497K

Before you invest, you may want to review the Fund’s prospectus, which contains more information about the Fund and its risks. You can find the Fund’s prospectus and other information about the Fund online at www.principalfunds.com/prospectuses. You can also get this information at no cost by calling 1-800-222-5852 or by sending an email request to prospectus@principalfunds.com.

This Summary prospectus incorporates by reference the Statutory Prospectus dated March 29, 2016, and the Statement of Additional Information dated December 31, 2015 as amended and restated March 29, 2016 (which may be obtained in the same manner as the Prospectus).

This table describes the fees and expenses that you may pay if you buy and hold shares 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 $50,000 in Class A shares of Principal Funds, Inc. 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 50 of the Fund’s prospectus and “Multiple Class Structure” beginning on page 3 of the Fund’s Statement of Additional Information.



	Share Class
	A	P	Inst.	R-6
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)	5.50%	None	None	None
Maximum Deferred Sales Charge (Load) (as a percentage of the offering price or NAV at the time Sales Load is paid, whichever is less)	1.00%	None	None	None



	Share Class
	A	P	Inst.	R-6
Management Fees	1.57%	1.57%	1.57%	1.57%
Distribution and/or Service (12b-1) Fees	0.25%	N/A	N/A	N/A
Other Expenses:⁽¹⁾
Dividend and Interest Expense on Short Sales	0.74%	0.74%	0.74%	0.74%
Remainder of Other Expenses	0.52%	0.34%	0.34%	0.30%
Total Other Expenses	1.26%	1.08%	1.08%	1.04%
Total Annual Fund Operating Expenses	3.08%	2.65%	2.65%	2.61%
Expense Reimbursement ⁽²⁾	(0.32)%	(0.14)%	(0.24)%	(0.27)%
Total Annual Fund Operating Expenses after Expense Reimbursement	2.76%	2.51%	2.41%	2.34%



⁽¹⁾	Based on estimated amounts for the current fiscal year.
⁽²⁾	Principal Management Corporation ("Principal"), the investment advisor, has contractually agreed to limit the Fund’s expenses by paying, if necessary, expenses normally payable by the Fund, (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 2.02% for Class A, 1.67% for Institutional Class, and 1.60% for Class R-6 shares. In addition, for Class P, the expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.20%, (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and other extraordinary expenses). It is expected that the expense limits will continue through the period ending December 30, 2017; however, Principal Funds, Inc. and Principal, the parties to the agreement, may mutually agree to terminate the expense limits prior to the end of the period.

The Example assumes that you invest $10,000 in the Fund for the time periods indicated. 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:

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. This is a new fund and does not yet have a portfolio turnover rate to disclose.

Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities and derivatives on equity securities, at the time of purchase. The Fund invests in exchange-traded funds. The Fund uses derivative instruments, including swaps, futures and options, to gain exposure to a variety of securities or mitigate volatility and forwards to manage its foreign currency exposure. The Fund uses hedging techniques to attempt to reduce the risk of investment positions. The Fund actively trades portfolio securities.

The Fund has a flexible investment strategy and invests in U.S. and foreign, including emerging market, securities. Although the Fund focuses on securities of mid- to large-capitalization companies, it may invest in equity securities regardless of market capitalization size and style (growth or value). The Fund invests in value equity securities, an investment strategy that emphasizes buying equity securities that appear to be undervalued. The Fund also invests in growth equity securities, an investment strategy that emphasizes buying equity securities of companies whose potential for growth of capital and earnings is expected to be above average.

The Fund takes long and short positions in equity securities, exchange-traded funds, and derivative instruments. When taking a short position, the Fund may sell an instrument that it does not own and then borrow to meet its settlement obligations. A short position will benefit from a decrease in price of the underlying instrument and loses value if the price of the underlying instrument increases. Long positions profit if the price of the instrument increases. Simultaneously engaging in long investing and short selling seeks to reduce the net exposure of the overall portfolio to general market movements. The Fund will take relative value positions, which seek to capitalize on price differences between similar securities or relative value among securities of the same company.

Principal Management Corporation (“Principal”), the Fund’s investment advisor, strategically allocates the Fund's assets among the investment strategies described below, which are executed by one or more of the Fund’s sub-advisors. In making these allocations, which will vary from time-to-time, Principal seeks to combine the strategies of the sub-advisors to deliver long-term growth of capital with lower volatility than the global equity markets. The Fund retains considerable latitude in allocating its investments. To achieve its desired combination of the Fund's strategies and depending on market conditions, Principal may allocate 0% to 100% of the Fund’s assets to any of these strategies at any time, may add additional strategies, and may direct a sub-advisor to reduce or omit investments in certain assets or asset classes.

Time Arbitrage. A portion of the Fund’s assets is primarily invested in long positions in securities of mid- to large-capitalization companies that the sub-advisor believes are attractively-valued, growth-oriented companies and in short positions that include, among other things, sector and market hedges and large, liquid single-name positions (meaning positions that are specific to one company). The sub-advisor identifies longer-term investment opportunities intended to be held for multiple years, while other long positions and short positions are intended to be maintained for shorter time periods. The strategy is primarily U.S.-focused with smaller exposures in Asia and Europe.

Global Thematic. A portion of the Fund’s assets is invested in both long and short positions in global equity securities and derivatives on equity securities. This portion of the Fund invests in both U.S. and foreign issuers, including issuers in emerging markets. For this strategy, the sub-advisor employs top-down analysis (focusing on broader industry, sector and regional developments) and bottom-up analysis (focusing on the fundamental analysis of individual issuers) in its investment process.

European Macro/Fundamental. A portion of the Fund’s assets is invested in long positions in securities of mid- to large-capitalization companies, primarily in Western Europe, and depending upon the market environment, in short positions in individual securities and region, country, and sector indices primarily through the use of index futures. This is a Western European-focused equity long/short strategy that utilizes top-down macro-economic views to support a bottom-up security selection process.

European Low Net. A portion of the Fund's assets is invested in equity securities of mid- to large-capitalization companies, primarily in Western Europe, targeting companies with improving fundamentals which could lead to an acceleration of revenue, margin expansion and corporate earnings. This is a Western European-focused equity long/short strategy managed on an opportunistic basis based on the Sub-Advisor’s evaluation of intrinsic value and with lower exposure (i.e., a smaller percentage difference between the long and short exposures).

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:

Derivatives Risk. Derivatives may not move in the direction anticipated by the portfolio manager. Transactions in derivatives may increase volatility, cause the liquidation of portfolio positions when not advantageous to do so and result in disproportionate losses that may be substantially greater than a fund's initial investment.

Emerging Markets Risk. Investments in emerging market countries may have more risk than those in developed market countries because the emerging markets are less developed and more illiquid. Emerging market countries can also be subject to increased social, economic, regulatory, and political uncertainties and can be extremely volatile.

Equity Securities Risk. The value of equity securities could decline 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 market capitalization or style) may underperform other market segments or the equity markets as a whole.

European Focus Risk. A fund that focuses its investments in securities of European companies may be particularly susceptible to economic, political, regulatory or other events or conditions affecting issuers and countries in Europe. Currency devaluations could occur or could continue to occur. Debt problems of the private or public sectors in a single European Union (EU) country can pose significant economic risks to the EU as a whole. As a result, the fund’s performance may be more volatile than the performance of a more geographically diversified fund.

Exchange-Traded Funds (“ETFs”) Risk. An ETF is subject to the risks associated with direct ownership of the securities in which the ETF invests or that comprise the index on which the ETF is based. Fund shareholders indirectly bear their proportionate share of the expenses of the ETFs in which the fund invests.

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; settlement delays; and limited government regulation (including less stringent reporting, accounting, and disclosure standards than are required of U.S. companies).

Hedging Risk. A fund that implements a hedging strategy using derivatives and/or securities could expose the fund to the risk that can arise when a change in the value of a hedge does not match a change in the value of the asset it hedges. In other words, the change in value of the hedge could move in a direction that does not match the change in value of the underlying asset, resulting in a risk of loss to the fund.

Leverage Risk. Leverage created by borrowing or certain types of transactions or investments may impair the fund's liquidity, cause it to liquidate positions at an unfavorable time, increase volatility of the fund's net asset value, or diminish the fund's performance.

Portfolio Turnover (Active Trading) Risk. A fund that has a portfolio turnover rate over 100% is considered actively traded. Actively trading portfolio securities may accelerate realization of taxable gains and losses, lower fund performance and may result in high portfolio turnover rates and increased brokerage costs.

Short Sale Risk. A short sale involves the sale by the fund of a security that it does not own with the hope of purchasing the same security at a later date at a lower price. A fund may also enter into a short derivative position through a futures contract or swap agreement. If the price of the security or derivative has increased during this time, then the fund will incur a loss equal to the increase in price from the time that the short sale was entered into plus any premiums and interest paid to the third party. Therefore, short sales involve the risk that losses may be exaggerated, potentially losing more money than the actual cost of the investment. Also, there is the risk that the third party to the short sale may fail to honor its contract terms, causing a loss to the fund.

No performance information is shown below because the Fund has not yet had a calendar year of performance. The Fund's performance is benchmarked against the HFRX Equity Hedge Index. Performance information provides an indication of the risks of investing in the Fund. Past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. You may get updated performance information by calling 1-800-222-5852 or online at:

Purchase and Sale of Fund Shares



Share Class	Investment Type	Purchase Minimum Per Fund
A	Initial Investment	$1,000⁽¹⁾
A	Initial Investment for accounts with an Automatic Investment Plan (AIP)	$100
A	Subsequent Investments	$100⁽¹⁾⁽²⁾
P, Institutional, and R-6	There are no minimum initial or subsequent investment requirements for eligible purchasers.	N/A

You may purchase or redeem shares on any business day (normally any day when the New York Stock Exchange is open for regular trading) through your plan, intermediary, or Financial Professional; by sending a written request to Principal Funds at P.O. Box 8024, Boston, MA 02266-8024 (regular mail) or 30 Dan Road, Canton, MA 02021-2809 (overnight mail); calling us at 1-800-222-5852; or accessing our website (www.principalfunds.com).

The Fund’s distributions you receive are generally subject to federal income tax as ordinary income or capital gain and may also be subject to state and local taxes, unless you are tax-exempt or your account is tax-deferred in which case your distributions would be taxed when withdrawn from the tax-deferred account.

For the other share classes, if you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank, insurance company, investment adviser, etc.), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment, or to recommend one share class of the Fund over another share class. Ask your salesperson or visit your financial intermediary's website for more information.



Class	A	P	Inst.	R-6
Ticker Symbol(s)	PGMMX	PGMPX	PGPIX	PGPMX



	1 year	3 years
Class A	$814	$1,395
Class P	254	798
Institutional Class	244	781
Class R-6	237	763


Objective:	The Fund seeks long-term growth of capital with lower volatility than the global equity markets.


•	Currency Contracts. Derivatives related to currency contracts involve the specific risk of government action through exchange controls that would restrict the ability of the fund to deliver or receive currency.


•	Growth Stock Risk. If growth companies do not increase their earnings at a rate expected by investors, the market price of the stock may decline significantly, even if earnings show an absolute increase. Growth company stocks also typically lack the dividend yield that can lessen price declines in market downturns.


•	Small and Medium Market Capitalization Companies. Investments in securities of smaller companies and mid-size companies may involve greater risk and price volatility than investments in larger, more mature companies.


•	For Institutional Class and Class R-6 - www.principal.com.


⁽¹⁾	Some exceptions apply; see "Purchase of Fund Shares - Minimum Investments" for more information.


⁽²⁾	For accounts with an AIP, the subsequent automatic investments must total $1,200 annually if the initial $1,000 minimum has not been met.


•	Jake S. Anonson (since 2016), Portfolio Manager


•	Jessica S. Bush (since 2016), Portfolio Manager


•	Marcus W. Dummer (since 2016), Portfolio Manager


•	Benjamin E. Rotenberg (since 2016), Portfolio Manager