**Section 5.17. Fees and Expenses**. Notwithstanding anything to the contrary contained in these Articles of Incorporation, each share of any series or class of a series may be subject to such sales loads or charges, whether initial, deferred or contingent, or any combination thereof, or any other type of sales load or charge; to such expenses and fees (including, without limitation, distribution expenses, administrative expenses under an administrative or service agreement, plan or other arrangement, however designated, and other administrative, recordkeeping, redemption, service and other fees, however designated); to such account size requirements; and to such other rights and provisions; which may be the same or different from any other share of any series or class, including any other share of the same series or class, all as the Board of Directors may from time to time establish and/or change in accordance with applicable laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;SECOND:&nbsp;&nbsp;&nbsp;&nbsp;The Corporation is registered as an open-end company under the Investment Company Act of 1940.

&nbsp;&nbsp;&nbsp;&nbsp;THIRD:&nbsp;&nbsp;&nbsp;&nbsp;The Articles Supplementary shall become effective immediately upon filing.

*Remainder of Page Intentionally Blank*

------

IN WITNESS WHEREOF, Principal Variable Contracts Funds, Inc. has caused this to be signed in its name and on its behalf by the undersigned.

---

| | |
|:---|:---|
| **PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.** | **PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.** |
| By: | /s/ Adam U. Shaikh |
|  | Adam U. Shaikh |
|  | Vice President, Assistant General Counsel, and |
|  | &nbsp;&nbsp;&nbsp;&nbsp; Assistant Secretary |
| By: | /s/ Deanna Y. Pellack |
|  | Deanna Y. Pellack |
|  | Counsel and Secretary |

---

---

| |
|:---|
| Attest |
| /s/ Laura B. Latham  |
| Laura B. Latham  |
| Counsel and Assistant Secretary  |

---

------

The UNDERSIGNED, Adam U. Shaikh, Vice President, Assistant General Counsel, and Assistant Secretary of Principal Variable Contracts Funds, Inc., who executed on behalf of said corporation the foregoing Articles Supplementary of which this certificate is made a part, hereby acknowledges, in the name and on behalf of said corporation, the foregoing Articles Supplementary to be the corporate act of said corporation and further certifies that, to the best of his knowledge, information, and belief, the matters and facts set forth therein with respect to the approval thereof are true in all material respects, under the penalties of perjury.

---

| |
|:---|
| /s/ Adam U. Shaikh |
| Adam U. Shaikh |
| Vice President, Assistant General Counsel, |
| &nbsp;&nbsp;&nbsp;&nbsp; and Assistant Secretary |
| Principal Variable Contracts Funds, Inc. |

---

The UNDERSIGNED, Deanna Y. Pellack, Counsel and Assistant Secretary of Principal Variable Contracts Funds, Inc., who executed on behalf of said corporation the foregoing Articles Supplementary, of which this certificate is made a part, hereby acknowledges, in the name and on behalf of said corporation, the foregoing Articles Supplementary to be the corporate act of said corporation and further certifies that, to the best of her knowledge, information, and belief, the matters and facts set forth therein with respect to the approval thereof are true in all material respects, under the penalties of perjury.

---

| |
|:---|
| /s/ Deanna Y. Pellack |
| Deanna Y. Pellack |
| Counsel and Secretary |
| Principal Variable Contracts Funds, Inc. |

---

## Ex-99.(D)(2)A

**<u>PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.</u>**

**SUB-ADVISORY AGREEMENT**

**LOS ANGELES CAPITAL MANAGEMENT LLC SUB-ADVISED FUNDS**

SUB-ADVISORY AGREEMENT (the "Agreement") to be effective as of April 14, 2026 by and between PRINCIPAL GLOBAL INVESTORS, LLC, a Delaware limited liability company (the "Manager"), and LOS ANGELES CAPITAL MANAGEMENT LLC (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 Variable Contracts 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 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 Sub-Advisor</u>

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 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)Provide information and assistance to the Manager related to the recommended investment program for each Series, consistent with each Series' respective investment objective and policies and any specific criteria applicable to the Allocated Assets, so the Manager may furnish such information to the Board of Directors of the Fund (or any appropriate committee of such Board) for approval and/or review, and update such information from time to time as conditions require.

&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.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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. Further, the Sub-Advisor will provide security and foreign exchange trade details to the Manager so that the effects of all securities trades entered into by or for a Series are included in the appropriate day's end of day net asset value. Sub-Advisor must also communicate all trade amendments, cancellations or re-books accurately and timely to be included in the daily net asset value of a Series. Rule 2a-4 of the 1940 Act permits registered investment companies to record security transactions as of one day after the trade date for purposes of determining net asset value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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;(j)Section 871(m) Transactions: Sub-Advisor shall not on behalf of a Series 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 Series, 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").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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: electronic copies of (i) the Sub-Advisor's compliance manual and policies and procedures adopted to comply with Rules 206(4)-6 and 206(4)-7 of the Advisers Act and (ii) 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 an electronic copy of any material changes to the Sub-Advisor's Rules 206(4)-6 and 206(4)-7 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 at the Sub-Advisor's office all deficiency letters issued by the SEC together with all responses given by Sub-Advisor to such letters, provided, however, such review may be done virtually if in-person review is not feasible. 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).

&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 and Section 817(h) 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 Sub-Advisor</u>

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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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 Financial Group, Inc., 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 Financial Group, Inc. 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 11150 Santa Monica Blvd, Ste 200, Los Angeles, CA 90025.

------

&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 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)This Agreement contains the entire understanding and agreement of the parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

*Remainder of Page Intentionally Blank*

------

IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date first above written.

---

| | |
|:---|:---|
| **PRINCIPAL GLOBAL INVESTORS, LLC** | **PRINCIPAL GLOBAL INVESTORS, LLC** |
| By: | /s/ Adam U. Shaikh |
| Name: | Adam U. Shaikh |
| Title: | Associate General Counsel |
| By: | /s/ Laura B. Latham |
| Name: | Laura B. Latham |
| Title: | Assistant General Counsel |
| <br>**LOS ANGELES CAPITAL MANAGEMENT LLC** | <br>**LOS ANGELES CAPITAL MANAGEMENT LLC** |
| By: | /s/ Dan Allen |
| Name: | Dan Allen |
| Title: | Chief Executive Officer |

---

------

**<u>APPENDIX A</u>**

INTENTIONALLY OMITTED

------

---

| | | |
|:---|:---|:---|
| **<u>APPENDIX B</u>** | **<u>APPENDIX B</u>** | **<u>APPENDIX B</u>** |
| **Effective Date and Initial Term of Sub-Advisory Agreement for each Series** | **Effective Date and Initial Term of Sub-Advisory Agreement for each Series** | **Effective Date and Initial Term of Sub-Advisory Agreement for each Series** |
| **Series** | **Effective Date** | **Initial Term** |
| LargeCap Growth Account I | April 14, 2026 | 2 Years |

---

## Ex-99.(D)(2)C

**<u>PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.</u>**

**AMENDED AND RESTATED SUB-ADVISORY AGREEMENT**

**T. ROWE PRICE ASSOCIATES, INC. SUB-ADVISED FUND**

AMENDED AND RESTATED SUB-ADVISORY AGREEMENT (the "Agreement") to be effective as of April 1, 2026, by and between PRINCIPAL GLOBAL INVESTORS, LLC, a Delaware limited liability company (the "Manager"), and T. ROWE PRICE ASSOCIATES, INC., a corporation organized and existing under the laws of the State of Maryland (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 Variable Contracts 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 May 1, 2023 with this Agreement; and&nbsp;&nbsp;&nbsp;&nbsp;

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 Sub-Advisor</u>

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 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)Provide information and assistance to the Manager related to the recommended investment program for each Series, consistent with each Series' respective investment objective and policies and any specific investment guidelines provided by the Manager applicable to the Allocated Assets, so the Manager may furnish such information to the Board of Directors of the Fund (or any appropriate committee of such Board) for approval and/or review, and update such information from time to time as conditions require.

------

&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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Advise and assist the officers of the Fund, as reasonably 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 the Allocated Assets of each Series.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 investment guidelines provided by the Manager applicable to the Allocated Assets. The Manager acknowledges that the Sub-Advisor is not the compliance agent for the Series, and does not have access to all of the Series' books and records necessary to perform certain compliance testing. The Sub-Advisor shall perform such services based upon its books and records with respect to the Allocated Assets of the Series.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 the Allocated Assets of each Series (and any specific investment guidelines provided by the Manager applicable to the Allocated Assets) are being observed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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. Further, the Sub-Advisor will provide security and foreign exchange trade details to the Manager so that the effects of all securities trades entered into by or for a Series are included in the appropriate day's end of day net asset value. Sub-Advisor must also communicate all trade amendments, cancellations or re-books accurately and timely to be included in the daily net asset value of a Series. Rule 2a-4 of the 1940 Act permits registered investment companies to record security transactions as of one day after the trade date for purposes of determining net asset value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 the Allocated Assets of each Series.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 the Allocated Assets of 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 the Allocated Assets of 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 the Allocated Assets of 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 the Allocated Assets of 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;(j)Section 871(m) Transactions: Sub-Advisor shall not on behalf of a Series 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 Series, 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").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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, provided, however, the Sub-Advisor may retain copies of such records to the extent required for it to comply with applicable laws, rules and regulations. 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 the Allocated Assets of each 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. Upon due notice, 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 such times as mutually agreeable to the parties to review the investments of the Allocated Assets of each 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: electronic copies of (i) the Sub-Advisor's compliance manual and policies and procedures adopted to comply with Rules 206(4)-6 and 206(4)-7 of the Advisers Act and (ii) the Sub-Advisor's most recent annual compliance report or a detailed summary of such report; timely and complete responses to all 15(c) questionnaires; timely and complete responses to all Quarterly Compliance Questionnaires (including the identification of any material compliance matters and an electronic copy (marked to show changes) and summary of any material changes to the Sub-Advisor's Rules 206(4)-6 and 206(4)-7 policies and procedures; 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 together with all responses given by Sub-Advisor to such letters, related to the sub-advisory services it provides. The Sub-Advisor will advise 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 the Allocated Assets of each Series 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 the Allocated Assets of each Series.

&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 and Section 817(h) 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 Allocated Assets of each 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 Sub-Advisor</u>

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 the Allocated Assets of each 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. Any gains that occur due to a Trade Error shall be retained by the Fund.

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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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>

All information and advice furnished by one party to the other party (including their respective agents, employees and representatives) (the "Discloser") hereunder shall be treated as confidential and shall not be disclosed to third parties without prior notification to the Discloser, except as may be necessary to comply with applicable laws, rules and regulations, subpoenas or court orders. 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 Financial Group, Inc., 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 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 Financial Group, Inc. 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 T. Rowe Price Associates, Inc., 4515 Painters Mill Road, Owings Mills, Maryland 21117, Attention: Senior Legal Counsel - Subadvised.

&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 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. The Sub-Adviser hereby grants the Manager a royalty-free, non-exclusive, non-transferable (with no right to sublicense) limited license to display or otherwise use the name, trademark, service mark, logo, insignia or other identifying mark of the Sub-Advisor and/or its affiliate(s) ("Sub-Advisor Marks") during the term of this Agreement solely as incorporated within communications and materials relating to or about the Fund. The Manager shall use the Sub-Advisor Marks only in accordance with the Sub-Advisor's guidelines and applicable law. The Manager shall not use Sub-Advisor Marks or disclose information related to the business of the Sub-Advisor or any of its affiliates in any prospectus, sales literature or other material relating to the Fund in any manner not approved prior thereto by the Sub-Advisor; provided, however, that the Sub-Advisor hereby approves of all uses of its name which merely refer in accurate terms to the appointment of the Sub-Advisor hereunder or which are required by the SEC or a state securities commission. Materials which have been previously approved in writing by the Sub-Advisor or those that only refer to the Sub-Advisor's name or the Sub-Advisor Marks are not subject to such prior approval provided the Manager shall ensure that such materials are consistent with those which were previously approved by the Sub-Advisor and no changes have been made to the Sub-Advisor Marks previously approved by the Sub-Advisor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)Nothing in this Agreement shall limit or restrict the right of Sub-Advisor or its affiliates to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, or limit or restrict Sub-Advisor's right to engage in any other business or to render services of any kind to any other mutual fund, corporation, firm, individual, or association.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)This Agreement contains the entire understanding and agreement of the parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

*Remainder of Page Intentionally Blank*

------

IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date first above written.

---

| | |
|:---|:---|
| **PRINCIPAL GLOBAL INVESTORS, LLC** | **PRINCIPAL GLOBAL INVESTORS, LLC** |
| By: | /s/ Adam U. Shaikh |
| Name: | Adam U. Shaikh |
| Title: | Associate General Counsel |
| By: | /s/ Laura B. Latham |
| Name: | Laura B. Latham |
| Title: | Assistant General Counsel |
| <br>**T. ROWE PRICE ASSOCIATES, INC.** | <br>**T. ROWE PRICE ASSOCIATES, INC.** |
| By: | /s/ Terence Baptiste |
| Name: | Terence Baptiste |
| Title: | Vice President |

---

------

**<u>APPENDIX A</u>**

INTENTIONALLY OMITTED

------

---

| | | |
|:---|:---|:---|
| **<u>APPENDIX B</u>** | **<u>APPENDIX B</u>** | **<u>APPENDIX B</u>** |
| **Effective Date and Initial Term of Sub-Advisory Agreement for each Series** | **Effective Date and Initial Term of Sub-Advisory Agreement for each Series** | **Effective Date and Initial Term of Sub-Advisory Agreement for each Series** |
| **Series** | **Effective Date** | **Initial Term** |
| LargeCap Growth Account I | August 2004 | 2 Years |

---

## Ex-99.(D)(2)D

**<u>PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.</u>**

**SUB-ADVISORY AGREEMENT**

**WESTFIELD CAPITAL MANAGEMENT COMPANY, L.P. SUB-ADVISED FUND**

SUB-ADVISORY AGREEMENT (the "Agreement") to be effective as of April 15, 2026 by and between PRINCIPAL GLOBAL INVESTORS, LLC, a Delaware limited liability company (the "Manager"), and WESTFIELD CAPITAL MANAGEMENT COMPANY, L.P., a Delaware limited partnership (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 Variable Contracts 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 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 Sub-Advisor</u>

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 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)Provide information and assistance to the Manager related to the recommended investment program for each Series, consistent with each Series' respective investment objective and policies and any specific criteria applicable to the Allocated Assets, so the Manager may furnish such information to the Board of Directors of the Fund (or any appropriate committee of such Board) for approval and/or review, and update such information from time to time as conditions require.

&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.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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. Further, the Sub-Advisor will provide security and foreign exchange trade details to the Manager so that the effects of all securities trades entered into by or for a Series are included in the appropriate day's end of day net asset value. Sub-Advisor must also communicate all trade amendments, cancellations or re-books accurately and timely to be included in the daily net asset value of a Series. Rule 2a-4 of the 1940 Act permits registered investment companies to record security transactions as of one day after the trade date for purposes of determining net asset value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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;(j)Section 871(m) Transactions: Sub-Advisor shall not on behalf of a Series 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 Series, 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").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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: electronic copies of (i) the Sub-Advisor's compliance manual and policies and procedures adopted to comply with Rules 206(4)-6 and 206(4)-7 of the Advisers Act and (ii) 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 an electronic copy of any material changes to the Sub-Advisor's Rules 206(4)-6 and 206(4)-7 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 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 and Section 817(h) 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 Sub-Advisor</u>

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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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 Financial Group, Inc., 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 Financial Group, Inc. 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. The address of the Sub-Advisor for this purpose shall be One Financial Center, 23<sup>rd</sup> Floor, Boston, MA 02111.

------

&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 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, as amended ("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;(f)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;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)This Agreement contains the entire understanding and agreement of the parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

*Remainder of Page Intentionally Blank*

------

IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date first above written.

---

| | |
|:---|:---|
| **PRINCIPAL GLOBAL INVESTORS, LLC** | **PRINCIPAL GLOBAL INVESTORS, LLC** |
| By: | /s/ Laura B. Latham |
| Name: | Laura B. Latham |
| Title: | Assistant General Counsel |
| By: | /s/ John L. Sullivan |
| Name: | John L. Sullivan |
| Title: | Assistant General Counsel |
| **WESTFIELD CAPITAL MANAGEMENT COMPANY, L.P.** | **WESTFIELD CAPITAL MANAGEMENT COMPANY, L.P.** |
| By: | /s/ Kathryn Kearney |
| Name: | Kathryn Kearney |
| Title: | Partner, CFO/CCO |

---

------

**<u>APPENDIX A</u>**

INTENTIONALLY OMITTED

------

---

| | | |
|:---|:---|:---|
| **<u>APPENDIX B</u>** | **<u>APPENDIX B</u>** | **<u>APPENDIX B</u>** |
| **Effective Date and Initial Term of Sub-Advisory Agreement for each Series** | **Effective Date and Initial Term of Sub-Advisory Agreement for each Series** | **Effective Date and Initial Term of Sub-Advisory Agreement for each Series** |
| **Series** | **Effective Date** | **Initial Term** |
| LargeCap Growth Account I | April 15, 2026 | 2 Years |

---

## Ex-99.(H)(2)

**PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.**

**CONTRACTUAL FEE WAIVER AGREEMENT**

AGREEMENT to be effective May 1, 2026 by and between Principal Variable Contracts 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 Accounts. 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 Accounts through the fiscal year end, provided no reimbursement will be made if it would result in the Accounts' 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 Accounts. 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 cancelled 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 VARIABLE CONTRACTS FUNDS, INC.** | **PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.** | **PRINCIPAL GLOBAL INVESTORS, LLC** | **PRINCIPAL GLOBAL INVESTORS, LLC** |
| By: | /s/ Adam U. Shaikh | By: | /s/ Laura B. Latham |
| Name: | Adam U. Shaikh | Name: | Laura B. Latham  |
| Title: | Vice President, Assistant General Counsel, <br>&nbsp;&nbsp;&nbsp;&nbsp;and Assistant Secretary | Title: | Assistant General Counsel  |
| By: | /s/ Deanna Y. Pellack | By: | /s/ John L. Sullivan |
| Name: | Deanna Y. Pellack | Name: | John L. Sullivan  |
| Title: | Counsel and Secretary | Title: | Assistant General Counsel  |

---

------

**SCHEDULE A**

---

| | | |
|:---|:---|:---|
| **Series** | **Class 2** | **Expiration** |
| Blue Chip Account | 0.90% | April 30, 2027 |
| U.S. LargeCap S&P 500 Index Buffer January Account | 0.95% | April 30, 2027 |
| U.S. LargeCap S&P 500 Index Buffer April Account | 0.95% | April 30, 2027 |
| U.S. LargeCap S&P 500 Index Buffer July Account | 0.95% | April 30, 2027 |
| U.S. LargeCap S&P 500 Index Buffer October Account | 0.95% | April 30, 2027 |

---

------

**SCHEDULE B**

---

| | | |
|:---|:---|:---|
| **Series** | **Waiver** | **Expiration** |
| LargeCap Growth Account I | 0.016% | April 30, 2027 |

---

## Ex-99.(H)(3)

**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>March 2, 2026</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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<u>1940 Act</u>" means the Investment Company Act of 1940, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<u>Borrowing Instructions</u>" has the meaning specified in Section 3.1.1 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<u>Business Day</u>" means a day on which the New York Stock Exchange is open for the purpose of transacting business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<u>Interest Rate</u>" means, for each date on which interest accrues hereunder, the average of (i) the Repo Rate and (ii) the Bank Loan Rate.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<u>Lending Instructions</u>" has the meaning specified in Section 3.1.1 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<u>Loan</u>" has the meaning specified in Section 2 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<u>Loan Account</u>" has the meaning specified in Section 3.5 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<u>Maximum Amount</u>" has the meaning specified in Section 2 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<u>SEC</u>" means the United States Securities and Exchange Commission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<u>Secured Loan</u>" has the meaning specified in Section 2(e) hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<u>Security Agreement</u>" has the meaning specified in Section 3.11(d) hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "<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;

------

&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&nbsp;&nbsp;&nbsp;&nbsp;<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&nbsp;&nbsp;&nbsp;&nbsp;<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&nbsp;&nbsp;&nbsp;&nbsp;<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&nbsp;&nbsp;&nbsp;&nbsp;<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&nbsp;&nbsp;&nbsp;&nbsp;<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;

&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;&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;&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;&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;&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;&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;&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;&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;&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;&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;&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;&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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2&nbsp;&nbsp;&nbsp;&nbsp;<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.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3&nbsp;&nbsp;&nbsp;&nbsp;<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%).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4&nbsp;&nbsp;&nbsp;&nbsp;<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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5&nbsp;&nbsp;&nbsp;&nbsp;<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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6&nbsp;&nbsp;&nbsp;&nbsp;<u>Computations</u>. All computations hereunder shall be computed on the basis of the actual number of days elapsed and a 360-day year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.7&nbsp;&nbsp;&nbsp;&nbsp;<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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.8&nbsp;&nbsp;&nbsp;&nbsp;<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.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9&nbsp;&nbsp;&nbsp;&nbsp;<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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.10&nbsp;&nbsp;&nbsp;&nbsp;<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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.11&nbsp;&nbsp;&nbsp;&nbsp;<u>Collateral Security for Loans</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 (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;&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;&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;&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>").

&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&nbsp;&nbsp;&nbsp;&nbsp;<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

&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&nbsp;&nbsp;&nbsp;&nbsp;<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 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2&nbsp;&nbsp;&nbsp;&nbsp;<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.

**7.<u>Default</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1&nbsp;&nbsp;&nbsp;&nbsp;<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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2&nbsp;&nbsp;&nbsp;&nbsp;<u>Remedies</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.1&nbsp;&nbsp;&nbsp;&nbsp;<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&nbsp;&nbsp;&nbsp;&nbsp;<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&nbsp;&nbsp;&nbsp;&nbsp;<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.

**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.

*Remainder of Page Intentionally Blank; Signature Page Follows*

------

**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.** <br>**ON BEHALF OF EACH OF ITS FUNDS LISTED IN SCHEDULES A AND B** | **PRINCIPAL FUNDS, INC.** <br>**ON BEHALF OF EACH OF ITS FUNDS LISTED IN SCHEDULES A AND B** |
| By: | /s/ Adam U. Shaikh |
|  | Adam U. Shaikh |
|  | Vice President, Assistant General Counsel, and  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;Assistant Secretary |
| **PRINCIPAL VARIABLE CONTRACTS FUNDS, INC. <br>ON BEHALF OF EACH OF ITS FUNDS LISTED IN SCHEDULES A AND B** | **PRINCIPAL VARIABLE CONTRACTS FUNDS, INC. <br>ON BEHALF OF EACH OF ITS FUNDS LISTED IN SCHEDULES A AND B** |
| By: | /s/ Adam U. Shaikh |
|  | Adam U. Shaikh |
|  | Vice President, Assistant General Counsel, and  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;Assistant Secretary |
| **PRINCIPAL GLOBAL INVESTORS, LLC** | **PRINCIPAL GLOBAL INVESTORS, LLC** |
| By: | /s/ Adam U. Shaikh |
|  | Adam U. Shaikh |
|  | Associate General Counsel  |
| By: | /s/ John L. Sullivan |
|  | John L. Sullivan |
|  | Assistant General Counsel |

---

------

**SCHEDULE A**

**BORROWING FUNDS**

---

| | |
|:---|:---|
| **Except as otherwise indicated below, for each Fund, the Agreement was effective as of the Effective Date.** | **Except as otherwise indicated below, for each Fund, the Agreement was effective as of the Effective Date.** |
| **<u>PFI</u>:** | |
| Blue Chip Fund | International Equity Index Fund |
| Bond Market Index Fund | International Small Company Fund |
| Capital Securities Fund | LargeCap Growth Fund I |
| Core Fixed Income Fund | LargeCap S&P 500 Index Fund |
| Core Plus Bond Fund | LargeCap Value Fund III |
| Diversified Income Fund | MidCap Fund |
| Diversified International Fund | MidCap S&P 400 Index Fund |
| Diversified Real Asset Fund | MidCap Value Fund I |
| Equity Income Fund | Overseas Fund |
| Finisterre Emerging Markets Total Return Bond Fund | Principal Capital Appreciation Fund |
| Global Emerging Markets Fund | Real Estate Securities Fund |
| Global Macro Fund | Short-Term Income Fund |
| Global Multi-Strategy Fund | Small-MidCap Dividend Income Fund |
| Global Real Estate Securities Fund | SmallCap Fund |
| Global Listed Infrastructure Fund | SmallCap Growth Fund I |
| Government & High Quality Bond Fund | SmallCap Value Fund II |
| High Yield Fund | SmallCap S&P 600 Index Fund |
| Inflation Protection Fund | Spectrum Preferred and Capital Securities Income Fund |
| International Equity Fund |  |
| **<u>PVC</u>:** |  |
| Blue Chip Account | LargeCap S&P 500 Managed Volatility Index Account |
| Bond Market Index Account | MidCap Account |
| Core Plus Bond Account | Principal Capital Appreciation Account |
| Diversified Balanced Adaptive Allocation Account | Real Estate Securities Account |
| Diversified Growth Adaptive Allocation Account | Short-Term Income Account |
| Diversified International Account | SmallCap Account |
| Equity Income Account | U.S. LargeCap S&P 500 Index Buffer July Account |
| Global Emerging Markets Account | U.S. LargeCap S&P 500 Index Buffer October Account |
| Government & High Quality Bond Account | U.S. LargeCap S&P 500 Index Buffer January Account |
| LargeCap Growth Account I | U.S. LargeCap S&P 500 Index Buffer April Account |
| LargeCap S&P 500 Index Account |  |

---

------

**SCHEDULE B**

**LENDING FUNDS**

---

| | |
|:---|:---|
| **Except as otherwise indicated below, for each Fund, the Agreement was effective as of the Effective Date.** | **Except as otherwise indicated below, for each Fund, the Agreement was effective as of the Effective Date.** |
| **<u>PFI</u>:** | |
| Blue Chip Fund | International Equity Index Fund |
| Bond Market Index Fund | International Small Company Fund |
| Capital Securities Fund | LargeCap Growth Fund I |
| Core Fixed Income Fund | LargeCap S&P 500 Index Fund |
| Core Plus Bond Fund | LargeCap Value Fund III |
| Diversified Income Fund | MidCap Fund |
| Diversified International Fund | MidCap S&P 400 Index Fund |
| Diversified Real Asset Fund | MidCap Value Fund I |
| Equity Income Fund | Overseas Fund |
| Finisterre Emerging Markets Total Return Bond Fund | Principal Capital Appreciation Fund |
| Global Emerging Markets Fund | Real Estate Securities Fund |
| Global Multi-Strategy Fund | Short-Term Income Fund |
| Global Real Estate Securities Fund | Small-MidCap Dividend Income Fund |
| Global Listed Infrastructure Fund | SmallCap Fund |
| Government & High Quality Bond Fund | SmallCap Growth Fund I |
| High Yield Fund | SmallCap Value Fund II |
| Inflation Protection Fund | SmallCap S&P 600 Index Fund |
| International Equity Fund | Spectrum Preferred and Capital Securities Income Fund |
| **<u>PVC</u>:** |  |
| Blue Chip Account | LargeCap Growth Account I |
| Bond Market Index Account | LargeCap S&P 500 Index Account |
| Core Plus Bond Account | LargeCap S&P 500 Managed Volatility Index Account |
| Diversified Balanced Adaptive Allocation Account | MidCap Account |
| Diversified Growth Adaptive Allocation Account | Principal Capital Appreciation Account |
| Diversified International Account | Real Estate Securities Account |
| Equity Income Account | Short-Term Income Account |
| Global Emerging Markets Account | SmallCap Account |
| Government & High Quality Bond Account |  |

---

------

**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 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 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 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.

*Remainder of Page Intentionally Blank; Signature Page Follows*

------

**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

## Ex-99.(H)(5)

**PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.**

**<u>Power of Attorney</u>**

Each member of the Board of Directors of Principal Variable Contracts Funds, Inc. (the "Fund"), whose signature appears below, hereby constitutes and appoints Kamal Bhatia, Laura B. Latham, David P. Michalik, Deanna Y. Pellack, Adam U. Shaikh, and John L. Sullivan, 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 director 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 each 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: <u>March 10, 2026</u>

---

| | |
|:---|:---|
| /s/ Daniel J. Beckman<br>___________________________________<br>Daniel J. Beckman | /s/ Sharmila C. Kassam<br>___________________________________<br>Sharmila C. Kassam |
| /s/ Kamal Bhatia<br>___________________________________<br>Kamal Bhatia | /s/ Padelford L. Lattimer<br>___________________________________<br>Padelford L. Lattimer |
| /s/ Craig Damos<br>___________________________________<br>Craig Damos | /s/ Kenneth A. McCullum<br>___________________________________<br>Kenneth A. McCullum |
| /s/ Katharin S. Dyer<br>___________________________________<br>Katharin S. Dyer | /s/ Karen McMillan<br>___________________________________<br>Karen McMillan |
| /s/ Frances P. Grieb<br>___________________________________<br>Frances P. Grieb | /s/ Thomas A. Swank<br>___________________________________<br>Thomas A. Swank |
| /s/ Victor L. Hymes<br>___________________________________<br>Victor L. Hymes | |

---

## Ex-99.(I)

---

| | |
|:---|:---|
| Principal Variable Contracts Funds, Inc.<br>711 High Street, Des Moines, IA 50392<br>515 247 5111 tel | ![principallogoregcolorb.jpg](principallogoregcolorb.jpg) |

---

April 27, 2026

Principal Variable Contracts Funds, Inc.

Des Moines, IA 50392-0200

---

| |
|:---|
| Re: Principal Variable Contracts Funds, Inc. (the "Registrant") |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Registration Statement on Form N-1A (the "Registration Statement") |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the Securities Act of 1933, as amended |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Registration No. 002-35570 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Post-Effective Amendment No. 134 (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/ Laura B. Latham

Laura B. Latham

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 B – Financial Highlights" in the Prospectus and "Portfolio Holdings Disclosure" and "Independent Registered Public Accounting Firm" in the Statement of Additional Information, each dated May 1, 2026, and each included in this Post-Effective Amendment No. 134 on the Registration Statement (Form N-1A, File No. 002-35570) of Principal Variable Contracts Funds, Inc. (the "Registration Statement").

We also consent to the incorporation by reference of our report dated February 20, 2026, with respect to the financial statements and financial highlights of Blue Chip Account, Bond Market Index Account, Core Plus Bond Account, Diversified Balanced Account, Diversified Balanced Adaptive Allocation Account, Diversified Balanced Strategic Allocation Account (merging on or about May 1, 2026), Diversified Growth Account, Diversified Growth Adaptive Allocation Account, Diversified Growth Strategic Allocation Account (merging on or about May 1, 2026), Diversified Income Account, Diversified International Account, Equity Income Account, Global Emerging Markets Account, Government & High Quality Bond Account, LargeCap Growth Account I, LargeCap S&P 500 Index Account, LargeCap S&P 500 Managed Volatility Index Account (liquidated on March 25, 2026), MidCap Account, Principal Capital Appreciation Account, Principal LifeTime 2020 Account, Principal LifeTime 2030 Account, Principal LifeTime 2040 Account, Principal LifeTime 2050 Account, Principal LifeTime 2060 Account, Principal LifeTime Strategic Income Account, Real Estate Securities Account, SAM Balanced Portfolio, SAM Conservative Balanced Portfolio, SAM Conservative Growth Portfolio, SAM Flexible Income Portfolio, SAM Strategic Growth Portfolio, Short-Term Income Account, SmallCap Account, U.S. LargeCap S&P 500 Index Buffer April Account (formerly U.S. LargeCap Buffer April Account), U.S. LargeCap S&P 500 Index Buffer January Account (formerly U.S. LargeCap Buffer January Account), U.S. LargeCap S&P 500 Index Buffer July Account (formerly U.S. LargeCap Buffer July Account), and U.S. LargeCap S&P 500 Index Buffer October Account (formerly U.S. LargeCap Buffer October Account) (37 of the portfolios constituting Principal Variable Contracts Funds, Inc) included in the Annual Report to Shareholders (Form N-CSR) for the year ended December 31, 2025, into this Registration Statement filed with the Securities and Exchange Commission.

---

| | |
|:---|:---|
| | /s/ Ernst & Young LLP |
| Minneapolis, Minnesota | |
| April 27, 2026 | |

---

## Ex-99.(L)(45)

---

| | |
|:---|:---|
| Principal Funds<br>711 High Street, Des Moines, IA 50392<br>800 222 5852 tel<br><u>www.principalfunds.com</u> | ![principallogoregcolor1a.jpg](principallogoregcolor1a.jpg) |

---

April 30, 2025

Mr. Kamal Bhatia

Chief Executive Officer and President

Principal Variable Contracts Funds, Inc.

Principal Financial Group

Des Moines, IA 50392

Dear Mr. Bhatia:

Principal Global Investors, LLC intends to purchase the following shares (the "Shares"):

---

| | | |
|:---|:---|:---|
| **Principal Variable Contracts** | **Purchase<br>Amount** | **Shares<br>Purchased** |
| Blue Chip Account, Class 2 | $10000 | 690 |

---

Each share of the PVC Blue Chip Account, Class 2 has a par value of $.01 and a price of $14.50 per share. In connection with such purchase, Principal Global Investors, LLC. represents and warrants that it will purchase such Shares as an investment and not with a view to resell, distribute or redeem.

---

| | |
|:---|:---|
| PRINCIPAL GLOBAL INVESTORS, LLC | PRINCIPAL GLOBAL INVESTORS, LLC |
| BY | /s/ George Djurasovic |
| | George Djurasovic, |
| | Vice President - Principal Asset Management |
| | &nbsp;&nbsp;&nbsp;&nbsp;and General Counsel |

---

## Ex-99.(P)(1)

**Los Angeles Capital Management LLC**

**Code of Ethics**

**Rev. July 16, 2024**

---

| | | |
|:---|:---|:---|
| ***Table of Contents*** | ***Table of Contents*** | |
| ***Definitions*** | ***Definitions*** | **2** |
| ***Introduction*** | ***Introduction*** | **3** |
| ***Scope of the Code*** | ***Scope of the Code*** | **3** |
| ***General Principles*** | ***General Principles*** | **3** |
| ***Standards of Business Conduct*** | ***Standards of Business Conduct*** | **4** |
| A. | Conflicts of Interest | 4 |
| B. | Outside Business Interest | 5 |
| C. | Disciplinary Events | 5 |
| D. | Prohibited Activities | 5 |
| ***Giftts and Entertainment*** | ***Giftts and Entertainment*** | **6** |
| A. | Limits to Gifts and Entertainment Received by Employees | 6 |
| B. | Limits to Gifts and Entertainment Given by Employees | 6 |
| C. | Broker/Dealer Entertainment | 7 |
| D. | Pre-Clearing and Reporting Gifts and Entertainment | 7 |
| ***Personal Trading Policy*** | ***Personal Trading Policy*** | **7** |
| A. | Scope of Personal Trading Policy | 7 |
| B. | Personal Trading Procedures | 7 |
| C. | Confidentiality | 10 |
| ***Code of Ethics Certifications*** | ***Code of Ethics Certifications*** | **11** |
| ***Administration and Enforcement of Code*** | ***Administration and Enforcement of Code*** | **11** |
| A. | Annual Review | 11 |
| B. | Recordkeeping | 11 |
| C. | Violations of the Code | 11 |
| ***Whisteblower Policy*** | ***Whisteblower Policy*** | **12** |
| ***Appendix A: Account Disclosure Matrix*** | ***Appendix A: Account Disclosure Matrix*** | **14** |
| ***Appendix B: Code of Ethics Pre-Cleraance Matrix*** | ***Appendix B: Code of Ethics Pre-Cleraance Matrix*** | **15** |
| ***Appendix C: Account Statement Requirements*** | ***Appendix C: Account Statement Requirements*** | **16** |

---

------

**<u>Definitions</u>**

**Access Persons.** Any Supervised Person who has access to non-public information regarding any clients' purchase or sale of securities, or non-public information regarding the portfolio holdings of a ***Reportable Fund***; or who is involved in the investment decision making process for a client, or who has access to such investment decisions for a client. All directors, officers, and partners are presumed to be Access Persons as the Firm's primary business is providing investment advice. Each employee of the Firm is considered an Access Person unless otherwise exempted by Los Angeles Capital's Approving Officers.

**Approving Officers.** Chief Compliance Officer in conjunction with any of the following: Counsel, CEO, or Chairman.

**Automatic Investment Plan.** A program in which regular periodic purchases or withdrawals are made automatically in to or from Investment Accounts in accordance with a pre-determined schedule and allocation. An Automatic Investment Plan includes a dividend reinvestment plan.

**Beneficial Ownership**. Generally speaking, beneficial ownership encompasses those situations where the beneficial owner has the right to enjoy some economic benefit from the ownership of the security or can obtain ownership of the securities immediately or within 60 days or can vote or dispose of the securities. A person is normally regarded as the beneficial owner of securities held in the name of his or her spouse or minor children living in his or her household.

**Closed End Fund.** A fund which does not continuously offer their shares for sale, but rather, sells a fixed number of shares at one time (in an Initial Public Offering), after which the shares typically trade on a secondary market. The price is determined by the market and may be greater or less than the shares' net asset value.

**Compliance System*.*** Third-party compliance software used by Los Angeles Capital to record certifications and monitor activities including, but not limited, to employee and/or Access Persons' personal trading, conflicts of interest, outside business interests, gifts and entertainment, etc.

**Foreign Official.** Includes governmental officials, political party leaders, candidates for office, employees of state-owned enterprises (such as state-owned banks or pension plans), and relatives or agents of such persons if a payment is made to such relative or agent of a Foreign Official with the knowledge or intent that it ultimately would benefit the Foreign Official.

**Initial Public Offering (IPO).** An offering of securities registered under the Securities Act of 1933, the issuer of which, immediately before registration, was not subject to the reporting requirements of sections 13 and 15 of the Securities Exchange Act of 1934.

**Investment Account.** An Investment Account is considered any personal brokerage account or retirement account capable of holding a security and where the Access Person has Beneficial Ownership or direct or indirect influence or control.

**Limited Offering.** An offering made to a few select individuals that is exempt from registration under the Securities Act of 1933 (e.g., hedge funds, private placements, etc.).

**Non-Discretionary Account.** An account over which the Access Person has no direct or indirect influence or control.

**Outside Business Interest.** Any significant business interest in, or an outside position with, an entity not owned by the Firm.

**Outside Entity.** Any entity (including non-profits) unaffiliated with the Firm, whether publicly or privately held. This may also include unincorporated businesses or self-employment, including family or private businesses. An Outside Entity does NOT include local community organizations such as local churches, homeowners' associations, clubs, or local charities.

**Reportable Fund.** Any fund for which Los Angeles Capital serves as an investment adviser or sub-adviser.

------

**Reportable Security.** Any security as defined in Section 202(a)(18) of the Act, except that it does NOT include: (i) direct obligations of the Government of the United States; (ii) Bankers' acceptances, back certificates of deposit, commercial paper and high quality short term debt instruments, including repurchase agreements, (iii) shares issued by money market funds; (iv) Shares issued by open-end funds other than ***Reportable Funds***; and (v) Shares issued by unit investment trusts that are invested exclusively in one or more open-end funds, none of which are ***Reportable Funds***.

**Supervised Person.** Director, officer, partner, or other person occupying similar status or performing similar functions, an employee of the Firm, and any other person who provides advice on behalf of the adviser and is subject to the adviser's supervision and control.

**<u>Introduction</u>**

This Code of Ethics ("the Code") establishes the rules of conduct for Los Angeles Capital Management LLC ("Los Angeles Capital") and LACM Global, Ltd. (together, with Los Angeles Capital "the Firm") under Section 204 and Rule 204A-1 of the Investment Advisers Act of 1940, Rule 17j-1 of the Investment Company Act of 1940, and the Financial Conduct Authority Principles for Business and Conduct of Business.

**<u>Scope of the Code</u>**

The Code applies to all employees, directors, and officers of the Firm with the exception of the Personal Trading Policy section. The Personal Trading Policy section only applies to individuals that are deemed to be Access Persons.

**<u>General Principles</u>**

The Firm acts as a fiduciary to its clients and investors ("clients") and therefore has an affirmative duty of care, loyalty, honesty, and good faith to act in clients' best interests. The Firm's personnel have an obligation to uphold these duties. At a minimum, the Firm and its employees must conduct themselves in accordance with the following principles at all times:

1. You must place the interests of clients before yourself and the Firm.

2. You must conduct business with integrity.

3. You must act in a professional and ethical manner.

4. You have a duty to act with skill, competence, and diligence.

5. You have a duty to communicate with clients in a timely and accurate manner.

6. You must conduct all personal securities transactions in such a manner as to be consistent with the Code and to avoid any actual or potential conflict of interest or any abuse of an employee's position of trust and responsibility.

7. You must adequately protect client assets.

8. You must take reasonable care to organize and control the Firm's affairs responsibly and effectively, with adequate risk management.

9. You must adhere to the fundamental standard that investment advisory personnel do not take inappropriate advantage of their positions.

10. You must adhere to the principle that information concerning the identity of security holdings and financial circumstance of clients is confidential.

11. Decisions affecting clients are to be made with the goal of providing suitable advice and equitable and fair treatment among clients.

12. Communications with clients or prospective clients should be candid and fulsome. They should be true and complete and not mislead or misrepresent. This applies to all marketing and promotional materials.

13. You must adhere to the principle that independence and objectivity in the investment decision making process is paramount.

14. You must report any violations of the code to Los Angeles Capital's Chief Compliance Officer ("CCO"). If it would not be appropriate to report to the CCO, then violations should be brought to the attention of Los Angeles Capital's General Counsel.

All employees must comply with applicable federal securities laws and Firm policies issued from time to time, and, as an adviser the Firm and its employees are prohibited from the following:

------

1. Employing a device, scheme, or artifice that would defraud an investment advisory client

2. Making to a client or potential client any untrue statement of a material fact or omitting a material fact necessary in order to make the statements made not misleading

3. Engaging in any act, practice, or course of business which operates or would operate as a fraud or deceit upon a client

4. Engaging in a manipulative practice with respect to a client

5. Engaging in any manipulative practice with respect to securities, including price manipulation, acting on or spreading false market rumors, or

6. Making use of any information that an employee may have become aware of by virtue of his/her relationship with a client organization. Employees may not conduct a transaction while aware of such "inside information" if the information is indeed non-public in nature and comes about through dialogue and/or interaction with an official at a publicly traded organization.<sup>1</sup>

**<u>Standards of Business Conduct</u>**

**A.Conflicts of Interest**

The Firm recognises that, from time to time, a conflict of interest may arise between its own interests and those of a client. The Firm requires that its clients' interests take precedence and that its employees and Access Persons disregard any other relationship, arrangement, material interest, or conflict of interest which may serve to influence, or appear to influence, the Firm's discretionary management.

From time to time the Firm may have an interest or relationship to a transaction that either gives, or may give, rise to a conflict of interest. As a fiduciary, the Firm must not knowingly advise or deal in the exercise of discretion in relation to that transaction unless reasonable steps are taken to manage the conflict of interest to avoid impairment of that transaction. Where the Firm faces a material conflict as to a client that the Firm is unable to manage, this fact must be disclosed to the client(s) concerned.

All conflicts and potential conflicts of interest, including interest in a transaction, should be reported by employees to Los Angeles Capital's Compliance department via the Compliance System upon hire or upon entering into any such relationship, whichever may come first. Each reported conflict will be examined by a member of the Compliance department or the General Counsel to determine whether a conflict exists and determine the appropriate measures to be taken to avoid or manage the conflict. These measures may include the implementation of appropriate information barriers or other procedures to isolate the involved personnel from investment-making decisions regarding the securities of or transactions with the company.

In determining whether a conflict of interest exists, the Firm must specifically take into account whether the Firm or an employee: (i) is likely to make a financial gain or avoid a financial loss at the expense of the client; (ii) has an interest in the outcome of the service provided to the client, or the transaction carried out on behalf of its client, which is distinct from the client's interest in that outcome; (iii) carries on the same business as the client; or (iv) receives, or will receive, from a person other than the client, an inducement in relation to a service provided to the client in the form of monies, goods, or services, other than the standard commission or fee for that service. The following list includes, but is not limited to, possible conflicts:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Immediate family member is employed by a:

obroker-dealer

opublicly traded company

ocritical service provider (see Compliance for a full list of Critical Service Providers)

oclient

oregulatory agency

oinvestment adviser

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Employee or family member serves on the board of directors or committee of any of the above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any material, ***Beneficial Ownership*** or interest in any of the above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Executorship, trusteeship, or power of attorney privileges other than with respect to a family member.

<sup>1</sup> Refer to Los Angeles Capital's Insider Trading Policy for further information.

------

**Record of Conflicts**

As its principal mechanism for identifying, managing, monitoring, and mitigating conflicts of interest, the Firm maintains a record of reported conflicts of interests, which itemizes conflicts, mitigating controls, and responsibilities.

Identified material conflicts are disclosed to clients in Los Angeles Capital's Form ADV Part 2A.

**B.Outside Business Interest**

The Firm permits employees to maintain ***Outside Business Interests*** as long as the Outside Business Interest does not: (i) create an actual or potential conflict of interest for the Firm; (ii) interfere with the employee's duties to the Firm and its clients; or (iii) jeopardize the business or reputation of the Firm. Outside Business Interests include a wide range of endeavors, including but not limited to employment with an unaffiliated company, acting as an independent contractor or consultant, owner of an unrelated business, or serving as a director or officer of any Outside Entity.

Employees should not hold any part-time or secondary position with any ***Outside Entity*** that may create an actual or potential conflict of interest with the duties the employee performs for the Firm, regardless of whether the employee is compensated or not. A position with an Outside Entity is considered an Outside Business Interest.

**Employees may not engage in Outside Business Interests without approval from their supervisor, the CCO, General Counsel, and the CEO.** A request to engage in or undertake an Outside Business Interest must be submitted via the Compliance System. See Compliance for more information.

No Firm employee may accept an appointment as an executor, trustee, guardian, conservator, general partner, or other fiduciary, or any appointment as a consultant in connection with fiduciary or active money management matters, without obtaining approval from Los Angeles Capital's CCO. Securities trading by employees in any fiduciary capacity is subject to the Firm's Personal Trading Procedures.

Approval of an Outside Business Interest will be subject to the implementation of procedures to safeguard against potential conflicts of interest, such as establishing information barriers, placing securities of the company on the Firm's restricted list, or recusing yourself if the entity ever considers doing business with the Firm. Approval may be withdrawn at any time if the Firm's senior management concludes that withdrawal is in the Firm or its clients' interests. Employees must provide Compliance with prompt notification any time a previously approved Outside Business Interest changes or the employee becomes aware of a conflict of interest relating to the activity. It is possible that the employee may be required to discontinue the previously approved activity.

See Compliance if you are unsure of your reporting obligations.

**C.Disciplinary Events**

All employees are required to promptly notify Los Angeles Capital's CCO of any disciplinary history upon hire and in the event of notice of or commencement of any regulatory, legal, or disciplinary action even if such action relates to your prior employment. The CCO is responsible for determining whether the information is material and must be reported to regulators and/or clients.

**D.Prohibited Activities**

Employees are prohibited from all of the following activities:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Using or sharing knowledge about pending, currently considered, or recent securities transactions of clients to profit personally, directly or indirectly, as a result of such transaction, including purchasing or selling such securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Disclosing to other persons any information about a client and/or former clients, including financial circumstances, security holdings, identity (unless the client has previously consented to the circumstances of the disclosure), and any advice furnished by the Firm.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Borrowing from clients or providers of goods or services with whom the Firm deals, except those who engage in lending in the usual course of business and then only on terms offered to others in similar circumstances, without special treatment. This prohibition does not preclude borrowing from individuals related to you by blood or marriage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Giving advice to clients that may be interpreted as giving legal advice. All questions in this area should be referred to Los Angeles Capital's General Counsel.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Giving clients advice on tax matters, the preparation of tax returns, or investment decisions, with the exception of situations that may be appropriate in the performance of an official fiduciary or advisory responsibility, or as otherwise required in the ordinary course of your duties.

**<u>Gifts and Entertainment</u>**

A conflict of interest may occur when an employee's personal interests interfere or potentially interfere with responsibilities to the Firm or its clients. The overriding principle is to eliminate any conflict of interest. Accordingly, employees should not solicit, give, or accept inappropriate gifts, favors, entertainment, special accommodations, or other things of material value that could be viewed as overly generous, aimed at influencing decision-making, or making either party feel beholden to a person or a company or that in any manner would conflict with the best interests of the Firm or its clients.

**A.Limits to Gifts and Entertainment Received by Employees**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• No employee may receive any gift, service, or other thing valued greater than $100 in aggregate (a "Prohibited Gift") from any person or entity that does or hopes to do business with the Firm or an affiliate of the Firm within a calendar year. Receiving cash gifts is prohibited. Los Angeles Capital's CCO is authorized to make a final determination as to whether the thing of value should be considered a Prohibited Gift within the context of the Code's principles and may approve or deny requests to be able to accept any gift. An example of something that would not be considered a Prohibited Gift would be receipt of free admission to a conference hosted by one of the Firm's current vendors or service providers which is also provided to other clients at no charge.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• No employee may accept extravagant or excessive entertainment from a client, prospective client, or any other person or entity that does or hopes to do business with the Firm or an affiliate of the Firm.<sup>2</sup> Employees may accept a business entertainment event, such as dinner or a sporting event, of reasonable value, if the person or entity providing the entertainment (i) is present; (ii) the entertainment is not provided as part of a quid pro quo arrangement; and (iii) the entertainment does not create a conflict of interest in relation to any client account.

**B.Limits to Gifts and Entertainment Given by Employees**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• No employee may give or offer to give any gift, service, entertainment, or other thing of value to employees or representatives of entities appearing on the LACM Restricted Entities List.<sup>3</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Except as prohibited above, no employee may give or offer to give any gift, service, or other thing valued greater than $100 in aggregate within a calendar year to existing clients, prospective clients, or any other person or entity that does or hopes to do business with the Firm or an affiliate of the Firm, including brokers and service providers, without the prior consent of Los Angeles Capital's Compliance department. Cash gifts are prohibited.

o<u>There are more restrictive rules and limitations for gifts and entertainment provided to individuals associated or employed by certain state or local government plans, ERISA plans, unions and union officials, and</u> ***<u>Foreign Officials</u>***<u>. Please see Compliance regarding specific gift giving limitations prior to giving any gifts to such persons.</u> Please note that for some clients or prospects entertainment and gifts may be required to be reported to a third party and could reflect unfavorably on the Firm or disqualify the Firm from being able to provide management services.

oState and local governments increasingly limit or prohibit gifts and entertainment to the employees, officers, board members, and consultants of their pension and other investing funds. Some prohibit providing anything of value, including any food, whether provided at a Firm facility or event or elsewhere, or transportation to and from airports by cab or private car. Failure to comply with these requirements by the Firm or its employees can lead to disqualification of the Firm from managing assets for the client, loss of management fees, or other penalties. Please see Compliance regarding specific gift and entertainment limitations for such persons.

oGifts and contributions to elected political officials and candidates for political office are covered by special rules. See the Pay to Play Policy.

<sup>2</sup> Entertainment provided by a broker/dealer is subject to stricter requirements. Please refer to the section on Broker/Dealer Entertainment for more information.

<sup>3</sup> The LACM Restricted Entities List is available via the Compliance System.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• No employee may provide extravagant or excessive entertainment to a client, prospective client, or any other person or entity that does or hopes to do business with the Firm or an affiliate of the Firm. Employees may provide a business entertainment event, such as dinner or a sporting event, of reasonable value, if the person or entity providing the entertainment is present and it is both necessary and incidental to the performance of the Firm's business.

**C.Broker/Dealer Entertainment**

All employees are required to obtain pre-clearance from Compliance prior to accepting any ***entertainment from a broker/dealer*** by submitting a Broker Entertainment Request via the Compliance System. EACH Firm attendee/representative must submit a separate request to cover his or her participation only. Pre-clearance approval cannot be granted by the same individual seeking pre-clearance. All Broker Entertainment Requests must be submitted to the Compliance department in advance of the event.

**D.Pre-Clearing and Reporting Gifts and Entertainment**

Regardless of value or giver, all gifts and entertainment received are required to be logged in to the Compliance System. You are advised to seek pre-approval if you are not certain whether the entertainment would be considered excessive, if you are providing a gift or entertainment to a government fund/pension plan, Union or Union Official, or ERISA fiduciary, or if you cannot judge whether a gift has a value over $100. If any unapproved gift is received, the recipient should either reject the gift, give the gift to Compliance who will return the gift to the giver, or if returning the gift would harm relations with the giver, Compliance will donate the gift to charity.

**<u>Personal Trading Policy</u>**

**A.Scope of Personal Trading Policy**

**The Personal Trading Policy portion of the Code is only applicable to *Access Persons*. Every director, officer, and employee of the Firm is considered an *Access Person,* unless otherwise exempted by Los Angeles Capital's *Approving Officers*.** Consultants, interns, or other temporary or leased employees may be considered an *Access Person* depending on certain factors such as length of service, nature of duties, and access to the Firm's information. Such persons will be notified if they are NOT considered to be an Access Person.

**Related Parties of Access Persons**

Certain Related Parties to Access Persons are subject to the specific reporting requirements detailed in the *Personal Trading Procedures* section.

**B.Personal Trading Procedures**

The Firm has adopted the following Personal Trading Procedures that must be followed by all Access Persons and their Related Parties where applicable. In certain circumstances, and in its discretion, Compliance may prohibit an Access Person from engaging in any personal trading activity and will communicate such prohibition or other limitations to the Access Person at hire or at the time of effect. Restrictions on personal trading do not relieve an Access Person of any reporting requirements set forth by the Code.<sup>4</sup>

**Disclosure of Personal Accounts and Security Holdings**

Each Access Person must disclose via the Compliance System all Investment Accounts and directly held Reportable Securities where the Access Person or a Related Party has direct or indirect Beneficial Ownership:

• Within 10 days of being hired

• At account opening

• At the time such ownership is obtained, and

• On a quarterly basis thereafter

Appendix A offers guidance on account disclosure requirements specific to various account types. Appendix C includes the minimum account statement requirements accepted to fulfill regulatory requirements.

Each Access Person & Related Party, where relevant, must consent to Compliance's receipt of data feeds directly via the Compliance System for all Investment Accounts.

<sup>4</sup> Certain Access Persons, such as consultants, interns, or other temporary employees, may be required to meet the Code's reporting obligations in alternative ways to the Compliance System. Where applicable, the Compliance department will work with each Access Person to determine satisfactory requirements and will be communicated at time of hire or occurrence.

------

Under the SEC Rules, a person is regarded as having Beneficial Ownership when they can either directly or indirectly benefit economically from the account OR if the securities are held in the name of a Related Party, defined as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A husband, wife, or domestic partner

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A minor child

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A relative or significant other sharing the same house, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Anyone else if the Access Person:

oObtains benefits substantially equivalent to ownership of the securities

oCan obtain ownership of the securities immediately or within 60 days, or

oCan vote the securities

Another example of an Access Person having Beneficial Ownership includes trades in any relative's brokerage account (not just those living in the same household) if the Access Person is authorized to make or direct trades AND can benefit economically from the account, regardless of whether the Access Person actually makes or directs the trades.

Whether you have Beneficial Ownership in the securities of a spouse, domestic partner, minor child, or relative or significant other sharing the same house can be rebutted only under very limited facts and circumstances. If you believe your situation is unique and therefore rebuts the presumption of Beneficial Ownership, you must contact the CCO for written approval.

If you act as a fiduciary with respect to funds and accounts managed outside of the Firm (e.g., if you act as the executor of an estate for which you make investment decisions) and have received approval to engage in such Outside Business Interest, you are deemed to have Beneficial Ownership in the assets of that fund or account. Accordingly, any securities transactions you make on behalf of that fund or account will be subject to the general trading restrictions and reporting applicable to you under the Code.

Permitted Investment Accounts

Access Persons and their Related Parties are only permitted to maintain Investment Accounts with the brokerages identified on LACM's Designated Brokerage List for Access Persons and Related Parties.<sup>5</sup> Employer-sponsored retirement accounts (e.g., 401(k), 403(b), and pension plans), 529 Plans, and Compliance-approved Non-Discretionary Accounts are exempt from this requirement.

Unless written permission is granted by Compliance, Access Persons and their Related Parties are required to transition any applicable accounts within 90 calendar days from the time of disclosure to a broker on LACM's Designated Brokerage List. The transition process must begin within 30 calendar days from the date of account disclosure. Evidence that the transition has commenced may be requested by Compliance at any time on or after the 31<sup>st</sup> calendar day.

**Pre-Clearance Procedures**

Transacting in various security types, including limited offerings, must be pre-cleared via the Compliance System. Please see Appendix B for examples of the types of securities transactions that require pre-clearance or consult Compliance if you are unsure of any pre-clearance obligations. All personal trading pre-clearance requests must be approved in the Compliance System prior to execution.

Personal Trade Pre-Clearance Requests are made via the Compliance System and require the approval of a member of the Trading department <u>AND</u> a member of the Compliance department. Compliance retains the discretion to evaluate the circumstances of each transaction in conjunction with its corresponding trade request. Certain circumstances may require an estimated value of the transaction subject to a reasonable variance.

Pre-clearance approval cannot be granted by the same individual seeking pre-clearance. **<u>A standard approval is valid only until the end of the trading day on which approval was granted, or such shorter time as may be specified.</u>** If the trade is not executed by the end of the current trading day a new pre-clearance request needs to be submitted for approval prior to trading on any subsequent day.

<sup>5</sup> The LACM Designated Brokerage List for Access Persons and Related Parties is available via the Compliance System. Consultants, interns, or other temporary employees deemed an Access Person by Compliance may be exempt from the Firm's Designated Brokerage requirement in certain circumstances.

------

***Private Investments***

Initial purchases by Access Persons or their Related Parties in securities of privately – owned companies are required to receive pre-clearance approval from a member of the Compliance department via the Compliance System. A standard approval is valid only within thirty calendar days from the day on which approval was granted. If the company notifies you of their intent to go public, you must immediately notify Compliance. All such positions in privately – owned companies and subsequent transactions need to be confirmed quarterly via the Compliance System as part of the Quarterly Reporting process.

***LACM Identified Securities List***

Transactions directed by Access Persons or Related Parties in securities and ***Reportable Funds*** identified on this list require pre-clearance approval prior to execution. This includes transactions directed by Access Persons or Related Parties in employer sponsored retirement accounts, as well as applicable transactions occurring in the Los Angeles Capital 401(k) Profit Sharing Plan.

***Exemptions from Pre-Clearance***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Transactions pursuant to an ***Automatic Investment Plan*** (plan contributions, dividend reinvestment plans, etc.). **Note that a voluntary, initial automatic investment transaction in an account other than an employer sponsored retirement account must be pre-cleared in accordance with its security and transaction type,** but all subsequent automatic investments are exempt from pre-clearance provided the schedule and security remain the same.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Purchases effected upon the exercise of rights issued 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Non-directed acquisition or sales of securities due to involuntary corporate actions, including stock dividends, splits, mergers, spin-offs, etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Receipt of gifts of securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Purchases or sales held in Compliance-approved Non-Discretionary Accounts where the employee has no direct or indirect influence or control. This includes accounts where the employee has signed overall investment discretion to an adviser, broker, or other trustee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Acquisition of shares of Los Angeles Capital by Access Persons pursuant to periodic share offerings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Subsequent transactions in a Limited Offering where the initial investment received pre-clearance approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Fractional share positions that are automatically executed subject to broker discretion or account terms.

**Prohibited Transactions**

The Firm does not allow:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Purchases of a publicly traded **client** security (stock, bond, etc.)<sup>6</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Purchase of shares through an ***Initial Public Offering (IPO)***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Engaging in frequent trading of a ***Reportable Fund***<sup>7</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Purchase of such other security types as listed on Appendix B

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Engaging in day trading as it may be a potential distraction from servicing clients, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Undertaking personal investment transactions with the same individual employee at a broker-dealer firm on the Firm's approved brokerage roster<sup>8</sup>

In the event that a restricted security was held prior to your employment with the Firm or prior to the addition to the Firm's restricted list, the Firm will not require you to liquidate your position but instead require pre-clearance on future transactions.

<sup>6</sup> Refer to the Firm's Restricted Securities List.

<sup>7</sup> Frequent trading of a ***Reportable Fund*** is defined as selling or repurchasing a position that was taken or sold, respectively, less than thirty days prior to the transaction. Certain funds may have more restrictive frequent trading policies. A list of the ***Reportable Funds*** is available via the Compliance System.

<sup>8</sup> ***Non-Discretionary Accounts*** and Related Parties are not subject to this prohibition. A list of prohibited individuals is available via the Compliance System.

------

**Quarterly Personal Brokerage Statements**

Access Persons will provide the Compliance department via the Compliance System all Investment Account statements where the Access Person has either direct or indirect Beneficial Ownership AND direct/indirect influence or control, including the investment accounts of all Related Parties. This may include such accounts as traditional brokerage accounts, IRAs, former employer sponsored retirement plans (e.g., 401(k)s or 403(b)s), etc. and must reflect all activity within the account during the quarterly period under review.

Where possible, data feeds for these accounts and their respective activity will be provided on a daily basis to the Compliance department via the Compliance System. If feeds are not possible, each Access Person will be required to submit, on a quarterly basis via the Compliance System, duplicate copies of all Investment Account statements where the Access Person has either direct or indirect Beneficial Ownership AND direct/indirect influence or control, including the Investment Accounts of all Related Parties. Statements must meet the minimum requirements outlined in Appendix C.

**Exempt Reporting Requirements**

Access Persons do not need to provide statements or pre-clear transactions in Compliance-approved Non-Discretionary Accounts where the Access Person has no direct or indirect influence or control, including securities held in accounts where the Access Person may have signed over ALL investment discretion to an adviser, broker, or other trustee. However, Access Persons are required to report the existence of these accounts in the Compliance System on a quarterly basis, along with acceptable proof of the account's non-discretionary status within 10 days of being hired, at the time the account is considered to be non-discretionary, and annually thereafter. If you are uncertain as to whether this exclusion applies to you, please see Compliance for further clarification.

Ownership of shares of Los Angeles Capital allocated pursuant to periodic share offerings and 529 College Savings Plans are exempt from <u>all</u> reporting requirements and do not need to be disclosed in any capacity in the Compliance System.

**Los Angeles Capital's 401(k) Profit Sharing Plan**

Most investments available through Los Angeles Capital's 401(k) Profit Sharing Plan are exempt from reporting, with the exception of the ***Reportable Funds*** listed on the LACM Identified Securities List. Transactions in ***Reportable Funds*** that are made pursuant to an automatic investment plan, such as a plan contribution, are exempt. However, transactions in ***Reportable Funds*** that are directed by the Access Person by either a direct exchange in or out of the ***Reportable Fund***, or through a one-time reallocation of your investment mix, require pre-clearance approval.

Access Persons are not required to provide a quarterly statement for the Los Angeles Capital 401(k) Profit Sharing Plan. Transactions in ***Reportable Funds*** will be monitored directly via transaction reports provided by the plan administrator. Transaction reports must meet the minimum requirements outlined in Appendix C.

**C.Confidentiality**

All reports submitted to Los Angeles Capital's Compliance department pursuant to the Code will remain confidential, except to the extent necessary to implement and enforce the provisions of the Code or to comply with requests for information from regulatory and law enforcement agencies.

------

**<u>Code of Ethics Certifications</u>**

The Compliance department will provide each employee with a current copy of the Code upon hire, request, material change, and a copy will be maintained on the Compliance System for easy, continuous retrieval. Upon hire and quarterly thereafter, each employee will certify in writing that he/she: (i) received, read, and understands the Code and any applicable amendments; (ii) recognizes that he/she is subject to the Code; (iii) has complied with the requirements of the Code; and (iv) if an Access Person, has disclosed all personal securities and transactions required to be reported pursuant to the requirements of the Code.

Certifications are made by all employees and Access Persons via the Compliance System upon hire and within 30 days of each calendar quarter-end.<sup>9</sup> As applicable, certifications include all positions in directly held Reportable Securities, confirmation of all Investment Accounts for the Access Person and their Related Parties, certification of all entries made in the Compliance System, including, but not limited to, gifts and entertainment, and conflicts of interest, and responses to any additional requests or certifications deemed necessary by Compliance. The Compliance department will review all submissions for accuracy and completeness, cross checking with other required documentation.

**<u>Administration and Enforcement of Code</u>**

**A.Annual Review**

Compliance will review the Code at least annually for its adequacy and effectiveness. Any material amendments to the Code must be approved by Los Angeles Capital's Board and the Board of any mutual fund that Los Angeles Capital currently serves as a sub-adviser. All material amendments will be promptly communicated to Firm employees.

As a mutual fund adviser or sub-adviser, Los Angeles Capital will provide a written annual report to the Board of each mutual fund that describes any issues arising under the Code since the last report, including information about material violations of the Code and sanctions imposed in response. This report will also include discussion of any waivers that might be considered important by the Fund's Board and will certify that the Firm has adopted policies and procedures reasonably designed to prevent employees and Access Persons from violating the Code.

**B.Recordkeeping**

All required documentation will be retained in accordance with Rule 204-2 of the Investment Advisers Act and Rule 17j-1 of the Investment Company Act of 1940. Please see the Firm's Books and Records policy for further information.

**C.Violations of the Code**

All employees and Access Persons must report immediately to Compliance if they: (i) suspect that another employee or anyone else working on behalf of the Firm or its affiliates has breached any of the General Principles outlined in this Code; (ii) believe that any of the Firm's procedures are inconsistent with the Firm's fiduciary duty or regulations; or (iii) are asked, directly or indirectly, to act in any manner inconsistent with the General Principles of the Code.

Access Persons must make sure that Related Parties covered by the Code are familiar with the requirements of the Code, particularly regarding personal trading requirements. A violation due to the actions of a Related Party constitutes a violation by the Access Person.

Material violations of the Code include violations that impact a client or are egregious, malicious, or repetitive in nature. A violation may include, but is not limited to: failure to receive pre-clearance when obligated; opening a non-permitted Investment Account; trading in restricted securities; fraudulent misrepresentation of personal securities holdings or conflicts of interest; receipt of or gifting an excessive gift or entertainment event to a client, prospective client, or any individual or entity who does business or hopes to do business with the Firm; failing to receive pre-clearance for broker entertainment; repetitive non-material violations for the same offense; non-compliance with applicable laws, rules, and regulations; fraud or illegal acts involving any of the Firm's business; material misrepresentation in regulatory filings, internal books and records, client records, or reports; activity that is harmful to a client, including its shareholders; and deviations from required controls and procedures that safeguard clients and the Firm.

<sup>9</sup> Certain APs, such as consultants, interns, or other temporary employees, may be required to meet the Code's reporting obligations in alternative ways to the Compliance System. These individuals are currently not loaded into the Compliance System and complete reporting obligations via hardcopy/emailed forms.

------

**Sanctions**

Any violations of the Code may result in disciplinary action that Los Angeles Capital's Board and the CCO deem appropriate, including, but not limited to, a warning, fines, disgorgement, suspension, demotion, loss of responsibility, or termination of employment. In addition to sanctions, violations may result in referral to civil or criminal authorities where appropriate.

**Sanctions for Personal Trading Violations**

Personal trading violations, including, but not limited to, trading without the required pre-clearance or trading restricted securities, may result in the immediate unwinding of the trade or a fine. If required, the amount of the fine will be determined by members of Los Angeles Capital's Board and the CCO. It may include the disgorgement of any profits from the trade to a mutually agreed upon charity. The trade(s) may be unwound as soon as possible upon discovery and notification of the violation.

**<u>Whistleblower Policy</u>**

The Firm is committed to high ethical standards and compliance with the law in all of its operations and will deal with its regulators in an open and cooperative way. The Firm must disclose to regulators anything relating to the Firm of which a regulator would reasonably expect notice. The Firm believes that its employees are in the best position to provide early identification of significant issues that may arise with compliance with these standards and the law. The Firm's policy is to create an environment in which its employees can report these issues in good faith without the fear of reprisal.

The Firm requires employees to report illegal activity or activities that are not in compliance with the Firm's formal written policies and procedures, including the Firm's Code of Ethics, to assist the Firm in detecting and putting an end to fraud or unlawful conduct. All such reports will be treated confidentially to the extent permitted by law and investigated promptly and appropriately.

The Firm expects the Whistleblower Policy to be used responsibly. If an employee believes that a policy is not being followed because it is merely being overlooked, the normal first recourse should be to bring the issue to the attention of the party charged with the operation of the policy. In most cases, an employee should be able to resolve the issue with his or her manager, or, if appropriate, another senior member of the Firm. However, instances may occur when this recourse fails, or you have legitimate reason to not notify management. In such cases the Firm has established a system for employees to report illegal activities or non-compliance with the Firm's formal policies and procedures.

An employee who has good faith belief that a violation of law or failure of compliance may occur or is occurring has a right to come forward and report under this Whistleblower Policy. "Good faith" does not mean that a reported concern must be correct, but it does require that the reporting employee believe that he or she is fully disclosing information that is truthful.

Reports may be oral, by telephone or interview, or in writing by letter, memorandum, instant message, or e-mail. The employee making the report must identify himself or herself. The employee should also clearly identify that the report is being made pursuant to the Whistleblower Policy and in a context commensurate with the fact that the Policy is being invoked. The report should be made to the following parties, in the order shown:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Chief Compliance Officer, unless it would not be appropriate or that officer fails to respond, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The General Counsel

The Chief Compliance Officer and/or General Counsel, as appropriate, will consult about the investigation as required. Depending on the nature of the matters covered by the report, an officer or manager may conduct the investigation, or it may be conducted by the Chief Compliance Officer, the General Counsel, or by an external party.

The investigation will be conducted diligently by any appropriate action.

The Firm understands the importance of maintaining confidentiality of the reporting employee to make the Whistleblower right effective. Therefore, the identity of the employee making the report will be kept confidential, except to the extent that disclosure may be required by law, a governmental agency, by self-regulatory organization, or as an essential part of completing the investigation determined by the Chief Compliance Officer or General Counsel. Any disclosure shall be limited to the minimum required. The employee making the report will be advised if confidentiality cannot be maintained.

------

The Chief Compliance Officer will follow up on the investigation to make sure that it is completed, that any non-compliance issues are addressed. The Chief Compliance Officer will ensure that no acts of retribution or retaliation occur against the person(s) reporting violations or cooperating in an investigation in good faith.

The Chief Compliance Officer or General Counsel will report to the Firm's Board concerning the findings of any investigation they determine involved a significant non-compliance issue.

If an employee elects not to report suspected unlawful activity or a suspected violation of law to the Firm, the employee may contact the appropriate governmental authority for review and possible investigation. Nothing in any Confidentiality Agreement or separation agreement/release between an employee or former employee and the Company will be considered violated in making a report of suspected unlawful activity to a governmental authority. This includes reporting related to the performance of a US Government contract involving: (i) evidence of gross mismanagement, (ii) gross waste, (iii) fraud, (iv) abuse of authority, (v) substantial and specific danger to public health or safety, or (vi) a violation of law, rule, or regulation. Reporting may be made to a designated investigative or law enforcement representative of a Federal department or agency authorized to receive such information (e.g., a Federal employee responsible for contract oversight or management at the relevant agency). For more information please refer to the federal procedures and remedies detailed in the Contractor Employee Whistleblower Rights under 41 U.S.C. 4712 and as described in Federal Acquisition Regulations 3.900 through 3.905.

**The California Attorney General's whistleblower hotline is 800-952-5225, the SEC's whistleblower hotline is 202-551-4790, and the FCA's Whistleblowing Advice Line is +44 (0)20 7066 9200 or <u>whistle@fca.org.uk</u>.&nbsp;&nbsp;&nbsp;&nbsp;**

Note that submitting a report that is known to be false is a violation of this Policy. The Firm will not retaliate against an individual who reports a violation as required by law.

Retaliation against an individual who reports a violation is prohibited and constitutes a further violation of the Code.

------

**<u>Appendix A: Account Disclosure Matrix</u>**

---

| | | | | |
|:---|:---|:---|:---|:---|
| ***Account Type*** | ***Disclosure*** | ***Electronic Feed*** | ***Assets at Firm-Approved Brokerage*** | ***Other Requirements*** |
| **Discretionary Investment Accounts** <br>***(e.g., individual/joint non-retirement, IRAs, HSA, Trusts)*** | Required | Required | Required | New Investment Accounts are disclosed at account inception via the Compliance System, upon obtaining Beneficial Ownership, or upon a change from Non-Discretionary status.<br>Access Persons and Related Parties must transition applicable accounts within 90 days of disclosure date directly to an eligible brokerage. The transition process must commence within 30 days from the date of account disclosure.  |
| **Non-Discretionary Investment Account** | Required | Not Required | Not Required | Non-Discretionary status is subject to Compliance approval and must be evidenced:<br>1)within 10 days of hire date OR account opening OR at time the account is considered to be non-discretionary; AND<br>2)on an annual basis thereafter.<br>An account is considered non-discretionary only AFTER Compliance has provided written approval. |
| **Employer-sponsored retirement** <br>***(e.g., 401(k), 403(b), pensions)*** | Required | Not Required | Not Required | Disclosure is required at the time of hire or account inception. Quarterly statement must be uploaded via the Compliance System. |
| **Los Angeles Capital's 401(k) Profit Sharing Plan** | Required | Not Required | N/A | Transactions are monitored for investments in securities and ***Reportable Funds*** on the LACM Identified Securities List. Pre-clearance requirements are included on the LACM Identified Securities List. |
| **529 Plans** | Not Required | N/A | N/A | N/A |

---

------

**<u>Appendix B: Code of Ethics Pre-Clearance Matrix</u>**

If a security type you would like to trade is not listed below, please see Compliance for additional guidance. Transactions made pursuant to an automatic investment plan require pre-clearance at the initial investment in an investment account other than an employer sponsored retirement account (subsequent investments made pursuant to the automatic investment plan do not require pre-clearance).

---

| | |
|:---|:---|
| ***Security Type*** | ***Pre-Clearance Approval*** |
| **Bankers' Acceptance** | Not Required |
| **Certificate of Deposits (CDs)** | Not Required |
| **Commercial Paper** | Not Required |
| **Debt** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All debt issued by LACM Restricted Security List | PROHIBITED |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial Paper | Not Required |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate Bonds | Not Required |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;High Quality, Short-Term Debt Instruments | Not Required |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Municipal or Government Bond (Non-Federal) | Not Required |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Promissory Notes | Not Required |
| **Digital Currency** | Not Required |
| **Digital Coin/Token** | Not Required |
| **Direct Obligations of U.S. Government** | Not Required |
| **Funds (Open and Closed)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;ETF | Not Required |
| &nbsp;&nbsp;&nbsp;&nbsp;Single-Stock ETFs | Required |
| &nbsp;&nbsp;&nbsp;&nbsp;ETFs on LACM Identified Securities List | Required |
| &nbsp;&nbsp;&nbsp;&nbsp;Closed-end Funds | Required |
| &nbsp;&nbsp;&nbsp;&nbsp;Money Market Funds | Not Required |
| &nbsp;&nbsp;&nbsp;&nbsp;Mutual Funds | Not Required |
| &nbsp;&nbsp;&nbsp;&nbsp;Mutual Funds on LACM Identified Securities List | Required<sup>10</sup> |
| &nbsp;&nbsp;&nbsp;&nbsp;***Reportable Funds*** on LACM Identified Securities List | Required<sup>9</sup> |
| &nbsp;&nbsp;&nbsp;&nbsp;Unit Investment Fund or Trust | Required |
| **Initial Coin Offering (ICO)** | PROHIBITED |
| **IPO Allocation** | PROHIBITED |
| **Limited or Direct Offering** | Required at time of initial investment; not required for subsequent investments provided in same offering |
| **Options/Futures Contracts** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;ETFs or Indices | Not Required |
| &nbsp;&nbsp;&nbsp;&nbsp;Single-Stock ETFs | Required |
| &nbsp;&nbsp;&nbsp;&nbsp;ETFS on LACM Identified Securities List | Required |
| &nbsp;&nbsp;&nbsp;&nbsp;Stocks | Required |
| &nbsp;&nbsp;&nbsp;&nbsp;Stocks on LACM Restricted Security List | PROHIBITED |
| &nbsp;&nbsp;&nbsp;&nbsp;All other options/futures contracts | Not Required |
| **Repurchase Agreements** | Not Required |
| **Shares issued by Los Angeles Capital** | Not Required |
| **Stock** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common Stock | Required |
| &nbsp;&nbsp;&nbsp;&nbsp;Stocks on LACM Restricted Security List | PROHIBITED |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred Stocks | Required |
| **Swaps** | PROHIBITED |

---

<sup>10</sup> Transactions in securities or ***Reportable Funds*** on the LACM Identified Securities List that occur as a part of an automatic investment plan in an employer sponsored retirement account do not require pre-clearance. Direct exchanges in or out of these securities, or one-time reallocations involving these securities, require pre-clearance.

------

**<u>Appendix C: Account Statement Requirements</u>**

---

| | | |
|:---|:---|:---|
| ***Disclosure/Statement Type*** | ***Requirements*** | ***Method of Verification*** |
| Initial Account and Holdings Disclosures | Account statements or information provided to satisfy the initial account and holdings disclosure requirement must be current as of a date no more than 45 days prior to the date the employee became an Access Person ("Hire Date"). <br>Statements must include at a minimum, the following position level detail:<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Security Name<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Type of security<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Exchange Ticker or CUSIP/SEDOL (if applicable)<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Number of Shares<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Principal Amount | Required certifications and disclosures are obtained via the Compliance System on the **Initial Combined Report** or via hard copy on the **Personal Securities & Account Disclosure Report**.<br>Statements as of a date no more than 45 days prior to the Hire Date are to be supplemented with a brokerage transaction report from the as-of date of the statement to the Hire Date to reasonably determine ownership and holdings as-of the Hire Date. |
| Quarterly Personal Brokerage Statements | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Account statements or information provided must be current as of a date no more than 45 days prior to the date the report was submitted.<br>Statements must include at a minimum, the following:<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Position level detail<br>oSecurity Name<br>oType of security<br>oExchange Ticker or CUSIP/SEDOL (if applicable)<br>oNumber of Shares<br>oPrincipal Amount<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Transaction level detail:<br>oTransaction Date<br>oNature of Transaction (e.g., buy, sell)<br>oSecurity Name<br>oExchange Ticker or CUSIP/SEDOL (if applicable)<br>oInterest Rate/Maturity Date (if applicable)<br>oNumber of Shares<br>oPrice the transaction was effected<br>oPrincipal Amount<br>oName of broker, dealer, or bank  | Required certifications and disclosures are obtained via the Compliance System on the **Quarterly Combined Report** or via hard copy on the **Quarterly Report**.<br>For Discretionary Investment Accounts, transaction level detail is collected on a T+1 basis via direct broker feeds and reconciled daily for position level detail. Until transaction data feeds are established for this account type, transaction and position level detail is obtained via brokerage account statements. <br>For Employer-Sponsored Retirement Accounts, position level detail is obtained via a brokerage account statement that includes transaction level detail for the quarterly period under review.<br>For Los Angeles Capital's 401(k) Profit Sharing Plan, transaction level detail is provided via a transaction feed from the Plan Administrator and used to reconcile position level detail. |

---

## Ex-99.(P)(2)

![principallogo.jpg](principallogo.jpg)

Code of Ethics

Effective: October 1, 2025

Last Reviewed: September 29, 2025

**I.REGULATORY REQUIREMENT**

The investment advisers, investment companies, distributor companies and service companies listed in Addendum A (collectively, the Firm) have adopted this Code of Ethics, establishing a standard of conduct for Firm Employees.

This Code of Ethics (the Code) establishes a standard of conduct for Firm employees by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Providing clear guidance to all employees that the Firm's Clients' interests come first – ahead of all personal interests;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Providing policies and procedures consistent with applicable laws and regulations, including Rule 204A-1 under the Advisers Act and Rule 17j-1 under the 40 Act; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Seeking to avoid conflicts of interests, or the appearance of such conflicts, when officers, directors, supervised persons, employees and other persons of the Firm own or engage in transactions involving securities.

The Code applies to persons deemed to be **Access Persons** of the Firm, as defined below under Definitions. Access Persons include any officer, director, employee or other person of the Firm. Unless otherwise determined by Principal Asset Management (PrinAM) Compliance, Access Persons also includes positions held by consultants, contractors, temporary employees, interns, co-op students, and Principal Financial Group (**Principal**) Human Resources and Legal staff supporting the Firm.

Please see the Addenda for a custom Principal Funds Access Person definition applicable to the Funds, as well as other custom provisions applicable to certain entities of the Firm.

The Code is supplemental to the **Principal Corporate Global Code of Conduct** which can be found on **Principal Passport**.

**II.STANDARDS OF BUSINESS CONDUCT**

The following standards of business conduct shall govern personal investment activities of Access Persons and interpretation and administration of this Code:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The interests of the Firm's Clients must be placed first at all times;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Access Persons must act honestly and fairly and with due skill, care and diligence in the best interest of Firm clients and the integrity of the market;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Access Persons have an obligation to observe just and equitable principals of trading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All personal securities transactions must be conducted consistent with this Code and in such a manner as to avoid any actual or potential conflict of interest or any abuse of an individual's position of trust and responsibility;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Access Persons should not take advantage of their positions; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Access Persons must comply with applicable Federal Securities Laws.

------

The Code does not attempt to identify all possible conflicts of interests, and literal compliance with each of its specific provisions will not shield Access Persons from liability for personal trading or other conduct that violates a fiduciary duty to the Firm's Clients.

**III.PROTECTION OF MATERIAL NON-PUBLIC INFORMATION**

Access Persons must review and comply with the **Insider Trading Policy**.

It is unlawful to trade in any security based on material nonpublic (or inside) information or to disclose such information to others who may profit from it. This applies to all types of securities, including equities, options, debt, and mutual funds. All Access Persons will keep information pertaining to Clients' portfolio transactions and holdings confidential. No person with access to securities recommendations or pending securities transactions and Client portfolio holdings should disclose this information to any person unless such disclosure is made in connection with the person's regular functions or duties. Additionally, Access Persons with knowledge about the composition of a creation basket are prohibited from disclosing such information to any other person (except as authorized in the course of their employment) until such information is made public. All possible care should be taken to avoid discussing confidential information with anyone who would not normally have access to such information.

**IV.PERSONAL ACCOUNT REPORTING**

Access Persons must report all Covered Accounts (**Accounts**) in which they have Beneficial Ownership of any Reportable Security (**Security**) or Reportable Fund or are capable of holding such Securities at the start of their employment, upon opening of a new account and annually thereafter.

**Beneficial Ownership** shall be interpreted in the same manner as it would be under Rule 16a-1(a)(2) under the Securities Exchange Act of 1934 (**Exchange Act**) when determining whether a person is a beneficial owner of a Security.

For example, the term Beneficial Ownership shall encompass:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Securities in the person's own Accounts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Securities owned by members of the person's immediate family sharing the same household including those by marriage or domestic partnership;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A person's proportionate interest in the portfolio of Securities held by a partnership, trust, corporation or other arrangements; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Securities a person might acquire or dispose of through the exercise or conversion of any derivative Security (e.g. an option, whether presently exercisable or not).

**Security** shall have the meaning set forth in Section 202(a)(18) of the Advisers Act and Section 2(a)(36) of the 40 Act including, but not limited to fixed income securities such as bonds and notes, equity securities such as stocks and exchange traded funds (ETF), derivatives such as options and futures, unit investment trusts (UIT), and private investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**I.New Accounts**

New Accounts must be opened with brokerage firms that provide electronic data feeds unless otherwise pre-approved by PrinAM Compliance. This does not apply to ex-U.S. Accounts or Discretionary Accounts. New Accounts must be reported in ComplianceAlpha (ACA) within 10 days of opening.

**Registered Representatives of Principal Funds Distributor must submit a PFD New Broker Account Pre-Approval Request PRIOR to opening a brokerage account.** Once approval is granted, PFD Registered Representatives are able to open the account and must report the new Account within 10 days.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**II.Discretionary Accounts**

Discretionary Accounts **are reportable** and require Access Persons to provide a copy of the managed account agreement to PrinAM Compliance. The discretionary managed account agreement outlines trading discretion authority granted to another party (individual, entity or money manager), which allows them to buy/sell Securities without the Account owner's consent for each trade. A Discretionary Account is sometimes referred to as a "managed" or "blind-managed" account. Discretionary Accounts are exempt from the pre-clearance requirement, 30- day holding period, quarterly transaction reports and initial public offerings prohibition provisions of the Code if the Access Person does not have Direct or Indirect Influence or Control over the account. Please note that an immediate family member sharing the same household with discretion over a Covered Account is not considered a third-party adviser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**III.Crypto-Asset Accounts**

Crypto-Asset Accounts and their digital asset holdings **are reportable**. This would include investments in cryptocurrency (e.g. Bitcoin, Ethereum, Dogecoin, Shiba INU), initial coin offering (ICO), distributed ledger technology, blockchain and/or any related products and pooled investment vehicles. Crypto-Asset Accounts that are not capable of holding Reportable Securities are exempt from the trade pre-clearance requirement, 30-day holding period, and quarterly transaction reports provisions of the Code. An Account summary must be provided upon request from PrinAM Compliance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**IV.Principal Fund Accounts**

Principal Fund Accounts **are reportable** and include Principal Funds\* that are open-end mutual funds (including underlying sub-accounts within Principal Variable Life and Variable Annuity contracts) and closed-end investment companies operated as interval funds.

Principal Funds are subject to the initial and annual reporting requirements; however, they are exempt from pre-clearance and the 30--calendar day holding period. Notwithstanding the exemption from the 30-calendar day holding period, trustees, beneficial owners of more than 10%, and certain designated Executive Officers of the Principal Real Asset Fund, Principal Private Credit Fund I, and any other closed end interval fund managed by PrinAM or its affiliates, generally must disgorge, under Section 16 of the Exchange Act, any profit realized by such person from any purchase and sale, or any sale and purchase, of any equity security of such fund (or a security based swap agreement involving such equity security) within any period of less than six (6) months.

*\*Applicable to U.S. Funds*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**V.Individual Retirement Accounts**

Individual Retirement Accounts (IRAs) that are capable of holding Reportable Securities or Reportable Funds **are reportable** and subject to all provisions of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**VI.TreasuryDirect Accounts**

TreasuryDirect Accounts **are exempt** from reporting, pre-clearance and holding period requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**VII.Private Investments**

Private Investments **are reportable** and may only be acquired or sold with prior approval of the Access Person's supervisor and PrinAM Compliance. Pre-approval requests for private investments can be submitted within ACA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**VIII.Former Employer Human Resources (HR) Benefit Plans**

HR Benefit Plans held with former employers **are reportable** and subject to all provisions of the Code if they are capable of holding Reportable Securities (i.e. self-directed brokerage account windows).

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**IX.Principal HR Benefit Plans**

The Principal Select Savings Plan **is exempt** from reporting, pre-clearance and holding period requirements.

The Principal Select Savings Plan's self-directed brokerage account option, Schwab Personal Choice Retirement Account® (PCRA), **is reportable** and subject to all provisions of the Code.

---

| | | | |
|:---|:---|:---|:---|
| **Principal Select Savings Plan 401(k) and Self-Directed Brokerage Option** | **Principal Select Savings Plan 401(k) and Self-Directed Brokerage Option** | **Principal Select Savings Plan 401(k) and Self-Directed Brokerage Option** | **Principal Select Savings Plan 401(k) and Self-Directed Brokerage Option** |
| **Account** | **Accessible Via** | **Reportable** | **Trade Preclearance** |
| Principal Select Savings 401(k) | Principal.com | No | No |
| Schwab Personal Choice Retirement Self-Directed Brokerage Account | Schwab.com | Yes | Yes |

---

Holdings in a Morgan Stanley StockPlan Connect Account that have not vested or exercised **are exempt** from reporting, pre-clearance or holding period requirements. This includes the Principal Employee Stock Purchase Plan (ESPP), Excess Plan, Restricted Stock Units (RSU), Stock Option Awards, Stock Options, Broad-based Options, and Performance Share Awards.

Access Persons have the option to link an E\*Trade Securities brokerage account to the Morgan Stanley StockPlan Connect Account. Once shares have vested or exercised in the Morgan Stanley StockPlan Connect Account, the shares will be swept to the E\*Trade Securities brokerage account.

E\*Trade Securities brokerage accounts **are reportable,** and all provisions of the Code will apply to the account and its holdings, including Principal Financial Group, Inc. stock (PFG stock).

Some Access Persons may be ineligible to open an account at E\*Trade for the purpose of linking to Morgan Stanley or simply elect not to open an E\*Trade account.

---

| | | | |
|:---|:---|:---|:---|
| **Principal Employee Stock Purchase Plan (ESPP), Excess Plan, Restricted Stock Units (RSUs), Stock Option Awards, Broad-based Options, Performance Share Awards** | **Principal Employee Stock Purchase Plan (ESPP), Excess Plan, Restricted Stock Units (RSUs), Stock Option Awards, Broad-based Options, Performance Share Awards** | **Principal Employee Stock Purchase Plan (ESPP), Excess Plan, Restricted Stock Units (RSUs), Stock Option Awards, Broad-based Options, Performance Share Awards** | **Principal Employee Stock Purchase Plan (ESPP), Excess Plan, Restricted Stock Units (RSUs), Stock Option Awards, Broad-based Options, Performance Share Awards** |
| **Account** | **Accessible Via** | **Reportable** | **Trade Preclearance** |
| Morgan Stanley StockPlan Connect Account | Stockplanconnect.<br>MorganStanley.com | No | No |
| E\*Trade Brokerage Account (linked to StockPlan Connect Account) | Etrade.com | Yes | Yes |

---

Access Persons with the High Deductible Health Insurance Plan may be eligible to open a Health Savings Account (HSA) through Optum Bank. Once the HSA reaches a certain designated balance, Access Persons may choose to invest a portion of their HSA dollars.

The digitally managed HSA through Betterment i**s reportable** and subject to all provisions of the Code. Additionally, a copy of the discretionary managed account agreement must be on file with Compliance.

------

The self-managed mutual fund HSA through Optum Bank **is exempt** from reporting, pre-clearance and holding period requirements.

---

| | | | |
|:---|:---|:---|:---|
| **Health Savings Account via Optum Bank** | **Health Savings Account via Optum Bank** | **Health Savings Account via Optum Bank** | **Health Savings Account via Optum Bank** |
| **Account** | **Accessible Via** | **Reportable** | **Trade Preclearance** |
| HSA – ETF portfolio managed by Betterment | MyUHC.com or Betterment.com | Yes | No |
| HSA – self managed mutual fund portfolio | MyUHC.com | No | No |

---

**V.PERSONAL SECURITY TRANSACTIONS**

All personal security transactions must be conducted in a manner consistent with the Standards of Business Conduct outlined in this Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**I.PFG Stock**

**All reporting, pre-clearance, and holding period requirements apply to transactions in PFG stock.** For exceptions related to employee benefit plans, refer to Personal Account Reporting – Principal HR Benefit Plans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**II.Pre-Clearance Approval**

Pre-clearance approval from PrinAM Compliance is required for personal Security transactions prior to executing or entering into any buy or sell transaction. Transactions for which pre-clearance has been denied may not be executed.

Pre-clearance approval:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Is valid for 2 business days (meaning the current day and next business day). If the trade is not executed within 2 business days, the Access Person must submit a new pre-clearance request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Applies to all market and limit orders, good-till-cancel orders, and stop loss orders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Is not required for Exempted Securities or Exempted Transactions. Please refer to those listed below.

Access Persons can submit a pre-clearance request online within ACA, which is available on a secure internet browser while connected to the Principal Network. The link to access ACA can be found here. Should an Access Person not have access to ACA, the person may call or email pre-clearance requests to PrinAM Compliance either directly or through use of a pre-approved delegate or proxy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**III.Restricted and Prohibited Activities and Transactions** 

The following personal Securities activities and transactions are restricted and prohibited; accordingly, you may not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Execute a Security transaction without pre-clearance approval, if required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Acquire any Security in an initial public offering (IPO).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Sell short any Security.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Participate in Investment Clubs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Sell a Security in less than 30-calendar days after purchase date for a profit (T+30).

oThe 30-calendar day holding period does not apply to sales at a loss.

oAny sales at a loss cannot be re-established (buy back) in the next 30- calendar days.

oIf sold at a profit prior to the expiration of the 30-calendar day period, the transaction will be a Code violation, and any profits realized may be required to be disgorged to a charitable organization designated by the Firm.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Buy a Security at a lower price in less than 30-calendar days after sale date (buy back).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Purchase or write derivatives (such as stock options, futures on indices and options and futures on commodity, credit, currency, equity, interest rate and volatility) if the expiration date is less than 30-calendar days from the purchase date.

oNo derivative position may be closed less than 30-calendar days from the date it is established.

oThis does not apply to stock options that are part of a hedged position where the underlying stock is held long.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Engage in financial spread betting and contracts of difference. These types of derivative contracts involve taking or placing a bet on the price movement of a security, index, currency, commodity or other financial product. This would include wagering, gambling or placing debts on the price movements of securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Loan money to individuals or entities as an investment or business transaction. Note: this does not apply to personal loans to family.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Purchase PFG stock on margin, short sell PFG stock, or trade PFG put or call options, or other instruments noted in the Principal Insider Trading Policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Purchase or sell a Security at all, when so determined by the Chief Compliance Officer, in the CCO's discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**IV.Exempt Securities**

Securities listed below are exempt from the reporting, pre-clearance, and holding period requirements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any Security directly issued or guaranteed as to principal or interest by the United States. (e.g. Cash Management Bills, Treasury Bills, Notes and Bonds, and those Treasury Securities designated by the U.S. Department of Treasury as eligible to participate in the STRIPS (Separate Trading of Registered Interest and Principal of Securities))

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• G7 bonds, issued by the governments of Canada, France, Germany, Italy, Japan, or the United Kingdom

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Direct Obligations of the Government of India such as Treasury Bills and Government Securities (G-Secs) Banker's acceptances

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Bank certificates of deposit (not brokered CDs)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Commercial paper

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• High quality short-term debt instruments, including repurchase agreements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Money market funds

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Open-end mutual funds with outside fund companies that are not advised or sub-advised by the Firm or its affiliates. U.S. open-end mutual funds always have a five-letter symbol ending in an "X."

oThis exemption applies to funds used in 529 Plans that are registered as municipal securities and only offer open-end mutual funds or securities designed to mirror the structure of open-end mutual funds as underlying investment options.

oThis exemption does not apply to ETFs, I-Shares (i.e. BlackRock) and closed-end funds. All ETF transactions must be pre-cleared and are subject to the Personal Securities Transactions requirements listed above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Shares issued by unit investment trusts (UIT) that are invested exclusively in one or more open-end mutual funds, none of which are advised or sub-advised by the Firm or its affiliates.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**V.Exempt Transactions**

The transactions listed below are exempt from the pre-clearance requirement only. All other reporting and holding period requirements apply.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Transactions in Reportable Funds.\*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Transactions in Principal Funds that are open-ended mutual funds (including underlying subaccounts of Principal Variable Life and Variable Annuity Contracts).\*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Securities acquired through an employer-sponsored automatic payroll deduction plan. However, any sale transaction must be pre-cleared and reported.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Reinvestment of dividends under a dividend reinvestment plan or in an automatic investment plan for purchase of Securities already owned and pre-cleared. Note, any sale transaction must be pre-cleared as those are not part of a plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Transactions effected by an issuer pro rata of a class of Securities already owned, such as stock splits, stock dividends or the exercise of rights, warrants or tender offers (e.g. corporate actions).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Transactions which are non-volitional on the part of the Access Person. Transactions in an account over which the Access Person has no direct or indirect influence or control (e.g. assignment of management discretion in writing to another party).

*\* Reportable Funds and Principal Funds are not subject to the 30-calendar day holding period. Notwithstanding this exemption from the 30-calendar day holding period, trustees, beneficial owners of more than 10%, and certain designated Executive Officers of the Principal Real Asset Fund, Principal Private Credit Fund I, and any other closed end interval fund managed by* PrinAM *or its affiliates, generally must disgorge, under Section 16 of the Exchange Act, any profit realized by such person from any purchase and sale, or any sale and purchase, of any equity security of such fund (or a security based swap agreement involving such equity security) within any period of less than six (6) months.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**VI.Special Rules for Portfolio Managers and Investment Personnel** 

A Portfolio Manager's personal Security trading shall have no effect on Client portfolio decisions or ability to trade.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• No Portfolio Manager may personally transact Securities that are held or traded in actively managed portfolios for which they are responsible.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Portfolio Managers must obtain pre-clearance approval to trade Reportable Funds and Principal Funds (including open-end mutual funds, closed-end investment companies operated as interval funds, and ETFs) they manage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain individuals with roles that have real-time trading data of portfolios may not personally purchase or sell a Security or its underlying securities within 7 calendar days before and after a portfolio has transacted in the same security. This blackout period is a total of 15 calendar days, which includes the full 7 calendar days before, after, and including the Client portfolio trade date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain investment personnel who may not have real-time trading data of portfolios but have potential insight or knowledge of trading within client portfolios may not personally purchase or sell a Security that is held or traded in an actively managed portfolio in which they have insight or knowledge for a total of 15 calendar days, which includes the full 7 calendar days before, after, and including the Client portfolio trade date.

------

**VI.REPORTING AND CERTIFICATION REQUIREMENTS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**I.Initial and Annual Certification**

Within 10 calendar days of hire or identification, all Access Persons must initially certify and acknowledge they have read and understand the Code and the Insider Trading Policy and its applicability to them, and that they will comply with the requirements. Thereafter, annual certification will be required no later than 30-calendar days after each calendar year-end. PrinAM Compliance will ensure each Access Person receives a copy of the Code and any material amendments thereto, which are available on Principal Passport.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**II.Holdings and Accounts Reports**

The Initial Holdings and Accounts report must be submitted within 10 calendar days after becoming an Access Person, with the Reportable Securities information being current as of a date no more than 45-calendar days prior to the date of becoming an Access Person. Thereafter, Annual Holdings and Accounts reports are required no later than 30-calendar days after each calendar year-end with information being no more than 45-calendar days prior to the report being submitted.

The Security holdings report must contain the following information:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Security name, number of shares, exchange ticker symbol/ CUSIP/ISIN and principal amount;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Name of the firm at which Securities are held; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Date which the Access Person submits the report.

The Quarterly Transactions report must be submitted no later than 30-calendar days after the end of each calendar quarter. This report will list all Security transactions during the previous calendar quarter in Reportable Securities, which excludes exempted transactions and exempted securities set forth above.

The Quarterly Transactions report must contain the following information:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Date of the transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Security name, number of shares, exchange ticker symbol/CUSIP/ISIN and principal amount of each Security executed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Nature of the transaction (e.g., buy or sell);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Price at which the transaction was effected;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Name of the firm through which the transaction was effected; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Date which the Access Person submits the report.

Upon reporting of Securities and Accounts, Compliance will request duplicate copies of Account statements and transaction confirmations from the investment firm (commonly referred to as broker) either electronically or paper. Ex-U.S. and other Account statements and transaction reporting may need to be obtained from the Access Person if the investment firm will not provide.

------

**VII.FAILURE TO REPORT OR COMPLY**

Upon discovering a violation of the Code, PrinAM Compliance will work with the Access Person's leader to recommend a sanction as determined appropriate, and the leader will then work with appropriate persons to impose such sanction. Sanctions may include a verbal warning, retraining session, written warning, disgorgement of profits, suspension from personal trading, or other sanctions, up to and including suspension or termination of employment.

Access Persons must report any violations of the Code or applicable laws promptly to the Chief Compliance Officer (or designee). This includes self-reporting if you commit a violation. Anyone who, in good faith, raises an issue regarding a possible violation of law, regulation, or company policy, or any suspected illegal or unethical behavior, will be protected from retaliation. Access Persons can also report violations or suspected violations to the Ethics Hotline at 1-888-858-4433, through the Principal Unethical or Fraudulent Activity Reporting Form, or through the Principal Whistleblower policy, which is available on Principal Passport.

The Chief Compliance Officer has the authority to interpret the Code and grant exceptions when appropriate. PrinAM Compliance will maintain a system for the regular review of all reports of personal Reportable Securities transactions and holdings under this Code.

Annually, individuals charged with the responsibility for monitoring compliance with this Code will prepare a written report to the Board of Directors that, at a minimum, will include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certification that the Firm has adopted procedures reasonably necessary to prevent Access Persons from violating the Code;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Identification of material violations and sanctions imposed in response to those violations during the past year;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Description of issues that arose during the previous year under the Code; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Recommendations, if any, as to changes in existing restrictions or procedures based upon experience with this Code, evolving industry practices, and changes and developments in applicable laws or regulations.

**VIII.CONTACTS**

---

| | | |
|:---|:---|:---|
| **NAME** | **CONTACT** | **CONTACT** |
| Kim Keating | (515) 878-0961 | <u>Keating.Kim@Principal.com</u>  |
| Monica Mencia | (515) 878-0724 | <u>Mencia.Monica@Principal.com</u> |
| Sue Harrington | (515) 878-1071 | <u>Harrington.Sue@Principal.com</u> |
| Justin Lange<br>Chief Compliance Officer | (515) 878-6206 | <u>Lange.Justin@Principal.com</u> |

---

**IX.DEFINITIONS**

**Access Person** means any officer, director, employee or other person of the Firm, as well other any other person, who (i) has access to nonpublic information regarding any client's purchase or sale of Securities; (ii) has access to nonpublic information regarding the portfolio holdings of any client or affiliated mutual funds; or (iii) is involved in making Security recommendations to clients or has access to such recommendations that are nonpublic. This includes positions held by consultants, contractors, temporary employees, interns, co-op students and Principal HR and legal staff supporting the Firm. All Firm employees are deemed to be Access Persons unless otherwise determined by Compliance to be specifically exempted as an **Exempt Access Person**.

------

**Beneficial Ownership** is interpreted in the same manner as it would be under Rule 16a-1(a)(2) under the Exchange Act when determining whether a person is a beneficial owner of a Security. For example, the term Beneficial Ownership shall encompass: (1) Securities in the person's own Accounts; (2) Securities owned by members of the person's immediate family\*, domestic partner\*\*, or family members of domestic partners sharing the same household; (3) A person's proportionate interest in the portfolio of Securities held by a partnership, trust, corporation or other arrangements; and (4) Securities a person might acquire or dispose of through the exercise or conversion of any derivative Security (e.g. an option, whether presently exercisable or not).

***\*Immediate family*** shall mean any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive relationships.

***\*\*Domestic Partner*** *shall mean:*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• unmarried opposite sex or same sex life partner provided:

-the Access Person and the partner are at least 18 years of age.

-the Access Person and the partner are not married under applicable State law.

-the partner is not a blood relative of the Access Person.

-the partner has lived together with the Access Person for at least six consecutive months.

-the partner and the Access Person are each other's sole domestic partner indefinitely; and

-the partner and the Access Person are jointly responsible for each other's welfare; or

-same sex partner with whom the Access Person has entered into a civil union under applicable State law.

**Covered Account** (**Account**) means any investment account or any other type of account that holds or is capable of holding Securities. The Account's tax status has no impact on whether an account qualifies as an Account.

**Crypto-Asset** means an investment in cryptocurrency (e.g. Bitcoin, Ethereum, Dogecoin, Shiba INU), initial coin offering (ICO), distributed ledger technology, blockchain and/or any related products and pooled investment vehicles.

**Direct or Indirect Influence or Control** means the ability to influence or control, directly or indirectly, specific investment decisions within an investment account, including (i) suggesting purchases or sales of specific investments to a trustee or third-party discretionary manager of an account, (ii) directing purchases or sales of specific investments in an account, and (iii) consulting with the trustee or third-party discretionary manager of an account as to the purchase, sale or status of specific investments to be made in the account. Account statements must be provided up on request from PrinAM Compliance.

**Exempt Access Person** refers to specific personnel deemed to be exempt from the personal trading provisions of the Code and Compliance Manual, specifically, if a Board Director does not have (i) access to nonpublic information regarding any client's purchase or sale of Securities; (ii) access to nonpublic information regarding the portfolio holdings of any client or affiliated mutual funds; and/or (iii) involvement in making Security recommendations to clients or have access to such recommendations that are nonpublic; the CCO may deem such person to be an Exempt Access Person. The CCO (or designee) will notify any Exempt Access Person of such designation. Exempt Access Person are relieved from personal trading provisions of the Code and Compliance Manual. PrinAM Compliance will maintain a list of any Exempt Access Persons and will review such list on an annual (or otherwise more frequent basis).

------

**Federal Securities Laws** refers to any one or more of the laws that govern the securities industry, such as the: Securities Act of 1933 (**Securities Act**), Securities Exchange Act of 1934 (**Exchange Act**), Trust Indenture Act of 1939 (**Indenture Act**), Investment Company Act of 1940 (**40 Act**), Investment Advisers Act of 1940 (**Advisers Act**), Sarbanes-Oxley Act of 2002 (**SOX**), Title V of the Gramm-Leach-Bliley Act (**GLB**), the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (**Dodd-Frank**), Jumpstart Our Business Startups Act of 2012 (**JOBS Act**), and any rules and regulations adopted by the U.S. Securities and Exchange Commission (**SEC**) under any of these statutes, as well as the Bank Secrecy Act (**BSA**, as it applies to funds and investment advisers), and any rules and regulations adopted thereunder by the SEC or the U.S. Department of the Treasury.

**Investment Club** means a group of individuals who combine their funds for the purpose of making investments and/or advancing their investment education. Participation in Investment Clubs is prohibited under this Code.

**Investment Personnel** means the Portfolio Managers, Traders, Charles River Trade Support staff, Compliance Department staff, any individual with authorization to send/direct a trade on client portfolios, or any individual at the discretion of the Chief Compliance Officer.

**Loans** mean either secured or unsecured arrangements (documented or undocumented) where an individual or entity finances a sum of money that must be repaid (with or without interest) at some point in the future. For purposed of the Code, loans to family members are excluded from this definition.

**Portfolio Manager** means an individual entrusted with the direct responsibility and authority to make investment decisions for or affecting the portfolios of clients.

**Private Investments** generally, private investments involve the sale of Securities to a relatively small number of qualified investors in a private transaction, rather than through an exchange or over-the-counter market. Private investments may not have to be registered with the SEC and, in many cases, detailed financial information is not disclosed. Examples include, but are not limited to, limited partnerships, hedge funds and private equity transactions.

**Reportable Fund** means (i) any fund for which the Firm serves as an investment advisor, as defined by the 40 Act; or (ii) any fund whose investment advisor or principal underwriter controls the Firm, is controlled by the Firm, or is in common control with the Firm.

**Reportable Security**, or **Security** shall have the meaning of Security as set forth in Section 202(a)(18) of the Advisers Act and Section 2(a)(36) of the 40 Act. Security means any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, brokered certificate of deposit, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guaranty of, or warrant or right to subscribe to or purchase any of the foregoing. General types (although not all inclusive) include fixed income securities, such as bonds and notes; equity securities, such as stocks and exchange-traded funds (ETFs); derivatives, such as options and futures; unit investment trusts (UITs); and private investments.

------

**Addendum A**

**CODE OF ETHICS**

**FIRM ENTITIES**

---

| | |
|:---|:---|
| Together, the **Firm** | Together, the **Firm** |
| Together, the **Advisers** | Principal Global Investors, LLC (**PGI**) |
| Together, the **Advisers** | Principal Global Investors (Australia) Limited (**PGIA**) |
| Together, the **Advisers** | Principal Global Investors (Dubai) |
| Together, the **Advisers** | Principal Global Investors (Europe) Limited (**PGIE**) |
| Together, the **Advisers** | Principal Global Investors (Japan) Limited (**PGIJ**) |
| Together, the **Advisers** | Principal Global Investors (Singapore) Limited (**PGIS**) |
| Together, the **Advisers** | Principal Global Investors (Ireland) and PGI (EU) |
| Together, the **Advisers** | Principal Real Estate Investors, LLC (**PrinRE**) |
| Together, the **Advisers** | Principal Real Estate Europe Limited (**PrinRE EU**) |
|  | Principal Asset Management Company (Asia) Limited (**PAM Asia**) |
| Together, the **Principal Funds** | Principal Funds, Inc. |
| Together, the **Principal Funds** | Principal Variable Contracts Funds, Inc. |
| Together, the **Principal Funds** | Principal Exchange Traded Funds |
| Together, the **Principal Funds** | Principal Real Asset Fund |
| Together, the **Principal Funds** | Principal Private Credit Fund |
| Together, the **Principal Funds** | (and any other continuously offered registered closed-end management investment company that may be organized in the future for which PGI or any entity controlling, controlled by, or under common control with PGI, or any successor in interest to any such entity, acts as investment adviser and which operates as an interval fund pursuant to Rule 23c-3 under the 40 Act or provides periodic liquidity with respect to its Shares pursuant to Rule 13e-4 under the Exchange Act. |
| **PFD** | Principal Funds Distributor, Inc. (**PFD**) |

---

------

**Addendum B**

**CODE OF ETHICS**

**PRINCIPAL FUNDS ACCESS PERSON PROVISIONS**

The following provisions shall be substituted into the Code, where applicable, for the Principal Funds.

**Principal Funds Access Person** 

Any individual identified as an officer or director of the Principal Funds or PGI; an officer or director of PFD; or an officer or director of any company controlling PGI who makes, participates in, or obtains information regarding the purchase or sale of Principal Funds Securities in such individual's regular functions or duties or whose functions relate to the recommendations of such purchases or sales; any employee, temporary employee and contract employee of the Principal Funds or the Principal Funds' Adviser who, in connection with such individual's regular functions or duties, has access to certain nonpublic information concerning the Principal Funds' purchase or sale of Securities or portfolio holdings or who is involved in making Securities recommendations to a Fund.

**Principal Funds Special Rules Applicable to Independent Directors/Trustees** 

Under Rule 17j-1 of the 40 Act, an Access Person who is an Independent Director/Trustee of the Principal Funds and who would be required to make a report solely by reason of being a Principal Funds Director/Trustee need not make an initial holdings or an annual holdings report. In addition, an Independent Director/Trustee need not provide a quarterly transaction report unless the Independent Director/Trustee knew, or in the ordinary course of fulfilling such individual's official duties as a Principal Funds Director/Trustee, should have known, that during the 15-day period immediately before or after the Independent Director's/Trustee's transaction in a Security, a Principal Fund purchased or sold the Security, or the Principal Funds' Adviser or sub-adviser considered purchasing or selling the Security.

With respect to the Interval Fund(s), the trustees, beneficial owners of more than 10%, and certain designated Executive Officers of the Interval Fund(s), have certain reporting obligations regarding ownership of Interval Fund(s) shares under Section 16 of the Exchange Act. Such reporting will occur outside of the administration of this Code.

**Principal Funds Administration** 

The Principal Funds rely upon PrinAM Compliance to administer the Code. It is the requirement of Principal Funds that PrinAM Compliance report material violations of the Code by Principal Funds Access Persons to the Principal Funds Chief Compliance Officer (or his or her designee).

No less than annually, Principal Funds Compliance will prepare a written report to the Principal Funds Board of Directors that, at a minimum, will include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A certification that the Principal Funds have adopted procedures reasonably necessary to prevent Access Persons from violating the Code; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A description of issues that arose under the Code since the last report to the Board, including information about material violations and sanctions imposed in response to those violations.

------

**Addendum C**

**CODE OF ETHICS**

**PrinRE ACCESS PERSON PROVISIONS**

The following provision shall be added to the Personal Account Reporting section of the Code for PrinRE and shall apply to all PrinRE personnel who are not associated persons of a broker-dealer. For associated persons, real estate investment property must be reported under the outside business activities guidelines.

**Real Estate Investment Property** 

Real Estate Investment Property is reportable and may only be acquired or sold with prior approval of the PrinRE Access Person's supervisor and Compliance. Pre-approval request for real estate investment property can be submitted within ACA.

The following property types are exempt from reporting and pre-approval:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Single-family residential property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Vacation residential property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Multi-family residential complex property with less than 20 units (examples include apartments and condos); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Farmland property zoned and operated as agricultural.

------

**Addendum D**

**CODE OF ETHICS**

**PrinRE EU ACCESS PERSON PROVISIONS**

The following provision shall be added to the Personal Account Reporting section of the Code for PrinRE EU.

PrinRE EU has adopted this Advisers Code in its entirety. Although this Code is U.S. centric, PrinRE EU staff must adhere to its provisions. References to U.S. federal and state law and regulations will apply in PrinRE EU where relevant but, where not relevant, PrinRE EU staff should apply European, local U.K./German/French law and regulations such as MiFID II and AIFMD.

**Real Estate Investment Property** 

Real Estate Investment Property is reportable and may only be acquired or sold with prior approval of the PrinRE EU Access Person's supervisor and Compliance. Pre-approval request for real estate investment property can be submitted within ACA.

The following property types are exempt from reporting and pre-approval:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Single-family residential property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Vacation residential property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Multi-family residential complex property with less than 20 units (examples include apartments); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Farmland property zoned and operated as agricultural.

------

**Addendum E**

**CODE OF ETHICS**

**PGIS ACCESS PERSON PROVISIONS**

The following provision shall be added to the Personal Security Transactions section of the Code for PGIS.

Exempted Securities listed below are exempt from the reporting, pre-clearance and holding period requirements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Singapore Savings Bond

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Singapore Government Securities (SGS) Bonds

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Singapore Treasury Bills (SG T-bills)

## Ex-99.(P)(3)

**T. ROWE PRICE GROUP, INC. AND ITS SUBSIDIARIES**

**T. ROWE PRICE MUTUAL FUNDS**

**T. ROWE PRICE EXCHANGE-TRADED FUNDS**

**CODE OF ETHICS AND PERSONAL TRANSACTIONS POLICY**

**July 1, 2025**

**Table of Contents**

---

| | | |
|:---|:---|:---|
| **I.** | **INTRODUCTION** | **2** |
| **II.** | **STANDARDS OF BUSINESS CONDUCT** | **3** |
| **III.** | **REPORTING REQUIREMENTS** | **5** |
| A. | Initial Disclosure of Existing Accounts | 5 |
| B. | New Accounts | 5 |
| C. | Transaction Reporting | 5 |
| D. | Exceptions to the Reporting Requirements | 6 |
| **IV.** | **PRE-CLEARANCE AND HOLDING PERIOD REQUIREMENTS** | **6** |
| A. | Pre-clearance Requirements for all Associates | 6 |
| B. | Pre-clearance Requirements for Access Persons | 7 |
| C. | Holding Period Requirements | 7 |
| D. | Exceptions to the Pre-Clearance Requirement | 7 |
| **V.** | **OTHER PROVISIONS RELATING TO PERSONAL TRANSACTIONS** | **8** |
| A. | Limit Orders | 8 |
| B. | Transacting in TRPG Securities | 8 |
| C. | Transacting in ETFs | 8 |
| D. | Initial Public Offerings ("IPOs") | 9 |
| E. | Options and Futures | 9 |
| F. | Participation in Investment Clubs | 9 |
| **VI.** | **PERSONAL TRANSACTIONS RESTRICTIONS** | **10** |
| **VII.** | **CERTIFICATION REQUIREMENTS** | **10** |
| A. | Initial Holdings | 10 |
| B. | Annual Compliance Certification | 11 |
| C. | Reporting of One – Half of One Percent Ownership | 11 |
| **VIII.** | **ROLES AND RESPONSIBILITIES** | **12** |
| **IX.** | **VIOLATIONS AND SANCTIONS** | **12** |
| **X.** | **EXCEPTIONS AND INTERPRETATIONS** | **13** |
| **XI.** | **DEFINED TERMS** | **14** |
| **Exhibit A: Provisions Applicable to Independent Directors** | **Exhibit A: Provisions Applicable to Independent Directors** | **17** |
| **Exhibit B: Pre-clearance and Reporting Matrix** | **Exhibit B: Pre-clearance and Reporting Matrix** | **22** |

---

------

**T. ROWE RICE GROUP, INC. AND ITS SUBSIDIARIES**

**T. ROWE PRICE MUTUAL FUNDS**

**T. ROWE PRICE EXCHANGE-TRADED FUNDS**

**CODE OF ETHICS AND PERSONAL TRANSACTIONS POLICY**

**I.<u>INTRODUCTION</u>**

This Code of Ethics and Personal Transactions Policy (the "Policy") sets forth the standards of business conduct expected of all:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• officers, directors and employees of T. Rowe Price Group, Inc. ("TRPG") and certain of its subsidiaries<sup>1</sup> (collectively, "T. Rowe Price") and their Family Members;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• officers, directors and employees of the Price Funds, the SICAVs, or the Cayman Funds (each as defined below); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• contingent workers, agency temporary workers, contractors, consultants, and any other personnel who have been notified that they are subject to this Policy

(collectively referred to as "Associates") in connection with their personal securities transactions.

The Policy is designed to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Reflect the fiduciary duty of the firm to its clients;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Address compliance with laws, rules, and regulations applicable to T. Rowe Price's business, including, but not limited to Rule 204A-1 under the Investment Advisers Act ("Rule 204A-1") and Rule 17j-1 under the Investment Company Act of 1940 ("Rule 17j- 1");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Prevent regulatory, business and ethical conflicts as they relate to personal transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Minimize the potential of a transaction or circumstance occurring that a regulatory agency would view as inconsistent with T. Rowe Price's role as a fiduciary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Avoid situations in which it might appear that any officer, director, employee or other personnel of T. Rowe Price or the Price Funds had benefited personally at the expense of a client or fund shareholder or taken inappropriate advantage of their fiduciary position; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Detect and prevent the misuse of material, non-public information.

All Associates must comply with the Policy. Certain Associates will be notified by Code Compliance that they have been designated as "Access Persons" and are subject to more restrictive pre-clearance and reporting requirements.

"Access Persons" are defined as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any officer or director of any of the Price Advisers and the Price Funds (except the Independent Directors of the Price Funds);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any person associated with T. Rowe Price who, in connection with their regular functions or duties: (i) makes, participates in, obtains or has access to non-public information regarding the purchase or sale of securities by any Price Adviser client; (ii) has access to non-public information regarding the securities holdings of any Price Adviser client; or (iii) makes recommendations with respect to the purchases or sales of securities for a Price Adviser client; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any other person classified as such by Code Compliance.

_________________

<sup>1&nbsp;&nbsp;&nbsp;&nbsp;</sup>For the avoidance of doubt, this Policy does not apply to Oak Hill Advisors, L.P and its subsidiaries.

------

The Policy has been adopted by T. Rowe Price and its subsidiaries<sup>2</sup>, the Price Funds, T. Rowe Price UK Limited (TRP UK"), the SICAVs, and the Cayman Funds.

The independent directors of TRPG, TRP UK , T. Rowe Price Funds SICAV ("SICAVI"), T. Rowe Price Funds Series II SICAV ("SICAVII"), Select Investments Series III SICAV ("SICAVIII"),

T. Rowe Price Funds B SICAV ("SICAVB" and together with the SICAVI, SICAVII, SICAVIII and SICAVB, the "SICAVs"), T. Rowe Price Macro and Absolute Return Strategies Master Fund Ltd and T. Rowe Price Macro and Absolute Return Strategies Offshore Fund Ltd (together the "Cayman Funds") and Price Funds are not subject to all the requirements of the Policy. The requirements of the Policy applicable to independent directors are set forth in <u>Exhibit A.</u>

This Policy and each Associate's adherence to it is meant to satisfy T. Rowe Price's requirements under Rule 204A-1 and Rule 17j-1.

Certain defined terms used in the Policy are set forth in "*Defined Terms."*

**II.<u>STANDARDS OF BUSINESS CONDUCT</u>**

T. Rowe Price has established a *Code of Conduct* that sets standards expected of all Associates and provides the framework for conducting business in a fair and ethical manner. Consistent with the *Code of Conduct*, T. Rowe Price and each Associate have a fiduciary duty to put client interests first and to always act in the clients' best interests. Associates must comply with applicable legal requirements, securities laws, the Code of Conduct and related policies and procedures.

**Conflicts of Interest**

The *Code of Conduct* states that conflicts of interest may arise between clients, between clients and T. Rowe Price, between clients and Associates, and among T. Rowe Price's own entities or business divisions. T. Rowe Price takes all reasonable steps to identify and manage conflicts. It is the responsibility of each Associate to disclose all material conflicts and to act in a manner consistent with this Policy. Conflicts or potential conflicts of interest involving an Associate's behavior may arise through, among other activities, an Associate's personal securities transactions, outside business activities, political contributions and activities and the exchange of gifts and business entertainment.

*Personal securities transactions.* An Associate's personal securities transactions may present an actual, potential or apparent conflict or other risk that could harm T. Rowe Price, its shareholders or its clients. For T. Rowe Price to identify and manage these conflicts and risks, Associates must disclose their personal brokerage accounts and holdings, disclose and receive approval for any trading accounts subject to this Policy and conduct approved securities transactions in accordance with the requirements of this Policy.

_________________

<sup>2&nbsp;&nbsp;&nbsp;&nbsp;</sup>For the avoidance of doubt, this Policy does not apply to Oak Hill Advisors, L.P and its subsidiaries.

------

Associates must not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Improperly benefit personally by causing a client to act, or fail to act, in making investment decisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Profit, or cause others to profit, based on their knowledge of completed or contemplated client transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Transact on the basis on material, non-public (inside) information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Engage in personal securities transactions that are in conflict with the interests of clients, the parameters set by the Policy, or the restrictions imposed by T. Rowe Price restricted lists.

T. Rowe Price maintains lists of issuers for which a Price Adviser or an Associate may be in possession of material, non-public information (the "Restricted Lists"). When an issuer is listed on a Restricted List, personal trading by Access Persons is prohibited.

*Outside business activities.* Associates are expected to put their responsibilities at T. Rowe Price ahead of any other personal business opportunities or second jobs and must avoid any activities, relationships or situations that might conflict with, or appear to conflict with, their duties on behalf of T. Rowe Price. When an Associate is engaged in an approved outside business activity, they must be vigilant about any changes in the arrangement that may present a real or perceived conflict of interest with T. Rowe Price. Refer to the *Global Outside Business Activities Policy* for more information.

*Political contributions and activities.* Associates must obtain prior clearance for their political contributions and activities in support of candidates for political office in the U.S. Political contributions and activities undertaken by Associates must always be lawful and consistent with

T. Rowe Price and business unit policies. Associates may not coordinate or solicit third parties to make a contribution or payment to any candidate, officeholder, political party, political action committee, political organization or bond ballot campaign in the U.S. Furthermore, Associates may not do anything indirectly that, if done directly, would violate T. Rowe Price policies or applicable regulation. Refer to the *Global Political Contributions and Activities Policy* for more information.

*Gifts and business entertainment.* Associates may not offer, give, provide, or accept any gift or business entertainment unless such gift or entertainment:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Is reasonable and customary under the circumstances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Is not lavish in value, unique in nature, or excessive in frequency;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Cannot be construed as a bribe, payoff, or kickback to obtain or retain business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Is an appropriate reimbursable business expense; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Does not violate any applicable law or regulation.

Refer to the *Global Gifts and Business Entertainment Policy* for more information.

Associates must contact Code Compliance for guidance if they believe that a perceived or actual conflict arises under any of the activities described above or otherwise.

------

**III.<u>REPORTING REQUIREMENTS</u>**

Securities accounts are generally defined as accounts that satisfy one of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Associate is a direct or Beneficial Owner of the account; OR

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Associate Controls or directs securities trading for another person or entity, even if they are not the Beneficial Owner of the account;

**AND** invest in, or have the ability to invest in, any of the following securities:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Individual equity securities, including ETFs, and derivatives of these securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Fixed income securities and derivatives of these securities; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Reportable Funds.

**A.Initial Disclosure of Existing Accounts**

All Associates must disclose their securities accounts and the securities accounts of their Family Members (including Fully Discretionary Accounts and any securities accounts holding TRPG securities) maintained with any broker, dealer, investment adviser, bank or other financial institution via myTRPcompliance. Such disclosure must take place within <u>ten calendar days</u> of becoming subject to the Policy, opening or discovering a reportable account.

**B.New Accounts**

All Associates must obtain prior approval via myTRPcompliance for all new non-T. Rowe Price securities accounts opened while they are associated with the firm. Associates in the U.S. and the U.K. may only open new securities accounts with financial institutions that agree to provide Code Compliance with an automated data feed of the transactions effected in the account (the Approved Broker List). All Associates opening a new securities account with a broker-dealer must inform such firm of their association with a T. Rowe Price-affiliated broker-dealer.

Securities held in securities accounts are generally subject to reporting and <u>may</u> require pre- clearance. Refer to "*Reporting Requirements"* and "*Pre-clearance and Holding Period Requirements"* for details. Code Compliance may, in certain circumstances, grant an exception to the requirements described above. Refer to *"Exceptions and Interpretations"* for more information.

**C.Transaction Reporting**

All Associates must request broker-dealers, investment advisers, banks, or other financial institutions executing transactions in securities in the Associate's securities accounts to provide:

(i) a duplicate trade confirmation with respect to each transaction in a security; and (ii) a copy of all periodic account statements.

<u>If the executing firm provides a trade confirmation directly to Code Compliance via an established</u> <u>automated data feed, no further reporting is needed.</u>

If the broker is unable to satisfy transaction reporting through an automated data feed or by delivery of a paper copy of trade confirmations and statements, Associates are required to enter transaction details in myTRPcompliance (as prescribed in Rule 17j-1(d)(1)(ii)) within <u>10 calendar days</u> after the transaction occurred.

------

A transaction in a Reportable Fund, a spousal payroll deduction plan or a stock split or similar acquisition or disposition must be reported within <u>30 calendar days</u> after the end of the calendar quarter in which the transaction occurred

**D.Exceptions to the Reporting Requirements**

***Robo Adviser Accounts****.* Accounts held through a robo-adviser platform that invest solely in third party collective investment vehicles that are not advised by T. Rowe Price (such as non-Price ETFs) do not require approval or reporting to Code Compliance. Transactions effected in such accounts do not need to be reported. Questions on whether an account is classified as a robo- adviser should be directed to Code Compliance

***Fully Discretionary Accounts.*** A Fully Discretionary Account is a securities account for which an Associate has completely relinquished decision-making authority to a professional money manager (who is not a Family Member or not otherwise subject to this Policy) and over which the Associate has no direct or indirect influence or Control. When disclosing Fully Discretionary Accounts, Associates must provide Code Compliance with a copy of the investment management agreement (or equivalent).

**IV.<u>PRE-CLEARANCE AND HOLDING PERIOD REQUIREMENTS</u>**

All Associates must obtain pre-clearance via myTRPcompliance when transacting in TRPG securities. Associates who have been designated as Access Persons must also obtain pre-clearance for other securities transactions, as described in further detail below.

Associates will receive a response via myTRPcompliance indicating whether the request was approved or denied and must refrain from executing the transaction until such response is obtained.

Pre-clearance approval is valid for the day it is received and the following business day (measured from the first business day in the requesting Associate's time zone). Pre- clearance approval for Private Placements is valid for 90 calendar days.

**A.Pre-clearance Requirements for all Associates**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All Associates must request pre-clearance via myTRPcompliance before executing a transaction to sell or transfer TRPG securities (TRPG stock ticker: TROW) from their ESPP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All Associates must request pre-clearance via myTRPcompliance before executing a transaction to purchase, sell, or gift TRPG securities outside of the ESPP.

**B.Pre-clearance Requirements for Access Persons**

Access Persons must request pre-clearance via myTRPcompliance <u>before</u> executing a transaction in any individual stocks, bonds, Private Placements and derivatives of these securities, and Price ETFs for which the Access Person is a Beneficial Owner. Refer to <u>Exhibit B</u> for additional pre- clearance requirements.

------

**C.Pre-clearance for Private Placements:**

Access Persons and FINRA-registered representatives must obtain pre-clearance when investing in a Private Placement, including the purchase of limited partnership interests. Along with the Private Placement offering document, the Access Person or FINRA-registered representative must provide:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The name, location and a brief description of the private issuer/company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The amount of investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The desired date of investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If applicable, the percentage of the Access Person's ownership in the private issuer/company after investment; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The source (name and relationship to Access Person) that introduced the investment opportunity to the Access Person.

An Access Person or FINRA-registered representative who has invested in a Private Placement and who later anticipates participating in a Price Adviser's investment decision regarding the purchase or sale of securities of the issuer of that Private Placement on behalf of any Price Adviser client, must immediately disclose their investment to the Chairperson of the Ethics Committee, or their designee and to the Chairperson of the appropriate Investments steering committee.

**D.Holding Period Requirements**

A 60-day holding period applies to securities and transactions requiring pre-clearance. Access Persons are not permitted to: (i) sell shares of an issuer if they have purchased shares of the same issuer for a lesser price during the previous 60 calendar days; or (ii) buy shares to cover a short position when the short position was entered in the previous 60 calendar days, if covering the position for a lesser price. Access Persons must check their compliance with the holding period requirement **before** entering into a transaction.

***Holding Period for Associates in Japan.*** Securities acquired by employees of T. Rowe Price Japan, Inc. are subject to a holding period of six months. Refer to *TRP Japan Compliance Manual* for more information.

***Holding Period for the Price Funds.*** Associates must comply with the provisions of the holding restrictions set forth in the prospectus for the applicable Price Fund.

**E.Exceptions to the Pre-Clearance Requirement**

***Fully Discretionary Accounts.*** Transactions in securities held in Fully Discretionary Accounts are not subject to the pre- clearance requirement, except transactions involving TRPG securities, short sales and Private Placements.

------

Refer to <u>Exhibit B</u> for other exceptions to the pre-clearance requirement.

**V.<u>OTHER PROVISIONS RELATING TO PERSONAL TRANSACTIONS</u>**

**A.Limit Orders**

While limit orders are permitted, Access Persons must be careful using "good until cancelled" orders, keeping in mind that pre-clearance is valid for the day it is received and the following business day. Use of "day" limit orders are encouraged.

**B.Transacting in TRPG Securities**

The following chart is a summary of requirements applicable when Associates transact in TRPG securities:

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Description of Activity** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Requirement Under the Policy** |
| &nbsp;&nbsp;Executing a transaction to sell or transfer TRPG securities from an Associate's ESPP | &nbsp;&nbsp;&nbsp;&nbsp;◦ Pre-clearance via myTRPcompliance<br>&nbsp;&nbsp;&nbsp;&nbsp;◦ Reporting |
| &nbsp;&nbsp;Executing a transaction to purchase, sell, or gift TRPG securities outside of an Associate's ESPP\* | &nbsp;&nbsp;&nbsp;&nbsp;◦ Pre-clearance via myTRPcompliance<br>&nbsp;&nbsp;&nbsp;&nbsp;◦ Reporting |
| &nbsp;&nbsp;Giving TRPG securities as a gift (including a gift to a donor advised fund) after holding the stock for at least 60 days | &nbsp;&nbsp;&nbsp;&nbsp;◦ Pre-clearance via myTRPcompliance<br>&nbsp;&nbsp;&nbsp;&nbsp;◦ Reporting |
| &nbsp;&nbsp;Applicability of a holding period [not applicable to options or vested shares] | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes, 60 calendar days |
| &nbsp;&nbsp;Transacting in TRPG during a Blackout Period | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Prohibited** |
| &nbsp;&nbsp;Transacting in options related to TRPG securities (other than stock options granted to Associates) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Prohibited** |
| &nbsp;&nbsp;Selling TRPG securities short | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Prohibited** |
| &nbsp;&nbsp;Entering into any contract or purchasing any instrument designed to hedge or offset any decrease in the market value of TRPG securities | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Prohibited** |
| &nbsp;&nbsp;Reporting of transactions in TRPG securities to the SEC (applies to Associates subject to Section 16 of the Securities Exchange Act of 1934, as amended) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transactions must be reported immediately |
| &nbsp;&nbsp;\*Associates should contact Payroll & Stock Transactions in the event of uncertainty regarding applicability of the pre-clearance requirement. | &nbsp;&nbsp;\*Associates should contact Payroll & Stock Transactions in the event of uncertainty regarding applicability of the pre-clearance requirement. |

---

**C.Transacting in ETFs**

Following is a summary of requirements applicable when Associates transact in ETFs:

---

| | | |
|:---|:---|:---|
| | &nbsp;&nbsp;&nbsp;**Access Persons** | &nbsp;&nbsp;&nbsp;**All Other Associates** |
| &nbsp;&nbsp;Pre-clearance (Price ETFs) | &nbsp;&nbsp;&nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;No |
| &nbsp;&nbsp;Pre-clearance (Third-party ETFs) | &nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;No |
| &nbsp;&nbsp;Post-trade reporting (Price ETFs) | &nbsp;&nbsp;&nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Post-trade reporting (Third-party ETFs) | &nbsp;&nbsp;&nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Subject to the 60-Day Rule (Price ETFs) | &nbsp;&nbsp;&nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;No |
| &nbsp;&nbsp;Subject to the 60-Day Rule (Third-party ETFs) | &nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;No |
| &nbsp;&nbsp;Able to buy/sell in the primary market (Price ETFs) | &nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;No |
| &nbsp;&nbsp;Able to buy/sell in the primary market (Third-party ETFs) | &nbsp;&nbsp;&nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Able to sell short (Price ETFs) | &nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;No |
| &nbsp;&nbsp;Able to sell short (Third-party ETFs) | &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;&nbsp;Yes |

---

------

---

| | | |
|:---|:---|:---|
| | &nbsp;&nbsp;&nbsp;**Access Persons** | &nbsp;&nbsp;&nbsp;**All Other Associates** |
| &nbsp;&nbsp;Able to transact in options (Price ETFs) | &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;Able to transact in options (Third-party ETFs) | &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;&nbsp;Yes |
| &nbsp;&nbsp;Able to transact in inverse/short and narrow Price ETFs\* | &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;Yes |
| &nbsp;&nbsp;Able to transact in inverse/short and narrow (Third-party ETFs\*) | &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;Yes |
| &nbsp;&nbsp;Able to transact in single-stock ETFs | &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;\* 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). | &nbsp;&nbsp;\* 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). | &nbsp;&nbsp;\* 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). |

---

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Investment Personnel and FINRA-registered representatives are prohibited from purchasing securities in an IPO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Access Persons other than Investment Personnel and FINRA-registered representatives may purchase securities in an IPO only after receiving pre-clearance via Code Compliance or myTRPcompliance. The 60-day holding period requirement applies to transactions in securities purchased in an IPO.

**E.Options and Futures**

The purchase, sale and exercise of options are generally subject to the same restrictions as applicable to securities (*i.e.,* an option should be treated as if it were the common stock). If a transaction in the underlying instrument does not require pre-clearance (*e.g.,* ETFs, national government obligations, unit investment trusts), then an options or futures transaction on the underlying instrument does not require pre-clearance.

Closing (selling to close or buying to close) or exercising an option (for which the underlying instrument is subject to pre-clearance, *e.g*., stock options) requires pre-clearance. Pre-clearance is not required when an Access Person writes (sells) an option and the option is exercised against such Access Person, without any action on their part. Access Persons should be cautious when transacting in options since a client transaction in the underlying security or a restriction associated with the underlying security may prevent an option transaction from being closed or exercised.

**F.Participation in Investment Clubs**

Associates may form or participate in an investment club. Investment club transactions in TRPG securities are subject to pre-clearance and must be reported along with the Associate's personal transactions activity.

Access Persons or their Family Members must not form or participate in an investment club without prior written approval from the Chairperson of the Ethics Committee, or their designee. Transactions effected by an investment club in which an Access Person is a member, Beneficial Owner or Controller are subject to the same pre-clearance and reporting requirements as apply to the Access Person's personal trades.

------

**VI.<u>PERSONAL TRANSACTIONS RESTRICTIONS</u>**

**Associates must not:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Engage in personal transactions that are excessive or that compromise the firm's fiduciary duty to clients. Excessive trading in covered accounts is strongly discouraged. In general, anyone requesting and/or trading covered securities more than 20 times (other than TRP funds) in a month across all their covered accounts should expect additional scrutiny of their activity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Code Compliance monitors trading activity and may send notice to your direct manager regarding the number of trades and associated details during a given period for further review and potential escalation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Wager, bet or gamble in connection with individual securities, securities indices, currency spreads, or other similar financial indices or instruments including contracts for difference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Participate in initial coin offerings.

**Access Persons must not:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Transact in securities for which orders have been placed by any Price Adviser to purchase or sell the security, unless certain size or volume parameters<sup>3</sup> as set forth by the Ethics Committee are met.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Transact in any security that has been purchased or sold by any Price Adviser client seven calendar days immediately prior to the date of the Access Person's proposed transaction, unless certain size or volume parameters<sup>3</sup> as established by the Ethics Committee are met.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Transact in securities issued by broker-dealers, underwriters or SEC-registered investment advisers, unless the entity is traded on an exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Transact in securities of issuers on any of the firm's Restricted Lists.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Transact in securities for which a change in the rating of an issuer has occurred within seven calendar days immediately prior to the date of the proposed transaction.

**VII.<u>CERTIFICATION REQUIREMENTS</u>**

In addition to disclosure of their securities accounts (as described in "*Types of Accounts/Account Opening Requirements"),* Associates are required to, among other things, disclose the holdings in such accounts upon becoming subject to the Policy and periodically thereafter.

**A.Initial Holdings**

<u>All Associates</u> must disclose and certify, via myTRPcompliance, any shares of TRPG securities that they Beneficially Own no later than <u>ten calendar days</u> after they become subject to this Policy.

<u>Access Persons</u> must disclose and certify, via myTRPcompliance, all holdings in the following securities in which they have a Beneficial Interest or Control (the "Initial Holdings Report"**)** no later than <u>ten calendar days</u> after the become subject to the Policy as an Access Person:

_________________

<sup>3</sup>Transactions involving no more than US $50,000 or the nearest round lot (even if the amount of the transaction marginally exceeds US $50,000) per security per seven calendar day period in securities of (i) issuers with market capitalizations of US $7.5 billion or more, or (ii) 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., **<u>unless</u>** the rating on the security has been changed within the seven calendar days immediately prior to the date of the proposed transaction.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Individual equity securities, including any derivatives (e.g., options, futures, etc.) of these securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Bonds, including any derivatives of these securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ETFs, including any derivatives of these securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Unit investment trusts and listed closed end funds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Private Placements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Products (AUTs, ITMs, ETFs, mutual funds, OEICs, 529 portfolios, SICAVs, trusts) advised by a Price Adviser; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Products sub-advised by a Price Adviser.

The Initial Holdings Report must be current as of a date no more than <u>45 days</u> prior to the date the individual becomes an Access Person, and include, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The title, number of shares and principal amount of each security;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The name of the broker, dealer or bank with whom the Access Person maintains a securities account in which any securities are for the Access Person's direct or indirect benefit; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The date the Access Person submits the Initial Holdings Report.

<u>Securities that are not subject to reporting</u> include, but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Bankers' acceptances, bank certificates of deposit and commercial paper;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Currency;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Cryptocurrency;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Direct obligations of the U.S. Government;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Investment grade, short-term debt instruments, including repurchase agreements (which for these purposes are repurchase agreements and any instrument that has a maturity at issuance of fewer than 366 days that is rated in one of the two highest categories by a nationally recognized statistical rating organization);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Open end mutual funds, including money market funds, advised by a third party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• UCITS advised by a third-party; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Variable insurance products that invest in third-party funds.

Refer to <u>Exhibit B</u> for applicable exemptions from the reporting requirement.

**B.Annual Compliance Certification**

<u>All Associates</u> must certify annually via myTRPcompliance to, among other things, their securities accounts and transactions and compliance with various firm policies (including the Policy).

<u>Access Persons</u> must certify annually via myTRPcompliance to, among other things, their personal securities holdings, their securities accounts and transactions and compliance with various firm policies (including the Policy).

**C.Reporting of One – Half of One Percent Ownership**

An Associate owning more than one half of one percent of the total outstanding shares of a public or private company must immediately disclose such information in writing to Code Compliance via Code_of_Ethics@troweprice.com, providing the name of the company and the total number of such company's shares they Beneficially Own.

Refer to <u>Exhibit B</u> for applicable exceptions from the reporting requirement.

------

**VIII.<u>ROLES AND RESPONSIBILITIES</u>**

All Associates must attest to receipt and understanding of the Policy: (i) upon becoming subject to it; (ii) on an annual basis; and (iii) whenever material amendments to the Policy are made. In attesting to the Policy, Associates agree to their understanding of the Policy and agree to comply with the requirements of the Policy. See "*Annual Compliance Certification*."

Associates should contact LegalCompliance_EmployeeTrading@TRowePrice.com regarding the applicability, meaning or administration of the Policy, including requests for an exception, <u>in</u> <u>advance</u> of any contemplated transaction.

Code Compliance:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Administers and monitors adherence to the Policy, including reviewing disclosures, providing training and identifying violations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Maintains and oversees the maintenance of certain records in accordance with applicable legal and regulatory requirements.

The Payroll & Stock Transaction Group provides guidance to Associates when they are transacting in TRPG securities.

The Ethics Committee provides oversight of the Policy, including reviewing exceptions and violations. The Ethics Committee also provides a point of escalation for Code Compliance and the Payroll & Stock Transactions Group.

Material changes to the Policy shall be approved by the Board of TRPG, the board of directors of TRP UK and by the board of directors of each Price Fund, including a majority of the Independent Directors of the Price Funds. Approval of any material change to the Policy by the board of directors of the Price Funds shall be obtained within six months after the change is implemented.

**IX.<u>VIOLATIONS AND SANCTIONS</u>**

Violations and potential violations of the Policy are typically investigated by Code Compliance or, if necessary, the Ethics Committee. Violations are taken seriously and may result in sanctions or other consequences, including one or more of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A letter of censure or suspension;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Disgorgement of profit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A fine;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A suspension of trading privileges;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Consideration in Associate performance review and year-end compensation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Disciplinary action, up to and including, termination of employment; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any other sanction as may be determined by the Business Unit in consultation with Human Resources and the Ethics Committee.

When tracking violations, Code Compliance generally utilizes a rolling two-year look-back period in the administration of the sanctions guidelines set forth below. All violations of the Policy shall be reported to the Board of Directors of TRPG, the Board of Directors of any Price Fund and any other applicable board. As noted above, however, these sanctions are not the exclusive remedy for violations of this Policy.

------

<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 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;• Consideration in Associate performance review and year-end compensation;

&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;<br>**Associate** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>**VP, TRPG** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Investment Personnel** | &nbsp;&nbsp;&nbsp;&nbsp;**Portfolio Manager, Management Committee Member, Direct Report of Management Committee Member** |
| &nbsp;&nbsp;US $250 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;US $750 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;US $750 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;US $1500 |

---

*Subsequent violation(s) may result in disciplinary action, up to and including, termination of employment.* 

<u>Third Violation</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Associate and escalated manager notifications, up to and including applicable Management Committee member;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Chief Executive Officer notification;

&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 a personal trading prohibition of at least three months;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Consideration in Associate performance review and year-end compensation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Disciplinary action, up to and including, termination of employment; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Associate fined according to officer or role guidelines.

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;<br>**Associate** | &nbsp;&nbsp;<br>**VP, TRPG** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Investment Personnel** | &nbsp;&nbsp;&nbsp;&nbsp;**Portfolio Manager, Management Committee Member, Direct Report of Management Committee Member** |
| &nbsp;&nbsp;At least US $500 | &nbsp;&nbsp;At least US $2000 | &nbsp;&nbsp;At least US $2000 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At least US $5000 |

---

<u>More than Three Violations</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Along with the notifications and sanctions listed above for a third violation, evaluation of additional sanctions to be determined by the Business Unit in consultation with Human Resources and the Ethics Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Consideration in Associate performance review and year-end compensation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Associate subject to an extended personal trading prohibition; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Disciplinary action, up to and including, termination of employment.

------

**X.<u>EXCEPTIONS AND INTERPRETATIONS</u>**

Code Compliance, in conjunction with the Ethics Committee, may grant an exception from any provision of the Policy, including pre-clearance, other trading restrictions, and certain reporting requirements. Exceptions will be considered on a case-by-case basis if it is determined that the proposed conduct involves no opportunity for abuse and does not conflict with client interests. Exceptions are expected to be rare.

From time to time, situations may arise with respect to certain provisions of this Policy that require interpretation. Associates may submit a written request for clarification or interpretation to Code Compliance (Code_of_Ethics@TRowePrice.com). Any such request for clarification or interpretation should name the account, the Associate's interest in the account, the persons or firms responsible for its management, and the specific facts of the situation. **Associates may not assume that the Policy (or a specific provision of the Policy) is not applicable to their situation.** Code Compliance will provide a response to each properly submitted request for clarification or interpretation. When in doubt, Associates must not proceed with a transaction or course of action until they receive a response from Code Compliance.

**XI.<u>DEFINED TERMS</u>**

***AUT*** means Australian unit trusts.

***Beneficial Owner*** means an individual with the opportunity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, to share at any time in any economic interest or profit derived from ownership of or a transaction in a security. An Associate may be deemed to be the Beneficial Owner of securities belonging to others and not registered in their name.

The SEC will presume that a person Beneficially Owns securities held by a Family Member who shares their household or securities held by a trust of which the individual is a beneficiary or a trustee with investment Control.

An individual is not considered to be the Beneficial Owner of a 401(k) account, individual retirement account or a transfer upon death account for which they are solely a named beneficiary, assuming the individual does not reside with the Family Member and does not have the ability to Control and/or direct transactions in such account.

***Blackout Period*** means the period from the second trading day after quarter end (or such other date as management shall determine) through the end of the first trading day following when TRPG's earnings release is filed with the SEC. Quarterly notifications with respect to the Blackout Period are published on the firm's intranet site.

***Control*** means the power to exercise a controlling influence over the management or policies of a company unless such power is solely the result of an official position with such company. Ownership of more than 25% of a company's outstanding voting securities is presumed to give the holder thereof Control over the company.

***ESPP*** means the T. Rowe Price Group, Inc. Employee Stock Purchase Plan.

***ETF*** means exchange traded fund.

***Exchange traded fund or ETF*** means an investment fund that is traded on a stock exchange.

***Family Member*** means the Associate's spouse, domestic partner, parent, stepparent, child, stepchild, sibling, grandparent, or in-law (including mother, father, sister, brother, daughter or son) sharing the same household as the Associate.

------

***Independent Director of TRPG, TRP UK, the SICAVs, or the Cayman Funds*** means those directors who are neither officers nor employees of TRPG or any of its subsidiaries.

***Investment Personnel*** means an Access Person who, in connection with their regular functions or duties, makes or participates in making, or is closely associated with personnel who make recommendations regarding the purchase or sale of securities by a Price Adviser client.

The term "Investment Personnel" includes, but is not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Individuals 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;&nbsp;&nbsp;&nbsp;&nbsp;• Research and credit analysts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Traders who assist in the investment process; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Support staff who assist in the investment process.

***Investment Advisers Act*** means the U.S. Investment Advisers Act of 1940, as amended.

***Investment Company Act*** means the U.S. Investment Company Act of 1940, as amended. ***ITM*** means an investment trust management company.

***OEIC*** means open-ended investment company.

***Price Adviser*** means a subsidiary of T. Rowe Price Group, Inc. that is an investment adviser entity registered with the SEC. For the avoidance of doubt, "Price Adviser" does not include Oak Hill Advisors, L.P. and its subsidiaries.

***Price ETFs*** means the T. Rowe Price Exchange-Traded Funds, the family of ETFs advised by a Price Adviser.

***Price Funds*** means any T. Rowe Price-sponsored fund registered under the Investment Company Act, including but not limited to, the T. Rowe Price Mutual Funds and the Price ETFs, and advised by a Price Adviser.

***Price Funds' Independent Directors*** means those directors of the Price Funds who are not deemed to be "interested persons" (as defined in Section 2(a)(19) of the Investment Company Act) of T. Rowe Price Group, Inc. or the Price Funds.

***Private Placement*** means an offering that is exempt from registration by a regulatory authority and sold through a private offering. For purposes of the Policy, investments made: (i) in a small business sourced through family, friends or any other referral source; and (ii) through a crowdfunding site that matches entrepreneurs with investors, through which investors receive an equity stake in the business, are considered Private Placements (*e.g.,* Seedrs, OurCrowd, Crowdcube).

------

***Reportable Fund*** means any open-end investment company for which any of the Price Advisers serves as an investment adviser. The term Reportable Fund includes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Price Funds, including money market funds and the Price ETFs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ UCITs advised by a Price Adviser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ SICAVs advised by a Price Adviser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ OEICs advised by a Price Adviser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ ITMs advised by a Price Adviser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ AUTs advised by a Price Adviser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Any fund managed by a Price Adviser through a sub-advised relationship, including an ETF;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Any fund offered through retirement plans (e.g., 401(k) plans) other than the T. Rowe Price U.S. Retirement Plan; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Any fund managed by a Price Adviser that is an investment option offered as part of a variable annuity.

Code Compliance maintains a list of sub-advised Reportable Funds on the firm's intranet site.

***SEC*** means the U.S. Securities and Exchange Commission.

***SICAV*** means société d'investissement à capital variable.

***T. Rowe Price*** means T. Rowe Price Group, Inc. and its subsidiaries, except Oak Hill Advisors, L.P. and its subsidiaries.

***TRPG Independent Director*** means those directors of TRPG who are neither officers nor employees of TRPG or any of its subsidiaries.

***TRPG*** means T. Rowe Price Group, Inc.

***TRPG securities*** means any security issued by T. Rowe Price Group, Inc.

***UCITs*** means Undertakings for Collective Investments in Transferrable Securities.

------

**EXHIBIT A**

**CODE OF ETHICS AND PERSONAL TRANSACTION POLICY**

**Provisions Applicable to Independent Directors**

**I.<u>INTRODUCTION</u>**

This Exhibit A sets forth the responsibilities of the Independent Directors of TRPG, TRP UK, SICAVs, Cayman Funds and Price Funds under this *<u>Code of Ethics and Personal Transactions</u> Policy.* Defined terms used herein are the same as those used in the Policy.

The Independent Directors are subject to the requirements set forth below.

**II.<u>REQUIREMENTS FOR THE INDEPENDENT DIRECTORS OF TRPG OR ITS SUBSIDIARIES, OTHER THAN TRP UK</u>**

**Pre-clearance.** The personal securities trades of TRPG Independent Directors are **<u>not</u>** subject to pre-clearance requirements, <u>except for transactions in TRPG securities</u> for which they are the Beneficial Owner. Pre-clearance is also required when:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Transferring TRPG securities to another person, entity, or trust account; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Giving or receiving TRPG securities, including donation transactions into donor-advised funds such as T. Rowe Price Charitable Foundation.

Pre-clearance is <u>not</u> required when moving shares of TRPG securities between securities firms or to/from individual or joint brokerage accounts.

Requests for pre-clearance must be submitted to the Payroll & Stock Transactions Group. Pre- clearance is effective for the day it is received and the following business day (taking into consideration the time zone), unless the Independent Director: (i) is advised to the contrary by the Payroll & Stock Transaction Group prior to the proposed transaction; or (ii) comes into possession of material, non-public information concerning T. Rowe Price. Any trades not executed within the prescribed timeframe must be re-submitted.

TRPG Independent Directors may not initiate transactions in TRPG securities during the Blackout Period.

**Reporting.** TRPG Independent Directors are not required to report their personal securities transactions (other than transactions in TRPG securities). If, however, the Independent Director has obtained information about a Price Adviser's investment research, recommendations, or transactions, they must not transact in the securities of the issuers about which they have information.

Independent Directors are reminded that changes to information reported in the Annual Questionnaire for Independent Directors must be reported to Corporate Funds and Administration *(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 TRPG.** An Independent Director shall report to Code Compliance any officership, directorship, general partnership or other managerial position which they hold with any public, private, or governmental issuer other than TRPG or any of its subsidiaries.

**Reporting of Significant Ownership.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Issuers (other than a non-public investment partnership, pool or fund).* If a TRPG Independent Director owns more than ½ of 1% of the total outstanding shares of a public or private issuer, they must report such ownership in writing to Code Compliance, providing the name of the issuer and the total number of the issuer's shares Beneficially Owned.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Non-public investment partnerships, pools or funds.* If a TRPG 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, they must report such ownership in writing to Code Compliance. For non-public investment partnerships, pools or funds where the Independent Director does not exercise Control or influence, they need not report such ownership to Code Compliance unless and until such ownership exceeds 4% of the total outstanding shares or units of the entity.

**III.<u>REQUIREMENTS FOR THE INDEPENDENT DIRECTORS OF TRP UK, THE SICAVS AND THE CAYMAN FUNDS</u>**

**TRPG securities.** The Independent Directors of TRP UK, the SICAVs, or the Cayman Funds may not own TRPG securities in any account of which they are the Beneficial Owner.

**Pre-clearance.** The personal securities trades of the Independent Directors of TRP UK, the SICAVs, or the Cayman Funds are not subject to pre-clearance requirements, as long as the Independent Director had no knowledge of trading involving the Price Funds or the funds overseen by TRP UK, SICAVs, or the Cayman Funds.

**Reporting of Officership, Directorship, General Partnership or Other Managerial Positions Apart from TRPG.** An Independent Director of TRP UK, the SICAVs, or the Cayman Funds shall report to Corporate and Funds Administration any officership, directorship, general partnership or other managerial position which they hold with any public, private, or governmental issuer.

**Reporting of Significant Ownership.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Issuers (other than a non-public investment partnership, pool or fund).* If an Independent Director of TRP UK, the SICAVs, or the Cayman Funds owns more than ½ of 1% of the total outstanding shares of a public or private issuer, they must report such ownership in writing to Corporate and Funds Administration, providing the name of the issuer and the total number of the issuer's shares Beneficially Owned.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Non-public investment partnerships, pools or funds.* If an Independent Director of TRP UK, the SICAVs, or the Cayman Funds 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, they must report such ownership in writing to Corporate and Funds Administration. For non-public investment partnerships, pools or funds where the Independent Director does not exercise Control or influence, they need not report such ownership to Corporate and Funds Administration unless and until such ownership exceeds 4% of the total outstanding shares or units of the entity.

**IV.<u>REQUIREMENTS FOR THE INDEPENDENT DIRECTORS OF PRICE FUNDS</u>**

**TRPG securities.** The Independent Directors of the Price Funds may not own TRPG securities in any account of which they are the Beneficial Owner.

**Pre-clearance.** The personal securities trades of the Independent Directors of the Price Funds are not subject to pre-clearance requirements, as long as the Independent Director had no knowledge of trading involving the Price Funds.

**Reporting.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Transactions in Publicly Traded Securities.* A Price Funds' Independent Director must report transactions in publicly-traded securities in which they have Beneficial Ownership.

An Independent Director is not required to report securities transactions in accounts over which they have no direct or indirect influence, such as an account over which they have granted full investment discretion to a financial adviser. The Independent Director should contact Code Compliance to request approval to exempt any such accounts from this reporting requirement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Transactions in Non-Publicly-Traded Securities.* A Price Funds' Independent Director is not required to report transactions in securities which are not traded on an exchange, unless the Independent Director knew, or in the ordinary course of fulfilling their official duties as an Independent Director, 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 or Price Adviser client.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• Methods of Reporting.*

<u>Duplicate Trade Confirmations.</u> A Price Funds' Independent Director may satisfy their obligation to report transactions in securities by arranging for the executing brokers to provide duplicate trade confirmations directly to Code Compliance.

<u>Quarterly Report Requirements</u>. If a Price Funds' Independent Director elects to report their transactions by submitting a quarterly report: (i) the report must be filed with Code Compliance no later than 30 days after the end of the calendar quarter in which the transaction was effected; and (ii) the report must be filed for each quarter, regardless of whether there were any reportable transactions.

------

Among the types of transactions that are commonly <u>not</u> reported through a broker confirmation and may therefore have to be reported directly to T. Rowe Price on a quarterly basis are:

oRetirement plan account activity that occurs in a Reportable Fund;

oT. Rowe Price-advised products;

oIncentive plan account activity;

oExercise of stock options of a corporate employer;

oAn inheritance of a security;

oA gift of a security; and

oTransactions in certain commodity futures contracts (*e.g.,* financial indices).

A Price Funds' Independent Director must include any transactions listed above, if applicable, in their quarterly reports if they are not included in a duplicate broker confirmation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Reporting of Officership, Directorship, General Partnership or Other Managerial Positions Apart from the Price Funds.* A Price Funds' Independent Director must report to Corporate Funds and Administration any officership, directorship, general partnership or other managerial position which they hold with any public, private or governmental issuer other than the Price Funds.

**Reporting of Significant Ownership.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Issuers (other than non-public investment partnerships, pools or funds). If a Price Funds' 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), they must report such ownership immediately in writing to Code Compliance, providing the name of the issuer and the total number of the issuer's shares Beneficially Owned.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Non-Public Investment Partnerships, Pools or Funds. If a Price Funds' 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 they exercise Control or influence, the Independent Director must report such ownership in writing to Code Compliance. For non- public investment partnerships, pools or funds where the Independent Director does not exercise Control or influence, they need not report such ownership to Code Compliance unless and until such ownership exceeds 4% of the total outstanding shares or units of the entity.

**Prohibitions.** A Price Funds' Independent Director may not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Purchase or sell the shares of a broker-dealer, underwriter or SEC-registered investment adviser unless that entity is traded on an exchange, or the purchase or sale has otherwise been approved by the Price Funds' board; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Knowingly transact with a Price Fund, other than in connection with market transactions effected through securities exchanges. This prohibition does not preclude the purchase 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 Adviser.

------

**Transactions in Price ETFs.** Following is a summary of requirements applicable when Price Funds' Independent Directors transact in Price ETFs:

---

| | |
|:---|:---|
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Independent Directors of Price Funds** |
| &nbsp;&nbsp;Obtain pre-clearance for trades in Price ETFs | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No |
| &nbsp;&nbsp;Post-report trades in Price ETFs | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Subject to the holding period | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No |
| &nbsp;&nbsp;Subject to ad hoc trading restrictions | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Ability to buy/sell Price ETFs in the primary market | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No |
| &nbsp;&nbsp;Ability to sell short Price ETFs | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No |
| &nbsp;&nbsp;Ability to transact in options of the Price ETFs | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No |

---

**V.<u>VIOLATIONS</u>**

**Violations by Independent Directors of TRPG, the Price Funds, TRP UK, the SICAVs, or the Cayman Funds.** Upon discovering a material violation of the Policy by an Independent Director of TRPG, the Price Funds, TRP UK, the SICAVs, or the Cayman Funds, the applicable board of directors will impose such sanctions as it deems appropriate.

------

**EXHIBIT B**

**CODE OF ETHICS AND PERSONAL TRANSACTIONS POLICY**

**Pre-clearance and Reporting Matrix**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | &nbsp;&nbsp;**<u>Access Person Pre-clearance</u>** | &nbsp;&nbsp;**<u>Access Person Reporting</u>** | **<u>Associate</u>** <br>**<u>Pre-clearance</u>** | **<u>Associate Reporting</u>** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Stocks/Bonds/Derivatives**<br>(Refer to "*Transacting in TRPG Securities"* for specific information relating to trading in TRPG securities) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Stocks/Bonds/Derivatives**<br>(Refer to "*Transacting in TRPG Securities"* for specific information relating to trading in TRPG securities) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Stocks/Bonds/Derivatives**<br>(Refer to "*Transacting in TRPG Securities"* for specific information relating to trading in TRPG securities) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Stocks/Bonds/Derivatives**<br>(Refer to "*Transacting in TRPG Securities"* for specific information relating to trading in TRPG securities) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Stocks/Bonds/Derivatives**<br>(Refer to "*Transacting in TRPG Securities"* for specific information relating to trading in TRPG securities) |
| &nbsp;&nbsp;Equity securities | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes | &nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Fixed income securities | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes | &nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Corporate and Municipal Bonds | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes | &nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Derivative instruments | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes | &nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Writing an option to purchase or sell a security | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes | &nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Subsequent sale of stock obtained by means of the exercise of stock options | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes | &nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Exercise of stock option of corporate employer by Access Person's spouse. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Restricted stock plan automatic sales for tax purposes by Access Person's spouse | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &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;&nbsp;&nbsp;&nbsp;**Collective Investment Products**<br>(Refer to "*Transacting in ETFs"* for specific information relating to trading in ETFs) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Collective Investment Products**<br>(Refer to "*Transacting in ETFs"* for specific information relating to trading in ETFs) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Collective Investment Products**<br>(Refer to "*Transacting in ETFs"* for specific information relating to trading in ETFs) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Collective Investment Products**<br>(Refer to "*Transacting in ETFs"* for specific information relating to trading in ETFs) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Collective Investment Products**<br>(Refer to "*Transacting in ETFs"* for specific information relating to trading in ETFs) |
| &nbsp;&nbsp;T. Rowe Price products (including the AUTs,<br>ITMs, mutual funds, OEICs, 529 portfolios, SICAVs, and trusts | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>No | &nbsp;&nbsp;<br>Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>Yes |
| &nbsp;&nbsp;Exchange listed collective investment vehicles (including closed-end funds) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Third-party mutual funds, 529 portfolios, OEICs, SICAVs and variable insurance products | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>No | &nbsp;&nbsp;<br>No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>No |
| &nbsp;&nbsp;Unit investment trusts | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No |
| &nbsp;&nbsp;Donor-advised funds | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &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;**Private Placements** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Private Placements** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Private Placements** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Private Placements** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Private Placements** |
| &nbsp;&nbsp;Private Placements | &nbsp;&nbsp;&nbsp;Yes<br>(see *Section IV.C*) | &nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No\* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No\* |
| &nbsp;&nbsp;Capital calls for Private Placement investments | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No |
| &nbsp;&nbsp;Distributions received from a Private Placement investment | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;N/A | &nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;N/A | &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;**Other Securities** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Other Securities** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Other Securities** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Other Securities** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Other Securities** |
| &nbsp;&nbsp;Commercial paper and similar instruments (bankers acceptances, bank certificates of deposit, commercial paper and high quality,<br>short-term debt instruments, including repurchase agreements) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No |
| &nbsp;&nbsp;U.S. Government obligations | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No |
| &nbsp;&nbsp;National (other than U.S.) government obligations | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;&nbsp;Currency | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No |
| &nbsp;&nbsp;&nbsp;Securitized or financial instruments used for currency exposure | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No |
| &nbsp;&nbsp;Cryptocurrency (*e.g.,* Bitcoin, Ethereum) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No |
| &nbsp;&nbsp;Publicly&nbsp;&nbsp;&nbsp;&nbsp;traded&nbsp;&nbsp;&nbsp;&nbsp;cryptocurrency&nbsp;&nbsp;&nbsp;&nbsp;tracker instruments (ETFs) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Variable rate demand notes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;Yes | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **\*FINRA-registered representatives are required to request pre-clearance and report** | **\*FINRA-registered representatives are required to request pre-clearance and report** | **\*FINRA-registered representatives are required to request pre-clearance and report** | **\*FINRA-registered representatives are required to request pre-clearance and report** | **\*FINRA-registered representatives are required to request pre-clearance and report** |
| | &nbsp;&nbsp;**<u>Access Person Pre-clearance</u>** | &nbsp;&nbsp;**<u>Access Person Reporting</u>** | **<u>Associate</u>** <br>**<u>Pre-clearance</u>** | **<u>Associate Reporting</u>** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Transactions** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Transactions** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Transactions** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Transactions** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Transactions** |
| &nbsp;&nbsp;Securities acquired through an Automatic Investment Plan<sup>4</sup> (initial investment) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes | &nbsp;&nbsp;Yes | No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Securities acquired through an Automatic Investment Plan (subsequent investments) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;Yes | No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Non-systemic investment<sup>5</sup> through an Automatic Investment Plan | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes | &nbsp;&nbsp;Yes | No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Acquisition of securities through inheritance | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;Yes | No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Giving stock (non-TRPG) as a gift | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;Yes | No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Pro-rata distributions | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;Yes | No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Tender offers | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;Yes | No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Merger election (voluntary) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes | &nbsp;&nbsp;Yes | No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;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 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;Yes<br>*(within 30 days of the end of the quarter in which the transaction occurred)* | No | &nbsp;&nbsp;&nbsp;Yes <br>*(within 30 days of the end of the*<br>*quarter in which the transaction*<br>*occurred)* |
| &nbsp;&nbsp;Purchases, but not sales, by an Access Person's spouse pursuant to an employee- sponsored payroll deduction plan (as long as Code Compliance has been notified that the spouse will be participating in such plan) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;Yes<br>*(within 30 days of the end of the quarter in which the transaction occurred)* | No | &nbsp;&nbsp;&nbsp;Yes <br>*(within 30 days of the end of the*<br>*quarter in which the transaction*<br>*occurred)* |
| &nbsp;&nbsp;Sale or exchange of stock held in an Access Person's spouse's payroll deduction plan | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes | &nbsp;&nbsp;Yes | No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Sale of partial shares held in an account when the account is transferred to another broker- dealer or to new owner or partial shares sold automatically by the broker-dealer. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No | &nbsp;&nbsp;Yes | No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes |
| &nbsp;&nbsp;Transactions effected in a robo-adviser<br>account (investing solely in third party collective investment vehicles) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>No | &nbsp;&nbsp;<br>No | <br>No | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>No |

---

_________________

4A 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.

5 A transaction that overrides the preset schedule or allocations of an Automatic Investment Plan.

## Ex-99.(P)(4)

**WESTFIELD CAPITAL MANAGEMENT COMPANY, L.P.** 

**Code of Ethics**

Date Approved: October 21, 2025

In accordance with Rule 204A-1 of the Investment Advisers Act of 1940 and with Rule 17j-1 of the Investment Company Act of 1940, as amended, Westfield Capital Management Company, L.P. ("Westfield") has developed and implemented this Code of Ethics (the "Code") to set forth standards for business conduct and personal activities. The Code serves many purposes. Among them are to:

• educate employees of Westfield's expectations and the laws governing their conduct;

• remind employees that they are in a position of trust and must act with complete propriety at all times;

• protect the reputation of Westfield;

• guard against violations of securities laws;

• protect Westfield's clients by deterring misconduct; and

• establish procedures for employees to follow so Westfield can assess whether employees are complying with our ethical principles.

**Key terms used throughout this Code are defined in Appendix A.** 

**Persons Covered by the Code**

All permanent Westfield employees are covered under the Code. All employees are deemed an "Access Person". Compliance will deem an Access Person also as an "Investment Person" if the person makes or participates in making investment recommendations for client accounts. Investment Persons may be required to provide additional information for certain personal activities and may be subject to additional transactional restrictions than non-Investment Persons. At any time, employees may check their status by contacting Compliance.

Temporary employees may be subject to either all or certain provisions within the Code. Compliance may also deem a temporary employee an Access Person.

**Waivers to Code**

The Chief Compliance Officer (the "CCO") and the Deputy Chief Compliance Officer (the "Deputy CCO") have the authority to grant written waivers of the provisions of this Code in appropriate instances. However, Westfield expects that waivers will be granted only in rare instances. Compliance will document any waivers granted. No waivers shall be granted on any provisions of the Code that are mandated by the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC").

**Ethical Principles**

As a fiduciary for its clients, Westfield owes its clients the utmost duty of loyalty, good faith, and fair dealing. As an employee of Westfield, you are obligated to uphold these important duties. Westfield expects every employee to uphold these principles when acting on behalf of the firm or in any capacity that may affect the firm's advisory business.

• Employees must act with honesty, integrity, and professionalism in all aspects of our business.

• Employees are to place the interests of Westfield's clients first, at all times.

• Employees must not take advantage of their positions or of investment opportunities that would otherwise be available for Westfield's clients.

• Employees must treat all information concerning clients (e.g., trading, holdings, investment recommendations, and financial situations) confidential.

• Employees must exercise independent, unbiased judgment in the investment decision-making process.

------

**Standards of Business Conduct**

The following standards govern all conduct, whether or not the conduct is covered by more specific provisions in the Code or other Westfield policies.

• Employees must comply with applicable federal securities laws.

• Employees must not:

• Defraud any Westfield client in any manner.

• Mislead any client, including making a statement that omits material facts or passing along information that is baseless or suspected to be untrue.

• Engage in any act, practice or course of conduct which operates or would operate as a fraud or deceit upon any client (e.g., creating the false appearance of active trading in client accounts).

• Engage in any manipulative practice with respect to any client.

• Engage in any manipulative practice with respect to securities, including price or market manipulation. This includes rumor mongering, which is illegal and can lead to allegations of market manipulation.

• Employees are prohibited from inappropriately favoring the interests of one client over another as it would constitute a breach of fiduciary duty.

• Employees must not use for their own direct or indirect benefit (or the benefit of anyone other than Westfield's clients) information about: (a)Westfield's trading or investment recommendations for client accounts, (b) our relationships with our clients, or (c) our relationships with the brokerage community. Personal securities transactions must be conducted in accordance with applicable provisions in the Code.

• Employees must comply with the spirit and letter of the Code and other internal policies. Technical compliance with the requirements in the Code or other policies does not insulate you from scrutiny for any actions that can create the appearance of a violation or the appearance that you are circumventing the rules.

• Employees must avoid any actual or potential conflicts of interest with Westfield's clients. Employees will be required to complete certifications or questionnaires on such matters. It is the employee's responsibility to promptly notify Compliance of any changes to their responses.

• Employees must ensure that any personal activities (e.g., personal trading) conducted during work hours do not interfere (or appears to interfere) with their daily work.

• Employees must disclose any family members who have senior level positions at public or private companies.

• Employees must not accept from or give to clients or other business contacts any gifts or business entertainment that would present an actual or potential conflict of interest or would be viewed as improper. (See Westfield's policy on Gifts and Business Entertainment)

• Employees may not recommend, implement, or consider any securities transaction for client accounts without having disclosed any material business or personal relationship (e.g., family member is a senior employee) with or beneficial ownership or other material interest in the issuer or its affiliates, to Compliance. If Compliance deems the disclosed interest to present a material conflict, the employee may not participate in any decision-making process regarding that issuer.

• Employees must act in the best interest of Westfield's clients regarding execution and other costs paid by clients for brokerage services. This includes disclosing to Compliance any personal investment in any business or personal (e.g., family member) relationship with brokers utilized by Westfield for client

• transactions or research services. All employees must strictly adhere to Westfield's policies and procedures regarding brokerage services, including those on best execution, research services, and directed brokerage.

• Employees must disclose to Compliance any personal investments or other interests in third-party service providers if the employees negotiate or make decisions on behalf of the firm with such third-party service providers. If any employee has such an interest, Compliance may prohibit the person from negotiating or making decisions regarding Westfield's business with those companies.

• Employees are prohibited from making referrals to clients (e.g., attorneys, accountants) if the employee will benefit in any way.

------

<u>Reporting Unethical or Illegal Behavior</u>

If at any time an employee has knowledge of any behavior that might be viewed as unethical, illegal or in violation of internal policies, the employee must report such behavior immediately.

**How to Report.** To promote employee reporting, while protecting the employee and maintaining their identity in confidence, Westfield offers different methods for reporting.

• **Contact the CCO and/or the Deputy CCO**

Employees may report actual or suspected violations by contacting the CCO and/or the Deputy CCO directly (or the Chief Executive Officer if the suspected violation is by the CCO). Employees are not required to report such matters to their managers before contacting the CCO and/or the Deputy CCO.

• **Report via Westfield's Whistleblower Hotline**

Please call (833) 902-0979. Calls are accessible to the CCO and Deputy CCO only. All calls are anonymous. If suspected violation is by the CCO and/or Deputy CCO, employees should contact the CEO directly and not leave a message on the whistleblower hotline.

**What to Report.** Employees should report any: a) noncompliance with applicable laws, rules and regulations, or internal policies such as the Code; b) fraud or illegal acts involving any aspect of the firm's business; c) material misstatements in regulatory filings, internal books and records, client records or reports, and financial statements; d) activity that is harmful to clients; and e) material deviations from required controls and procedures that safeguard clients and the firm.

**Usage of Information Provided.** The CCO and/or the Deputy CCO will take the steps deemed necessary under the circumstances to investigate relevant facts surrounding the information provided, and to take any appropriate corrective measures. Reporting employees typically will not be notified of any actions the firm is taking in response to their comments.

**Guidance.** Employees are encouraged to seek guidance from the CCO and/or the Deputy CCO with respect to any violation and to refrain from any action or transaction that might lead to the appearance of a violation.

Confidentiality. Any report created shall be treated confidentially. Best efforts will be used to ensure that specific details of the report cannot be used to identify the reporting employee.

**Retaliation.** No employee who in good faith reports a suspected unethical or illegal business practice will be subject to retaliation or discipline for having done so, even if such reports ultimately establish that no violation had occurred.

<u>SEC Whistleblower Program</u>

Westfield encourages employees to report unethical or illegal behavior to the firm first, but employees also have an option of directly reporting actual or suspected violations to the SEC's Whistleblower Office. The SEC offers awards and incentives to individuals who voluntarily provide original information that leads to a successful enforcement. There are very specific criteria and procedures that apply when making such a report to the SEC. Regardless of the employee's reporting method, Westfield will utilize the framework described directly above with regards to reported information.

The SEC encourages individuals to submit information in writing by filling out their questionnaire at <u>https://denebleo.sec.gov/TCRExternal/disclaimer.xhtml</u>. Alternatively, you may submit information by mail to the Office of the Whistleblower at 100 F Street, NE, Mail Stop 5971, Washington, D.C. 20549 or by fax to (703) 813-9322.

Employees have the option to directly report actual or suspected violations to the SEC during and after their employment with Westfield.

------

<u>Personal Trading</u>

(All references to Access Persons in this section include family members.)

**Preclearance Requirement**

Access Persons must obtain approval from Compliance prior to entering into any personal securities transactions in a Covered Security for a Covered Account, as defined in Appendix A. Written approval must be received prior to executing any personal security transaction.

With limited exceptions, approvals are valid until 4:00pm on the day they were granted. Approvals for certain transactions (e.g., private offering of securities) may be extended with the CCO's or the Deputy CCO's permission. In such instances, the approval is valid until either the transaction is executed or revoked by Compliance. Access Persons are responsible for notifying Compliance when the transaction has been either completed or cancelled.

Because Westfield primarily supervises domestic growth equities, certain transactions and securities pose minimal conflicts with our clients. As such, the following securities also are exempt from the preclearance requirement. (Reporting requirements still apply). If a security or transaction is not listed directly below or excluded from the Covered Security definition in Appendix A, then it must be precleared.

• ETFs and ETNs that are not advised and/or subadvised by Westfield, that are not short the market, a sector, industry, etc.

• Closed-end mutual funds

• Gifting or transferring shares from one account to another

• Municipal bonds

**Submitting Preclearance Requests**

Preclearance requests for securities transactions should be submitted through the online personal transactions system, StarCompliance (the "personal trading system"). Compliance will set up each Access Person in the system and provide training. It is important that Access Persons not share their passwords with anyone as they are responsible for the information created, modified, and deleted from the system under their login information.

Should an Access Person wish to make a personal security transaction but does not have access to the system, the person must contact a senior member of Compliance for preclearance of the transaction. Compliance will enter the transaction into the system, which will send an approval or denial, via email, to the requestor. It is the Access Person's responsibility to ensure that the trade information contained in the email confirmation is complete and accurate (i.e., transaction type, shares requested, brokerage account, and security name) prior to entering into the transaction.

<u>Private Offerings</u>

Any requests to enter into private offerings of securities must first be discussed with a senior member of Compliance. At a minimum, Compliance will request a copy of the offering documents, if applicable and available, in order to obtain the security/issuer name, investment amount, and target investment date. If the offering documents are not available, Compliance will accept written confirmation from the company. Written confirmation should include the security name, investment amount and target investment date. If the transaction is approved, the employee may then submit the preclearance request. Access Persons must receive a written approval via the personal trading system before entering into the transaction.

**Reviewing Preclearance Requests**

Preclearance requests are not reviewed until after 9:30am. Preclearance requests submitted prior to 9:30am will be placed in pending status. Preclearance requests that go into pending after 3:00pm will be reviewed on a best efforts basis. If a response is not received by 4:00pm, Access Persons are not permitted to enter into the trade and must re-enter the preclearance request the following day. Employees must ensure to cancel all limit orders that are not fully executed by 4:00pm each day.

Compliance has full authority to:

• revoke a preclearance any time after it is granted;

• require an Access Person to close out or reverse a transaction; and

• not provide an explanation for a preclearance denial or revocation, especially when the reasons are confidential in nature.

------

**Restrictions to Personal Securities Transactions**

The following restrictions and limitations have been placed on personal securities transactions to address actual or possible conflicts arising from personal trading activities.

• **Material, Non-public Information.** Access Persons who possess or have been made aware of material, non-public information regarding a security, or the issuer of a security may not engage in any transaction of such security or related security. (See Westfield's policy on Insider Trading.)

• **Market Manipulation.** Access Persons may not engage in any transactions intended to raise, lower, or maintain the price of any security.

• **Market Timing and Excessive Trading.** Access Persons must not engage in excessive trading or market timing activities with respect to any mutual fund. When placing trades in any mutual fund, whether the trade is placed directly in a personal account, 401(k) account, deferred compensation account, account held with an intermediary or any other account, Access Persons must comply with the rules set forth in the fund's prospectus and SAI regarding the frequency and timing of such trades.

• **Transactions with Clients.** Access Persons are prohibited from knowingly selling to, or purchasing from, a client any security or other property, except publicly traded securities issued by such client.

• **Advised and/or Subadvised Funds.** Access Persons are prohibited from trading in ETFs and mutual funds that are advised and/or subadvised by Westfield without prior Compliance approval.

• **Transactions Likely to Raise Conflicts with Duties to Clients.** Access Persons may not enter into any transactions that: a) may have a negative impact on their attention to their responsibilities to the firm or our clients (e.g., trading frequently in personal accounts), or b) overextend their financial resources or commit them to financial liability that they are unable to meet.

• **Derivatives, Warrants and Rights.** Access Persons are prohibited from trading options, forwards, swaps, warrants, rights, and any other similar security in their Covered Accounts.

• **Private and Limited Offerings (e.g., IPOs).** Typically, if client accounts are participating in a private or limited offering, Access Persons may not participate in the same offering. With prior approval from the CCO and/or DOC, Access Persons may participate alongside client accounts, but the client's interest will always come first. This includes Access Persons invested in Westfield's LPs (e.g., Micro-Cap Fund).

• **Short Selling and Short ETFs/ETNs.** Access Persons are prohibited from short selling securities in their Covered Accounts.

• **30-Day Holding Period.** Covered Security investments made in Covered Accounts must be held for a minimum period of 30 calendar days after purchase (day one starts one day after trade date). ETFs and ETNs are not subject to the 30-day holding period.

**Investment Team Sales in Covered Securities**

All analysts (defined as sector and research analysts) that own securities in their covered accounts that overlap with their sector universe <u>and</u> are owned in a Westfield strategy managed by Westfield's Investment Committee must hold such security or securities until they have been fully liquidated from all strategies. Once the security is fully liquidated, the analyst may sell their personal shares 5 business days following the last client sale.

All individual portfolio managers that own securities in their covered accounts that overlap with the individual portfolios that they manage, must hold such security or securities until they have been fully liquidated from all client accounts under their management. Once the security is fully liquidated; the portfolio manager may sell their personal shares 5 business days following the last client sale.

The above restrictions do not apply to securities that are held due to client restrictions (e.g., tax considerations, retention for proxy voting, etc.). Any exceptions must be approved by the CCO and/or the Deputy CCO. Analysts may continue to trim and/or sell securities for their covered accounts that are not in their sector universe. Portfolio managers may continue to trim/sell securities for their covered accounts that are not held in the portfolios they manage. Any trims/sales will still follow the above personal securities transaction restrictions, front running, and blackout periods as applicable.

------

**Front Running and Blackout Periods**

Front running is an illegal practice. Access Persons should not enter into a personal security transaction when the Access Person knows, or has reason to believe, that the security or related security: a) has recently been acted upon, b) may in the near future be recommended for action, or c) may in the near future be acted upon by the firm for client accounts.

• For Covered Securities that have been traded in client accounts, the blackout period begins five business days before the client trade and ends five business days after the last client trade. If the Covered Security was traded for reasons outside of an investment recommendation (e.g., cash flow, rebalancing/dispersion, etc.), the blackout period begins when the trades are placed on the blotter and ends when the trades have been completed.

• For Covered Securities that have been recommended or are "under consideration," the blackout period begins five business days before the day a security was recommended or placed under consideration and typically ends five business days thereafter. Some securities may remain on the restricted list for longer periods of time. Compliance has full discretion to decide whether a security is restricted and for how long.

• ETFs and ETNs that are not advised and/or subadvised by Westfield are not subject to the blackout periods discussed in this section.

**New Employees**

All new employees will be required to be in compliance with Westfield's Code within 10 calendar days from their date of hire (e.g., must cover short positions). New employees may also be allowed to continue to hold put and/or call options until they expire. Compliance will review these on a case by case basis.

New investment team employees will be allowed 10 calendar days to trim/liquidate securities within their sector universe that overlap with a strategy managed by Westfield's Investment Committee. However, all other provisions within the Code must be followed (e.g., must follow preclearance requirements, blackout periods apply).

Initial 401(k) allocations, including open-end mutual Funds sub-advised or advised by Westfield do not require preclearance.

**Reporting Requirements for Personal Securities Transactions**

Unless noted in *Exemptions* in this section, Access Persons must file the reports described below, even if the person has had no holdings, transactions, or accounts to list in the reports.

Reports are submitted through the personal trading system, which will track the dates and times of submissions. All submissions will remain confidential and will not be accessible by anyone other than Compliance and to the extent necessary to implement and enforce the provisions of the Code or to comply with regulatory or legal requirements.

Access Persons are responsible for reviewing and verifying the information on all of their reports prior to submission. You must promptly speak with Compliance about any errors, omissions, or discrepancies on these reports before they are submitted.

**Initial and Annual Holdings Reports.** Access Persons must submit a report of their holdings in Covered Securities within 10 days after the day they become an Access Person and on an annual basis thereafter. Initial holdings information should be current as of a date no more than 45 days prior to the employee's date of becoming an Access Person. Annual holding reports should be as of December 31st and submitted within 30 days after the calendar year-end. For each holding, Access Persons must provide: 1) the title and type of security, 2) as applicable, the exchange ticker symbol or cusip number, 3) the number of shares and principal amount of each reportable security in which the access person has any direct or indirect beneficial ownership, 4) the name of any broker, dealer or bank with which the access person maintains an account in which any securities are held for the access person's direct or indirect benefit, and 5) the date the access person submits the report.

------

**Quarterly Transaction Reports.** Access Persons are required to report Covered Securities transactions for the most recent calendar quarter. Each transaction should indicate: 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 reportable security involved, 2) the nature of the transaction (i.e., purchase, 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 broker, dealer or bank with or through which the transaction was effected, and 5) the date the access person submits the report. Quarterly transaction reports are due within 30 days after the calendar quarter end.

**Initial Investment Account Reports.** Access Persons must submit brokerage statements for all accounts held for their direct or indirect benefit within 10 days after the day they become an Access Person. Compliance will review these statements and determine if the accounts would fall under ongoing reporting requirements (i.e., a Covered Account). Statements should be dated no later than 45 days prior to the employee becoming an Access Person.

Quarterly Investment Account Reports. Access Persons must certify to a list of their Covered Accounts (as defined in Appendix A). Quarterly account reports are due within 30 days after the calendar quarter end.

Access Persons must notify Compliance of any new and closed Covered Accounts as soon as reasonably possible. Closed accounts will remain active in the personal trading system and will be subject to applicable reporting requirements described above unless Compliance has been notified otherwise.

**Duplicate Statements or Confirms.** Duplicate copies of personal transaction confirmations or account statements are required for Covered Accounts. Copies of such documents must be sent directly to Compliance or through an electronic feed into the personal trading system. Employees with accounts set up to receive electronic feeds in the personal trading system are not required to provide paper copies of confirmations or statements as transactions and positions directly feed into the system. If Compliance does not receive the appropriate electronic data or duplicate confirmations and statements, Compliance will request the documents from the Access Person. This requirement does not satisfy the quarterly or annual reporting requirements outlined above.

**Private Investments.** A confirmation of the investment with the invested dollar amount must be submitted to Compliance promptly after the investment is made.

<u>Exemptions</u>

The following transactions are exempt from the preclearance and/or reporting requirements discussed previously. Access Persons should be reminded that these exemptions do not absolve them from violations of other Westfield policies, applicable laws, and regulations, as well as the spirit of the Code.

• **No Knowledge or** Control**.** Transactions where the Access Person has no influence, control or knowledge are exempt from preclearance (e.g., corporate or broker actions).

Subject to Compliance approval, Access Persons can omit any report with respect to securities held in accounts over which the Access Person had no direct or indirect influence or control.

• Managed Accounts. Transactions effected in accounts managed by an external financial adviser are exempt from preclearance and reporting requirements. Access Persons may speak to their adviser about their financial goals and objectives, but they are not permitted to consult with their adviser (or be consulted) on any specific security transactions. To qualify for this exemption, Access Persons must:

Have their financial adviser provide an initial written certification to Westfield on the arrangement and/or provide a copy of the managed account agreement with their financial adviser.

Complete certifications quarterly regarding their influence or control over these accounts.

Annually have their financial adviser provide a written certification to Westfield that they did not consult with their adviser on any specific security transactions and that the adviser did not consult with them on any specific security transactions.

If requested, provide Compliance with copies of holdings and/or transactions made in their account(s).

• **529 Plans or College Savings Plans.** Transactions in 529 Plans or college savings plans are exempt from preclearance and reporting requirements. (Does not apply to Coverdell ESAs that are invested in Covered Securities.)

• **Automatic Investment Plans.** Transactions effected pursuant to an automatic investment plan are exempt from preclearance and reporting requirements.

------

• **Prior Employer's Profit Sharing or Retirement Plans.** Transactions executed in a prior employer's profit sharing or retirement plan are exempt from preclearance and reporting. This exemption does not apply to transactions in reportable securities or to any discretionary brokerage account option that may be available from a former employer. Such transactions/accounts are subject to preclearance and reporting requirements.

• **Other.** Transactions in securities determined by Compliance to present a low potential for impropriety or the appearance of impropriety may be exempt from transactional restrictions and preclearance/reporting requirements. Compliance will review these on a case-by-case basis.

**Administration**

**Approval and Distribution**

Compliance will distribute the Code (either as a stand-alone document or as part of the firm's Compliance Manual) to all employees during the first week of hire and at least annually thereafter. Employees are required to acknowledge their having received, read, and complied with the Code.

Material amendments or material revisions made to this Code will be approved by the CCO and the Management Committee. Upon approval, the Code will be distributed to all employees shortly thereafter. Immaterial amendments do not require Management Committee approval and will be distributed either with material amendments or during the annual distribution period. Employees may be required to complete appropriate acknowledgements after distribution.

**Training and Education**

Compliance is responsible for coordinating the training and education of employees regarding the Code. All newly hired employees are required to complete a compliance overview session that includes a review of the Code. They are also required to acknowledge that they have attended the new employee training and have received a copy of the Code (as part of the firm's Compliance Manual). Temporary or contract employees will be required to sign a confidentiality agreement and attend a compliance overview session.

Employees are required to attend all training sessions and read any applicable materials that Compliance deems appropriate. On occasion, it may be necessary for certain departments or individuals to receive additional training. Should this be the case, a member of Compliance will coordinate with the appropriate department managers to discuss particular topics and concerns to address at the training session.

**Personal Transactions Monitoring**

On at least a quarterly basis, a member of Compliance will review and monitor required reports for conformity with all applicable provisions outlined in the personal trading section. Each member of the Compliance

Department will review and monitor each other's reports as required by the Code.

**Annual Review of Code**

The CCO and/or the Deputy CCO will review, at least annually, the adequacy of the Code and the effectiveness of its implementation. Such results are usually recorded in the firm's annual testing program.

**Reports to Management Committee**

At least annually, the CCO will report material Code matters to Westfield's Management Committee. On occasion, the CCO will also report immaterial items to the Management Committee in order to keep them informed of Code matters.

------

**Recordkeeping Requirements**

Westfield will maintain the following records in a readily accessible place for a period of not less than seven years.

• A copy of each Code **that is in effect, or at any time within the past seven years;**

• **A record of any violation of the Code, and of any action taken as a result of the violation, for seven years after the end of the fiscal year in which the violation occurred;**

• **A copy of each report and acknowledgement made under the Code for the past seven years after the end of the fiscal year in which the report is made or information is provided;**

• **A list of names of persons, currently or within the past seven years, who are or were Access Persons or Investment Persons;**

• **A record of any decision, and the reasons supporting the decision, for approving the acquisition of IPOs and limited offerings for at least seven years after the end of the fiscal year in which the approval was granted; and**

• **A record of any granted** waivers or exceptions, and supporting reasons, to any provisions of the Code.

**Violations and Sanctions**

Westfield treats violations of the Code (including violations of the spirit of the Code) very seriously. If an employee violates either the letter or the spirit of this Code, Westfield may impose disciplinary actions or fines, or it may make a civil or criminal referral to appropriate regulatory entities (Refer to Appendix B for the sanctions table). Code violations become a part of the employee's employment history at Westfield. Multiple violations within a 12-month period will be reported to Human Resources and appropriate supervisors or managers. Employees should always consult with the CCO and/or the Deputy CCO if they are in doubt of any of the requirements or restrictions in the Code.

A senior member of Compliance will notify employees of any discrepancy between their personal activities and the rules outlined in this Code. Each violation and the circumstances surrounding each violation will be reviewed by a senior member of Compliance. Based on the review, a senior member of Compliance will determine whether the policies established in this Code have been violated, and whether any action should be taken. The CCO and/or the Deputy CCO will determine appropriate sanctions (in accordance with Westfield's sanctions guidelines). Once the sanction has been approved, Compliance will notify the employee. Compliance has the discretion of reporting material Code matters to the Operations & Risk Management Committee and/or the Management Committee.

------

<u>Appendix A: Glossary of Terms</u>

Westfield Capital Management Company, L.P.

Date Approved: 10/21/2025

**Access Person** is any Westfield employee or non-employee who meets at least one of the following conditions:

• is an officer, director, or partner

• has access to nonpublic information about client purchases or sales of securities

• makes or participates in making investment recommendations to clients

• has access to client investment recommendations that are non-public

• has access to nonpublic information regarding the portfolio holdings of affiliated mutual funds

**Beneficial Interest** generally refers to the opportunity, directly or indirectly, to profit or share in any profit.

**Business Day** refers to every official Westfield working day of the week.

**Client Account** refers to any account over which Westfield has been granted authority to purchase and/or sell securities on the client's behalf.

**Covered Account** refers to any investment account over which an Access Person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.has direct or indirect beneficial interest; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.exercises investment control, meaning he or she actually provides input into or makes the security buy and/or sell decisions for the account. The account does not need to be in an Access Person's name; if an Access Person has either joint or sole investment control over an account, it may be considered a Covered Account.

**Covered Security** refers to any security or fund that does not fall under one of the following exceptions:

• Direct obligations of the Government of the United States (e.g., treasury bills, treasury bonds, U.S. savings bonds);

• Bankers' acceptances, bank certificates of deposits, commercial paper, and high-quality short term debt instruments, including repurchase agreements;

• Shares issued by money market funds;

• Shares issued by open-end mutual funds that are not sub-advised or advised by Westfield;

• Shares issued by unit investment trusts ("UITs") that are invested exclusively in one or more open-end mutual funds, none of which are sub-advised or advised by Westfield.

**Employee** means all Westfield personnel who are not hired on a temporary or contract basis.

**Family member** refers to a spouse, children, step-children, grandchildren, parents, step-parents, grandparents, domestic partners, siblings, parents-in-law, children-in-law, as well as adoptive relationships sharing the same household.

**Investment Person** means any Access Person who makes or participates in making investment recommendations for client accounts.

**Reportable Fund** means any pooled fund, regardless of whether it is offered publicly or privately, for which Westfield serves as adviser or sub-adviser. This includes Westfield limited partnerships.

**Short Selling** means selling a security that is not owned in the account.

------

<u>Appendix B: Sanctions Guidelines</u>

Westfield Capital Management Company, L.P.

Date Approved: 09/25/2023

Sanctions can be more or less than what is indicated in the table below. Sanctions such as disgorgement of profits (gross of any taxes or transaction costs) and reversal of trades may be considered in addition to or instead of the sanctions indicated in the table below, In recommending sanctions, Compliance will:

• Consider an employee's role and responsibilities, past trading history, facts and circumstances around the violation and other applicable factors

• Impose the highest of all applicable sanctions, if a violation falls within more than one category or if multiple violations occur on the same day

• Review violations not listed in the table on a case-by-case basis

• Consult with the Management Committee or Operations & Risk Management Committee members, if needed

---

| | | |
|:---|:---|:---|
| **Violation** | **Management and Investment Committee, Research Analysts, Partners, Traders, Directors** | **All Other Employees** |
| &nbsp;&nbsp;Late Reporting or Certification<br>*All listed fines are per day after due date and per report or certification* | &nbsp;&nbsp;<u>First Offense</u>: $500<br><u>Second Offense</u>: $750 and suspension of personal securities transaction rights (up to 6 months)<br><u>Subsequent Offense</u>: $1,500 and suspension of personal securities transaction rights (up to 12 months) | &nbsp;&nbsp;<u>First Offense</u>: $100<br><u>Second Offense</u>: $200 and suspension of personal securities transaction rights (up to 3 months)<br><u>Subsequent Offense</u>: $300 and suspension of personal securities transaction rights (up to 6 months) |
| &nbsp;&nbsp;Failure to Preclear<br>(includes trading more shares then were precleared) | &nbsp;&nbsp;<u>First Offense</u>: $2,000 per transaction and suspension of personal securities transaction rights for 30 days<br><u>Second Offense</u>: $5,000 per transaction and suspension of personal securities transaction rights for 3 months<br><u>Subsequent Offense</u>: $10,000 per transaction and suspension of personal securities transaction rights for 12 months | &nbsp;&nbsp;<u>First Offense</u>: $500 per transaction<br><u>Second Offense</u>: $1,000 per transaction and suspension of personal securities transaction rights for 30 days<br><u>Subsequent Offense</u>: $2,500 per transaction and suspension of personal securities transaction rights for 6 months |
| &nbsp;&nbsp;Market Timing | &nbsp;&nbsp;Termination of employment and civil or criminal referral | &nbsp;&nbsp;Termination of employment and civil or criminal referral |
| &nbsp;&nbsp;Failure to Make Accurate or Complete Reports | &nbsp;&nbsp;Monetary fines starting at $5,000; suspension of personal securities transaction rights; possible termination of employment | &nbsp;&nbsp;Monetary fines starting at $1,000; suspension of personal securities transaction rights; possible termination of employment |
| &nbsp;&nbsp;Front Running | &nbsp;&nbsp;$2,500 per transaction; temporary or permanent suspension of personal securities transaction rights; possible termination of employment | &nbsp;&nbsp;$2,500 per transaction; temporary or permanent suspension of personal securities transaction rights; possible termination of employment |
| &nbsp;&nbsp;30-day Holding Period | &nbsp;&nbsp;<u>First Offense</u>: 2,000 per transaction<br><u>Second Offense</u>: $5,000 per transaction; suspension of personal transaction rights (up to 6 months)<br><u>Subsequent Offense</u>: $7,500 per transaction; suspension of personal securities transaction rights (up to 12 months) | &nbsp;&nbsp;<u>First Offense</u>: $500 per transaction<br><u>Second Offense</u>: $1,000 per transaction; suspension of personal transaction rights (up to 6 months)<br><u>Subsequent Offense</u>: $2,500 per transaction; suspension of personal securities transaction rights (up to 12 months) |

---

<br>