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N-1A
PRINCIPAL FUNDS, INC.
2026-08-25
MULTI-SECTOR INCOME FUND
Objective
<div style="margin-bottom:6pt;padding-left:63pt;text-align:justify;text-indent:-63pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Fund seeks income.</span></div>
Fees and Expenses of the Fund
<div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">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.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> 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 35 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 72 of the Fund’s Statement of Additional Information.</span></div><div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">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.</span></div>
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.
100000
Shareholder Fees (fees paid directly from your investment)
0.0375
0
0
0
0.0100
0.0100
0
0
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
0.0058
0.0058
0.0058
0.0058
0.0025
0.0100
0.0012
0.0014
0.0012
0.0006
0.0002
0.0002
0.0002
0.0002
0.0097
0.0174
0.0072
0.0066
-0.0003
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0.0097
0.0174
0.0069
0.0063
Fees have been restated to reflect current fees.
February 29, 2028
Example
This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example assumes conversion of the Class C shares to Class A shares after the eighth year. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
470
672
891
1520
277
548
944
1848
70
227
398
892
64
208
365
820
With respect to Class C shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):
177
548
944
1848
Portfolio Turnover
<div style="margin-bottom:8pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 92.9% of the average value of its portfolio.</span></div>
0.929
Principal Investment Strategies
<div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">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. A TBA transaction is a forward-settling trade in mortgage-backed security in which the parties agree on general trade parameters but the specific security to be delivered is identified shortly before settlement.</span></div><div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">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 invests in other investment companies (for example, exchange-traded funds (ETFs)) to gain exposure to fixed-income securities.</span></div><div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">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 or to seek to benefit from anticipated changes in the value of one currency relative to another.</span></div><div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Fund is actively managed using a top-down and bottom-up investment process. The Fund's investment advisor assesses macroeconomic conditions and market risks, allocates investments across fixed income sectors based on fundamental, technical, and valuation factors, and selects securities using proprietary analysis and sector-specific research. The portfolio is then constructed and monitored to pursue attractive risk-adjusted returns consistent with the Fund's investment objective and policies.</span></div>
Many factors affect that value, and it is possible to lose money by investing in the Fund.
An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
<span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Bank Loans Risk. </span>Changes in economic conditions are likely to cause issuers of bank loans (also known as senior floating rate interests) to be unable to meet their obligations. In addition, the value of the collateral securing the loan (if any) may decline, causing a loan to be substantially unsecured. Underlying credit agreements governing the bank loans, reliance on market makers, priority of repayment, and overall market volatility may harm the liquidity of loans.
<span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Counterparty Risk. </span>Counterparty risk is the risk that the counterparty to a contract or other obligation will be unable or unwilling to honor its obligations.
<div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Derivatives Risk. </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Derivatives may not move in the direction anticipated by the portfolio manager. Transactions in derivatives may increase volatility, cause the liquidation of portfolio positions when not advantageous to do so, and result in disproportionate losses that may be substantially greater than a fund’s initial investment. </span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%;padding-left:14.5pt">Credit Default Swaps.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> Credit default swaps involve special risks in addition to those associated with swaps generally because they are difficult to value, are highly susceptible to liquidity and credit risk, and generally pay a return to the party that has paid the premium only in the event of an actual default by the issuer of the underlying obligation (as opposed to a credit downgrade or other indication of financial difficulty). The protection “buyer” in a credit default contract may be obligated to pay the protection “seller” an up-front payment or a periodic stream of payments over the term of the contract, provided, generally, that no credit event on a reference obligation has occurred. If a credit event occurs, the seller generally must pay the buyer the “par value” (i.e., full notional value) of the swap in exchange for an equal face amount of deliverable obligations of the reference entity described in the swap, or the seller may be required to deliver the related net cash amount, if the swap is cash settled. The Fund may be either the buyer or seller in the transaction. </span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%;padding-left:14.5pt">Currency Contracts. </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Derivatives related to currency contracts involve the specific risk of government action that would restrict the ability of the Fund to deliver or receive currency. </span></div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%;padding-left:14.5pt">Forward Contracts, Futures, and Swaps. </span>Forward contracts, futures, and swaps involve specific risks, including: the imperfect correlation between the change in market value of the instruments held by the Fund and the price of the forward contract, future, or swap; possible lack of a liquid secondary market for a forward contract, future, or swap and the resulting inability to close a forward contract, future, or swap when desired; counterparty risk; and if the Fund has insufficient cash, it may have to sell securities from its portfolio to meet daily variation margin requirements.
<span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%;padding-left:14.5pt">Credit Default Swaps.</span> Credit default swaps involve special risks in addition to those associated with swaps generally because they are difficult to value, are highly susceptible to liquidity and credit risk, and generally pay a return to the party that has paid the premium only in the event of an actual default by the issuer of the underlying obligation (as opposed to a credit downgrade or other indication of financial difficulty). The protection “buyer” in a credit default contract may be obligated to pay the protection “seller” an up-front payment or a periodic stream of payments over the term of the contract, provided, generally, that no credit event on a reference obligation has occurred. If a credit event occurs, the seller generally must pay the buyer the “par value” (i.e., full notional value) of the swap in exchange for an equal face amount of deliverable obligations of the reference entity described in the swap, or the seller may be required to deliver the related net cash amount, if the swap is cash settled. The Fund may be either the buyer or seller in the transaction.
<span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%;padding-left:14.5pt">Currency Contracts. </span>Derivatives related to currency contracts involve the specific risk of government action that would restrict the ability of the Fund to deliver or receive currency.
<span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%;padding-left:14.5pt">Forward Contracts, Futures, and Swaps. </span>Forward contracts, futures, and swaps involve specific risks, including: the imperfect correlation between the change in market value of the instruments held by the Fund and the price of the forward contract, future, or swap; possible lack of a liquid secondary market for a forward contract, future, or swap and the resulting inability to close a forward contract, future, or swap when desired; counterparty risk; and if the Fund has insufficient cash, it may have to sell securities from its portfolio to meet daily variation margin requirements.
<span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Emerging Markets Risk. </span>Investments in emerging markets may have more risk than those in developed markets because the emerging markets are less developed and more illiquid. Emerging markets can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile. The U.S. Securities and Exchange Commission, the U.S. Department of Justice, and other U.S. authorities may be limited in their ability to pursue bad actors in emerging markets, including with respect to fraud.
<span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Fixed-Income Securities Risk. </span>Fixed-income securities are subject to interest rate, credit quality, and liquidity risks. The market value of fixed-income securities generally declines when interest rates rise, and increased interest rates may adversely affect the liquidity of certain fixed-income securities. Moreover, an issuer of fixed-income securities could default on its payment obligations due to increased interest rates or for other reasons.
<span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Floating and Variable Rate Securities Risk. </span>The market prices of securities with variable and floating interest rates are generally less sensitive to interest rate changes than are the market prices of securities of fixed interest rates. Floating and variable rate securities may decline in value if market interest rates or interest rates paid by them do not move as expected. Floating and variable rate securities may be subject to greater liquidity risk than other debt securities, meaning that there may be limitations on the Fund’s ability to sell the securities at any given time.
<span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Foreign Currency Risk. </span>Risks of investing in securities denominated in, or that trade in, foreign (non-U.S.) currencies include changes in foreign exchange rates and foreign exchange restrictions.
<span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Foreign Securities Risk. </span>The risks of foreign securities include loss of value as a result of: political or economic instability; nationalization, expropriation, or confiscatory taxation; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).
<span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Hedging Risk. </span>A fund that implements a hedging strategy using derivatives and/or securities could expose the fund to the risk that can arise when a change in the value of a hedge does not match a change in the value of the asset it hedges. In other words, the change in value of the hedge could move in a direction that does not match the change in value of the underlying asset, resulting in a risk of loss to the Fund.
<div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">High Portfolio Turnover Risk.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> 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.</span></div>
<div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">High Yield Securities Risk. </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">High yield fixed-income securities (commonly referred to as “junk bonds”) are subject to greater credit quality risk than higher rated fixed-income securities and should be considered speculative.</span></div>
<div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Investment Company Securities Risk. </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">A fund that invests in another investment company (for example, another fund or an exchange-traded fund (or ETF)) is subject to the risks associated with direct ownership of the securities in which such investment company invests. Fund shareholders indirectly bear their proportionate share of the expenses of each such investment company.</span></div>
<span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Portfolio Duration Risk. </span>Portfolio duration is a measure of the expected life of a fixed-income security and its sensitivity to changes in interest rates. The longer a fund’s average portfolio duration, the more sensitive the fund will be to changes in interest rates, which means funds with longer average portfolio durations may be more volatile than those with shorter durations.
<span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Preferred Securities Risk. </span>Because preferred securities have a lower priority claim on assets or earnings than senior bonds and other debt instruments in a company’s capital structure, they are subject to greater credit and liquidation risk than more senior debt instruments. In addition, preferred securities are subject to other risks, such as limited or no voting rights, deferring or skipping distributions, interest rate risk, and redeeming the security prior to any stated maturity date.
<span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Redemption and Large Transaction Risk. </span>Ownership of the Fund’s shares may be concentrated in one or a few large investors (such as funds of funds, institutional investors, and asset allocation programs) that may redeem or purchase shares in large quantities. These transactions may cause the Fund to sell securities to meet redemptions or to invest additional cash at times it would not otherwise do so, which may result in increased transaction costs, increased expenses, changes to expense ratios, and adverse effects to Fund performance. Such transactions may also accelerate the realization of taxable income if sales of portfolio securities result in gains. Moreover, reallocations by large shareholders among share classes of a fund may result in changes to the expense ratios of affected classes, which may increase the expenses paid by shareholders of the class that experienced the redemption.
<span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Securitized Products Risk. </span>Investments in securitized products are subject to risks similar to traditional fixed-income securities, such as credit, interest rate, liquidity, prepayment, extension, and default risk, as well as additional risks associated with the nature of the assets and the servicing of those assets. Unscheduled prepayments on securitized products may have to be reinvested at lower rates. A reduction in prepayments may increase the effective maturities of these securities, exposing them to the risk of decline in market value over time (extension risk).
<div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Sovereign Debt Risk. </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">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.</span></div>
<div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">U.S. Government Securities Risk. </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">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.</span></div>
Performance
<div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The following information provides some indication of the risks of investing in the Fund. Past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information at www.principalam.com/mutualfundperformance.</span></div><div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The bar chart shows the investment returns of the Fund’s Class A shares for each full calendar year of operations for 10 years (or, if shorter, the life of the Fund). These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower. The table shows for the last one, five, and ten calendar year periods (or, if shorter, the life of the Fund), how the Fund’s average annual total returns compare with those of one or more broad measures of market performance.</span></div><div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">For periods prior to the inception date of Class R-6 shares (June 12, 2017), the performance shown in the table for Class R-6 shares is that of the Fund’s Institutional Class shares, adjusted to reflect the fees and expenses of Class R-6 shares. These adjustments result in performance for such periods that is no higher than the historical performance of the Institutional Class shares. </span></div><div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Prior to August 25, 2026, the Fund was known as the Diversified Income Fund, and the strategy of the Fund differed from its current strategy. Accordingly, performance of the Fund for periods prior to August 25, 2026 may not be representative of the performance the Fund would have achieved had the Fund been following its current strategy.</span></div>
The following information provides some indication of the risks of investing in the Fund.
Past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future.
www.principalam.com/mutualfundperformance
These annual returns do not reflect sales charges on Class A shares; if they did, results would be lower.
Total Returns as of December 31
<div style="margin-bottom:6pt;margin-top:5pt;padding-left:36pt;text-align:justify"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:384.75pt"><tr><td style="width:1.0pt"></td><td style="width:273.25pt"></td><td style="width:1.0pt"></td><td style="width:1.0pt"></td><td style="width:52.75pt"></td><td style="width:1.0pt"></td><td style="width:1.0pt"></td><td style="width:52.75pt"></td><td style="width:1.0pt"></td></tr><tr style="height:12pt"><td colspan="3" style="padding:1.5pt 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">Highest return for a quarter during the period of the bar chart above:</span></div></td><td colspan="3" style="padding:1.5pt 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">Q4 2020</span></td><td colspan="2" style="padding:1.5pt 0 1.5pt 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">8.39</span></td><td style="padding:1.5pt 1pt 1.5pt 0;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">%</span></td></tr><tr style="height:12pt"><td colspan="3" style="padding:1.5pt 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">Lowest return for a quarter during the period of the bar chart above:</span></div></td><td colspan="3" style="padding:1.5pt 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">Q1 2020</span></td><td colspan="2" style="padding:1.5pt 0 1.5pt 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">(17.02)</span></td><td style="padding:1.5pt 1pt 1.5pt 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">%</span></td></tr><tr style="height:12pt"><td colspan="3" style="padding:1.5pt 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">Year-to-date return for Class A shares:</span></td><td colspan="3" style="padding:1.5pt 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">Q2 2026</span></td><td colspan="2" style="padding:1.5pt 0 1.5pt 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">0.05</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%"> </span></td><td style="padding:1.5pt 1pt 1.5pt 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">%</span></td></tr></table></div>
Highest return for a quarter during the period of the bar chart above:
2020-12-31
0.0839
Lowest return for a quarter during the period of the bar chart above:
2020-03-31
-0.1702
Year-to-date return for Class A shares:
2026-06-30
0.0005
Average Annual Total ReturnsFor the periods ended December 31, 2025
Class A Return Before Taxes
0.0220
0.0218
0.0380
Class A Return After Taxes on Distributions
-0.0008
0.0009
0.0182
Class A Return After Taxes on Distributions and Sale of Fund Shares
0.0135
0.0080
0.0210
Class C Return Before Taxes
0.0436
0.0218
0.0356
Institutional Class Return Before Taxes
0.0649
0.0329
0.0453
Class R-6 Return Before Taxes
0.0649
0.0332
0.0455
Bloomberg US Aggregate Index (reflects no deduction for fees, expenses, or taxes)
(reflects no deduction for fees, expenses, or taxes)
0.0730
-0.0036
0.0201
<div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.</span></div>
<div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only and would be different for the other share classes.</span></div>
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes.
The after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
After-tax returns are shown for Class A shares only and would be different for the other share classes.
Fees have been restated to reflect current fees.
Includes 0.01% of expenses associated with the reclaim of foreign taxes paid. The expense is not subject to the contractual expense limit.
Based on estimated expenses for the current fiscal year.
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.
Principal Global Investors, LLC ("PGI"), the investment advisor, has contractually agreed to waive a portion of the Fund's management fees through the period ending February 29, 2028. The fee waiver will reduce the Fund's management fees by an amount equal to the Fund's acquired fund fees and expenses represented by the Fund's investment in affiliated exchange-traded funds. It is expected that the fee waiver will continue through the period disclosed; however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the fee waiver prior to the end of the period.