Asset Allocation Strategies
Diversification is critical to investment performance—and studies have shown that asset allocation is crucial to a sound portfolio.
As the world’s fifth-largest* provider of lifecycle funds, our funds are designed to provide broad asset allocation in a single investment, with options based on risk tolerance (“target risk”) or expected retirement date (“target date”), offering investors:
- Broad diversification in core and alternatives.
- A long track record.
- Active management focused on risk.
- Exposure of up to 25 underlying funds and 4,000 to 7,000 individual securities.
Principal Strategic Asset Management (SAM) Portfolios
Designed to align with investor risk profiles—from the most conservative to the most aggressive investor—there’s an option for practically everyone.
Approximately 75% fixed income and 25% equities. The Fund is designed to help investors with a low risk tolerance generate income and preserve capital.
Approximately 60% fixed income and 40% equities. The Fund is designed to help investors with a slightly higher risk tolerance than the most conservative investor to generate income and achieve some capital growth.
Approximately 40% fixed income and 60% equities. The Fund is designed to help moderately conservative investors grow their capital while generating some income.
Approximately 20% fixed income and 80% equities. The Fund is designed to help investors with a moderate to high risk tolerance grow their capital at an above-average rate while generating a little income.
Approximately 5% fixed income and 95% equities. The Fund is designed to help aggressive investors generate a high level of capital growth.
Principal LifeTime Funds
Each fund is managed toward a particular target retirement date with the allocations becoming more conservative as the target retirement date draws closer.
Designed to help investors who retired before 2015, but are fewer than 15 years past normal retirement age.
Designed to help investors planning to retire between 2015 and 2024.
Designed to help investors planning to retire between 2025 and 2034.
Designed to help investors planning to retire between 2035 and 2044.
Designed to help investors planning to retire in 2045 or later.
Designed to help investors who are about 15 years beyond retirement age.
*Strategic Insight Lifecycle Report--Q4, 2014.
The Principal LifeTime portfolios, which are target date portfolios, invest in underlying Principal Funds. Each Principal LifeTime portfolio is managed toward a particular target (retirement) date, or the approximate date the participant or investor starts withdrawing money. As each Principal LifeTime portfolio approaches its target date, the investment mix becomes more conservative by increasing exposure to generally more conservative investment options and reducing exposure to typically more aggressive investment options. The asset allocation for each Principal LifeTime portfolio is regularly re-adjusted within a time frame that extends 10-15 years beyond the target date, at which point it reaches its most conservative allocation. Principal LifeTime portfolios assume the value of the investor’s account will be withdrawn gradually during retirement. Neither the principal nor the underlying assets of the Principal LifeTime portfolios are guaranteed at any time, including the target date. Investment risk remains at all times.