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Pricing & Performance: Sales Charge Discounts

We offer investors several methods of reducing the sales charges applicable to our Class A, B, and C shares.

Class A Shares

Class A shares may be purchased with a reduced up-front sales charge or at net asset value (NAV) under the arrangements noted below. Other less common factors that may make a purchase eligible for elimination of sales charges are detailed in the prospectus.

Class A Shares of The Money Market Fund do not have an up-front sales charge.

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Breakpoints

The simplest way to qualify for discounted sales charges is through quantity purchases of Class A shares. If the amount to be invested is equal to or more than the breakpoints shown in the table below ($50,000; $100,000; $250,000; $500,000; and $1,000,000), it will qualify for a reduced sales charge.

Principal Funds, Inc.

Class A Shares Equity Funds (except LargeCap S&P 500 Index Fund), SAM Portfolios (except SAM Flexible Income Portfolio), Principal LifeTime Funds (except Principal LifeTime Strategic Income Fund and Principal LifeTime 2010) LargeCap S&P 500 Index Fund
Amount of Transaction
Max. Sales Charge
Max. Sales Charge
Less than $50,000
5.50%
1.50%
$50,000 but less than $100,000
4.75%
1.25%
$100,000 but less than $250,000
3.75%
1.00%
$250,000 but less than $500,000
3.00%
0.75%
$500,000 but less than $1,000,000
2.00%
0.50%
$1,000,000 or more
0.00%
0.00%

 

Class A Shares Fixed-Income Funds (except Short-Term Income Funds), California Municipal Fund, SAM Flexible Income Portfolio, Principal LifeTime Strategic Income Fund, and Principal LifeTime 2010 Short-Term Income, Income, and Government & High Quality Bond Fund Diversified Real Asset Fund, Global Diversified Income Fund, and Global Multi-Strategy Fund
Amount of Transaction
Max. Sales Charge
Max. Sales Charge
Max. Sales Charge
Less than $100,000
3.75%
2.25%
3.75%
$100,000 but less than $250,000
2.75%
1.75%
2.75%
$250,000 but less than $500,000
1.50%
1.25%
1.50%
$500,000 or more
0.00%
0.00%
0.00%

Class A shares purchased in amounts of $1 million ($500,000 for the Bond & Mortgage Securities, California Municipal, Diversified Real Asset, Government & High Quality Bond, High Yield, Global Diversified Income, Income, Inflation Protection, Preferred Securities, Principal LifeTime Strategic Income, Short-Term Income, and Tax-Exempt Bond Funds and the SAM Flexible Income Portfolio) or more (other than shares of the Money Market Fund) are generally subject to a CDSC of 1.00% (0.25% for the LargeCap S&P 500 Index Fund) if the shares are redeemed during the first 12 months after purchase, unless the dealer, at its discretion, has waived the commission. See the prospectus for complete details.

Example: Mike has decided to invest $100,000 in Class A shares of the SAM Strategic Growth Portfolio. His investment qualifies for a reduced sales charge of 3.75%. When he purchases the shares, $96,250 will be invested in the Portfolio and $3,750 will go toward sales commissions.

Class A Shares of The Money Market Fund do not have an up-front sales charge.

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Rights of Accumulation (ROA)

A shareholder's existing investments in Class A, B and/or C shares may be used to qualify a purchase of Class A shares for a lower sales charge.

  • The market value of existing investments is combined with the amount of the new purchase to determine the applicable sales charge. (See breakpoint table above.)
  • Investments eligible for the cumulative discount include those made by an individual shareholder, their spouse or domestic partner, or the children (under age 25) of the shareholder or their spouse or domestic partner.

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Statement of Intention (SOI)

A shareholder may qualify for reduced sales charges by entering into a statement of intention (SOI) agreement with Principal Funds Distributor. Typically, the shareholder agrees to purchase a certain dollar amount of Class A shares over a 13-month period. The sales charge applied to all purchases made under the SOI will be the lower sales charge that would have been applicable had all the shares been purchased in one transaction. (See breakpoint table above.)

  • The start of the 13-month period is determined by the date of the first purchase covered by the SOI.
  • Only current and future purchases of Class A shares may be used to fulfill the SOI.
  • Completion of an SOI agreement is based on the dollar amount purchased, not on the market value of the shares.
  • Eligible investments include those made by an individual shareholder, their spouse or domestic partner, or the children (under age 25) of the shareholder or their spouse or domestic partner.

Example: Karen decides to invest $50,000 in the SAM Balanced Portfolio. She plans to invest an additional $4,000 each month over the next 13 months, totaling an additional $52,000. Karen can sign an SOI and qualify for a reduced sales charge of 3.75% on her first purchase and all subsequent purchases made under the SOI.

Certain general rules apply to all purchases eligible for discounts under ROA and SOI programs:

  • It is the responsibility of the shareholder or financial professional to notify Principal Funds Distributor when a purchase is eligible for ROA or SOI sales charge reduction.
  • The shareholder or financial professional must notify Principal Funds Distributor of accounts that should be linked for cumulative discounts. Fund direct accounts and accounts established at other broker/dealers may be linked to obtain ROA and/or SOI breakpoint discounts.

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Class B and C Shares

The back-end sales charge (called a contingent deferred sales charge or CDSC) typically assessed when Class B shares are redeemed (sold) within the first five years or Class C shares within the first year may be waived under the following circumstances:

  • For periodic withdrawals in amounts of 12% or less annually, based on the Fund's value at the time the periodic withdrawal plan is established;
  • Due to death or post-purchase disability of the shareholder.
  • From retirement plans to satisfy minimum distribution rules under the Internal Revenue Code (the Code) or to assure the plan complies with various sections of the Code.
  • To pay surrender charges or retirement plan fees.
  • Involuntarily from small balance accounts.
  • Additional circumstances as described in the Statement of Additional Information.

Principal Funds, Inc Class B share mutual funds were closed to new investors and new assets effective March 1, 2010.

It is the responsibility of the shareholder or Financial Professional to notify Principal Funds Distributor at the time of redemption if the shareholder is entitled to CDSC waiver.

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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.

This Web site was created and is maintained by Principal Funds Distributor, Inc. exclusively, and not by the Directors of the funds.

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.

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