Small-MidCap Dividend Income Fund (Prospectus Summary) | Small-MidCap Dividend Income Fund

Small-MidCap Dividend Income Fund

Objective:

The Fund primarily seeks to provide a relatively high level of current income and
long-term growth of income

and secondarily long-term growth of capital, while investing primarily in small-
to mid-capitalization companies.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund. Information about discounts is available from your financial
professional and in "Choosing a Share Class and The Costs of Investing"
beginning on page 38 of the Fund's prospectus and "Multiple Class Structure"
beginning on page 59 of the Fund's Statement of Additional Information.

Shareholder Fees (fees paid directly from your investment)

Shareholder Fees	Small-MidCap Dividend Income Fund Class C
Maximum Deferred Sales Charge (Load) (as a percentage of dollars subject to charge)	1.00%

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

Annual Fund Operating Expenses		Small-MidCap Dividend Income Fund Class C
Management Fees		0.80%
Distribution and/or Service (12b-1) Fees		1.00%
Other Expenses	[1]	0.39%
Total Annual Fund Operating Expenses		2.19%
Expense Reimbursement	[2]	0.04%
Total Annual Fund Operating Expenses after Expense Reimbursement		2.15%

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 redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:

Expense Example (USD $)	Expense Example, With Redemption, 1 Year	Expense Example, With Redemption, 3 Years
Small-MidCap Dividend Income Fund Class C	318	681

You would pay the following expenses if you did not redeem your shares:

Expense Example, No Redemption (USD $)	Expense Example, No Redemption, 1 Year	Expense Example, No Redemption, 3 Years
Small-MidCap Dividend Income Fund Class C	218	681

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 rate
may indicate higher transaction costs and may result in higher taxes when Fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund's performance.
From June 6, 2011, date operations commenced, through August 31, 2011, the Fund's
annualized portfolio turnover rate was 43.5% of the average value of its portfolio.

Principal Investment Strategies

Under normal circumstances, the Fund invests at least 80% of its net assets,
plus borrowings for investment purposes, in dividend-paying equity securities
of companies with small to medium market capitalizations (those with market
capitalizations ranging from between $200 million and $7 billion) at the time
of purchase. The Fund invests in value equity securities, an investment strategy
that emphasizes buying equity securities that appear to be undervalued. The Fund
will invest in the securities of foreign issuers, real estate investment trusts,
preferred securities, convertible securities, fixed-income securities, master
limited partnerships, and royalty trusts.

Principal Risks

The Fund may be an appropriate investment for investors who seek dividends to
generate income or to reinvest for growth and who can accept fluctuations in the
value of investments and the risks of investing in real estate investment trust
securities and foreign securities.
  
The value of your investment in the Fund changes with the value of the Fund's
investments. Many factors affect that value, and it is possible to lose money by
investing in the Fund. An investment in the Fund is not a deposit of a bank and
is not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. The principal risks of investing in the Fund, in
alphabetical order, are:
  
Convertible Securities Risk. Convertible securities can be bonds, notes,
debentures, preferred stock or other securities which are convertible into
common stock. Convertible securities are subject to both the credit and interest
rate risks associated with fixed income securities and to the stock market risk
associated with equity securities.
  
Equity Securities Risk. Equity securities (common, convertible preferred stocks
and other securities whose values are tied to the price of stocks, such as rights,
warrants and convertible debt securities) could decline in value if the issuer's
financial condition declines or in response to overall market and economic conditions.
A fund's principal market segment(s), such as large cap, mid cap or small cap stocks,
or growth or value stocks, may underperform other market segments or the equity
markets as a whole. Investments in smaller companies and mid-size companies may
involve greater risk and price volatility than investments in larger, more mature
companies.
  
Fixed-Income Securities Risk. Fixed-income securities are subject to interest
rate risk and credit quality risk. The market value of fixed-income securities
generally declines when interest rates rise, and an issuer of fixed-income
securities could default on its payment obligations.
  
Foreign Securities Risk. The risks of foreign securities include loss of value
as a result of: political or economic instability; nationalization, expropriation
or confiscatory taxation; changes in foreign exchange rates and foreign exchange
restrictions; settlement delays; and limited government regulation (including less
stringent reporting, accounting, and disclosure standards than are required of
U.S. companies).
  
Master Limited Partnership ("MLP") Risk. MLPs are publicly-traded limited
partnership interests or units. An MLP that invests in a particular industry
(e.g., oil and gas) will be harmed by detrimental economic events within that
industry. As partnerships, MLPs may be subject to less regulation (and less
protection for investors) under state laws than corporations. In addition, MLPs
may be subject to state taxation in certain jurisdictions, which may reduce the
amount of income an MLP pays to its investors.
  
Preferred Securities Risk. Preferred securities are junior subordinated
securities in a company's capital structure and therefore can be subject to
greater credit and liquidation risk. An issuer of preferred securities could
redeem the security prior to the stated maturity date and reduce the return of
the security.
  
Real Estate Investment Trusts ("REITs") Risk. A REIT could fail to qualify for
tax-free pass-through of income under the Internal Revenue Code, and fund
shareholders will indirectly bear their proportionate share of the expenses
of REITs in which the fund invests.
  
Real Estate Securities Risk. Real estate securities are subject to the risks
associated with direct ownership of real estate, including declines in value,
adverse economic conditions, increases in expenses, regulatory changes and
environmental problems.

Risk of Being an Underlying Fund. An underlying fund of a fund of funds may
experience relatively large redemptions or investments as the fund of funds
periodically reallocates or rebalances its assets. These transactions may cause
the underlying fund to sell portfolio securities to meet such redemptions, or to
invest cash from such investments, at times it would not otherwise do so, and
may as a result increase transaction costs and adversely affect underlying fund
performance.
  
Royalty Trust Risk. A royalty trust generally acquires an interest in natural
resource or chemical companies and distributes the income it receives to its
investors. A sustained decline in demand for natural resource and related
products could adversely affect royalty trust revenues and cash flows. Such a
decline could result from a recession or other adverse economic conditions, an
increase in the market price of the underlying commodity, higher taxes or other
regulatory actions that increase costs, or a shift in consumer demand. Rising
interest rates could adversely affect the performance, and limit the capital
appreciation, of royalty trusts because of the increased availability of
alternative investments at more competitive yields. Fund shareholders will
indirectly bear their proportionate share of the royalty trusts' expenses.
  
Value Stock Risk. The market may not recognize the intrinsic value of value
stocks for a long time, or they may be appropriately priced at the time of
purchase.

Performance

No performance information is shown because the Fund has not yet had a calendar
year of performance. The Fund's performance will be benchmarked against the
Russell 2500 Value Index.

[1] Other Expenses estimated for the year ending August 31, 2012.

[2] Principal Management Corporation ("Principal"), the investment advisor, has contractually agreed to limit the Fund's expenses attributable to Class C shares and, if necessary, pay expenses normally payable by the Fund, excluding interest expense through the period ending December 31, 2013. The expense limit will maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 2.15% for Class C shares. It is expected that the expense limit will continue through the period disclosed; however, Principal Funds, Inc. and Principal, the parties to the agreement, may agree to terminate the expense limit prior to the end of the period.