Company Press Release

DES MOINES, Iowa - (Business Wire) In an effort to help investors get off the sidelines and start working toward their long-term financial goals again, Principal Funds has lowered the up-front sales charges on Class A shares of its fixed-income funds.

"We understand the market's current downward trend may be troubling to investors, especially those nearing retirement," said Nora Everett, president of Principal Funds. "Fixed-income investing may be an attractive option in this environment, and we want to make it as easy and cost-effective as possible for sidelined investors to re-enter the market."

Simultaneously, Principal Funds has reduced the level at which investors can purchase Principal fixed-income funds without an up-front sales charge to $500,000 from $1,000,000. In addition, Principal Funds has shortened the Contingent Deferred Sales Charge (CDSC) holding period on those purchases to 12 months from 18 months.

Principal Funds offers several fixed-income funds including:

Principal High Yield Fund (CPHYX)

Principal Preferred Securities Fund (PPSAX)

Principal Income Fund (CMPIX)

Principal Mortgage Securities Fund (CMPGX)

Principal Short-Term Income Fund (SRHQX)

For more information about the reduction in fixed-income sales charges, visit https://www.principalfunds.com/investor/performance/saleschrgdiscounts.htm. This site also outlines recent changes in breakpoint levels.

About Principal Funds

Principal Funds is a leading provider of mutual funds, with more than $42 billion in assets under management.1 Principal Funds brings expertise in global investment management, asset allocation and retirement leadership to financial professionals and investors. Including its target-risk and target-date offerings, Principal Funds is the fifth-largest manager of lifecycle funds in the industry.2 The companies that make up Principal Funds are members of the Principal Financial Group®. For more information, visit www.principalfunds.com.

About the Principal Financial Group

The Principal Financial Group® (The Principal®)3 is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance, and banking through its diverse family of financial services companies. A member of the Fortune 500, the Principal Financial Group has $247.0 billion in assets under management4 and serves some 19.1 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.