California Municipal Fund (Prospectus Summary): | California Municipal Fund

CALIFORNIA MUNICIPAL FUND    

Supplement dated June 15, 2012

to the Class A, Class B, Class C, and Class P Shares Prospectus

for Principal Funds, Inc.

dated February 29, 2012

(as supplemented on March 16, 2012, March 29, 2012, April 9, 2012, April 20, 2012, and May 11, 2012)

This supplement updates information currently in the Prospectus. Retain this supplement with the Prospectus.

FUND SUMMARIES

Under the Principal Investment Strategies heading, delete the first sentence in the paragraph and substitute:    

Under normal circumstances, the Fund invests at least 80% of its net assets in California municipal obligations  

(securities issued by or on behalf of state or local governments and other public authorities).  

Under the Principal Investment Strategies heading, delete the fourth sentence in the paragraph and substitute:

Under normal circumstances, the Fund maintains an average portfolio duration that is within ±50% of the  

duration of the Barclays Capital California Municipal Bond Index, which as of December 31, 2011 was 8.43  

years.