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Investment Type: pifretail

Global Real Estate Securities Fund (A) (POSAX)

Quick Facts Ticker: POSAX Inception Date: 10/01/2007 Morningstar Category: Global Real Estate Total Net Assets (mil): $12.68	Investment Strategy    What's this? The investment seeks to generate a total return. The fund invests at least 80% of net assets (plus any borrowing for investment purposes) in equity securities of U.S. and non-U.S. companies principally engaged in the real estate industry ("real estate companies"), which include real estate companies with at least 50% of assets, income or profits derived from products or services related to the real estate industry. It is nondiversified.
Morningstar Style Box™   as of 07/31/2010 What's this?	Overall Morningstar Star Rating™   What's this? Out of Funds Star Rating Not Rated 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 % -0.98 6.55 4.38 14.30 --- --- --- -12.29 Including Sales Charge % -6.49 0.71 -1.40 7.93 --- --- --- -13.97 FTSE EPRA/NAREIT Developed Index % --- --- --- --- --- --- --- --- Global Real Estate Category % -0.57 7.57 1.62 10.94 -11.78 -0.11 9.62 --- Morningstar Percentile Ranking** --- --- --- 23 --- --- --- --- # of Funds in Category 165 165 162 154 104 40 16 ---

* Inception Date: 10/01/2007

**Morningstar percentile rankings are based on total returns.

Expenses

  as of 08/31/2010

Total Investment Expense - Gross:	3.13%
Total Investment Expense - Net:	1.45%
Waiver Date:	02/28/2011
Contractual Cap Date:	02/28/2011
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?

Principal Real Estate Inv

Portfolio Managers

   What's this?

Chris Lepherd Since 10/01/2007 M.S. , Securities Institute of Australia

Simon Hedger Since 10/01/2007 M.B.A. , University of New England

Kelly D. Rush , CFA Since 10/01/2007 M.B.A. , University of Iowa

© 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 Global Real Estate Securities 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

FTSE EPRA/NAREIT Developed Index is designed to represent general trends in eligible real estate equities worldwide. International and global investment options are subject to additional risk due to fluctuating exchange rates, foreign accounting and financial policies, and other economic and political environments. Real estate investment options are subject to some risks inherent in real estate and Real Estate Investment Trusts, such as risks associated with general and local economic conditions. On January 2, 2008, the Principal Funds, Inc. Global Real Estate Securities Fund experienced a one-time gain of $0.05/share from an as of shareholder transaction which resulted in a positive impact on its performance and if the gain had been excluded, the return would be lower.