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Investment Type: pifretail

LargeCap S&P 500 Index Fund (A) (PLSAX)

Quick Facts Ticker: PLSAX Inception Date: 06/28/2005 Extended Performance Inception Date: 12/06/2000 Morningstar Category: Large Blend Total Net Assets (mil): $2,044.70	Investment Strategy    What's this? The investment seeks long-term growth of capital. The fund invests at least 80% of net assets in common stocks of companies that compose the S&P 500 index. It uses an indexing strategy or a passive investment approach designed to track the performance of the S&P 500. It does not attempt to manage market volatility, use defensive strategies or reduce the effect of any long-term periods of poor stock performance.
Morningstar Style Box™   as of 07/31/2010 What's this?	Overall Morningstar Star Rating™   as of 08/31/2010 What's this? Out of 1790 Large Blend Funds Morningstar's Star Ratings reflect risk adjusted performance and are derived from a weighted average of the performance figures associated with its three, five, and ten-year (if applicable) time periods.

Total Returns

Investment results shown represent historical performance and do not guarantee future results. Investment returns and principal values fluctuate with changes in interest rates and other market conditions so the value, when redeemed, may be worth more or less than original costs. Current performance may be lower or higher than the performance data shown. Where gross and net expense ratios differ, Principal Management Corporation has contractually agreed to limit the investment option's expenses. Differences also may be due to Principal Management Corporation's decision to pay (through the same dates) certain expenses that would normally be payable by the fund. Returns displayed are based on net total investment expense.

Month-End | Quarter-End

Average Annual Total Returns as of 08/31/2010

1 Month 3 Month YTD 1 Year 3 Year 5 Year 10 Year Since      Inception* Excluding Sales Charge % -4.52 -3.40 -5.13 4.12 -9.29 -1.58 --- -1.47 Including Sales Charge % -5.98 -4.89 -6.57 2.55 -9.75 -1.87 --- -1.63 Standard & Poor's 500 Index % -4.51 -3.17 -4.62 4.91 -8.66 -0.91 -1.81 --- Large Blend Category % -4.55 -3.31 -5.26 3.91 -8.62 -1.03 -1.08 --- Morningstar Percentile Ranking** --- --- --- 47 66 66 --- --- # of Funds in Category 2171 2127 2100 2035 1790 1477 764 ---

* Inception Date: 06/28/2005 ; Extended Performance Inception Date: 12/06/2000

**Morningstar percentile rankings are based on total returns.

Expenses

  as of 08/31/2010

Total Investment Expense - Gross:	0.79%
Total Investment Expense - Net:	0.79%
Maximum Up-front Sales Charge:	1.50%
12b-1 Fee:	0.15%

Growth of $10,000

   What's this?

Represents performance for Class A shares adjusted for the maximum sales charge and assumes the reinvestment of distributions. Performance assumes reinvestment of all dividends and capital gains. Extended performance is calculated based on the historical performance of the investment option's oldest share class, adjusted for the fees and expenses of the share class shown. Periods of less than one year are not annualized.

Investment Subadvisors

   What's this?

Principal Global Investors

Portfolio Managers

   What's this?

Dirk Laschanzky , CFA Since 10/01/2003 B.A. , University of Iowa

Scott Smith Since 12/31/2007 B.S. , Iowa State University

© 2010 Morningstar, Inc. All Rights Reserved. Part of the mutual fund data contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. The full name of this investment option is Principal LargeCap S&P 500 Index Fund (A). Before investing in mutual funds, investors should carefully consider the investment objectives, risks, charges and expenses of the funds. This and other information is contained in the free prospectus, which can be downloaded from our site, or by contacting us at 1.800.222.5852. Please read the prospectus carefully before investing. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc., member of the Principal Financial Group®. Principal Funds Distributor, Principal Shareholder Services, Principal Management Corporation and its affiliates, and Principal Funds, Inc. are collectively referred to as Principal Funds. Not FDIC Insured May Lose Value - Not a Deposit - No Bank Guarantee Not Insured by any Federal Government Agency

Standard & Poor's 500 Index is a market capitalization-weighted index of 500 widely held stocks often used as a proxy for the stock market. Each index based investment option is invested in the stocks or bonds of the index it tracks. Performance of indexes reflects the unmanaged results for the market segment the selected stocks or bonds represent. There is no assurance an index based investment option will match the performance of the index tracked. S&P 500 is a trademark of The McGraw-Hill Companies, Inc., and has been licensed for use by Principal Life Insurance Company and Principal Management Corporation. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the product. These calculated returns reflect the historical performance of the oldest share class of the fund, adjusted to reflect a portion of the fees and expenses of this share class. Please see the fund's prospectus for more information on specific expenses, and the fund's most recent shareholder report for actual date of first sale. Expenses are deducted from income earned by the fund. As a result, dividends and investment results will differ for each share class.