Principal Funds Launches Two New Fixed-Income Funds

In response to investor demand for more flexible and opportunistic fixed-income strategies, Principal Funds has launched two new funds: the Principal Credit Opportunities Explorer Fund (PCEAX) and the Principal Dynamic High Yield Explorer Fund (PDYAX).

“We believe fixed income is a critical part of any well-diversified portfolio,” said Nora Everett, president and CEO of Principal Funds. “Fixed-income investors are looking for adequate yield and effective ways to manage interest rate exposure, and these new funds address those needs and risks.”

The Principal Credit Opportunities Explorer Fund seeks to achieve long-term returns composed of income and capital appreciation by opportunistically investing across the broad credit spectrum. The fund aims to reduce risk by using volatility-mitigation strategies in addition to considerable flexibility in managing interest rate exposure.

The Principal Dynamic High Yield Explorer Fund is designed for investors seeking high yield bond strategies that manage interest rate risk while providing the best possible total return opportunity within the high yield asset class.

Both funds are managed by the Principal Global Investors fixed-income team, which has more than 30 years’ experience in managing multi-sector fixed income strategies. The team manages $78.6 billion1 in fixed-income assets.

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About Principal Funds
Principal Funds is a leading provider of mutual funds, with $118.5 billion in assets under management.2 Principal Funds brings expertise in global investment management, asset allocation and retirement leadership to financial professionals and investors. Including its target-risk and target-date offerings, Principal Funds is the fifth largest manager of lifecycle funds in the industry.3 The companies that make up Principal Funds are members of the Principal Financial Group®. For more information, visit www.principalfunds.com.

About the Principal Financial Group
The Principal Financial Group® (The Principal®)4 is a global investment management leader offering retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $517.9 billion in Assets Under Management5 and serves some 19.4 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.

Carefully consider a fund’s objectives, risks, charges and expenses. Contact your financial professional or visit principalfunds.com for a prospectus, or summary prospectus if available, containing this and other information. Please read it carefully before investing.

Investing involves risk, including possible loss of principal.

International investing involves increased risks due to currency fluctuations, political or social instability, and differences in accounting standards.

Lower-rated securities are subject to additional credit and default risks.

Fixed-income investments are subject to interest rate risk; as interest rates rise their value will decline.

Asset allocation and diversification do not ensure a profit or protect against loss.

Principal Funds are distributed by Principal Funds Distributor, Inc.

1 As of June 30, 2014.
2 As of June 30, 2014. Includes all share classes of the Principal Funds, Inc. and Principal Variable Contracts Funds, Inc.
3 Strategic Insight Mutual Fund Lifecycle Report Q1 2014.
4 “The Principal Financial Group” and “The Principal” are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
5 As of June 30, 2014.