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Investment Type: pifretail

SAM Balanced Portfolio (A) (SABPX)

Quick Facts Ticker: SABPX Inception Date: 07/25/1996 Morningstar Category: Moderate Allocation Total Net Assets (mil): $2,987.71	Investment Strategy    What's this? The investment seeks to provide a high level of total return (consisting of reinvestment of income with some capital appreciation). The fund invests between 30% and 70% of net assets in equity funds and between 30% and 70% of net assets in fixed-income funds and cash equivalents. It may invest up to 30% of its assets in any single equity fund, and up to 40% of assets in any single fixed-income fund as well as cash equivalents.
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 974 Moderate Allocation 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 % -2.13 0.45 0.34 8.52 -1.84 2.26 2.64 6.43 Including Sales Charge % -7.50 -5.10 -5.17 2.55 -3.68 1.10 2.07 6.00 Standard & Poor's 500 Index % -4.51 -3.17 -4.62 4.91 -8.66 -0.91 -1.81 --- Capital Benchmark (60/40) % --- --- --- --- --- --- --- --- Moderate Allocation Category % -2.32 -0.20 -0.79 6.53 -3.39 1.34 1.76 --- Morningstar Percentile Ranking** --- --- --- 18 21 28 31 --- # of Funds in Category 1213 1204 1189 1166 974 782 421 ---

* Inception Date: 07/25/1996

**Morningstar percentile rankings are based on total returns.

Expenses

  as of 08/31/2010

Total Investment Expense - Gross:	1.41%
Total Investment Expense - Net:	1.41%
Maximum Up-front Sales Charge:	5.50%
12b-1 Fee:	0.25%

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?

Edge Asset Management, Inc.

Portfolio Managers

   What's this?

Charlie Averill , CFA Since 01/01/2010 M.A. , Princeton University

Todd Jablonski , CFA Since 01/01/2010 M.B.A. , New York University

Jill R. Cuniff Since 01/01/2010 B.S. , Montana 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 SAM Balanced Portfolio (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. Capital Benchmark (60/40) is intended to represent a relevant proxy for market and Portfolio performance. It is allocated as follows: 60% S&P 500 Index and 40% Barclays Capital Aggregate Bond Index. Equity investment options involve greater risk, including heightened volatility, than fixed-income investment options. Fixed-income investment options are subject to interest rate risk, and their value will decline as interest rates rise. Fixed-income and asset allocation investment options that invest in mortgage securities are subject to increased risk due to real estate exposure. Asset allocation does not guarantee a profit or protect against a loss. Investing in real estate, small-cap, international, and high-yield investment options involves additional risks. Additionally there is no guarantee this investment option will provide adequate income at or through retirement. This Principal Strategic Asset Management Portfolio (SAM) indirectly bears its pro rata share of the management fees incurred by the underlying Principal Funds in which this portfolio invests. Based on the asset allocation of the SAM Portfolio outlined in the prospectus dated March 1, 2010, the weighted average operating expenses of the underlying funds are: Flexible Income, 0.59%; Conservative Balanced, 0.62%; Balanced, 0.67%; Conservative Growth, 0.70%; Strategic Growth, 0.71%. While the operating expenses of the underlying mutual funds are not part of the SAM Portfolio operating expenses they are included in the Total Investment Expense. Performance results shown for the SAM Portfolios reflect the application of these expenses.