# EDGAR Filing Document

**Accession Number:** 0000898745
**File Stem:** 0001683863-23-001590
**Filing Date:** 2023-2
**Character Count:** 19446
**Document Hash:** f9993f617d59c885e310feafbd8192c0
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001683863-23-001590.hdr.sgml**: 20230227

**ACCESSION NUMBER**: 0001683863-23-001590

**CONFORMED SUBMISSION TYPE**: 497K

**PUBLIC DOCUMENT COUNT**: 3

**FILED AS OF DATE**: 20230227

**DATE AS OF CHANGE**: 20230227

**EFFECTIVENESS DATE**: 20230227

**FILER**: 

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

**FILING VALUES:**
- **FORM TYPE:** 497K
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 033-59474
- **FILM NUMBER:** 23673233

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

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

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

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

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

## Series and Classes Contracts Data

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

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

![](sumpro.gif)

**MidCap S&P 400 Index Fund** 

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Class** | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| **Ticker Symbol(s)** | PMFJX | MPSIX | PMSSX | PMFMX | PMFSX | PMFPX | PMAPX |

---

**Principal Funds, Inc. Summary Prospectus March 1, 2023**

Before you invest, you may want to review the Fund's Prospectus, which contains more information about the Fund and its risks. You can find the Fund's Prospectus, Statement of Additional Information, Reports to Shareholders, and other information about the Fund online at www.PrincipalAM.com/Prospectuses. You can also get this information at no cost by calling 1-800-222-5852 or by sending an email request to <u>prospectus@principalfunds.com</u>.

The Fund's Prospectus and Statement of Additional Information, both dated March 1, 2023, as may be amended or supplemented, are incorporated by reference into this Summary Prospectus.

**Objective**

The Fund seeks long-term growth of capital.

**Fees and Expenses of the Fund**

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.

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

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

---

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

---

**Annual Fund Operating Expenses**

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

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** | **Share Class** |
|  | **J** | **Inst.** | **R-1** | **R-3** | **R-4** | **R-5** | **R-6** |
| Management Fees | 0.15% | 0.15% | 0.15% | 0.15% | 0.15% | 0.15% | 0.15% |
| Distribution and/or Service (12b-1) Fees | 0.15% | N/A | 0.35% | 0.25% | 0.10% | N/A | N/A |
| Other Expenses | 0.11% | 0.08% | 0.54% | 0.33% | 0.29% | 0.27% | 0.01% |
| **Total Annual Fund Operating Expenses** | **0.41%** | **0.23%** | **1.04%** | **0.73%** | **0.54%** | **0.42%** | **0.16%** |

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**Example**

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

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

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $142 | $132 | $230 | $518 |
| **Institutional Class** | &nbsp;&nbsp;&nbsp;&nbsp; 24 | &nbsp;&nbsp;&nbsp;&nbsp; 74 | &nbsp;&nbsp; 130 | &nbsp;&nbsp;&nbsp;&nbsp; 293 |
| **Class R-1** | &nbsp;&nbsp; 106 | &nbsp;&nbsp; 331 | &nbsp;&nbsp; 574 | &nbsp;&nbsp; 1271 |
| **Class R-3** | &nbsp;&nbsp;&nbsp;&nbsp; 75 | &nbsp;&nbsp; 233 | &nbsp;&nbsp; 406 | &nbsp;&nbsp;&nbsp;&nbsp; 906 |
| **Class R-4** | &nbsp;&nbsp;&nbsp;&nbsp; 55 | &nbsp;&nbsp; 173 | &nbsp;&nbsp; 302 | &nbsp;&nbsp;&nbsp;&nbsp; 677 |
| **Class R-5** | &nbsp;&nbsp;&nbsp;&nbsp; 43 | &nbsp;&nbsp; 135 | &nbsp;&nbsp; 235 | &nbsp;&nbsp;&nbsp;&nbsp; 530 |
| **Class R-6** | &nbsp;&nbsp;&nbsp;&nbsp; 16 | &nbsp;&nbsp;&nbsp;&nbsp; 52 | &nbsp;&nbsp;&nbsp;&nbsp; 90 | &nbsp;&nbsp;&nbsp;&nbsp; 205 |

---

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

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
| **Class J** | $42 | $132 | $230 | $518 |

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**Portfolio Turnover**

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 20.90% of the average value of its portfolio.

**Principal Investment Strategies**

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of companies that compose the Standard & Poor's ("S&P") MidCap 400 Index (the "Index") at the time of purchase. The Index is designed to represent U.S. equities with risk/return characteristics of the mid cap universe. As of January 31, 2023, the market capitalization range of the companies comprising the Index was between approximately $1.8 billion and $16.6 billion. Each component stock of the Index is weighted in proportion to its total market value. The Index is rebalanced quarterly.

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

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

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

**Note**: "Standard & Poor's MidCap 400" and "S&P MidCap 400" are trademarks of S&P Global and have been licensed by Principal. The Fund is not sponsored, endorsed, sold, or promoted by S&P Global, and S&P Global makes no representation regarding the advisability of investing in the Fund.

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**Principal Risks**

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

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

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

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

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

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

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

**Investment Company Securities Risk.** A fund that invests in another investment company (for example, another fund or an exchange-traded fund (or ETF)) is subject to the risks associated with direct ownership of the securities in which such investment company invests. Fund shareholders indirectly bear their proportionate share of the expenses of each such investment company.

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

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**Performance**

The following information provides some indication of the risks of investing in the Fund. Past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information at www.PrincipalAM.com.

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

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

**Total Returns as of December 31**

![](mcsp400.jpg)

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| | | |
|:---|:---|:---|
| **Highest return for a quarter during the period of the bar chart above:** | **Q4 2020** | **24.32%** |
| **Lowest return for a quarter during the period of the bar chart above:** | **Q1 2020** | **(29.79)%** |

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**Average Annual Total Returns**

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

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| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Years** | **10 Years** |
| **Institutional Class Return Before Taxes** | **(13.22)%** | **6.47%** | **10.52%** |
| **Institutional Class Return After Taxes on Distributions** | **(14.68)%** | **4.43%** | **8.65%** |
| **Institutional Class Return After Taxes on Distributions and Sale of Fund Shares** | **(6.81)%** | **4.80%** | **8.28%** |
| **Class J Return Before Taxes** | **(14.19)%** | **6.28%** | **10.24%** |
| **Class R-1 Return Before Taxes** | **(13.93)%** | **5.61%** | **9.62%** |
| **Class R-3 Return Before Taxes** | **(13.64)%** | **5.95%** | **9.96%** |
| **Class R-4 Return Before Taxes** | **(13.53)%** | **6.14%** | **10.16%** |
| **Class R-5 Return Before Taxes** | **(13.41)%** | **6.27%** | **10.30%** |
| **Class R-6 Return Before Taxes** | **(13.21)%** | **6.53%** | **10.33%** |
| S&P MidCap 400 Index (reflects no deduction for fees, expenses, or taxes) | (13.07)% | 6.71% | 10.78% |

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

**Investment Advisor and Portfolio Managers**

Principal Global Investors, LLC

<sup>•</sup>

Jeffrey A. Schwarte (since 2016), Portfolio Manager

<sup>•</sup>

Aaron J. Siebel (since 2018), Portfolio Manager

**Purchase and Sale of Fund Shares**

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

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

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

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

See Purchase of Fund Shares for more information.

**Tax Information**

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

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

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

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