
Preferred Securities Fund (Prospectus Summary): \| Preferred Securities Fund
PREFERRED SECURITIES FUND
Supplement dated June 15, 2012 to the Class A, Class C, and Class P Prospectus for Principal Funds, Inc. dated December 30, 2011 (as supplemented on January 30, 2012, February 29, 2012, March 16, 2012, March 30, 2012, April 30, 2012, and May 11, 2012) This supplement updates information currently in the Prospectus. Retain this supplement with the Prospectus. FUND SUMMARIES
Fees and Expenses of the Fund
Delete the last sentence in the paragraph under this heading and substitute:
More information about these and other discounts is available from your financial professional and in “Choosing a Share Class and The Costs of Investing” beginning on page 47 of the Fund’s prospectus and “Multiple Class Structure” beginning on page 59 of the Fund’s Statement of Additional Information.

- Definition

Risk/Return Summary Fee Table Includes the following information, in plain English under rule 421(d) under the Securities Act, after Item 2 Fees and expenses of the Fund This table describes the fees and expenses that you may pay if you buy and hold shared of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $[_____] in [name of fund family] funds. Shareholder Fees (fees paid directly from your investment) Example This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then you redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return per year and that the Fund's operating expenses remained the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be You would pay the following expenses if you did not redeem your shares The Example does not reflect sales charges (loads) on reinvested dividends [and other distributions]. If these sales charges (loads) were included, your costs would be higher. Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover may indicate higher transaction costs. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was __% of the average value of its whole portfolio. Instructions. A.3.instructions.6 New Funds. For purposes of this Item, a "New Fund" is a Fund that does not include in Form N-1A financial statements reporting operating results or that includes financial statements for the Fund's initial fiscal year reporting operating results for a period of 6 months or less. The following Instructions apply to New Funds.

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