Mar. 18, 2022

PFI Prospectus | Blue Chip Fund

Blue Chip Fund

PFI Prospectus | Bond Market Index Fund

Bond Market Index Fund

PFI Prospectus | Capital Securities Fund

Capital Securities Fund

PFI Prospectus | Diversified Real Asset Fund

DIVERSIFIED REAL ASSET FUND

Principal Funds, Inc.

Supplement dated March 18, 2022

to the Prospectus dated December 31, 2021

(as previously supplemented)

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

SUMMARY FOR DIVERSIFIED REAL ASSET FUND

Delete the last paragraph after the Average Annual Total Returns table, and add the following:

Performance of a blended index shows how the Fund’s performance compares to a blend of indices with similar investment objectives. Performance of the components of the blended index are also shown. The weightings of the Diversified Real Asset Strategic Index are as follows:

•for periods from January 1, 2022 and after the Diversified Real Asset Strategic Index will be known as the Diversified Real Asset Index (Linked): 30% S&P Global Infrastructure Index NTR, 25% FTSE EPRA/NAREIT Developed Index NTR, 15% Bloomberg US Treasury TIPS Index, 15% Bloomberg Commodity Index, and 15% S&P Global Natural Resources Index NTR.

•for periods prior to January 1, 2022: 35% Bloomberg US Treasury TIPS Index, 20% S&P Global Infrastructure Index NTR, 20% S&P Global Natural Resources Index NTR, 15% Bloomberg Commodity Index, and 10% FTSE EPRA/NAREIT Developed Index NTR. The blended index returns reflect the allocation described in the preceding sentence.

PFI Prospectus | Edge MidCap Fund

Edge MidCap Fund

PFI Prospectus | Global Multi-Strategy Fund

Global Multi-Straget Fund

PFI Prospectus | International Equity Index Fund

International Equity Index Fund

PFI Prospectus | International Small Company Fund

International Small Company Fund

PFI Prospectus | Opportunistic Municipal Fund

Opportunistic Municipal Fund

PFI Prospectus | Origin Emerging Markets Fund

Origin Emerging Markets Fund

PFI Prospectus | Small-MidCap Dividend Income Fund

Small-MidCap Dividend Income Fund

PFI Prospectus | Small-MidCap Growth Fund

Small-MidCap Growth Fund

PFI Prospectus | Spectrum Preferred and Capital Securities Income Fund

Spectrum Preferred and Capital Securities Income Fund