PRINCIPAL FUNDS, INC.
AMENDED AND RESTATED
MANAGEMENT AGREEMENT

        AGREEMENT to be effective November 1, 2010 by and between
PRINCIPAL FUNDS, INC., a Maryland corporation (hereinafter called the
"Fund") and PRINCIPAL MANAGEMENT CORPORATION, an Iowa corporation
(hereinafter called the "Manager").

W I T N E S S E T H:

        WHEREAS, The Fund has furnished the Manager with copies properly
certified or authenticated of each of the following:
(a)	Articles of Incorporation of the Fund;
(b)	Bylaws of the Fund as adopted by the Board of Directors; and
(c)	Resolutions of the Board of Directors of the Fund selecting
the Manager as investment adviser and approving the form of
this Agreement.

        NOW THEREFORE, in consideration of the premises and mutual
agreements herein contained, the Fund hereby appoints the Manager to
act as investment adviser and manager of the Fund, and the Manager
agrees to act, perform or assume the responsibility therefore in the
manner and subject to the conditions hereinafter set forth.  The Fund
will furnish the Manager from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing, if any.

1.	INVESTMENT ADVISORY SERVICES
        The Manager will regularly perform the following services for the
Fund:
(a)	Provide investment research, advice and supervision;
(b)	Provide investment advisory, research and statistical
facilities and all clerical services relating to research,
statistical and investment work;
(c)	Furnish to the Board of Directors of the Fund (or any
appropriate committee of such Board), and revise from time
to time as conditions require, a recommended investment
program for the portfolio of each Series of the Fund
consistent with each Series' investment objective and
policies;
(d)	Implement such of its recommended investment program as the
Fund shall approve, by placing orders for the purchase and
sale of securities, subject always to the provisions of the
Fund's Articles of Incorporation and Bylaws and the
requirements of the Investment Company Act of 1940 (the
"1940 Act"), and the Fund's Registration Statement, current
Prospectus and Statement of Additional Information, as each
of the same shall be from time to time in effect;
(e)	Advise and assist the officers of the Fund in taking such
steps as are necessary or appropriate to carry out the
decisions of its Board of Directors and any appropriate
committees of such Board regarding the general conduct of
the investment business of the Fund; and
(f)	Report to the Board of Directors of the Fund at such times
and in such detail as the Board may deem appropriate in
order to enable it to determine that the investment policies
of the Fund are being observed.

2.	ACCOUNTING SERVICES
		The Manager will provide all accounting services customarily
required by investment companies, in accordance with the requirements
of applicable laws, rules and regulations and with the policies and
practices of the Fund as communicated to the Manager from time to
time, including, but not limited to, the following:
(a)	Maintain fund general ledger and journal;
(b)	Prepare and record disbursements for direct Fund expenses;
(c)	Prepare daily money transfer;
(d)	Reconcile all Fund bank and custodian accounts;
(e)	Assist Fund independent auditors as appropriate;
(f)	Prepare daily projection of available cash balances;
(g)	Record trading activity for purposes of determining net
asset values and daily dividend;
(h)	Prepare daily portfolio valuation report to value portfolio
securities and determine daily accrued income;
(i)	Determine the net asset value per share daily or at such
other intervals as the Fund may reasonably request or as may
be required by law;
(j)	Prepare monthly, quarterly, semi-annual and annual financial
statements;
(k)	Provide financial information for reports to the Securities
and Exchange Commission in compliance with the provisions of
the Investment Company Act of 1940 and the Securities Act of
1933, the Internal Revenue Service and any other regulatory
or governmental agencies as required;
(l)	Provide financial, yield, net asset value, and similar
information to National Association of Securities Dealers,
Inc., and other survey and statistical agencies as
instructed from time to time by the Fund;
(m)	Investigate, assist in the selection of and conduct
relations with custodians, depositories, accountants, legal
counsel, insurers, banks and persons in any other capacity
deemed to be necessary or desirable for the Fund's
operations; and
(n)	Obtain and keep in effect fidelity bonds and directors and
officers/errors and omissions insurance policies for the
Fund in accordance with the requirements of the Investment
Company Act of 1940 and the rules thereunder, as such bonds
and policies are approved by the Fund's Board of Directors.

3.	CORPORATE ADMINISTRATIVE SERVICES
        The Manager will provide the following corporate administrative
services for the Fund:

(a)	furnish the services of such of the Manager's officers and
employees as may be elected officers or directors of the
Fund, subject to their individual consent to serve and to
any limitations imposed by law;

(b)	furnish office space, and all necessary office facilities
and equipment, for the general corporate functions of the
Fund (i.e., functions other than (i) underwriting and
distribution of Fund shares; (ii) custody of Fund assets,
(iii) transfer and paying agency services; and (iv)
corporate and portfolio accounting services); and

(c)	furnish the services of executive and clerical personnel
necessary to perform the general corporate functions of the
Fund.

4.	RESERVED RIGHT TO DELEGATE DUTIES AND SERVICES TO OTHERS
        The Manager in assuming responsibility for the various services
as set forth in this Agreement reserves the right to enter into
agreements with others for the performance of certain duties and
services or to delegate the performance of some or all of such duties
and services to Principal Life Insurance Company, or one or more
affiliates thereof; provided, however, that entry into any such
agreements shall not relieve the Manager of its duty to review and
monitor the performance of such persons to the extent provided in the
agreements with such persons or as determined from time to time by the
Board of Directors.

5.	EXPENSES BORNE BY THE MANAGER
        The Manager will pay:
(a)	 the organizational expenses of the Fund and its
portfolios and share classes, including the Fund's
registration under the Investment Company Act of 1940, and
the initial registration of its Capital Stock for sale under
the Securities Act of 1933 with the Securities and Exchange
Commission;
(b)	Compensation of personnel, officers and directors who are
also affiliated with the Manager; and
(c)	Expenses and compensation associated with furnishing
office space, and all necessary office facilities and
equipment, and personnel necessary to perform the general
corporate functions of the Fund.

6.	COMPENSATION OF THE MANAGER BY FUND
        For all services to be rendered and payments made as provided in
Sections 1, 2 and 4 hereof, the Fund will accrue daily and pay the
Manager monthly, or at such other intervals as the Fund and Manager
may agree, a fee based on the average of the values placed on the net
assets of each Series of the Fund as of the time of determination of
the net asset value on each trading day throughout the month in
accordance with Schedule 1 attached hereto.

        Net asset value shall be determined pursuant to applicable
provisions of the Articles of Incorporation of the Fund.  If pursuant
to such provisions the determination of net asset value is suspended,
then for the purposes of this Section 5 the value of the net assets of
the Fund as last determined shall be deemed to be the value of the net
assets for each day the suspension continues.

        The Manager may, at its option, waive all or part of its
compensation for such period of time as it deems necessary or
appropriate.

7.	EXPENSES BORNE BY FUND
        The Fund will pay, without reimbursement by the Manager, all
expenses attributable to the operation of the Fund or the services
described in this Agreement and not specifically identified in this
Agreement as being paid by the Manager.

8.	AVOIDANCE OF INCONSISTENT POSITION
        In connection with purchases or sales of portfolio securities for
the account of the Fund, neither the Manager nor any of the Manager's
directors, officers or employees will act as a principal or agent or
receive any commission.

9.	LIMITATION OF LIABILITY OF THE MANAGER
        The Manager shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection with
the matters to which this Agreement relates, except a loss resulting
from willful misfeasance, bad faith or gross negligence on the
Manager's part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.

10.	COPIES OF CORPORATE DOCUMENTS
        The Fund will furnish the Manager promptly with properly
certified or authenticated copies of amendments or supplements to its
Articles of Incorporation or Bylaws.  Also, the Fund will furnish the
Manager financial and other corporate information as needed, and
otherwise cooperate fully with the Manager in its efforts to carry out
its duties and responsibilities under this Agreement.

11.	DURATION AND TERMINATION OF THIS AGREEMENT
        This Agreement shall remain in force and in effect from year to
year following its execution provided that the continuance is
specifically approved at least annually either by the Board of
Directors of the Fund or by a vote of a majority of the outstanding
voting securities of the Series and in either event by vote of a
majority of the directors of the Fund who are not interested persons
of the Manager, Principal  Life Insurance Company, or the Fund cast in
person at a meeting called for the purpose of voting on such approval.
This Agreement may, on sixty days written notice, be terminated at any
time without the payment of any penalty, by the Board of Directors of
the Fund, by vote of a majority of the outstanding voting securities
of the Series, or by the Manager.  This Agreement shall automatically
terminate in the event of its assignment.  In interpreting the
provisions of this Section 10, the definitions contained in Section
2(a) of the Investment Company Act of 1940 (particularly the
definitions of "interested person," "assignment" and "voting
security") shall be applied.

12.		AMENDMENT OF THIS AGREEMENT
        No provision of this Agreement may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge
or termination is sought, and no amendment of this Agreement shall be
effective until approved by vote of the holders of a majority of the
outstanding voting securities of the Series to which such amendment
relates and by vote of a majority of the directors who are not
interested persons of the Manager, Principal  Life Insurance Company
or the Fund cast in person at a meeting called for the purpose of
voting on such approval.

13.	ADDRESS FOR PURPOSE OF NOTICE
        Any notice under this Agreement shall be in writing, addressed
and delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate for the receipt of such
notices.  Until further notice to the other party, it is agreed that
the address of the Fund and that of the Manager for this purpose shall
be the Principal Financial Group, Des Moines, Iowa 50392-0200.

14.	MISCELLANEOUS
        The captions in this Agreement are included for convenience of
reference only, and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.  This
Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized.

                                          PRINCIPAL FUNDS, INC.


                                             By /s/ Beth C. Wilson
	Beth C. Wilson, Vice President &
Secretary


                                          PRINCIPAL MANAGEMENT CORPORATION


                                             By /s/ Nora Everett
	Nora Everett, President and Chief
Executive Officer


SCHEDULE 1

Series	Management Fee as a Percentage
of Average Daily Net Assets
	First $500 million	Next $500 million
	Next $1 billion	Next $1 billion
	Next $1 billion	Next $1 billion
	Over $5 billion
SAM Balanced Portfolio*	0.55%	0.50%	0.45%	0.40%	0.35%	0.30%
	0.25%
SAM Conservative Balanced Portfolio*	0.55%	0.50%	0.45%	0.40%	0.35%
	0.30%	0.25%
SAM Conservative Growth Portfolio*	0.55%	0.50%	0.45%	0.40%	0.35%
	0.30%	0.25%
SAM Flexible Income Portfolio*	0.55%	0.50%	0.45%	0.40%	0.35%	0.30%
	0.25%
SAM Strategic Growth Portfolio*	0.55%	0.50%	0.45%	0.40%	0.35%	0.30%
	0.25%
*Breakpoints based on aggregate SAM Portfolio net assets

Series	Management Fee as a Percentage
of Average Daily Net Assets
	First $500 million	Next $500 million	Next
$500 million	Over $1.5 billion
Diversified Real Asset Fund	0.85%	0.83%	0.81%	0.80%
Global Real Estate Securities Fund	0.90%	0.88%	0.86%	0.85%
High Yield Fund I	0.65%	0.63%	0.61%	0.60%
Inflation Protection Fund	0.40%	0.38%	0.36%	0.35%
International Emerging Markets Fund	1.20%	1.18%	1.16%
	1.15%
International Fund I	1.10%	1.08%	1.06%	1.05%
International Growth Fund	1.00%	0.98%	0.96%	0.95%
International Value Fund I	1.10%	1.08%	1.06%	1.05%
LargeCap Blend Fund I 	0.45%	0.43%	0.41%	0.40%
LargeCap Blend Fund II	0.75%	0.73%	0.71%	0.70%
LargeCap Value Fund	0.45%	0.43%	0.41%	0.40%
MidCap Blend Fund	0.65%	0.63%	0.61%	0.60%
MidCap Growth Fund	0.65%	0.63%	0.61%	0.60%
MidCap Growth Fund III	1.00%	0.96%	0.94%	0.92%
MidCap Value Fund I	1.00%	0.98%	0.96%	0.95%
MidCap Value Fund III	0.65%	0.63%	0.61%	0.60%
Real Estate Securities Fund	0.85%	0.83%	0.81%	0.80%
Short-Term Bond Fund	0.40%	0.38%	0.36%	0.35%
SmallCap Blend Fund	0.75%	0.73%	0.71%	0.70%
SmallCap Growth Fund	0.75%	0.73%	0.71%	0.70%
SmallCap Growth Fund I	1.10%	1.08%	1.06%	1.05%
SmallCap Growth Fund II	1.00%	0.98%	0.96%	0.95%
SmallCap Value Fund	0.75%	0.73%	0.71%	0.70%
SmallCap Value Fund I	1.00%	0.98%	0.96%	0.95%
SmallCap Value Fund II	1.00%	0.98%	0.96%	0.95%
Tax-Exempt Bond Fund	0.50%	0.48%	0.46%	0.45%

Series	Management Fee as a Percentage
of Average Daily Net Assets
	First $500 million	Next $500 million	Next
$500 million	Next $500 million	Next $1 billion	Over $3
billion
Bond & Mortgage Securities Fund	0.55%	0.53%	0.51%	0.50%	0.48%	0.45%
Disciplined LargeCap Blend Fund	0.60%	0.58%	0.56%	0.55%	0.54%	0.53%
Diversified International Fund 	0.90%	0.88%	0.86%	0.85%	0.83%	0.80%
Global Diversified Income Fund	0.80%	0.78%	0.76%	0.75%	0.73%	0.70%
LargeCap Value Fund I	0.80%	0.78%	0.76%	0.75%	0.74%	0.73%
LargeCap Value Fund III	0.80%	0.78%	0.76%	0.75%	0.73%	0.70%
LargeCap Growth Fund I	0.66%	0.64% 	0.62%	0.61%	0.60%	0.59%
LargeCap Growth Fund II	0.95%	0.93%	0.91%	0.90%	0.89%	0.88%
Money Market Fund	0.40%	0.39%	0.38%	0.37%	0.36%	0.35%
Preferred Securities Fund	0.75%	0.73%	0.71%	0.70%	0.69%	0.68%

Series	Management Fee as a Percentage
of Average Daily Net Assets
	First $500 million	Next $500 million	Next $1
billion	Next $1 billion	Over $3 billion
LargeCap Growth Fund	0.68%	0.65%	0.62%	0.58%	0.55%

Series	Management Fee as a Percentage
of Average Daily Net Assets
	First $500 million	Next $500 million	Next
$500 million	 Next $500 million	Next $500 million	Over
$2.5 billion
Core Plus Bond Fund I	0.60%	0.58%	0.56%	0.55%	0.53%	0.50%

Series	Management Fee as a Percentage
of Average Daily Net Assets
	First $250 million	Next $250 million	Over
$500 million
Equity Income Fund	0.60%	0.55%	0.50%

Series	Management Fee as a Percentage
of Average Daily Net Assets
	First $500 million	Next $500 million	Over $1
billion
Principal Capital Appreciation Fund	0.625%	0.50%	0.375%

Series	Management Fee as a Percentage
of Average Daily Net Assets
	First $2 billion	Over $2 billion
Government & High Quality Bond Fund	0.50%	0.45%
Income Fund	0.50%	0.45%

Series	Management Fee as a Percentage
of Average Daily Net Assets
	First $250 million	Over $250 million
High Yield Fund	0.625%	0.50%

Series	Management Fee as a Percentage
of Average Daily Net Assets
	First $1 billion	Over $1 billion
California Municipal Fund	0.50%	0.45%

Series	Management Fee as a Percentage
of Average Daily Net Assets
	First $200 million	Next $300 million	Over
$500 million
Short-Term Income	0.50%	0.45%	0.40%

Series	Management Fee as a Percentage of Average Daily
Net Assets
Bond Market Index Fund	0.25%
International Equity Index Fund	0.25%
LargeCap S&P 500 Index Fund	0.15%
MidCap S&P 400 Index Fund	0.15%
Principal LifeTime 2010 Fund	0.03%
Principal LifeTime 2015 Fund	0.03%
Principal LifeTime 2020 Fund	0.03%
Principal LifeTime 2025 Fund	0.03%
Principal LifeTime 2030 Fund	0.03%
Principal LifeTime 2035 Fund	0.03%
Principal LifeTime 2040 Fund	0.03%
Principal LifeTime 2045 Fund	0.03%
Principal LifeTime 2050 Fund	0.03%
Principal LifeTime 2055 Fund	0.03%
Principal LifeTime Strategic Income Fund	0.03%
SmallCap S&P 600 Index Fund	0.15%


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