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Principal Funds Inc | Diversified Real Asset Fund

Principal Funds, Inc.

Supplement dated March 20, 2020

to the Statutory Prospectus dated December 31, 2019

(as previously supplemented)

This supplement updates information currently in the Statutory Prospectus. Please retain this supplement for future reference.

SUMMARY FOR DIVERSIFIED REAL ASSET FUND

Effective April 1, 2020, delete the Example section, and replace with the following: 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. The calculation of costs takes into account any applicable contractual fee waivers and/or expense reimbursements for the period noted in the table above. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

Expense Example - Principal Funds Inc - Diversified Real Asset Fund - USD ($)	Expense Example, with Redemption, 1 Year	Expense Example, with Redemption, 3 Years	Expense Example, with Redemption, 5 Years	Expense Example, with Redemption, 10 Years
Class A	494	771	1,070	1,916
Class C	299	667	1,162	2,525
Institutional Class	86	294	519	1,167
R-3	137	438	761	1,675
R-4	118	379	660	1,462
R-5	106	342	596	1,324
R-6	80	262	460	1,032

With respect to Class C shares, you would pay the following expenses if you did not redeem your shares (all other classes would be the same as in the above example):

Expense Example, No Redemption	Expense Example, No Redemption, 1 Year	Expense Example, No Redemption, 3 Years	Expense Example, No Redemption, 5 Years	Expense Example, No Redemption, 10 Years
Principal Funds Inc | Diversified Real Asset Fund | Class C | USD ($)	199	667	1,162	2,525