Principal Portfolio Construction StrategiesSM
Innovative Strategies to Address Clients' Top Concerns
We believe that investors face three key retirement risks - longevity, market volatility, and inflation. Help investors seek to overcome their top concerns with outcome-oriented strategies that are designed to complement traditional portfolios.
Our strategies are designed to address specific objectives; seek to manage volatility, generate income, and protect purchasing power.
Three Key Retirement Concerns
Not having enough money for retirement is the top financial concern for two-thirds of Americans.1 See how a multi-discipline approach can help.
At a 2% inflation rate, $100,000 of income today would be worth only about $67,300 after 20 years. Help address inflation concerns with multiple real asset classes.
Volatility can cost investors money–and time. Alternative strategies seek to help manage volatility and provide downside protection.
- Principal Global Diversified Income Fund
(Class A: PGBAX)
- Principal Diversified Real Asset Fund
(Class A: PRDAX)
- Principal Global Multi-Strategy Fund
(Class A: PMSAX)
Principal Global Diversified Income Fund (Class A: PGBAX)
Principal Diversified Real Asset Fund (Class A: PRDAX)
- Portfolio Construction Strategies Financial Professional Guide (login required)
1 Principal Financial Well-Being Index, Fourth Quarter 2013.
Index performance information reflects no deduction for fees, expenses, or taxes. Indices are unmanaged and individuals cannot invest directly in an index.
The Principal Global Diversified Income Fund uses fixed-income investment options that are subject to interest rate risk, and their value will decline as interest rates rise. Lower-rated securities are subject to additional credit and default risks. Risks associated with preferred securities differ from risks inherent with other investments. In particular, in the event of bankruptcy, a company's preferred securities are senior to common stock but subordinated to all other types of corporate debt. International investing involves increased risks due to currency fluctuations, political or social instability, and differences in accounting standards. These risks are magnified in emerging markets. REIT securities are subject to risk factors associated with the real estate industry and tax factors of REIT registration.
The call option writing program seeks to improve the Principal Global Diversified Income Fund's risk profile by reducing the volatility of its underlying equity components as well as improve the economics of the Fund via the receipt of option premium. While option premiums are not accounted for as income they do accrue, which may cause the Fund's price to rise. Writing calls may limit upside potential of the Fund and like any investment strategy, loss is possible.
The Principal Global Diversified Fund invests in fixed-income investment options that invest in mortgage securities, such as commercial mortgage-backed securities, which are subject to increased risk due to real estate exposure.
The Principal Diversified Real Asset Fund uses fixed-income investment options that are subject to interest rate risk, and their value will decline as interest rates rise. Neither the principal of bond investment options nor their yields are guaranteed by the U.S. or any other government entity. Investments concentrated in natural resources industries can be affected significantly by events relating to those industries, such as variations in the commodities markets, weather, disease, embargoes, international, political, and economic developments, the success of exploration projects, tax and other government regulations, and other factors. Investing in derivatives entails specific risks relating to liquidity, leverage, and credit that may reduce returns and/or increase volatility.
REIT securities used in the Principal Diversified Real Asset Fund are subject to risk factors associated with the real estate industry and tax factors of REIT registration. An MLP that invests in a particular industry (e.g., oil and gas) may be harmed by detrimental economic events within that industry. As partnerships, MLPs may be subject to less regulation (and less protection for investors) under state laws than corporations. In addition, MLPs may be subject to state taxation in certain jurisdictions, which may reduce the amount of income paid by an MLP to its investors.
The Principal Global Multi-Strategy Fund utilizes alternative investment strategies such as arbitrage, leverage, derivatives, and shorting securities in addition to traditional investments. Long/short investing does not guarantee reduced risks associated with equity markets, capitalization, sector swings, or other risk factors. Long/short investing may also have higher turnover rates, which can result in additional tax consequences. Short selling involves certain risks, including investment loss and added costs associated with covering short positions. Investing outside the U.S. involves added risks, such as currency fluctuations, periods of illiquidity, and price volatility. Investment risk may be magnified with the use of these alternative strategies. In addition, securities such as bonds, equities, international and emerging market securities, and currencies are used to implement the investment strategy. These investments are subject to risks associated with market and interest rate movements. The Fund is considered non-diversified, which may make it more susceptible to price volatility if the Fund does not meet its objective. Due to the nature of the investment process, investors should not expect significant outperformance during market rallies. Additional risks are included in the Fund's prospectus. It is possible to lose money when investing in the Fund.
To obtain a prospectus, download online or call Customer Service at 1.800.222.5852
While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that The Principal® is not rendering legal, accounting, or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements. For more information about our funds, including their full names, please see the Principal Funds, Inc. prospectus or call Customer Service at 1.800.222.5852.
A mutual fund's share price and investment return will vary with market conditions, and the principal value of an investment when you sell your shares may be more or less than the original cost.
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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 or NCUA/NCUSIF insured - May lose value - No bank guarantee - Not a deposit - Not insured by any federal government agency