To further diversify its real estate mutual fund lineup, Principal Funds has launched two new funds: the Principal Real Estate Debt Income Fund (Class A: PRDYX and Class I: PRDIX ) and the Principal Real Estate Allocation Fund (Class A: PAEDX and Class I: PADDX).

The Principal Real Estate Debt Income Fund seeks to provide current income and allow investors access to commercial real estate debt. The fund expands Principal Funds’ real estate mutual fund offerings beyond public real estate equity into public real estate debt.

“We continue to see strong demand for income, which is driving interest in our real estate expertise and products,” said Nora Everett, president and CEO of Principal Funds. “As the real estate mutual fund universe continues to grow, we have a deep, talented and long-tenured real estate team helping us design and launch these innovative funds.”

The Principal Real Estate Allocation Fund is a fund of funds that invests in the existing Principal Global Real Estate Securities Fund, which has more than $2.5 billion in assets1, and the newly launched Principal Real Estate Debt Income Fund. The structure of the fund allows the management team to move allocations between the two underlying funds to help provide a balanced approach for investors.

“This fund of funds gives investors yet another opportunity to participate in the growth across the global real estate equity and debt markets,” Everett said.

Both funds became effective December 31, 2014, and are managed by Principal Real Estate Investors, a wholly owned subsidiary of Principal Global Investors. Principal Real Estate Investors manages or sub-advises more than $54.3 billion in commercial real estate assets2 and is among the top-10 managers of real estate assets worldwide3.

About Principal Funds
Principal Funds is a leading provider of mutual funds, with $118.4 billion in assets under management.4 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.5 Principal Funds are distributed by Principal Funds Distributor, Inc. 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®)6 is a global investment management leader offering retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $513.5 billion in assets under management7 and serves some 19.5 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.

Carefully consider a fund’s objectives, risks, charges and expenses. Contact your financial professional or visit principalfunds.com for a prospectus, or summary prospectus if available, containing this and other information. Please read it carefully before investing.

Real estate investment options are subject to some risks inherent in real estate and real estate investment trusts (REITs), such as risks associated with general and local economic conditions. Investing in REITs involves special risks, including interest rate fluctuation, credit risks, and liquidity risks, including interest conditions on real estate values and occupancy rates.

International and global investing involves greater risks such as currency fluctuations, political/social instability and differing accounting standards.

Investing involves risk, including possible loss of principal.

Principal Funds are distributed by Principal Funds Distributor, Inc.

1 As of December 31, 2014.

2 As of September 30, 2014.

3 Managers ranked by total worldwide assets (net of leverage) managed internally as of June 30, 2013. “The Largest Real Estate Managers,” Pensions & Investments, October 28, 2013 (data as of September 30, 2013).

4 As of September 30, 2014. Includes all share classes of the Principal Funds, Inc. and Principal Variable Contracts Funds, Inc.

5 Strategic Insight Mutual Fund Lifecycle Report Q3 2014.

6 “The Principal Financial Group” and “The Principal” are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.

7 As of Sept. 30, 2014.