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Investment Type: pifretail

MidCap Value Fund I (A) (PVEAX)

Quick Facts Ticker: PVEAX Inception Date: 03/02/2009 Extended Performance Inception Date: 12/29/2003 Morningstar Category: Mid Cap Value Total Net Assets (mil): $1,288.11	Investment Strategy    What's this? The investment seeks long term growth of capital. The fund invests at least 80% of assets in a diversified portfolio of equity investments in mid-cap issuers with a medium market capitalization (those with market capitalizations similar to companies in the Russell MidCap Value index) at the time of purchase. The advisor employs a quantitative approach for selecting securities it believes are favored in the current market environment.
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 345 Mid Cap Value 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 % -4.39 -3.53 0.66 12.11 -5.09 0.55 --- 5.39 Including Sales Charge % -9.65 -8.80 -4.90 5.92 -6.87 -0.58 --- 4.50 Russell Midcap Value Index % -4.48 -3.67 1.73 13.01 -6.79 0.45 6.95 --- Mid Cap Value Category % -5.03 -5.04 -1.35 9.35 -7.17 -0.03 5.71 --- Morningstar Percentile Ranking** --- --- --- 20 21 36 --- --- # of Funds in Category 448 440 419 409 345 271 88 ---

* Inception Date: 03/02/2009 ; Extended Performance Inception Date: 12/29/2003

**Morningstar percentile rankings are based on total returns.

Expenses

  as of 08/31/2010

Total Investment Expense - Gross:	2.87%
Total Investment Expense - Net:	1.34%
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?

Goldman Sachs Asset Mgt

LA Capital Management

Portfolio Managers

   What's this?

Sean J. Gallagher Since 12/29/2003 M.B.A. , New York University

Andrew I. Braun Since 12/29/2003 M.B.A. , New York University

David R. Borger , CFA Since 10/03/2005 M.B.A. , University of Michigan

Thomas D. Stevens , CFA Since 10/03/2005 B.B.A. , University of Wisconsin

Christine M. Kugler Since 10/03/2005 B.A. , University of California, Santa Barbara

Stuart K. Matsuda Since 10/03/2005 M.B.A. , California State University Northridge

Hal W. Reynolds , CFA Since 10/03/2005 M.B.A. , University of Pittsburgh

Dolores Bamford , CFA Since 03/02/2009 M.S. , Massachusetts Institute of Technology (Sloan)

Scott Carroll , CFA Since 03/02/2009 M.B.A. , University of Chicago

Mariateresa Monaco Since 06/02/2009 M.B.A. , Massachusetts Institute of Technology

© 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 MidCap Value Fund I (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

Russell Midcap Value Index is a market-weighted total return index that measures the performance of companies within the Russell Midcap index having lower price-to-book ratios and lower forecasted growth values. Small-cap and mid-cap investment options are subject to more fluctuation in value and may have additional risks than other investment options with stocks of larger, more stable companies. 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. The manager of the Fund, Principal Management Corporation, invests between 10% and 40% of the Fund's assets in common stocks in an attempt to match or exceed the performance of the Fund's benchmark index for performance. Effective July 1, 2010, this fund is closed to new investors. Effective August 5, 2010, this fund is closed to new assets.