Ticker Symbols by Share Class

Fund

A

C

Inst.

R-6

Multi-Sector Income (formerly, Diversified Income)

PGBAX

PGDCX

PGDIX

PGBLX

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
			Page
FUND SUMMARY
MULTI-SECTOR INCOME FUND			4
ADDITIONAL INFORMATION ABOUT INVESTMENT STRATEGIES AND RISKS			10
PORTFOLIO HOLDINGS INFORMATION			21
MANAGEMENT OF THE FUND			22
PRICING OF FUND SHARES			23
CONTACT PRINCIPAL FUNDS, INC.			24
PURCHASE OF FUND SHARES			24
REDEMPTION OF FUND SHARES			28
EXCHANGE OF FUND SHARES			30
DIVIDENDS AND DISTRIBUTIONS			32
FREQUENT PURCHASES AND REDEMPTIONS			33
TAX CONSIDERATIONS			34
CHOOSING A SHARE CLASS AND THE COSTS OF INVESTING			35
DISTRIBUTION PLANS AND INTERMEDIARY COMPENSATION			40
FUND ACCOUNT INFORMATION			42
APPENDIX A - DESCRIPTION OF BOND RATINGS			A-1
APPENDIX B - INTERMEDIARY-SPECIFIC SALES CHARGE WAIVERS AND REDUCTIONS			B-1
APPENDIX C - FINANCIAL HIGHLIGHTS			C-1
ADDITIONAL INFORMATION			D

MULTI-SECTOR INCOME FUND

(formerly, DIVERSIFIED INCOME FUND)

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

			Share Class
			A			C			Inst.			R-6
Management Fees (1)			0.58%			0.58%			0.58%			0.58%
Distribution and/or Service (12b-1) Fees			0.25%			1.00%			N/A			N/A
Other Expenses (2)			0.12%			0.14%			0.12%			0.06%
Acquired Fund Fees and Expenses (3)			0.02%			0.02%			0.02%			0.02%
Total Annual Fund Operating Expenses			0.97%			1.74%			0.72%			0.66%
Expense Reimbursement (4)			N/A			N/A			(0.03)%			(0.03)%
Total Annual Fund Operating Expenses after Expense Reimbursement			0.97%			1.74%			0.69%			0.63%

(1) Fees have been restated to reflect current fees.

(3) Based on estimated expenses for the current fiscal year.

(4) 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, expenses related to the ReFlow liquidity program, 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 0.66% for Institutional Class shares. In addition, for Class R-6, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.02% (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, expenses related to the ReFlow liquidity program, and tax reclaim recovery expenses and other extraordinary expenses). It is expected that the expense limits will continue through the period ending February 29, 2028; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period. Subject to applicable expense limits, the Fund may reimburse PGI for expenses incurred during the current fiscal year.

			1 year			3 years			5 years			10 years
Class A			$470			$672			$891			$1,520
Class C			277			548			944			1,848
Institutional Class			70			227			398			892
Class R-6			64			208			365			820

			1 year			3 years			5 years			10 years
Class C			$177			$548			$944			$1,848

The Fund generally invests a majority of its assets in fixed-income securities, such as investment-grade corporate bonds, which are rated at the time of purchase Baa3 or higher by Moody’s Ratings (“Moody’s”) or BBB- or higher by S&P Global Ratings (“S&P Global”); bank loans; high yield bonds (also known as “junk bonds"), which are rated at the time of purchase Ba1 or lower by Moody’s and BB+ or lower by S&P Global; preferred securities; foreign securities (including emerging market securities and sovereign debt); U.S. government securities; and securitized products. Securitized products include asset-backed securities and mortgage-backed securities, such as residential and commercial mortgage-backed securities, collateralized mortgage and loan obligations, and to-be-announced (“TBA”) transactions.

The securities in which the Fund invests include instruments with variable or floating interest rates. The Fund is not managed to a particular maturity or duration.

The Fund also uses derivative strategies. A derivative is a financial arrangement, the value of which is derived from, or based on, a traditional security, asset, or market index. The derivatives in which the Fund invests include interest rate swaps or futures to manage fixed-income exposure, credit default swaps to increase or decrease in an efficient manner exposures to certain sectors or individual issuers, and currency forwards to hedge currency risk and express views on the direction of currency.

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.

Sovereign Debt Risk. Sovereign debt instruments are subject to the risk that a governmental entity may delay or refuse to pay interest or repay principal on its sovereign debt, due, for example, to cash flow problems, insufficient foreign currency reserves, political considerations, the relative size of the governmental entity’s debt position in relation to the economy, or the failure to put in place economic reforms required by the International Monetary Fund or other multilateral agencies.

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.

Highest return for a quarter during the period of the bar chart above:			Q4 2020			8.39		%
Lowest return for a quarter during the period of the bar chart above:			Q1 2020			(17.02)		%
Year-to-date return for Class A shares:			Q2 2026			pending

• Michael Goosay (since 2026), Portfolio Manager

• Tina Paris (since 2026), Portfolio Manager

The Fund’s investment objective is described in the summary section for the Fund. The summary section also describes the Fund’s principal investment strategies, including the types of securities in which the Fund invests, and the principal risks of investing in the Fund. The principal investment strategies are not the only investment strategies available to the Fund, but they are the ones the 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 the Fund’s investment objective or investment strategies, you should consider whether the Fund remains an appropriate investment for you. There is no guarantee that the Fund will meet its objective.

The 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 the Fund before making an investment; it is possible to lose money by investing in the Fund.

The following investment strategies and risks (before the “Principal Strategies and Risks” below) apply to the Fund and, depending on market conditions, can materially impact the management of the Fund.

The 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. The 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 Principal Funds pursuant to the Fund's 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, the Fund (whether its usage of derivatives and/or investment companies is principal to the Fund or not) 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 Fund's 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 the Fund.

The Fund has 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 the Fund’s liquidity risk, which is the risk that the 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 the 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, the Fund can expect to be exposed to greater liquidity risk.

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 the Fund’s discretion to implement temporary defensive measures, as well as the circumstances in which the Fund may satisfy redemption requests in-kind.

To generate additional income, the 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 the 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 Fund anticipates it will receive in securities lending transactions.

From time to time, as part of its investment strategy, the 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, the 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 the Fund may take temporary defensive measures. In taking such measures, the Fund may lose the benefit of upswings and may limit its ability to meet, or fail to achieve, its investment objective.

Principal Strategies and Risks

The following describes certain of the Fund's principal investment strategies and their related risks in greater detail. The strategies and risks are listed in alphabetical order and not in order of significance. The SAI contains additional information about investment strategies and their related risks.

Active Management

The performance of a fund that is actively managed 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 the Fund, or in other funds that have the same strategy as the Fund, may have difficulty fully investing such Fund’s assets according to its investment objective due to potential liquidity constraints and high transaction costs. The Fund may add additional investment advisors or close the Fund to new investors to address such risks.

Bank loans typically hold the most senior position in the capital structure of a business entity (the “Borrower”), are secured by specific collateral, and have a claim on the Borrower’s assets and/or stock that is senior to that held by the Borrower’s unsecured subordinated debtholders and stockholders. The proceeds of bank loans primarily are used to finance leveraged buyouts, recapitalizations, mergers, acquisitions, stock repurchases, dividends, and, to a lesser extent, to finance internal growth and for other corporate purposes. Bank loans are typically structured and administered by a financial institution that acts as the agent of the lenders participating in the bank loan. The Fund may purchase bank loans that are rated below-investment-grade (sometimes called “junk”) or will be comparable if unrated, which means they are more likely to default than investment-grade loans. A default could lead to non-payment of income, which would result in a reduction of income to the Fund, and there can be no assurance that the liquidation of any collateral would satisfy the Borrower’s obligation in the event of non-payment of scheduled interest or principal payments, or that such collateral could be readily liquidated. Most bank loans are not traded on any national securities exchange. Bank loans generally have less liquidity than investment-grade bonds, and there may be less public information available about them. Bank loan interests may not be considered “securities,” and purchasers, therefore, may not be entitled to rely on the anti-fraud protections of the federal securities laws.

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

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

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 the 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 the Fund’s performance and its ability to maintain positive returns to the extent the Fund is exposed to such interest rates. To the extent the 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 the 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.

Floating and Variable Rate Securities

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

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

The Fund considers 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 Fund also considers 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 Fund invests 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. 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.

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.

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.

Below-investment-grade securities are fixed-income securities that are rated at the time of purchase Ba1 or lower by Moody’s Ratings (“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.

• 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.

• 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.

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

• Residential mortgage-backed securities (“RMBS”) represent an interest in a pool of underlying residential mortgage loans secured by residential real estate. Residential mortgage loans may be prepaid at any time. Residential mortgage loans are obligations of the borrowers thereunder and are not typically insured or guaranteed by any other person or entity, although such loans may be securitized by government agencies and the securities issued may be guaranteed. The rate of defaults and losses on residential mortgage loans will be affected by many factors, including general economic conditions and those in the geographic area where the associated properties are located, the terms of the loan, the borrower’s “equity” in the mortgaged property or properties and the borrower’s financial circumstances. If a residential mortgage loan is in default, foreclosure of such loan may be a lengthy, difficult, and expensive process. The market for defaulted residential mortgage loans or foreclosed single-family properties may also be very limited.

• In a to-be-announced (“TBA”) transaction, a fund agrees to purchase or sell mortgage-backed securities for a fixed price at a future date. The seller agrees to deliver a mortgage-backed security to the fund at a future date but does not specify the particular security to be delivered. Instead, the fund agrees to accept any security that meets specified terms. There can be no assurance that a security purchased on a forward commitment basis will ultimately be issued or delivered by the counterparty. During the settlement period, the fund will still bear the risk of any decline in the value of the security to be delivered. If the counterparty to a transaction fails to deliver the securities, the fund could suffer a loss.

U.S. Government Securities

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.

A description of the Registrant’s policies and procedures with respect to disclosure of the Fund's portfolio securities is available in the Fund's SAI.

Principal Global Investors, LLC (“PGI”), an indirect subsidiary of Principal Financial Group, Inc. ® (“Principal ® ”), serves as the manager and advisor for the Fund. Through the Management Agreement with the Registrant, PGI provides investment advisory services and certain corporate administrative services for the Fund.

Advisor:			Principal Global Investors, LLC (doing business as Principal Asset ManagementSM), 711 High Street, Des Moines, IA 50392, is part of a diversified global asset management organization that utilizes specialized investment teams and affiliates to provide institutional investors and individuals with diverse investment capabilities, including fixed income, equities, real estate, and asset allocation. In addition to its asset management offices in the U.S., PGI has asset management offices of affiliate advisors located in Europe, Asia, Latin America, and Australia. PGI has been a registered investment advisor since 1998.
Funds:			In fulfilling its investment advisory responsibilities, PGI provides day-to-day discretionary investment services (directly making decisions to purchase or sell securities) for the Fund.

As reflected in the Fund Summary, the day-to-day portfolio management is shared by two portfolio managers. The portfolio managers operate as a team, sharing authority and responsibility for research and the day-to-day management of the portfolio. Additional information about the portfolio managers follows. With respect to the biographies, references to Principal ® encompass various entities and groups within the Principal organization, as well as investment teams within PGI.

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 Fund.

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

The Fund pays PGI a fee for its services. The fee the Fund paid (as a percentage of the Fund’s average daily net assets) for the fiscal year ended October 31, 2025 was:

Fund			Percentage of the Fund’s Average Daily Net Assets
Multi-Sector Income			0.66%

The discussions regarding the basis for the Board's approval of the Management Agreement for the Fund will be available in the Registrant's Form N-CSR filing on the SEC's website at www.sec.gov for the period ending October 31, 2026.

Although there is no present intent to do so, the Fund 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 Fund's shareholders have approved reliance on the Order, as supplemented by the SEC Staff guidance, as follows:

Fund

Unaffiliated Sub-Advisors

Wholly-Owned Affiliated Sub-Advisors

Majority-Owned Affiliated Sub-Advisors

Any Other Sub-Advisors Regardless of Degree of Affiliation

Multi-Sector Income

X

X

X

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

The Fund’s shares are bought and sold at the current share price. The share price of each class of the Fund is calculated each day the New York Stock Exchange (“NYSE”) is open. Share prices are not calculated on the days on which the NYSE is closed for trading, generally: New Year’s Day; Martin Luther King, Jr. Day; Washington’s Birthday/ Presidents’ Day; Good Friday; Memorial Day; Juneteenth; Independence Day; Labor Day; Thanksgiving Day; and Christmas. The share price of the Fund is determined as of the close of business of the NYSE (normally, 3:00 p.m. Central Time). When an order to buy or sell shares is received, the share price used to fill the order is the next price calculated after the order is received (in proper form) at the transaction processing center in Kansas City, Missouri. To process your transaction (purchase, redemption, or exchange) on the day it is received, it must be received (with complete information) on a day that the NYSE is open and before the close of trading on the NYSE (normally, 3:00 p.m. Central Time).

Orders received after 3:00 p.m. Central Time or on days that the NYSE is not open will be processed on the next day that the NYSE is open for normal trading. The Fund 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.

The share price is calculated by:

With respect to any portion of the 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.

• If market quotations are not readily available for a security owned by the 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.

• The 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 Fund 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 the 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.

Principal Funds, Inc. offers funds in multiple share classes: A, C, J, Institutional, R-3, R-5, R-6, and S. Funds available in multiple share classes have the same investments, but differing expenses. Institutional Class and Classes A, C, and R-6 shares are available in this Prospectus.

The Fund reserves the right to refuse or cancel any purchase orders, including those by exchange, for any reason. For example, the Fund does not intend to permit market timing because short-term or other excessive trading into and out of the Fund may harm performance by disrupting portfolio management strategies and by increasing expenses. Accordingly, the Fund may reject any purchase orders from market timers or investors that, in PGI’s opinion, may be disruptive to the Fund. For these purposes, PGI may consider an investor’s trading history in the Fund or other funds advised by PGI and accounts under common ownership or control.

PGI may recommend to the Board, and the Board may elect, to close the Fund or share classes to new investors or to close the Fund or share classes to new and existing investors.

No salesperson, broker-dealer, or other person is authorized to give information or make representations about the Fund other than those contained in this Prospectus. Information or representations not contained in this Prospectus may not be relied upon as having been provided or made by the Registrant, the Fund, PGI, any sub-advisor (if any), or Principal Funds Distributor, Inc. ("PFD" or the "Distributor").

Shares of the Fund are generally purchased through Financial Professionals. Financial Professionals may establish shareholder accounts according to their procedures or they may establish shareholder accounts directly with the Fund by visiting our website to obtain the appropriate forms.

Your Financial Professional can help you buy shares of the Fund by mail, through bank wire, direct deposit, or Automatic Investment Plan (“AIP”). No wires are accepted on days when the NYSE is closed or when the Federal Reserve is closed (because the bank that would receive your wire is closed). An investment in the Fund may be held in various types of accounts, including individual, joint ownership, trust, and business accounts. The Fund also offers a range of custodial accounts for those who wish to invest for retirement and/or education expenses. Prospective shareholders should consult with their Financial Professional before making decisions about the account and type of investment that are appropriate for them.

Institutional Class and Class R-6 Shares

Shares of the Fund are generally purchased through Financial Professionals. There are no sales charges on Institutional Class and Class R-6 shares of the Fund.

Shareholder accounts in these share classes are generally maintained under an open account system. Under this system, an account is opened and maintained for each investor (generally within an omnibus account, plan level account, or institutional investor). Each investment is confirmed by sending the investor a statement of account showing the current purchase or sale and the total number of shares owned. The statement of account is treated by the Fund as evidence of ownership of Fund shares. Contact your Financial Professional for additional information on how to buy shares.

The Fund will not establish accounts with foreign addresses. If an existing shareholder with a U.S. address moves to a foreign location and updates the address on the shareholder’s account, we are unable to process any purchases or exchanges on that account. The Fund will not establish accounts that are for the benefit of a business/organization that is illegal under federal and/or state law (such as a marijuana clinic) or a person who owns or receives income from such an entity or whose source of funds is illegal.

You must be an eligible purchaser for a particular share class to buy shares of the Fund available in that share class. At the sole discretion of the Distributor, the Fund may broaden or limit the designation of eligible purchasers, permit certain types of investors to open new accounts, impose further restrictions on purchases, or reject any purchase orders, all without prior notice. The Fund's shares may not be offered in every state. Please check with your Financial Professional or our home office for state availability.

Institutional Class and Class R-6 Shares

Some eligible purchasers (as listed below) purchase shares through plans or other intermediaries; such plans or intermediaries may impose fees in addition to those charged by the Fund. The services or share classes available to you may vary depending upon how you wish to purchase shares of the Fund. Each investor’s financial considerations are different. You should speak with your Financial Professional to help you decide which share class is best for you.

Eligible purchasers currently include, but are not limited to:			Institutional			R-6
retirement and pension plans to which Principal Life Insurance Company (“Principal Life”) provides recordkeeping services			X			X
separate accounts of Principal Life			X			X
Principal Life or any of its subsidiaries or affiliates			X			X
any fund distributed by PFD if the fund seeks to achieve its investment objective by investing primarily in shares of mutual funds			X			X
clients of Principal Global Investors, LLC			X			X
certain employer-sponsored retirement plans with plan level omnibus accounts			X			X
certain pension plans and employee benefit plans			X			X
certain retirement account investment vehicles administered by foreign or domestic pension plans			X			X
an investor who buys shares through an omnibus account with certain intermediaries, such as a broker-dealer, bank, or other financial institution, pursuant to a written agreement between the intermediary and PFD or its affiliate			X			X
certain retirement plan clients that have an organization, approved by Principal Life, for purposes of providing plan recordkeeping services			X			X
investors investing at least $1,000,000 per fund			X			X
sponsors, recordkeepers, or administrators of wrap account, mutual fund asset allocation, or fee-based programs or participants in those programs			X			X
certain institutional investors that provide recordkeeping for retirement plans or other employee benefit plans			X			X
institutional clients that Principal Life has approved for purposes of providing plan recordkeeping			X			X
institutional investors investing for their own account, including banks, trust companies, financial intermediaries, corporations, endowments, and foundations			X			X
collective trust funds, fund of funds, or other pooled investment vehicles, and entities acting for the account of a public entity			X			X
certain clients of a private banking division pursuant to a written agreement between the bank and PFD or its affiliate			X			X
the portfolio manager of any advisor to the fund			X
certain institutional investors with special arrangements (for example, insurance companies, employee benefit plans, retirement plans, and Section 529 Plans, among others)			X			X
retirement plans and IRAs investing through a retirement marketplace enabled by state legislation			X
ReFlow Fund, LLC in connection with the ReFlow liquidity program			X			X

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

Classes A and C Shares

Principal Funds has a minimum initial investment amount of $1,000 and a minimum subsequent investment amount of $100. Initial and subsequent investment minimums apply on a per-Fund basis for the Fund in which a shareholder invests.

Institutional Class and Class R-6 Shares

Classes A and C Shares

The Fund may, in its discretion and under certain limited circumstances, accept securities as payment for Fund shares at the applicable net asset value (“‘NAV”). For federal income tax purposes, a purchase of shares with securities will be treated as a sale or exchange of such securities on which the investor will generally realize a taxable gain or loss. The Fund will value securities used to purchase its shares using the same method the Registrant uses to value its portfolio securities as described in this Prospectus.

You may reinvest your redemption proceeds, dividend payment, or capital gain distribution without an initial sales charge or contingent deferred sales charge, in the same share class of any other fund of Principal Funds within 90 days of the date of the redemption. To purchase the shares without a sales charge (initial or contingent deferred) as described in this section, the shareholder must notify Principal Funds at the time of reinvestment that the shareholder is reinvesting proceeds within 90 days of the date of redemption. The original redemption will be considered a sale for federal (and state) income tax purposes even if the proceeds are reinvested within 90 days. If a loss is realized on the sale, the reinvestment may be subject to the “wash sale” rules resulting in the postponement of the recognition of the loss for tax purposes.

Your Financial Professional can help you establish an AIP. You may make regular monthly investments with automatic deductions from your bank or other financial institution account. You select the day of the month the deduction is to be made (if none is selected, the investment will be made on the 15th of the month). If that date is a non-trading day, we will process the deduction on the next trading day. If the next trading day falls in the next month or year, we will process the deduction on the day before your selected day.

Institutional Class and Class R-6 Shares

Class C shares of the Fund acquired through a reinvestment of dividends and distributions will convert to Class A shares of the Fund on the Conversion Date pro rata with the converting Class C shares of that Fund that were not acquired through reinvestment of dividends and distributions.

Under normal circumstances, you may redeem shares of any class of the Fund at any time. There is no fee for any redemption. The Board has determined that it is not necessary to impose a fee upon the redemption of Fund shares because the Fund has adopted transfer restrictions as described in Exchange of Fund Shares.

The shares you redeem will have the NAV per share that is next computed after the Fund receives and accepts your redemption order in proper and complete form. The amount you receive will be reduced by any applicable CDSC, except as noted below; see Choosing a Share Class and the Costs of Investing - One-Time Fee - Contingent Deferred Sales Charge (“CDSC”) - CDSC Waiver. Your redemption proceeds will generally be sent on the next business day (a day when the NYSE is open for normal business) following the date on which your request is received and accepted in proper and complete form. Although you can redeem your shares at any time, if you purchased shares by check or ACH and subsequently request a redemption of those shares, your redemption proceeds will generally be delayed for seven calendar days after the purchase to allow a sufficient period of time to ensure your recent payment has been cleared by the relevant bank. To redeem shares purchased by check or ACH within the previous seven days, the Fund requires redemption requests with respect to those shares to be submitted in writing or by telephone, unless you contact the Fund and make an alternate arrangement.

Under unusual circumstances, the Fund may suspend redemptions, or postpone payments for more than seven days, as permitted by federal securities law.

Under normal circumstances, the 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, the 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. The Fund may also choose to sell portfolio assets for the purpose of meeting such requests. The 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.

Classes A and C Shares

Except as described above, you may redeem shares of the Fund in any of the following ways:

Classes A, C, and Institutional Shares - Systematic Withdrawal Plans

Institutional Class and Class R-6 Shares

You may redeem shares of the Fund in any of the following ways:

◦ $500,000 for Class R-6.

Payment for shares of the Fund tendered for redemption is ordinarily made by check. However, the Fund may determine that it would be detrimental to the remaining shareholders of the Fund to make payment of a redemption order wholly or partly in cash. Under certain circumstances, therefore, the Fund may pay the redemption proceeds in whole or in part by a distribution of “in kind” securities from the Fund’s portfolio in lieu of cash. If the Fund pays the redemption proceeds in kind, the redeeming shareholder might incur brokerage or other costs in selling the securities for cash. In addition, the securities received will be subject to market risk until sold. Typically, such in kind redemptions made to an affiliated person would be distributed pro rata. The 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. The Fund may also use redemption in kind for certain Fund shares held by ReFlow.

An exchange between funds is a redemption of shares of one fund and a concurrent purchase of shares in another fund with the redemption proceeds. All exchanges completed on the same day are considered a single exchange for purposes of the exchange limitations described below. To prevent excessive exchanges, and under other circumstances where the Board or PGI believes it is in the best interests of the Fund, the Fund reserves the right to revise or terminate this exchange privilege, limit the amount or further limit the number of exchanges, reject any exchange, or close an account.

Classes A and C Shares

Your shares in the Fund may be exchanged without a sales charge or CDSC for the same class of any other Principal Funds. However, the original purchase date of the shares from which an exchange is made is used to determine if newly acquired shares are subject to a CDSC when they are sold. The Fund reserves the right to revise or terminate the exchange privilege at any time.

This election authorizes an exchange from one fund of Principal Funds to another fund of Principal Funds on a monthly, quarterly, semi-annual, or annual basis. You can set up an automatic exchange by:

• your fund account balance of the account from which shares are redeemed is zero.

• If you do not have an existing account in the fund to which the exchange is being made, a new account is established. The new account has the same owner(s), dividend and capital gain options, and dealer of record as the account from which the shares are being exchanged.

• All exchanges are subject to the minimum investment and eligibility requirements of the fund being acquired.

• You may acquire shares of a fund only if its shares are legally offered in your state of residence.

Fund shares used to fund an employee benefit plan may be exchanged only for shares of other funds available to the employee benefit plan. Such an exchange must be made by following the procedures provided in the employee benefit plan and the written service agreement.

Institutional Class and Class R-6 Shares

A shareholder, which may include a beneficial owner of shares held in nominee name or a participant in a participant-directed employee benefit plan, may exchange Fund shares under certain circumstances. In addition to any restrictions an intermediary (which may include, without limitation, an employee retirement plan or other employee benefit plan, plan administrator, plan record keeper, or managed account provider) imposes, Fund shares may be exchanged, without charge, for shares of the same share class of any other fund of the Principal Funds, provided that:

• the shareholder has not exchanged shares of the Fund within 30 days preceding the exchange,

• the share class of such other fund is available through the intermediary,

• the share class of such other fund is available in the shareholder’s state of residence, and

• with respect to shares purchased through an intermediary that is willing and able to impose the 30-day exchange or repurchase restriction described below, the shareholder has not exchanged shares of the Fund within 30 days preceding the exchange.

With respect to shares purchased through an intermediary that is willing and able to impose a 30-day exchange or repurchase restriction, an order to purchase shares of any fund will be rejected if the shareholder redeemed shares from that fund within the preceding 30-day period. The 30-day exchange or purchase restriction does not apply to exchanges or purchases made on a scheduled basis such as scheduled periodic portfolio rebalancing transactions or to transactions by managers of funds of funds in shares of the underlying funds.

The Fund's transfer agent employs transaction monitoring that management believes is reasonably likely to identify and prevent excessive trading in Fund shares. The 30-day exchange or repurchase restriction described above is not imposed with respect to shares held directly with the Fund's transfer agent. However, such shares may be purchased through an intermediary that imposes such an exchange or repurchase restriction.

Dividends are based on estimates of income, expenses, and shareholder activity for the Fund. Actual income, expenses, and shareholder activity may differ from estimates; consequently, differences, if any, will be included in the calculation of subsequent dividends. The Fund pays its net investment income monthly to record date shareholders.

You may ask to have your dividends paid to you in cash. If you do not request cash payment, your dividend will be applied to purchase additional shares of the Fund monthly.

Dividend and capital gains distributions will be reinvested, without a sales charge, in shares of the Fund; however, you may authorize (on your application or at a later time) the distribution to be:

• invested in shares of another of the Principal Funds without a sales charge (distributions of the Fund may be directed only to one receiving fund); or

Generally, for federal income tax purposes, Fund distributions are taxable as ordinary income, except that any distributions of long-term capital gains will be taxed as such, regardless of how long Fund shares have been held. Special tax rules apply to Fund distributions to Individual Retirement Accounts and other retirement plans. A tax advisor should be consulted to determine the suitability of the Fund as an investment by such a plan and the tax treatment of distributions by the Fund. A tax advisor can also provide information on the potential impact of possible foreign, state, and local taxes. The Fund’s investments in foreign securities may be subject to foreign withholding taxes. In that case, the Fund’s yield on those securities would be decreased.

The Fund’s payment of income dividends and capital gains has the effect of reducing the share price by the amount of the payment. Distributions from the Fund, whether received in cash or reinvested in additional shares, may be subject to federal (and state) income tax. For these reasons, buying shares of the Fund shortly before it makes a distribution may be disadvantageous to you.

The Fund is not designed for, and does not knowingly accommodate, frequent purchases and redemptions of Fund shares. If you intend to trade frequently and/or use market timing investment strategies, you should not purchase the Fund.

Frequent purchases and redemptions pose a risk to the Fund because they may:

•    Disrupt the management of the Fund by:

◦ forcing the Fund to hold short-term (liquid) assets rather than investing for long-term growth, which results in lost investment opportunities for the Fund; and

• Hurt the portfolio performance of the Fund; and

• Increase expenses of the Fund due to:

The Fund may be at greater risk of harm due to frequent purchases and redemptions. A fund that invests in foreign securities may appeal to investors attempting to take advantage of time-zone arbitrage. The Fund has adopted procedures to “fair value” foreign securities owned by the Fund each day to discourage these market timing transactions in shares of the Fund.

The Board has also adopted policies and procedures with respect to frequent purchases and redemptions of shares of the Fund. The Fund monitors shareholder trading activity to identify and take action against abuses. When we do identify abusive trading, we will apply our policies and procedures in a fair and uniform manner. While our policies and procedures are designed to identify and protect against abusive trading practices, there can be no certainty that we will identify and prevent abusive trading in all instances. If we are not able to identify such excessive trading practices, the Fund and its shareholders may be harmed. If we, or the Fund, deem abusive trading practices to be occurring, we will take action that may include, but is not limited to:

• Restricting submission of exchange requests by, for example, allowing exchange requests to be submitted by 1 st  class U.S. mail only and disallowing requests made by facsimile, overnight courier, telephone, or via the internet;

The Fund has reserved the right to accept or reject, without prior written notice, any exchange requests. In some instances, an exchange may be completed before a determination of abusive trading. In those instances, we will reverse the exchange and return the account holdings to the positions held before the exchange. We will give the shareholder written notice in this instance. Purchases and redemptions of Fund shares by ReFlow under the program are generally not considered excessive short-term trading under the Fund's Excessive Trading Policy.

Institutional Class and Class R-6 Shares

In addition to taking any of the foregoing actions, if we, or the Fund, deem abusive trading practices to be occurring, we may require a holding period of a minimum of 30 days before permitting exchanges among the funds where there is evidence of at least one round-trip exchange (exchange or redemption of shares that were purchased within 30 days of the exchange/redemption).

The Fund has adopted an exchange frequency restriction for these classes, described above in “Exchange of Fund Shares” to limit excessive trading in Fund shares.

It is a policy of the Fund to make distributions of substantially all of its investment income and any net realized capital gains. Shareholders are responsible for federal income tax (and any other taxes, including state and local income taxes, if applicable) on dividends and capital gains distributions whether such dividends or distributions are paid in cash or are reinvested in additional shares. Special tax rules apply to distributions from IRAs and other retirement accounts. You should consult a tax advisor to determine the suitability of the Fund as an investment by such a plan and the tax treatment of Fund distributions.

Generally, dividends paid by the Fund from interest, dividends, or net short-term capital gains will be taxed as ordinary income. Distributions properly designated by the Fund as deriving from net gains on securities held for more than one year are taxable as such (generally at a 15% tax rate for individuals and taxable trusts, some individuals and taxable trusts will be subject to a 20% tax rate), regardless of how long you have held your shares. Distributions of investment income properly designated by the Fund as derived from “qualified dividend income” will be taxed at the rates applicable to long-term capital gains. Some high-income individuals and taxable trusts will be subject to a Medicare 3.8% tax on unearned net investment income.

Any gain resulting from the redemption or exchange of your shares will generally also be subject to tax. For shares acquired after January 1, 2012, you will need to select a cost basis method to be used to calculate your reported gains and losses prior to or at the time of any redemption or exchange. If you do not select a method, the Fund's default method of average cost will be applied to the transactions. The cost basis method used on your account could significantly affect your taxes due and should be carefully considered. You should consult your tax advisor for more information on your own tax situation, including possible foreign, state, and local taxes.

Investments by the Fund in certain debt instruments or derivatives may cause the Fund to recognize taxable income in excess of the cash generated by such instruments. As a result, the Fund could be required at times to liquidate other investments to satisfy its distribution requirements under the Internal Revenue Code. The Fund’s use of derivatives will also affect the amount, timing, and character of the Fund’s distributions.

Early in each calendar year, the Fund will notify you of the amount and tax status of distributions paid to you for the preceding year.

A dividend or distribution made after the purchase of shares of the Fund by a shareholder, although in effect a return of capital to that shareholder, would be taxable to that shareholder as described above, subject to a holding period requirement for dividends designated as qualified dividend income.

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

The information contained in this Prospectus is not a complete description of the federal, state, local, or foreign tax consequences of investing in the Fund. You should consult your tax advisor before investing in the Fund.

The following sections describe the fees and expenses you may pay if you invest in the Fund. You may pay both one-time fees and ongoing fees. Fees and expenses are important because they lower your earnings. Before investing, you should be sure you understand the nature of different costs. Your Financial Professional can help you with this process and can help you choose the share class and fund or funds that are appropriate for you based upon your investment objective, risk tolerance, and other factors. Financial Professionals may receive different compensation depending upon which class of shares you purchase.

Fees and Expenses of the Fund

Classes A and C Shares

These share classes may include a front-end sales charge and/or contingent deferred sales charge. There is no sales charge on shares of the Fund purchased with reinvested dividends or other distributions. You may obtain more information about sales charge reductions and waivers from your Financial Professional.

The Fund seeks to prevent investments in Class C shares by shareholders with at least $1 million of investments in Principal Funds eligible for inclusion pursuant to Rights of Accumulation. If you are making an initial purchase of Principal Funds of $1,000,000 or more and have selected Class C shares, the purchase will be of Class A shares of the fund(s) you have selected. If you are making subsequent purchases into your existing Principal Funds Class C share accounts and the combined value of the subsequent investment and your existing Classes A, C, and J share accounts combined for Rights of Accumulation purposes exceeds $1,000,000, the subsequent investment will be applied to purchase Class A shares of the fund(s) you have selected.

Institutional Class and Class R-6 Shares

However, if you purchase Institutional Class or Class R-6 shares through certain programs offered by certain financial intermediaries, you may be required to pay a commission and/or other forms of compensation to the broker, or to your Financial Professional or other financial intermediary. Shares of the Fund are usually available in other share classes that have different fees and expenses.

Multi-Sector Income Fund
						Class A Sales Charge as % of:						Dealer Allowance as %
			Amount of Purchase			Offering Price			Amount Invested			of Offering Price
			Less than $100,000			3.75%			3.90%			3.00%
			$100,000 but less than $250,000			2.75%			2.83%			2.25%
			$250,000 but less than $500,000			1.50%			1.52%			1.00%
			$500,000 or more			0.00%			0.00%			0.00%*
*			The Distributor may pay authorized dealers commissions on purchases of Class A shares over $500,000 calculated as follows: 1.00% on purchases between $500,000 and $4,999,999, 0.50% on purchases between $5 million and $49,999,999, and 0.25% on purchases of $50 million or more. The commission rate is determined based on the cumulative investments over the life of the account combined with the investments in existing Classes A and C shares.

Class A shares of the Fund may be purchased without a sales charge or at a reduced sales charge. The availability of certain sales charge waivers and reductions will depend on whether you purchase your shares directly from the Fund or through a financial intermediary. Intermediaries may have different policies and procedures regarding the availability of initial (front-end) sales charge waivers or reductions. Such intermediary-specific sales charge variations are described in Appendix B to this prospectus, titled “Intermediary-Specific Sales Charge Waivers and Reductions.” If you purchase Fund shares through an intermediary listed on Appendix B, you will be eligible to the receive only the intermediary’s applicable waivers and reductions described on Appendix B. If you purchase Fund shares directly from the Fund or through an intermediary not listed on Appendix B, you will be eligible to receive only the following initial sales charge waivers and reductions. In all instances, it is your responsibility to notify the Fund or your financial intermediary at the time of purchase of any relationship or other facts qualifying you for sales charge waivers or reductions.

• You may reinvest the Funds’ Class A share redemption proceeds without a sales charge within 90 days of the redemption, if you previously paid a sales charge.

• The Fund’s Class A shares may be purchased without an initial sales charge by the following individuals, groups, and/or entities:

• any employee or registered representative (and their immediate family members and employees) of an authorized broker-dealer or company that makes available shares of the Fund;

• financial intermediaries who offer shares to self-directed investment brokerage accounts; and

• retirement plans or benefit plans, or participants in such plans, where the plan’s investments in the Fund are part of an omnibus account. For clarification, such plans do not include individual retirement arrangements under IRC Section 408, such as Simplified Employee Pensions (SEP), SIMPLE IRAs or other IRAs.

• The following two bullet points are only applicable to intermediaries that are affiliated with Principal Financial Group, Inc. The Fund’s Class A shares may be purchased without an initial sales charge by the following individuals, groups, and/or entities:

(1) Rights of Accumulation. The sales charge varies with the size of your purchase. Purchases made by (i) you, your spouse or domestic partner, your children (including children of your spouse or domestic partner) age 25 or under, and/or a trust created by or primarily for the benefit of such persons (together “a Qualified Purchaser”) will be combined along with the value of existing Classes A, C, and J shares of Principal Funds owned by such persons, plus (ii) the value of holdings by you or an immediate family member which includes your spouse, domestic partner, parent, legal guardian, child, sibling, stepchild, and father- or mother-in law of Classes A, C, and R Units of the Scholar’s Edge 529 Plan, to determine the applicable sales charge. Class A shares of the Money Market Fund are not included in the calculation unless they were acquired in exchange from other Principal Fund shares. If the total amount being invested in the Principal Funds is near a sales charge breakpoint, you should consider increasing the amount invested to take advantage of a lower sales charge.

(2) Statement of Intent (SOI). Qualified Purchasers may obtain reduced sales charges by signing an SOI. The SOI is a nonbinding obligation on the Qualified Purchaser to purchase the full amount indicated in the SOI. Purchases made by you, your spouse or domestic partner, or the children of you, your spouse or domestic partner up to and including the age of 25 and/or a trust created by or primarily for the benefit of such persons (together “a Qualified Purchaser”) will be combined along with the value of existing Classes A, C, and J shares of Principal Funds owned by such persons. Purchases of Class A shares of the Money Market Fund are not included. The sales charge is based on the total amount to be invested in a 13-month period. If the intended investment is not made (or shares are sold during the 13-month period), sufficient shares will be sold to pay the additional sales charge due. If a shareholder who signs an SOI dies within the 13-month period, no additional front-end sales charge will be required and the SOI will be considered met. An SOI is not available for 401(a) plan purchases.

(3) The maximum sales charge that applies to purchases of Class A shares by qualified plans administered by Expertplan, Inc. that were previously converted from B share plans is the sales charge that applies to purchases of at least $250,000 but less than $500,000 as described in the sales charge tables; the regular sales charge applies to purchases of $500,000 or more in such accounts and to all purchases of the Fund shares.

(4) The maximum sales charge for all purchases made in an account that is included in a SIMPLE IRA, SEP, SAR-SEP, non-qualified deferred compensation, or payroll deduction plan established before March 1, 2002 with Principal Management Corporation as the Fund's transfer agent, is the sales charge that applies to purchases of at least $100,000 but less than $250,000 as described in the sales charge tables; the regular sales charge applies to purchases of $250,000 or more in such accounts and to all purchases of the Fund shares. The reduced sales charge applies to purchases made by or on behalf of participants to such plans who became participants on or before July 28, 2007.

Institutional Class and Class R-6 Shares

Class A shares purchased in amounts that are of sufficient size to qualify for a 0.00% sales charge, as disclosed in the “Class A Sales Charges” table, are generally subject to a CDSC of 1.00% if the shares are redeemed during the first 18 months after purchase, unless the dealer, at its discretion, has waived the commission. The Distributor may pay authorized dealers commissions up to 1.00% of the price of such purchases.

Institutional Class and Class R-6 Shares

The CDSC may be waived on Classes A and C shares of the Fund; waivers vary depending on how shares are purchased. Certain waivers and reductions apply when shares are purchased directly from the Fund; others apply when shares are purchased through an intermediary. Intermediaries may have different policies and procedures regarding the availability of waivers or reductions of the CDSC. Such intermediary-specific sales charge variations are described in Appendix B to this Prospectus, titled “Intermediary-Specific Sales Charge Waivers and Reductions.” If you purchase Fund shares through an intermediary listed on Appendix B, you will be eligible to the receive only the intermediary’s applicable waivers and reductions described on Appendix B. If you purchase Fund shares directly from the Fund or through an intermediary not listed on Appendix B, you will be eligible to receive only the following CDSC waivers and reductions. In all instances, it is your responsibility to notify the Fund or your financial intermediary at the time of redemption of any facts qualifying you for sales charge waivers or reductions.

For Classes A and C shares, the CDSC is waived on shares:

The ongoing fees are the operating expenses of the Fund, which are described in the “Annual Fund Operating Expenses” table included in the Summary for the Fund. These expenses reduce the value of each share you own. Because they are ongoing, they increase the cost of investing in the Fund.

The Fund pays ongoing fees to PGI and others who provide services to the Fund. These fees include:

• Management Fee (all Classes) - Through the Management Agreement with the Registrant, PGI has agreed to provide investment advisory services and corporate administrative services to the Fund.

• Distribution Fee (Classes A and C) - The Fund has adopted a distribution plan under Rule 12b-1 of the 1940 Act for the foregoing classes. Under the plan, these classes of the Fund pay a distribution fee based on the average daily NAV of the Fund. These fees pay distribution and other expenses for the sale of Fund shares and for services provided to shareholders. Because they are ongoing fees, over time, these fees may exceed other types of sales charges.

• Other Expenses (all Classes) - A portion of certain expenses are allocated to all classes of the Fund, 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. Additional examples of other expenses include:

◦ Transfer Agent Fee (all Classes) - Principal Shareholder Services, Inc. (“PSS”) has entered into a Transfer Agency Agreement with the Registrant under which PSS provides transfer agent services to these classes. For Classes A, C, Institutional, and R-6 shares, these services are currently provided at cost.

◦ Certain Operating Expenses (Institutional Class and Classes A, C, and R-6) — Expenses of registering and qualifying shares for sale, the cost of producing and distributing reports and prospectuses to shareholders of these classes, the cost of shareholder meetings held solely for shareholders of these classes, and other operating expenses of the Fund.

• Acquired Fund Fees and Expenses (all Classes) - Fees and expenses charged by other investment companies in which the Fund invests a portion of its assets.

The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act (the “12b-1 Plan”) for each of the Classes A and C shares of the Fund. Under the 12b-1 Plan, except as noted below, the Fund makes payments from its assets attributable to the particular share class to the Fund's Distributor for distribution-related expenses and for providing services to shareholders of that share class. Payments under the 12b-1 Plan are made by the Fund to the Distributor pursuant to the 12b-1 Plan regardless of the expenses incurred by the Distributor. When the Distributor receives Rule 12b-1 fees, it may pay some or all of them to financial intermediaries whose customers are shareholders of the Fund for sales support services and for providing services to shareholders of that share class. Financial intermediaries may include, among others, broker-dealers, registered investment advisors, banks, trust companies, pension plan consultants, retirement plan administrators, and insurance companies. These financial intermediaries include Principal Securities, Inc., a broker-dealer affiliated with PGI. Because Rule 12b-1 fees are paid out of Fund assets and are ongoing fees, over time they will increase the cost of your investment in the Fund and may cost you more than other types of sales charges.

Share Class			Maximum Annualized Rate 12b-1 Fee
A			0.25%
C			1.00%

Payments under the 12b-1 Plans will not automatically terminate for the Fund if it is closed to new investors or to additional purchases by existing shareholders. The Board will determine whether to terminate, modify, or leave unchanged the 12b-1 Plans when the Board directs the implementation of the closure of the Fund.

Class A Shares

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

Classes A and C Shares

Institutional Class and Class R-6 Shares

In addition to payments pursuant to applicable 12b-1 plans, PGI or its affiliates enter into agreements with some intermediaries pursuant to which the intermediaries receive payments for providing services relating to Fund shares. Examples of such services are administrative, networking, recordkeeping, sub-transfer agency, and/or shareholder services. For Institutional Class shares, in some situations the Fund will reimburse PGI or its affiliates for making such payments; in others, the Fund may make such payments directly to the intermediaries.

Principal Life Insurance Company is one such intermediary that provides services relating to Fund shares held in employee benefit plans, and it is typically paid other compensation described in this section as payable to intermediaries.

Institutional Class and Classes A, C, and R-6 Shares

In some cases, the Distributor and its affiliates will provide payments or reimbursements in connection with the costs of conferences, educational seminars, training, and marketing efforts related to the Fund. Such activities may be sponsored by intermediaries or the Distributor. The costs associated with such activities may include travel, lodging, entertainment, and meals. In some cases, the Distributor will also provide payment or reimbursement for expenses associated with transactions (“ticket”) charges and general marketing expenses.

You will receive quarterly statements for the Fund, or if you purchase through a third-party intermediary, on a periodic basis established by such intermediary. Such statements provide the number and value of shares you own, transactions during the period, dividends declared or paid, and other information. The year-end statement includes information for all transactions that took place during the year. Please review your statement as soon as you receive it. Keep your statements, as you may need them for tax reporting purposes.

Principal Funds may have an agreement with your intermediary, such as a broker-dealer, third-party administrator, or trust company, that permits the intermediary to receive orders on behalf of the Fund until 3:00 p.m. Central Time. The agreement may include authorization for your intermediary to designate other intermediaries (“sub-designees”) to receive orders on behalf of the Fund on the same terms that apply to the intermediary. In such cases, if your intermediary or a sub-designee receives your order in correct form by the required time, transmits it to the Fund, and pays for it in accordance with the agreement, the Fund will price the order at the next NAV per share it computes after your intermediary or sub-designee received your order.

The Fund reserves the right to refuse telephone and/or internet instructions. You are liable for a loss resulting from a fraudulent telephone or internet instruction that we reasonably believe is genuine. We use reasonable procedures to assure instructions are genuine. If the procedures are not followed, we may be liable for loss due to unauthorized or fraudulent transactions. The procedures include: recording all telephone instructions, requiring the use of a password (Personal Identification Number) for internet instructions, requesting personal identification information, and sending written confirmation to the shareholder’s address of record.

Signature guarantees are required in any of the following circumstances:

A

C

Inst.

R-6

if you sell more than $100,000 (in the aggregate) from the Principal Funds

X

X

if you sell more than $500,000 (in the aggregate) from the Principal Funds

X

X

if you sell more than $10,000,000 if you have the proceeds sent electronically to a previously authorized U.S. bank account

X

if a sales proceeds check is payable to a party other than the account shareholder(s)

X

X

if a sales proceeds check is payable to a party other than the account shareholder(s) or Principal Life, Principal Bank, a retirement plan trustee or custodian that has agreed in writing to accept a transfer of assets from the Fund, or Principal Securities, Inc. payable through Pershing

X

X

to change ownership of an account

X

X

X

X

to add telephone transaction services and/or wire or ACH redemption privileges to an existing account if there is not a common owner between the bank account and mutual fund account

X

X

X

X

to change bank account information designated under an existing telephone withdrawal plan if there is not a common owner between the bank account and mutual fund account

X

X

X

X

to wire or ACH to a shareholder’s U.S. bank account not previously authorized or when the request does not include a voided check or deposit slip indicating a common owner between the bank account and mutual fund account

X

X

X

X

to exchange or transfer among accounts with different ownership

X

X

X

X

to have a sales proceeds check mailed to an address other than the address on the account or to the address on the account if it has been changed within the preceding 15 days

X

X

X

X

Classes A and C Shares - Minimum Account Balance

The Fund has a minimum required account balance of $1,000. The Fund reserves the right to redeem all shares in your account if the value of your account falls below $1,000. The Fund will mail the redemption proceeds to you. An involuntary redemption of a small account will not be triggered by market conditions alone. The Fund will notify you before involuntarily redeeming your account. You will have 30 days to make an additional investment of an amount that brings your account up to the required minimum. The Fund reserves the right to increase the required minimum.

Moody’s Ratings - Rating Definitions:

To be filed by amendment.

Dated March 1, 2026 as amended and restated ________________

This Statement of Additional Information (“SAI”) is not a prospectus. It contains information in addition to the information in the Registrant’s Prospectus. The Prospectus, which may be amended from time to time, contains the basic information you should know before investing in a Fund. You should read this SAI together with the Prospectus dated ____________, 2026 for the Multi-Sector Income Fund and the Prospectus dated March 1, 2026 for the other series of the Registrant, set forth in the table below.

Incorporation by Reference: To be filed by amendment.

Ticker Symbols by Share Class

Fund/Portfolio

A

C

J

Inst.

R-3

R-5

R-6

California Municipal

SRCMX

SRCCX

PCMFX

Core Fixed Income

CMPIX

PIOJX

PIOIX

PIOOX

PIOQX

PICNX

Core Plus Bond

PRBDX

PBMJX

PMSIX

PBMMX

PBMPX

Diversified International

PRWLX

PIIJX

PIIIX

PINRX

PINPX

PDIFX

Equity Income

PQIAX

PEUCX

PEIJX

PEIIX

PEIOX

PEIQX

Finisterre Emerging Markets Total Return Bond

PFUMX

Global Emerging Markets

PRIAX

PIEJX

PIEIX

PEAPX

PEPSX

PIIMX

Global Real Estate Securities

POSAX

POSIX

PGRKX

PGRUX

PGRSX

Government & High Quality Bond

CMPGX

PMRJX

PMRIX

PRCMX

PMREX

Government Money Market

PGVXX

PGWXX

High Yield

CPHYX

CCHIX

PHYTX

PHYFX

Inflation Protection

PIPJX

PIPIX

PIFPX

PBPPX

International Bond

PIBRX

International Equity

PINIX

PRPPX

PTPPX

PIIDX

LargeCap Growth I

PLGAX

PLGJX

PLGIX

PPUMX

PPUPX

PLCGX

LargeCap S&P 500 Index

PLSAX

PSPJX

PLFIX

PLFMX

PLFPX

LargeCap Value III

PLVJX

PLVIX

PPSFX

PPSRX

MidCap

PEMGX

PMBCX

PMBJX

PCBIX

PMBMX

PMBPX

PMAQX

MidCap S&P 400 Index

PMFJX

MPSIX

PMFMX

PMFPX

PMAPX

MidCap Value I

PCMVX

PVEJX

PVMIX

PMPRX

PABVX

PCMSX

Money Market

PCSXX

PMJXX

Multi-Sector Income (formerly, Diversified Income)

PGBAX

PGDCX

PGDIX

PGBLX

Overseas

PINZX

PINTX

Principal Capital Appreciation

CMNWX

PWCIX

PCAOX

PCAQX

Principal LifeTime Strategic Income

PALTX

PLSJX

PLSIX

PLSMX

PLSPX

Principal LifeTime 2020

PTBAX

PLFJX

PLWIX

PTBMX

PTBPX

Principal LifeTime 2025

LTSTX

LTVPX

LTPDX

Principal LifeTime 2030

PTCAX

PLTJX

PMTIX

PTCMX

PTCPX

Principal LifeTime 2035

LTIUX

LTAOX

LTPEX

Principal LifeTime 2040

PTDAX

PTDJX

PTDIX

PTDMX

PTDPX

Principal LifeTime 2045

LTRIX

LTRVX

LTRDX

Principal LifeTime 2050

PPEAX

PFLJX

PPLIX

PTERX

PTEFX

Principal LifeTime 2055

LTFIX

LTFDX

LTFPX

Principal LifeTime 2060

PLTAX

PLTZX

PLTCX

PLTOX

Principal LifeTime 2065

PLJIX

PLJCX

PLJEX

Principal LifeTime 2070

PLTLX

PLTGX

PLTDX

PLTFX

Principal LifeTime Hybrid Income

PHJFX

PHTFX

PLTYX

Principal LifeTime Hybrid 2020

PHJTX

PHTTX

PLTTX

Principal LifeTime Hybrid 2025

PHJQX

PHTQX

PLFTX

Principal LifeTime Hybrid 2030

PHJNX

PHTNX

PLZTX

Principal LifeTime Hybrid 2035

PHJJX

PHTJX

PLRTX

Principal LifeTime Hybrid 2040

PHJEX

PLTQX

PLMTX

Principal LifeTime Hybrid 2045

PHJYX

PHTYX

PLNTX

Principal LifeTime Hybrid 2050

PHJUX

PHTUX

PLJTX

Principal LifeTime Hybrid 2055

PHJBX

PLTNX

PLHTX

Principal LifeTime Hybrid 2060

PHJGX

PLTHX

PLKTX

Principal LifeTime Hybrid 2065

PHJDX

PLHHX

PLHRX

Principal LifeTime Hybrid 2070

PLKJX

PLKSX

PLKRX

Real Estate Securities

PRRAX

PRCEX

PREJX

PIREX

PRERX

PREPX

PFRSX

Ticker Symbols by Share Class

Fund/Portfolio

A

C

J

Inst.

R-3

R-5

R-6

SAM Balanced

SABPX

SCBPX

PSAJX

PSBIX

PBAPX

PSBFX

SAM Conservative Balanced

SAIPX

SCIPX

PCBJX

PCCIX

PCBPX

PCBFX

SAM Conservative Growth

SAGPX

SCGPX

PCGJX

PCWIX

PCGPX

PCWPX

SAM Flexible Income

SAUPX

SCUPX

PFIJX

PIFIX

PFIPX

PFIFX

SAM Strategic Growth

SACAX

SWHCX

PSWJX

PSWIX

PSGPX

PSGFX

Short-Term Income

SRHQX

STCCX

PSJIX

PSHIX

PSIOX

PSIQX

SmallCap

PLLAX

PSBJX

PSLIX

PSBMX

PSBPX

PSMLX

SmallCap Growth I

PSIJX

PGRTX

PPNMX

PPNPX

PCSMX

SmallCap S&P 600 Index

PSSJX

PSSIX

PSSMX

PSSPX

PSPIX

SmallCap Value II

PSMJX

PPVIX

PJARX

PLARX

PSMVX

Tax-Exempt Bond

PTEAX

PTBCX

PITEX

Share Class

Fund/Portfolio

A

C

J

Inst.

R-3

R-5

R-6

California Municipal

X

X

X

Core Fixed Income

X

X

X

X

X

X

Core Plus Bond

X

X

X

X

X

Diversified International

X

X

X

X

X

X

Equity Income

X

X

X

X

X

X

Finisterre Emerging Markets Total Return Bond

X

Global Emerging Markets

X

X

X

X

X

X

Global Real Estate Securities

X

X

X

X

X

Government & High Quality Bond

X

X

X

X

X

Government Money Market

X

X

High Yield

X

X

X

X

Inflation Protection

X

X

X

X

International Bond

X

International Equity

X

X

X

X

LargeCap Growth I

X

X

X

X

X

X

LargeCap S&P 500 Index

X

X

X

X

X

LargeCap Value III

X

X

X

X

MidCap

X

X

X

X

X

X

X

MidCap S&P 400 Index

X

X

X

X

X

MidCap Value I

X

X

X

X

X

X

Money Market

X

X

Multi-Sector Income (formerly, Diversified Income)

X

X

X

X

Overseas

X

X

Principal Capital Appreciation

X

X

X

X

Principal LifeTime Strategic Income

X

X

X

X

X

Principal LifeTime 2020

X

X

X

X

X

Principal LifeTime 2025

X

X

X

Principal LifeTime 2030

X

X

X

X

X

Principal LifeTime 2035

X

X

X

Principal LifeTime 2040

X

X

X

X

X

Principal LifeTime 2045

X

X

X

Principal LifeTime 2050

X

X

X

X

X

Principal LifeTime 2055

X

X

X

Principal LifeTime 2060

X

X

X

X

Principal LifeTime 2065

X

X

X

Principal LifeTime 2070

X

X

X

X

Principal LifeTime Hybrid Income

X

X

X

Principal LifeTime Hybrid 2020

X

X

X

Principal LifeTime Hybrid 2025

X

X

X

Principal LifeTime Hybrid 2030

X

X

X

Principal LifeTime Hybrid 2035

X

X

X

Principal LifeTime Hybrid 2040

X

X

X

Principal LifeTime Hybrid 2045

X

X

X

Share Class

Fund/Portfolio

A

C

J

Inst.

R-3

R-5

R-6

Principal LifeTime Hybrid 2050

X

X

X

Principal LifeTime Hybrid 2055

X

X

X

Principal LifeTime Hybrid 2060

X

X

X

Principal LifeTime Hybrid 2065

X

X

X

Principal LifeTime Hybrid 2070

X

X

X

Real Estate Securities

X

X

X

X

X

X

X

SAM Balanced

X

X

X

X

X

X

SAM Conservative Balanced

X

X

X

X

X

X

SAM Conservative Growth

X

X

X

X

X

X

SAM Flexible Income

X

X

X

X

X

X

SAM Strategic Growth

X

X

X

X

X

X

Short-Term Income

X

X

X

X

X

X

SmallCap

X

X

X

X

X

X

SmallCap Growth I

X

X

X

X

X

SmallCap S&P 600 Index

X

X

X

X

X

SmallCap Value II

X

X

X

X

X

Tax-Exempt Bond

X

X

X

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:

a) The Global Emerging Markets, LargeCap Growth I, Real Estate Securities, and Principal Capital Appreciation Funds have elected to be non-diversified.

(b) The Diversified International, Finisterre Emerging Markets Total Return Bond, Global Emerging Markets, Global Real Estate Securities, International Bond Fund, Money Market, Multi-Sector Income, and Overseas Funds each may invest up to 100% of its assets in foreign securities;

(a) The Global Real Estate Securities, International Equity, Multi-Sector Income, and Real Estate Securities Funds and the Principal LifeTime Funds, Principal LifeTime Hybrid Funds, and the Strategic Asset Management (SAM) Portfolios have not adopted this non-fundamental restriction.

The California Municipal, Diversified International, Inflation Protection, Multi-Sector Income, Principal Capital Appreciation, Short-Term Income, and Tax-Exempt Bond Funds, Principal LifeTime Funds, Principal LifeTime Hybrid Funds, and Strategic Asset Management (SAM) Portfolios have not adopted this non-fundamental policy.

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.

"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.

Contingent Convertible Securities (“CoCos”)

A Fund may invest in contingent convertible securities (“CoCos”). CoCos are hybrid debt securities intended to either convert into equity or have their principal written down upon the occurrence of certain “triggers.” The triggers are generally linked to regulatory capital thresholds or regulatory actions calling into question the issuing banking institution’s continued viability as a going-concern if the conversion trigger were not exercised. CoCos’ unique equity conversion or principal write-down features are tailored to the issuing banking institution and its regulatory requirements. Some additional risks associated with CoCos include, but are not limited to, the following:

• The occurrence of a conversion event is inherently unpredictable and depends on many factors, some of which will be outside the issuer’s control. Because of the uncertainty regarding whether a conversion event will occur, it may be difficult to predict when, if at all, a CoCo will be converted to equity, and a fund may suffer losses as a result.

• CoCos may have no stated maturity and fully discretionary coupons. This means coupon (i.e., interest) payments can be canceled at the banking institution’s discretion or at the request of the relevant regulatory authority in order to help the bank absorb losses, without causing a default.

• CoCos are usually issued in the form of subordinated debt instruments to provide the appropriate regulatory capital treatment. If an issuer liquidates, dissolves, or winds-up before a conversion to equity has occurred, the rights and claims of the holders of the CoCos (such as a fund) against the issuer generally rank junior to the claims of holders of unsubordinated obligations of the issuer. In addition, if the CoCos are converted into the issuer’s underlying equity securities after a conversion event (i.e., a “trigger”), each holder will be further subordinated.

• The value of CoCos is unpredictable and is influenced by many factors, including, without limitation: the creditworthiness of the issuer and/or fluctuations in such issuer’s applicable capital ratios; supply and demand for CoCos; general market conditions and available liquidity; and economic, financial, and political events that affect the issuer, its particular market, or the financial markets in general. Moreover, the performance of CoCos may be correlated with one another and, as a result, negative information of one issuer may cause decline in the value of CoCos of many other issuers.

Due to these features, CoCos may have substantially greater risk than other securities in times of financial stress. If the trigger level is breached, the issuer’s decision to write down, write off, or convert a CoCo may result in the fund’s complete loss on an investment in CoCos with no chance of recovery, even if the issuer remains in existence.

Further, the portfolio managers of the Finisterre Emerging Markets Total Return Bond Fund and a portion of the emerging market debt investments in the Multi-Sector Income Fund use filtering techniques based on ESG criteria, which can result in the exclusion of companies that have exposures to certain controversial sectors. The exclusion of companies from the investable universe may, under certain circumstances, detract from investment performance.

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 Ratings ("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.