ITEM 405 REG S-K

Section 16(a) Beneficial Ownership Reporting Compliance

Section 30(h) of the 1940 Act and Section 16(a) of the 1934 Act require the Registrant’s trustees and executive officers, investment adviser, affiliated persons of the investment adviser, and persons who own more than 10% of a registered class of the Registrant’s equity securities to file Section 16(a) forms with the SEC reporting their affiliation with the Registrant, their ownership, and changes in their ownership of the Registrant’s shares. Those persons and entities are required by SEC regulations to furnish the Registrant with copies of all Section 16(a) forms they file or those filed on their behalf. Based solely on a review of those Section 16(a) forms furnished to it, the Registrant believes that all such filing requirements were met on a timely basis during the last fiscal year, except with respect to the filings described below.

On July 15, 2019, a Form 3 was filed on behalf of Andrew Donohue, an affiliated person of the Registrant’s investment adviser. That filing should have been made by July 5, 2019.

On December 9, 2019, a Form 3 was filed on behalf of Principal Life Insurance Company, a 10% beneficial owner of the Registrant. That filing should have been made by August 16, 2019.

On December 10, 2019, a Form 3 was filed on behalf of Principal Financial Services, Inc., a 10% beneficial owner of the Registrant. That filing should have been made by July 5, 2019.

On December 9, 2019, a Form 3 was filed on behalf of Principal Global Investors, LLC, the Registrant’s investment adviser. That filing should have been made by July 5, 2019.

Classification: Internal Use

OTHER REQUIRED INFO

Principal Funds
711 High Street, Des Moines, IA 50392
515 247 5111 tel
www.principal.com

May 20, 2020

Management has developed a plan to remediate the material weakness. Greater coordination of communication of information relevant to the valuation of private funds has been stressed for the Advisor’s portfolio management team. In conjunction with such coordination, the Advisor’s pricing group (responsible for monitoring the daily pricing process for all securities of the Registrant) has taken steps to help ensure that the Advisor’s financial reporting team (the group responsible for the preparation of the Registrant’s financial statements and reports) receive notification of each preliminary and final reported net asset value of a private fund in order to assess the impact of any change to financial statements and other regulatory filings. The pricing group is also enhancing reporting to the Registrant’s valuation committee through establishment of reporting thresholds for net asset value variances of a private fund and provision of summaries of any variances to the valuation committee for review. In addition, the pricing group will undertake to confirm unchanged net asset values with the portfolio management team on a periodic basis. The Registrant’s pricing group will also undertake to accelerate the review by a pricing consultant at annual and semi-annual period ends. This accelerated review will require the portfolio managers promptly to complete quarterly due diligence assessments.

INTERNAL CONTROL RPT

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees
Principal Diversified Select Real Asset Fund

In planning and performing our audit of the financial statements of Principal Diversified Select Real Asset Fund (the Fund) as of and for the period from June 25, 2019, date operations commenced, through March 31, 2020, in accordance with the standards of the Public Company Accounting Oversight Board (United States), we considered the Fund’s internal control over financial reporting, including controls over safeguarding securities, as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements and to comply with the requirements of Form N-CEN, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

The management of the Fund is responsible for establishing and maintaining effective internal control over financial reporting. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of controls. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of a company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that

there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Our consideration of the Fund’s internal control over financial reporting was for the limited purpose described in the first paragraph and would not necessarily disclose all deficiencies in internal control that might be material weaknesses under standards established by the Public Company Accounting Oversight Board (United States).

However, we noted the following deficiency involving the control environment and its operation that we consider to be a material weakness as defined above. This deficiency was considered in determining the nature, timing and extent of the procedures to be performed in our audit of the financial statements of the Fund as of and for the period from June 25, 2019, date operations commenced, through March 31, 2020, and this report does not affect our report on the financial statements of the Fund dated May 21, 2020. Private investment funds held by the Fund are valued at the net asset value provided by the investment manager of the private investment funds, subject to appropriate investment and operational due diligence review, in accordance with the Fund’s valuation policy. As of March 31, 2020, a material weakness existed in the operating effectiveness of the control related to the investment and operational due diligence review, which is designed to provide all available information to the Fund’s Valuation Committee in order for a fair value determination to be made. Based on this available information not being shared on a timely basis, the control over the Fund’s valuation of private investment funds did not operate effectively.

This report is intended solely for the information and use of management and the Board of Trustees of the Fund and the Securities and Exchange Commission and is not intended to be and should not be used by anyone other than these specified parties.

/s/ Ernst & Young LLP

Minneapolis, Minnesota
May 21, 2020