N-CSRS 1 primary-document.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES
 
 
Investment Company Act file number
 
811-23403
 
Principal Real Asset Fund
(Exact name of registrant as specified in charter)
 
 801 Grand Avenue, Des Moines, IA 50309
(Address of principal executive offices)                                                         (Zip code)
 
Principal Global Investors, LLC, 801 Grand Avenue, Des Moines, IA 50309
(Name and address of agent for service)
                                                                                               
Registrant’s telephone number, including area code:
515-235-1719
 
Date of fiscal year end:
March 31, 2024
 
Date of reporting period:
September 30, 2023
 

ITEM 1 – REPORT TO STOCKHOLDERS
 
 
Principal
Real
Asset
Fund
Semiannual
Report
September
30,
2023
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Table
of
Contents
Not
FDIC
or
NCUA
insured
May
lose
value
•
Not
a
deposit
•
No
bank
or
credit
union
guarantee
Not
insured
by
any
Federal
government
agency
Financial
Statements
1
Notes
to
Financial
Statements
5
Schedule
of
Investments
15
Financial
Highlights
(includes
performance
information)
18
Shareholder
Expense
Example
20
Supplemental
Information
24
Statement
of
Assets
and
Liabilities
September
30,
2023
(unaudited)
1
See
accompanying
notes.
Amounts
in
thousands,
except
per
share
amounts
Principal
Real
Asset
Fund
(a)
Investment
in
securities--at
cost
............................................................................................................................
$
147,799‌
Foreign
currency--at
cost
....................................................................................................................................
$
42‌
Assets
Investment
in
securities--at
value 
............................................................................................................................
$
148,640‌
Foreign
currency--at
value
....................................................................................................................................
42‌
Cash
...........................................................................................................................................................
81‌
Receivables:
Dividends
and
interest
...................................................................................................................................
572‌
Expense
reimbursement
from
Manager
.................................................................................................................
153‌
Investment
securities
sold
...............................................................................................................................
385‌
Prepaid
directors'
expenses
....................................................................................................................................
1‌
Total
Assets  
149,874‌
Liabilities
(b)
Accrued
management
and
investment
advisory
fees
..........................................................................................................
210‌
Accrued
transfer
agent
fees
...................................................................................................................................
54‌
Accrued
professional
fees
.....................................................................................................................................
174‌
Accrued
other
expenses
.......................................................................................................................................
10‌
Payables:
Investment
securities
purchased
........................................................................................................................
671‌
Total
Liabilities  
1,119‌
Net
Assets
Applicable
to
Outstanding
Shares
..............................................................................................................
$
148,755‌
Net
Assets
Consist
of:
Capital
shares
and
additional
paid-in-capital
.................................................................................................................
$
144,826‌
Total
distributable
earnings
(accumulated
loss)
...............................................................................................................
3,929‌
Total
Net
Assets 
$
148,755‌
Capital
Stock
(par
value:
$.01
per
share):
Net
Asset
Value
Per
Share:
Class
A
:
Net
Assets
............................................................................................................................................
$
828‌
Shares
Issued
and
Outstanding
..........................................................................................................................
34‌
Net
Asset
Value
per
share
...............................................................................................................................
$
24
.57‌
(c)
Maximum
Offering
Price
................................................................................................................................
$
26
.07‌
Class
Y
:
Net
Assets
............................................................................................................................................
$
137,281‌
Shares
Issued
and
Outstanding
..........................................................................................................................
5,519‌
Net
Asset
Value
per
share
...............................................................................................................................
$
24
.88‌
Institutional
:
Net
Assets
.......................................................................................................................................
$
10,646‌
Shares
Issued
and
Outstanding
..........................................................................................................................
432‌
Net
Asset
Value
per
share
...............................................................................................................................
$
24
.65‌
(a)
Effective
September
1,
2023,
Principal
Diversified
Select
Real
Asset
Fund
changed
its
name
to
Principal
Real
Asset
Fund.
(b)
See
Note
3
for
details
of
any
unfunded
commitments.
(c)
Redemption
price
per
share
is
equal
to
net
asset
value
per
share
less
any
applicable
contingent
deferred
sales
charge.
Statement
of
Operations
Six
Months
ended
September
30,
2023
(unaudited)
2
See
accompanying
notes.
Amounts
in
thousands
Principal
Real
Asset
Fund
(a)
Net
Investment
Income
(Loss)
Income:
Dividends
...................................................................................................................................................
$
2,775‌
Withholding
tax
............................................................................................................................................
(
120‌
)
Interest
......................................................................................................................................................
173‌
Total
Income
2,828‌
Expenses:
Management
and
investment
advisory
fees
................................................................................................................
1,331‌
Distribution
f
ees
-
Class
A
.................................................................................................................................
1‌
Registration
fees
-
Class
A
.................................................................................................................................
8‌
Registration
fees
-
Class
Y
.................................................................................................................................
8‌
Registration
fees
-
Institutional
............................................................................................................................
8‌
Shareholder
meeting
expense
..............................................................................................................................
1‌
Shareholder
reports
-
Class
A
..............................................................................................................................
7‌
Shareholder
reports
-
Institutional
.........................................................................................................................
2‌
Transfer agent
fees
-
Class
A
...............................................................................................................................
29‌
Transfer agent
fees
-
Class
Y
...............................................................................................................................
23‌
Transfer agent
fees
-
Institutional
..........................................................................................................................
48‌
Custodian
fees
..............................................................................................................................................
11‌
Directors'
expenses
.........................................................................................................................................
3‌
Professional fees
...........................................................................................................................................
184‌
Other
expenses
.............................................................................................................................................
41‌
Total
Gross
Expenses
1,705‌
Less: Reimbursement
from
Manager
......................................................................................................................
562‌
Less:
Reimbursement
from
Manager
-
Class
A
............................................................................................................
45‌
Less:
Reimbursement
from
Manager
-
Class
Y
............................................................................................................
216‌
Less:
Reimbursement
from
Manager
-
Institutional
.......................................................................................................
63‌
Total
Net
Expenses
819‌
Net
Investment
Income
(Loss)
2,009‌
Net
Realized
and
Unrealized
Gain
(Loss)
on
investments
and
foreign
currencies
Net
realized
gain
(loss)
from:
Investment
transactions
....................................................................................................................................
541‌
Foreign
currency
transactions
..............................................................................................................................
(
12‌
)
Net
change
in
unrealized
appreciation/(depreciation)
of:
Investments
.................................................................................................................................................
(
5,737‌
)
Translation
of
assets
and
liabilities
in
foreign
currencies
..................................................................................................
(
1‌
)
Net
Realized
and
Unrealized
Gain
(Loss)
on
investments
and
foreign
currencies
(
5,209‌
)
Net
Increase
(Decrease)
in
Net
Assets
Resulting
from
Operations
$
(
3,200‌
)
(a)
Effective
September
1,
2023,
Principal
Diversified
Select
Real
Asset
Fund
changed
its
name
to
Principal
Real
Asset
Fund.
Statement
of
Changes
in
Net
Assets
(unaudited)
3
See
accompanying
notes.
Amounts
in
thousands
Principal
Real
Asset
Fund
(a)
Period
Ended
September
30,
2023
Year
Ended
March
31,
2023
Operations
Net
investment
income
(loss)
................................................................................................................
$
2,009‌
$
4,706‌
Net
realized
gain
(loss)
on
investments
and
foreign
currencies
.............................................................................
529‌
5,403‌
Net
change
in
unrealized
appreciation/(depreciation)
of
investments
and
foreign
currencies
...............................................
(
5,738‌
)
(
15,114‌
)
Net
Increase
(Decrease)
in
Net
Assets
Resulting
from
Operations
(
3,200‌
)
(
5,005‌
)
Dividends
and
Distributions
to
Shareholders
From
net
investment
income
and
net
realized
gain
on
investments
.........................................................................
(
1,625‌
)
(
11,314‌
)
Total
Dividends
and
Distributions
(
1,625‌
)
(
11,314‌
)
Capital
Share
Transactions
Net
increase
(decrease)
in
capital
share
transactions
........................................................................................
(
6,150‌
)
(
12,013‌
)
Total
Increase
(Decrease)
in
Net
Assets
(
10,975‌
)
(
28,332‌
)
Net
Assets
Beginning
of
period
..........................................................................................................................
159,730‌
188,062‌
End
of
period
................................................................................................................................
$
148,755‌
$
159,730‌
Class
A
Class
Y
Institutional
Capital
Share
Transactions:
Period
Ended
September
30,
2023
Dollars:
Sold
.........................................................................................
$
98‌
–‌
$
609‌
Reinvested
....................................................................................
3‌
1,502‌
3‌
Redeemed
.....................................................................................
–‌
(
7,999‌
)
(
366‌
)
Net
Increase
(Decrease)
$
101‌
$
(
6,497‌
)
$
246‌
Shares:
Sold
.........................................................................................
4‌
–‌
24‌
Reinvested
....................................................................................
–‌
59‌
–‌
Redeemed
.....................................................................................
–‌
(
311‌
)
(
14‌
)
Net
Increase
(Decrease)
4‌
(
252‌
)
10‌
Year
Ended
March
31,
2023
Dollars:
Sold
.........................................................................................
$
416‌
–‌
$
10,422‌
Reinvested
....................................................................................
24‌
10,698‌
21‌
Redeemed
.....................................................................................
–‌
(
33,566‌
)
(
28‌
)
Net
Increase
(Decrease)
$
440‌
$
(
22,868‌
)
$
10,415‌
Shares:
Sold
.........................................................................................
16‌
–‌
400‌
Reinvested
....................................................................................
1‌
418‌
1‌
Redeemed
.....................................................................................
–‌
(
1,254‌
)
(
1‌
)
Net
Increase
(Decrease)
17‌
(
836‌
)
400‌
Dividends
and
Distributions
to
Shareholders:
Period Ended
September
30,
2023
From
net
investment
income
and
net
realized
gain
on
investments
.............................................
$
(
8‌
)
$
(
1,502‌
)
$
(
115‌
)
Total
Dividends
and
Distributions
$
(
8‌
)
$
(
1,502‌
)
$
(
115‌
)
Year
Ended
March
31,
2023
From
net
investment
income
and
net
realized
gain
on
investments
.............................................
$
(
43‌
)
$
(
10,698‌
)
$
(
573‌
)
Total
Dividends
and
Distributions
$
(
43‌
)
$
(
10,698‌
)
$
(
573‌
)
(a)
Effective
September
1,
2023,
Principal
Diversified
Select
Real
Asset
Fund
changed
its
name
to
Principal
Real
Asset
Fund.
Statement
of
Cash
Flows
Six
Months
Ended
September
30,
2023
(unaudited)
4
See
accompanying
notes.
(a)
Effective
September
1,
2023,
Principal
Diversified
Select
Real
Asset
Fund
changed
its
name
to
Principal
Real
Asset
Fund.
Amounts
in
thousands
Principal
Real
Asset
Fund
(a)
Cash
Flows
from
Operating
Activities:
Net decrease
in
net
assets
from
operations
.................................................................................
$
(3,200
)
Adjustments
to
reconcile
net
increase
in
net
assets
from
operations
to
net
cash
used
in
operating
activities:
Purchase
of
investment
securities
...................................................................................
(20,979)
Proceeds
from
sale
of
investment
securities
............................................................................
21,406
Net
sales
or
(purchases)
of
short
term
securities
.........................................................................
5,063
Net
accretion
of
bond
discounts
and
amortization
of
premiums
..............................................................
152
Change
in
unrealized
(appreciation)
depreciation
on
investments
.............................................................
5,737
Net
realized
gain
(loss)
from
investments
..............................................................................
(541)
(Increase)
decrease
in
dividends
and
interest
receivable
....................................................................
(237)
(Increase)
decrease
in
investment
securities
sold
.........................................................................
106
Increase
(decrease)
in
accrued
fees,
expenses,
and
expense
reimbursement
from
Manager
...........................................
(85)
Increase
(decrease)
in
investment
securities
purchased
....................................................................
430
Net
cash  provided
by
operating
activities
7,852
Cash
Flows
from
Financing
Activities:
Increase
(decrease)
in
cash
overdraft
.................................................................................
(9)
Proceeds
from
shares
sold
.........................................................................................
707
Payment
on
shares
redeemed
.......................................................................................
(8,365)
Dividends
and
distributions
paid
to
shareholders
.........................................................................
(117)
Net
cash  used
in
financing
activities
(7,784)
Net
increase in
cash
.............................................................................................
68
Cash:
Beginning
of
period
.............................................................................................
$
55
End
of
period
..................................................................................................
$
123
Supplemental
disclosure
of
cash
flow
information:
Reinvestment
of
dividends
and
distributions
...........................................................................
$
1,508
Notes
to
Financial
Statements
Principal
Real
Asset
Fund
September
30,
2023
(unaudited)
5
1.
Organization
Principal
Real
Asset
Fund
(the
"Fund")
is
registered
under
the
Investment
Company
Act
of
1940,
as
amended,
(the
“1940
Act”)
as
a
non-
diversified,
closed-end
management
investment
company.
The
Fund
continuously
offers
three
classes
of
shares:
Class
A,
Class
Y,
and
Institutional
Class.
The
Fund
was
organized
as
a
Delaware
statutory
trust
on
September
21,
2018
pursuant
to
an
Agreement
and
Declaration
of
Trust
governed
by
the
State
of
Delaware.
Principal
Global
Investors,
LLC
(the
“Manager”)
serves
as
the
Fund’s
manager
and
advisor.
The
Fund
is
structured
as
an
interval
fund,
meaning
it
conducts
quarterly
repurchase
offers
of
no
less
than
5%
and
no
more
than
25%
of
the
Fund’s
outstanding
shares
at
net
asset
value.
Repurchase
offers
of
more
than
5%
are
made
solely
at
the
discretion
of
the
Fund’s
Board
of
Trustees
(the
“Board”),
and
shareholders
should
not
rely
on
any
expectation
of
repurchase
offers
being
made
in
excess
of
5%.
Shareholders
should
consider
the
Fund’s
shares
illiquid.
The
Fund’s
shares
are
not
listed
on
any
national
securities
exchange
and
are
not
publicly
traded.
There
is
currently
no
secondary
market
for
the
shares,
and
the
Fund
expects
that
no
secondary
market
will
develop.
An
unlimited
number
of
shares
has
been
authorized
under
the
Agreement
and
Declaration
of
Trust.
Only
eligible
purchasers
can
buy
shares
of
the
Fund
in
that
share
class.
The
Manager
and
Principal
Funds
Distributor,
Inc.
(the
“Distributor”)
(an
affiliate
of
the
Manager),
the
principal
distributor
of
the
Fund,
reserve
the
right
to
broaden,
limit,
and
change
the
designation
of
eligible
purchasers
without
notice.
Shares
of
the
Fund
are
only
sold
in
U.S.
jurisdictions.
Subject
to
eligibility
and
minimum
initial
investment
requirements,
shares
of
the
Fund
may
be
purchased
directly
or
through
intermediary
organizations,
such
as
broker-dealers,
insurance
companies,
plan
sponsors,
third
party
administrators,
and
retirement
plans.
Minimum
initial
investment
requirements
are
$25,000
for
Class
A
shares
and
$100,000
for
Class
Y
and
Institutional
Class
shares.
Effective
September
1,
2023,
the
Fund
changed
its
name
from
Principal
Diversified
Select
Real
Asset
Fund
to
Principal
Real
Asset
Fund.
In
addition
to
the
name
change,
the
Fund’s
diversification
classification
changed
from
“diversified”
to
“non-diversified”
with
a
change
to
the
related
fundamental
policy.
The
Fund
is
an
investment
company
and
applies
specialized
accounting
and
reporting
under
Accounting
Standards
Codification
Topic
946,
Financial
Services
-
Investment
Companies
.
The
Fund
has
not
provided
financial
support
and
is
not
contractually
required
to
provide
financial
support
to
any
investee.
All
classes
of
shares
of
the
Fund
represent
interests
in
the
same
portfolio
of
investments
and
will
vote
together
as
a
single
class
except
where
otherwise
required
by
law
or
as
determined
by
the
Board.
In
addition,
the
Board
declares
separate
dividends
on
each
class
of
shares.
The
Fund
may
offer
additional
classes
of
shares
in
the
future.
2.
Significant
Accounting
Policies
The
preparation
of
financial
statements
in
conformity
with
U.S.
generally
accepted
accounting
principles
(“U.S.
GAAP”)
requires
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
and
disclosure
of
contingent
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
reported
amounts
of
revenues
and
expenses
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
The
following
summarizes
the
significant
accounting
policies
of
the
Fund:
Security
Valuation.
The
Fund
values
securities,
including
exchange-traded
funds,
for
which
market
quotations
are
readily
available
at
fair
value,
which
is
determined
using
the
last
reported
sale
price.
If
no
sales
are
reported,
as
is
regularly
the
case
for
some
securities
traded
over-the-counter,
securities
are
valued
using
the
last
reported
bid
price
or
an
evaluated
bid
price
provided
by
a
pricing
service.
Pricing
services
use
modeling
techniques
that
incorporate
security
characteristics
such
as
current
quotations
by
broker/dealers,
coupon,
maturity,
quality,
type
of
issue,
trading
characteristics,
other
yield
and
risk
factors,
and
other
market
conditions
to
determine
an
evaluated
bid
price.
When
reliable
market
quotations
are
not
considered
to
be
readily
available,
which
may
be
the
case,
for
example,
with
respect
to
restricted
securities,
certain
debt
securities,
preferred
stocks,
and
foreign
securities,
the
investments
are
valued
at
their
fair
value
as
determined
in
good
faith
by
the
Manager
under
procedures
established
and
periodically
reviewed
by
the
Board.
The
Fund
invests
in
other
publicly
traded
investment
funds
which
are
valued
at
the
respective
fund’s
net
asset
value.
In
addition,
the
Fund
invests
a
portion
of
its
assets
in
private
investment
funds
which
are
valued
at
fair
value
based
upon
the
net
asset
value
reported
on
a
periodic
basis.
In
the
event
that
a
net
asset
value
is
not
provided
by
a
private
investment
fund
following
the
end
of
the
period,
the
Fund’s
fair
valuation
procedures
will
be
followed,
which
includes
reviewing
investor
statements
and
trade
activity.
The
appropriateness
of
the
fair
value
of
these
securities
is
monitored
by
the
Manager.
The
value
of
foreign
securities
used
in
computing
the
net
asset
value
per
share
is
generally
determined
as
of
the
close
of
the
foreign
exchange
where
the
security
is
principally
traded.
Events
that
occur
after
the
close
of
the
applicable
foreign
market
or
exchange
but
prior
to
the
calculation
Notes
to
Financial
Statements
Principal
Real
Asset
Fund
September
30,
2023
(unaudited)
6
of
the
Fund’s
net
asset
values
are
reflected
in
the
Fund’s
net
asset
values
and
these
securities
are
valued
at
fair
value
as
determined
in
good
faith
by
the
Manager
under
procedures
established
and
periodically
reviewed
by
the
Board.
Many
factors,
provided
by
independent
pricing
services,
are
reviewed
in
the
course
of
making
a
good
faith
determination
of
a
security’s
fair
value,
including,
but
not
limited
to,
price
movements
in
American
depository
receipts
(“ADRs”),
futures
contracts,
industry
indices,
general
indices,
and
foreign
currencies.
To
the
extent
the
Fund
invests
in
foreign
securities
listed
on
foreign
exchanges
which
trade
on
days
on
which
the
Fund
does
not
determine
net
asset
values,
for
example
weekends
and
other
customary
national
U.S.
holidays,
the
Fund’s
net
asset
values
could
be
significantly
affected
on
days
when
shareholders
cannot
purchase
or
redeem
shares.
Certain
securities
issued
by
companies
in
emerging
market
countries
may
have
more
than
one
quoted
valuation
at
any
given
point
in
time,
sometimes
referred
to
as
a
“local”
price
and
a
“premium”
price.
The
premium
price
is
often
a
negotiated
price,
which
may
not
consistently
represent
a
price
at
which
a
specific
transaction
can
be
effected.
It
is
the
policy
of
the
Fund
to
value
such
securities
at
prices
at
which
it
is
expected
those
shares
may
be
sold,
and
the
Manager
or
any
sub-advisor
is
authorized
to
make
such
determinations
subject
to
such
oversight
by
the
Board
as
may
occasionally
be
necessary.
Currency
Translation.
Foreign
holdings
are
translated
to
U.S.
dollars
using
the
exchange
rate
at
the
daily
close
of
the
New
York
Stock
Exchange.
The
identified
cost
of
the
Fund’s
holdings
is
translated
at
approximate
rates
prevailing
when
acquired.
Income
and
expense
amounts
are
translated
at
approximate
rates
prevailing
when
received
or
paid,
with
daily
accruals
of
such
amounts
reported
at
approximate
rates
prevailing
at
the
date
of
valuation.
Since
the
carrying
amount
of
the
foreign
securities
is
determined
based
on
the
exchange
rate
and
market
values
at
the
close
of
the
period,
it
is
not
practicable
to
isolate
that
portion
of
the
results
of
operations
arising
as
a
result
of
changes
in
the
foreign
exchange
rates
from
the
fluctuations
arising
from
changes
in
the
market
prices
of
securities
during
the
period.
Net
realized
foreign
exchange
gains
or
losses
arise
from
sales
of
foreign
currencies,
currency
gains
or
losses
realized
between
trade
and
settlement
dates
on
security
transactions,
and
the
difference
between
the
amount
of
dividends,
interest
income,
interest
expense,
and
foreign
withholding
taxes
recorded
on
the
books
and
the
U.S.
dollar
equivalent
of
the
amounts
actually
received
or
paid.
Net
unrealized
appreciation
(depreciation)
on
translation
of
assets
and
liabilities
in
foreign
currencies
arise
from
changes
in
the
exchange
rate
relating
to
assets
and
liabilities,
other
than
investments
in
securities,
purchased
and
held
in
non-U.S.
denominated
currencies.
The
Fund
held
securities
denominated
in
foreign
currencies
that
exceeded
5%
of
net
assets
as
of
September
30,
2023
as
follows:
Income
and
Investment
Transactions.
The
Fund
records
investment
transactions
on
a
trade
date
basis.
Trade
date
for
senior
floating
rate
interests
purchased
in
the
primary
market
is
considered
the
date
on
which
the
loan
allocations
are
determined.
Trade
date
for
senior
floating
rate
interests
purchased
in
the
secondary
market
is
the
date
on
which
the
transaction
is
entered
into.
The
identified
cost
basis
has
been
used
in
determining
the
net
realized
gain
or
loss
from
investment
transactions
and
unrealized
appreciation
or
depreciation
of
investments.
The
Fund
records
dividend
income
on
the
ex-dividend
date,
except
dividend
income
from
foreign
securities
whereby
the
ex-dividend
date
has
passed;
such
dividends
are
recorded
as
soon
as
the
Fund
is
informed
of
the
ex-dividend
date.
Interest
income
is
recognized
on
an
accrual
basis.
Discounts
and
premiums
on
securities
are
accreted/amortized,
respectively,
on
the
level
yield
method
over
the
expected
lives
of
the
respective
securities.
Callable
debt
securities
purchased
at
a
premium
are
amortized
to
the
earliest
call
date
and
to
the
callable
amount,
if
other
than
par.
The
Fund
allocates
all
income
and
realized
and
unrealized
gains
or
losses
on
a
daily
basis
to
each
class
of
shares
based
upon
the
relative
proportion
of
the
value
of
shares
outstanding
of
each
class.
Distributions
from
Real
Estate
Investment
Trusts
(“REITs”)
may
be
characterized
as
ordinary
income,
net
capital
gain,
or
a
return
of
capital
to
the
Fund.
The
proper
characterization
of
distributions
from
REITs
is
generally
not
known
until
after
the
end
of
each
calendar
year.
As
such,
estimates
are
used
in
reporting
the
character
of
income
and
distributions
for
financial
statement
purposes.
Distributions
from
private
investment
funds
are
recorded
as
ordinary
income
and
are
included
in
dividend
income
on
the
statement
of
operations.
Expenses.
Expenses
directly
attributed
to
the
Fund
are
charged
to
the
Fund.
Other
expenses
not
directly
attributed
to
the
Fund
are
apportioned
among
the
registered
investment
companies
managed
by
the
Manager.
Management
fees
are
allocated
daily
to
each
class
of
shares
based
upon
the
relative
proportion
of
the
value
of
shares
outstanding
of
each
class.
Expenses
specifically
attributable
to
a
particular
class
are
charged
directly
to
such
class
and
are
included
separately
in
the
statement
of
operations.
Dividends
and
Distributions
to
Shareholders.
Dividends
and
distributions
to
shareholders
of
the
Fund
are
recorded
on
the
ex-dividend
date.
Dividends
and
distributions
to
shareholders
from
net
investment
income
and
net
realized
gain
from
investments
are
determined
in
accordance
with
federal
tax
regulations,
which
may
differ
from
U.S.
GAAP.
These
differences
are
primarily
due
to
differing
treatments
for
foreign
currency
transactions,
REITs,
passive
foreign
investment
companies,
partnership
investments,
and
losses
deferred
due
to
wash
sales.
Permanent
book
Principal
Real
Asset
Fund
Euro
7
.5%
2.
Significant
Accounting
Policies
(continued)
Notes
to
Financial
Statements
Principal
Real
Asset
Fund
September
30,
2023
(unaudited)
7
and
tax
basis
differences
are
reclassified
within
the
capital
accounts
based
on
federal
tax-basis
treatment;
temporary
differences
do
not
require
reclassification.
To
the
extent
dividends
and
distributions
exceed
current
and
accumulated
earnings
and
profits
for
federal
income
tax
purposes,
they
are
reported
as
return
of
capital
distributions.
Federal
Income
Taxes.
No
provision
for
federal
income
taxes
is
considered
necessary
because
the
Fund
intends
to
qualify
as
a
“regulated
investment
company”
under
the
Internal
Revenue
Code
and
intends
to
distribute
each
year
substantially
all
of
its
net
investment
income
and
realized
capital
gains
to
shareholders.
Management
evaluates
tax
positions
taken
or
expected
to
be
taken
in
the
course
of
preparing
the
Fund’s
tax
returns
to
determine
whether
it
is
“more
likely
than
not”
that
each
tax
position
would
be
sustained
upon
examination
by
a
taxing
authority
based
on
the
technical
merits
of
the
position.
Tax
positions
not
deemed
to
meet
the
“more
likely
than
not”
threshold
would
be
recorded
as
a
tax
benefit
or
expense
in
the
current
year.
The
Fund
recognizes
interest
and
penalties,
if
any,
related
to
unrecognized
tax
positions
as
tax
expense
on
the
statements
of
operations.
During
the
period
ended
September
30,
2023,
the
Fund
did
not
record
any
such
tax
benefit
or
expense
in
the
accompanying
financial
statements.
The
statute
of
limitations
remains
open
for
the
last
three
years,
once
a
return
is
filed.
No
examinations
are
in
progress
at
this
time.
Foreign
Taxes.
The
Fund
may
be
subject
to
foreign
income
taxes
imposed
by
certain
countries
in
which
it
invests.
Foreign
income
taxes
are
accrued
by
the
Fund
as
a
reduction
of
income.
This
amount
is
shown
as
withholding
tax
on
the
statement
of
operations.
In
consideration
of
recent
decisions
rendered
by
European
court,
the
Fund
may
file
tax
reclaims
for
taxes
withheld
in
prior
years.
Due
to
the
uncertainty
regarding
collectability
and
timing
of
the
reclaims,
among
other
factors,
a
corresponding
receivable
will
only
be
recognized
when
the
tax
position
meets
the
“more
likely
than
not”
threshold.
Any
tax
reclaims
received
are
included
in
dividends
income
on
the
statement
of
operations.
Recent
Accounting
Pronouncements.
In
March
2020,
the
Financial
Accounting
Standards
Board
("FASB")
issued
Accounting
Standards
Update
("ASU")
No.
2020-04
Reference
Rate
Reform
(Topic
848);
Facilitation
of
the
Effects
of
Reference
Rate
Reform
on
Financial
Reporting,
which
provides
optional
guidance
for
a
limited
period
of
time
to
ease
the
potential
burden
in
accounting
for
(or
recognizing
the
effects
of)
reference
rate
reform.
The
guidance
is
applicable
to
contracts
referencing
London
Interbank
Offered
Rate
("LIBOR")
or
another
reference
rate
that
is
expected
to
be
discontinued
due
to
reference
rate
reform. The
ASU
is
effective
as
of
March
12,
2020
and
generally
can
be
applied
through
December
31,
2022.
In
December
2022,
the
FASB
issued
ASU
No.
2022-06
Reference
Rate
Reform
(Topic
848):
Deferral
of
the
Sunset
Date
of
Topic
848
which
updates
and
clarifies
ASU
No.
2020-04.
The amendments
in
this ASU
defer
the
sunset
date
of
Topic
848
from
December
31,
2022,
to
December
31,
2024. Management expects
the impact
of
these
ASUs will
not
have
a
material
impact
on
the
Fund’s
financial
statements.
In
June
2022,
the
FASB
issued
ASU
No.
2022-03
Fair
Value
Measurement
(Topic
820);
Fair
Value
Measurement
of
Equity
Securities
Subject
to
Contractual
Sale
Restrictions,
which
provides
clarifying
guidance
that
a
contractual
restriction
on
the
sale
of
an
equity
security
is
not
considered
part
of
the
unit
of
account
of
the
equity
security
and,
therefore,
is
not
considered
in
measuring
fair
value.
The
ASU
is
effective
for
fiscal
years
beginning
after
December
15,
2023,
and
interim
periods
within
those
fiscal
years.
Management
expects
the
ASU
will
not
have
a
material
impact
on
the
Fund’s
financial
statements.
3.
Operating
Policies
Borrowings.
T
he
Fund
participates
in
a
line
of
credit
with
a
bank
which
allows
a
borrowing
commitment
amount
of
up
to
$15
million.
Borrowings
may
be
used
for
investment
purposes,
to
meet
repurchase
requests
and/or
to
facilitate
the
handling
of
unusual
or
unanticipated
short-term
cash
requirements.
The
Fund
will
pledge
securities
as
collateral
for
borrowing
on
the
line
of
credit
and
maintain
an
aggregate
collateral
value
not
less
than
the
outstanding
borrowing
amount
at
all
times.
Interest
is
charged
at
an
annual
rate
equal
to
the
Overnight
Bank
Funding
Rate
(“OBFR”)
plus
0.90%.
Additionally,
a
commitment
fee
is
charged
at
an
annual
rate
of
0.40%
on
any
day
when
the
outstanding
borrowing
amount
is
less
than
90%
of
the
borrowing
commitment
amount.
The
interest
expense
and
commitment
fee
associated
with
these
borrowings
is
included
in
other
expenses
on
the
statement
of
operations.
There
were
no
outstanding
borrowings
as
of
September
30,
2023
.
During
the
period
ended
September
30,
2023
,
the
Fund
did
not
borrow
against
the
line
of
credit.
Cross
Trades.
The
Fund
may
engage
in
cross
trades.
A
cross
trade
is
a
purchase
or
sale
transaction
between
affiliated
portfolios
executed
directly
or
through
an
intermediary
.
Mutual
funds
and
other
managed
portfolios
may
be
considered
affiliated
if
they
have
a
common
investment
advisor,
so
a
fund
may
be
considered
affiliated
with
any
portfolio
for
which
the
Fund's
sub-advisor
acts
as
an
investment
advisor.
Such
transactions
are
permissible
provided
that
the
conditions
of
Rule
17a-7
under
the
1940
Act
are
satisfied.
For
the
period
 ended
September
30,
2023
,
the
Fund
did
not
engage
in
cross
trades.
Foreign
Currency
Contracts.
The
Fund
may
be
subject
to
foreign
currency
exchange
rate
risk
in
the
normal
course
of
pursuing
the
Fund's
investment
objectives.
The
Fund
may
use
foreign
currency
contracts
to
gain
exposure
to,
or
hedge
against
changes
in
the
value
of
foreign
currencies. The
Fund enters
into
forward
contracts
to
purchase
and
sell
foreign
currencies
at
a
specified
future
date
at
a
fixed
exchange
rate.
2.
Significant
Accounting
Policies
(continued)
Notes
to
Financial
Statements
Principal
Real
Asset
Fund
September
30,
2023
(unaudited)
8
Forward
foreign
currency
contracts
are
valued
at
the
forward
rate,
and
are
marked-to-market
daily.
The
change
in
fair
value
is
recorded
by
the
Fund
as
an
unrealized
gain
or
loss.
When
the
contract
is
closed,
the
Fund
records
a
realized
gain
or
loss
equal
to
the
difference
between
the
value
of
the
contract
at
the
time
it
was
opened
and
the
value
at
the
time
it
was
closed.
The
use
of
forward
foreign
currency
contracts
does
not
eliminate
the
fluctuations
in
underlying
prices
of
the
Fund's
portfolio
securities,
but
it
does
establish
a
rate
of
exchange
that
can
be
achieved
in
the
future.
Although
forward
foreign
currency
contracts
limit
the
risk
of
loss
due
to
a
decline
in
the
value
of
the
hedged
currency,
they
also
limit
any
potential
gain
that
might
result
should
the
value
of
the
currency
increase.
In
addition,
the
Fund
could
be
exposed
to
risks
if
the
counterparties
to
the
contracts
are
unable
to
meet
the
terms
of
their
contracts
or
if
the
value
of
the
currency
changes
unfavorably
to
the
U.S.
dollar
or
other
respective
currency. 
Illiquid
Securities.
Illiquid
securities
generally
cannot
be
sold
or
disposed
of
in
the
ordinary
course
of
business
(within
seven
calendar
days)
at
approximately
the
value
at
which
the
Fund
has
valued
the
investments.
This
may
have
an
adverse
effect
on
the
Fund’s
ability
to
dispose
of
particular
illiquid
securities
at
fair
value
and
may
limit
the
Fund’s
ability
to
obtain
accurate
market
quotations
for
purposes
of
valuing
the
securities. 
Indemnification.
Under
the
Fund’s
by-laws,
present
and
past
officers,
trustees,
and
employees
are
indemnified
against
certain
liabilities
arising
out
of
the
performance
of
their
duties.
In
addition,
in
the
normal
course
of
business,
the
Fund
may
enter
into
a
variety
of
contracts
that
may
contain
representations
and
warranties
which
provide
general
indemnifications.
The
Fund’s
maximum
exposure
under
these
arrangements
is
unknown,
as
this
would
involve
future
claims
that
may
be
made
against
the
Fund.
Private
Investments
in
Public
Equity.
The
Fund
may
invest
in
private
investments
in
public
equity
(“PIPEs”)
which
are
issued
by
a
company
in
the
secondary
market
as
a
means
of
raising
capital.
In
connection
with
PIPEs,
the
Fund
may
enter
into
unfunded
commitments.
Commitments
may
be
subject
to
various
contingencies
and
are
recognized
as
a
financial
instrument
when
the
commitment
is
legally
binding.
These
contingencies
are
considered
in
the
valuation
of
the
commitments.
The
Fund
is
obligated
to
fund
these
commitments
when
the
contingencies
are
met
and
therefore,
the
Fund
must
have
funds
sufficient
to
cover
its
obligation.
Commitments
are
marked
to
market
daily
and
the
unrealized
gain
or
loss
is
shown
as
a
separate
line
item
called
unrealized
gain
or
loss
on
unfunded
commitments
on
the
statement
of
assets
and
liabilities
and
included
in
the
net
change
in
unrealized
appreciation/(depreciation)
of
investments
on
the
statement
of
operations,
as
applicable.
Commitments
are
typically
categorized
as
Level
2
within
the
disclosure
hierarchy.
As
of
September
30,
2023
,
the
Fund
had
no
unfunded
commitments
in
connection
with
PIPEs.
Private
and
Other
Underlying
Funds.
The
Fund
may
invest
in
private
investment
funds
and
other
publicly
traded
investment
funds.
The
shares
of
publicly
traded
investment
funds
and
private
investment
funds
are
collectively
referred
to
as
the
“Underlying
Funds”.
The
Fund
may
indirectly
bear
a
pro
rata
share
of
the
fees
and
expenses
of
the
Underlying
Funds
in
which
it
invests.
Because
the
Underlying
Funds
have
varied
expense
levels
and
the
Fund
may
own
different
proportions
of
Underlying
Funds
at
different
times,
the
amount
of
expense
incurred
indirectly
by
the
Fund
will
vary.
Expenses
included
in
the
statement
of
operations
and
financial
highlights
of
the
Fund
do
not
include
any
expenses
associated
with
the
Underlying
Funds.
Private
investment
funds
are
not
registered
as
investment
companies
under
the
1940
Act
and
therefore
the
Fund
will
not
be
able
to
avail
itself
of
the
protection
of
the
1940
Act
with
respect
to
such
private
investment
funds,
including
certain
corporate
governance
protections,
such
as
the
requirement
of
having
a
majority
or
50%
of
the
directors
serving
on
a
board
as
independent
directors,
statutory
protections
against
self-
dealings
by
the
institutional
asset
managers,
and
leverage
limitations.
Due
to
the
inherent
uncertainty
and
subjectivity
of
determining
the
value
of
investments
in
private
investment
funds,
upon
disposition
the
amounts
realized
may
differ
significantly
had
readily
available
market
values
existed
on
such
investments.
The
Fund
will
hold
liquid
assets
while
it
waits
for
such
Underlying
Funds
to
call
capital,
which
may
negatively
impact
its
performance.
Restricted
Securities.
The
Fund
may
invest
in
securities
that
are
subject
to
legal
or
contractual
restrictions
on
resale.
These
securities
generally
may
be
resold
in
transactions
exempt
from
registration
or
to
the
public
if
the
securities
are
registered.
Disposal
of
these
securities
may
involve
time-consuming
negotiations
and
expense,
and
prompt
sale
at
an
acceptable
price
may
be
difficult. 
Senior
Floating
Rate
Interests.
The
Fund
may
invest
in
senior
floating
rate
interests
(bank
loans).
Senior
floating
rate
interests
typically
hold
the
most
senior
position
in
the
capital
structure
of
a
business
entity
(the
“Borrower”),
and
are
secured
by
specific
collateral
and
have
a
claim
on
the
assets
and/or
stock
of
the
Borrower
that
is
senior
to
that
held
by
subordinated
debtholders
and
stockholders
of
the
Borrower.
Senior
floating
rate
interests
are
typically
structured
and
administered
by
a
financial
institution
that
acts
as
the
agent
of
the
lenders
participating
in
the
senior
floating
rate
interest.
Borrowers
of
senior
floating
rate
interests
are
typically
rated
below-investment-grade,
which
means
they
are
more
likely
to
default
than
investment-grade
loans.
A
default
could
lead
to
non-payment
of
income
which
would
result
in
a
reduction
of
income
to
the
Fund
and
there
can
be
no
assurance
that
the
liquidation
of
any
collateral
would
satisfy
the
Borrower’s
obligation
in
the
event
of
non-payment
of
scheduled
interest
or
principal
payments,
or
that
such
collateral
could
be
readily
liquidated.
3.
Operating
Policies
(continued)
Notes
to
Financial
Statements
Principal
Real
Asset
Fund
September
30,
2023
(unaudited)
9
Senior
floating
rate
interests
pay
interest
at
rates
which
are
periodically
reset
by
reference
to
a
base
lending
rate
plus
a
spread.
These
base
lending
rates
are
generally
the
prime
rate
offered
by
a
designated
U.S.
bank
or
the
LIBOR
rate
(or
such
successor
if
no
longer
available).
Senior
floating
rate
interests
generally
are
subject
to
mandatory
and/or
optional
prepayment.
Because
of
these
mandatory
prepayment
conditions
and
because
there
may
be
significant
economic
incentives
for
the
Borrower
to
repay,
prepayments
of
senior
floating
rate
interests
may
occur.
As
a
result,
the
actual
remaining
maturity
of
senior
floating
rate
interests
may
be
substantially
less
than
stated
maturities
shown
in
the
schedule
of
investments.
Unfunded
Commitments.
In
connection
with
the
senior
floating
rate
interests,
the
Fund
may
enter
into
unfunded
loan
commitments
(“commitments”).
All
or
a
portion
of
the
commitments
may
be
unfunded.
The
Fund
is
obligated
to
fund
these
commitments
at
the
Borrower’s
discretion.
Therefore,
the
Fund
must
have
funds
sufficient
to
cover
its
contractual
obligation.
Commitments
are
marked
to
market
daily
and
the
unrealized
gain
or
loss
is
shown
as
a
separate
line
item
called
unrealized
gain
or
loss
on
unfunded
commitments
on
the
statement
of
assets
and
liabilities
and
included
in
the
net
change
in
unrealized
appreciation/(depreciation)
of
investments
on
the
statement
of
operations,
as
applicable.
As
of
September
30,
2023,
the
Fund
had
no
unfunded
commitments
relating
to
senior
floating
rate
interests.
The
Fund
may
also
enter
into
unfunded
commitments
relating
to
potential
future
investments
in
private
investment
funds,
which
are
not
marked
to
market
daily.
These
unfunded
commitments
are
typically
made
for
a
specified
amount
of
capital
and
may
be
called
at
the
discretion
of
the
general
partner
of
the
private
investment
fund
pursuant
to
its
limited
partnership
agreement.
As
of
September
30,
2023,
the
Fund
had
unfunded
commitments
relating
to
potential
future
investments,
as
follows
(amounts
in
thousands):
*Unfunded
commitments
approximate
their
fair
values.
4.
Fair
Valuation
Fair
value
is
defined
as
the
price
that
the
Fund
would
receive
upon
selling
a
security
in
a
timely
transaction
to
an
independent
buyer
in
the
principal
or
most
advantageous
market
of
the
security
at
the
measurement
date.
In
determining
fair
value,
the
Fund
may
use
one
or
more
of
the
following
approaches:
market,
income,
net
asset
value
and/or
cost.
A
hierarchy
for
inputs
is
used
in
measuring
fair
value
that
maximizes
the
use
of
observable
inputs
and
minimizes
the
use
of
unobservable
inputs
by
requiring
that
the
most
observable
inputs
be
used
when
available.
Observable
inputs
are
inputs
that
reflect
the
assumptions
market
participants
would
use
in
pricing
the
asset
or
liability
developed
based
on
market
data
obtained
from
sources
independent
of
the
Fund.
Unobservable
inputs
are
inputs
that
reflect
the
Fund’s
own
estimates
about
the
estimates
market
participants
would
use
in
pricing
the
asset
or
liability
developed
based
on
the
best
information
available
in
the
circumstances.
The
three-
tier
hierarchy
of
inputs
is
summarized
in
the
three
broad
levels
listed
below.
Level
1
–
Quoted
prices
are
available
in
active
markets
for
identical
securities
as
of
the
reporting
date.
Investments
which
are
generally
included
in
this
category
include
listed
equities
and
exchange-traded
derivatives.
Level
2
–
Other
significant
observable
inputs
(including
quoted
prices
for
similar
investments,
interest
rates,
prepayment
speeds,
credit
risk,
etc.).
Investments
which
are
generally
included
in
this
category
include
certain
foreign
equities,
corporate
bonds,
senior
floating
rate
interests,
municipal
bonds,
and
U.S.
Government
and
Government
Agency
Obligations.
Level
3
–
Significant
unobservable
inputs
(including
the
Fund’s
assumptions
in
determining
the
fair
value
of
investments).
Investments
which
are
generally
included
in
this
category
include
certain
common
stocks,
corporate
bonds,
or
senior
floating
rate
interests.
In
accordance
with
Accounting
Standards
Codification
820
–
Fair
Value
Measurement
,
the
Fund
has
elected
to
apply
the
practical
expedient
to
value
its
investments
in
private
investment
funds
at
their
respective
net
asset
value
each
calendar
month
or
quarter.
Private
investment
funds
valued
at
net
asset
value
are
excluded
from
the
fair
value
hierarchy.
The
availability
of
observable
inputs
can
vary
from
security
to
security
and
is
affected
by
a
wide
variety
of
factors,
including,
for
example,
the
type
of
security,
whether
the
security
is
new
and
not
yet
established
in
the
market
place,
and
other
characteristics
particular
to
the
transaction.
To
the
extent
that
valuation
is
based
on
models
or
inputs
that
are
less
observable
or
unobservable
in
the
market,
the
determination
of
fair
value
requires
more
judgment.
Accordingly,
the
degree
of
judgment
exercised
by
the
Fund
in
determining
fair
value
is
greatest
for
instruments
categorized
in
Level
3.
Private
Investment
Fund
Unfunded
Commitment
ACIP
Parallel
Fund
A,
LP
$
897
IFM
Net
Zero
Infrastructure
Fund
(USD)
B,
SCSp
6,000
3.
Operating
Policies
(continued)
Notes
to
Financial
Statements
Principal
Real
Asset
Fund
September
30,
2023
(unaudited)
10
In
certain
cases,
the
inputs
used
to
measure
fair
value
may
fall
into
different
levels
of
the
fair
value
hierarchy.
In
such
cases,
for
disclosure
purposes,
the
level
in
the
fair
value
hierarchy
within
which
the
fair
value
measurement
in
its
entirety
falls
is
determined
based
on
the
lowest
level
input
that
is
significant
to
the
fair
value
measurement
in
its
entirety.
Fair
value
is
a
market-based
measure
considered
from
the
perspective
of
a
market
participant
who
holds
the
asset
rather
than
an
entity
specific
measure.
Therefore,
even
when
market
assumptions
are
not
readily
available,
the
Fund’s
own
assumptions
are
set
to
reflect
those
that
market
participants
would
use
in
pricing
the
asset
or
liability
at
the
measurement
date.
The
Fund
uses
prices
and
inputs
that
are
current
as
of
the
measurement
date,
when
available.
Investments
which
are
included
in
the
Level
3
category
may
be
valued
using
quoted
prices
from
brokers
and
dealers
participating
in
the
market
for
these
investments.
These
investments
are
classified
as
Level
3
investments
due
to
the
lack
of
market
transparency
and
market
corroboration
to
support
these
quoted
prices.
Valuation
models
may
be
used
as
the
pricing
source
for
other
investments
classified
as
Level
3.
Valuation
models
rely
on
one
or
more
significant
unobservable
inputs
such
as
prepayment
rates,
probability
of
default,
or
loss
severity
in
the
event
of
default.
Significant
increases
in
any
of
those
inputs
in
isolation
would
result
in
a
significantly
lower
fair
value
measurement.
Benchmark
pricing
procedures
set
the
base
price
of
a
security
based
on
current
market
data.
The
base
price
may
be
a
broker-dealer
quote,
transaction
price,
or
internal
value
based
on
relevant
market
data.
The
fair
values
of
these
securities
are
dependent
on
economic,
political,
and
other
considerations.
The
values
of
such
securities
may
be
affected
by
significant
changes
in
the
economic
conditions,
changes
in
government
policies,
and
other
factors
(e.g.,
natural
disasters,
pandemics,
accidents,
conflicts,
etc.).
The
following
is
a
summary
of
the
inputs
used
as
of
September
30,
2023
in
valuing
the
Fund’s
securities
carried
at
value
(amounts
in
thousands):
*For
additional
detail
regarding
sector
and/or
sub-industry
classifications,
please
see
the
schedule
of
investments.
5.
Management
Agreement
and
Transactions
with
Affiliates
Management
Services.
The
Fund
has
agreed
to
pay
management
and
investment
advisory
fees
to
the
Manager
computed
at
an
annual
percentage
rate
of
the
Fund’s
average
daily
net
assets.
A
portion
of
the
management
fee
is
paid
by
the
Manager
to
the
sub-advisors
of
the
Fund,
which
may
be
affiliates
of
the
Manager.
The
annual
rate
paid
by
the
Fund
is
based
upon
the
aggregate
average
daily
net
assets
(“aggregate
net
assets”)
of
the
Fund.
The
management
and
investment
advisory
fees
schedule
for
the
Fund
is
1.70%
of
aggregate
net
assets
up
to
$1.5
billion
and
1.65%
of
aggregate
net
assets
over
$1.5
billion.
The
Manager
has
contractually
agreed
to
waive
0.82%
of
the
Fund’s
management
and
investment
advisory
fees
effective
August
1,
2023.
Prior
to
August
1,
2023,
the
contractual
fee
waiver
was
0.67%.
It
is
expected
that
the
fee
waiver
will
continue
through
the
period
ending
July
31,
2024;
however,
the
Fund
and
the
Manager,
the
parties
to
the
agreement,
may
mutually
agree
to
terminate
the
fee
waiver
prior
to
the
end
of
the
period.
Fund
Level
1
-
Quoted
Prices
Level
2
-
Other
Significant
Observable
Inputs
Level
3
-
Significant
Unobservable
Inputs
Totals
(Level
1,2,3)
Principal
Real
Asset
Fund
Bonds*
$
—
$
4,871
$
—
$
4,871
Common
Stocks
Basic
Materials
—
—
—
—
Consumer,
Non-cyclical
384
1,090
—
1,474
Energy
2,055
700
—
2,755
Financial
11,438
5,805
—
17,243
Industrial
485
1,052
—
1,537
Utilities
5,447
6,581
—
12,028
Convertible
Preferred
Stocks*
59
—
—
59
Investment
Companies*
13,185
—
—
13,185
Preferred
Stocks*
387
—
—
387
Total
$
33,440
$
20,099
$
—
$
53,539
Investments
Using
NAV
as
practical
expedient
Private
Investment
Funds
95,1
01
Total
investments
in
securities
$
—
$
—
$
—
$
148,6
40
4.
Fair
Valuation
(continued)
Notes
to
Financial
Statements
Principal
Real
Asset
Fund
September
30,
2023
(unaudited)
11
The
Manager
has
contractually
agreed
to
limit
the
Fund’s
expenses
(excluding
interest
expense,
expenses
related
to
fund
investments,
acquired
fund
fees
and
expenses,
and
tax
reclaim
recovery
expenses
and
other
extraordinary
expenses).
The
reductions
and
reimbursements
are
in
amounts
that
maintain
total
operating
expenses
at
or
below
certain
limits.
The
limits
are
expressed
as
a
percentage
of
average
daily
net
assets
attributable
to
each
class
of
shares
on
an
annualized
basis
during
the
reporting
period.
The
expenses
borne
by
the
Manager
are
subject
to
reimbursement
by
the
Fund
through
the
fiscal
year
end,
provided
no
reimbursement
will
be
made
if
it
would
result
in
the
Fund
exceeding
the
total
operating
expense
limits.
Any
amounts
outstanding
at
the
end
of
the
period
are
shown
as
an
expense
reimbursement
from
Manager
or
expense
reimbursement
to
Manager
on
the
statement
of
assets
and
liabilities
and
are
settled
monthly.
It
is
expected
that
the
operating
expense
limits
will
continue
through
the
period
ending
July
31,
2024,
the
contractual
expiration
date;
however,
the
Fund
and
the
Manager,
the
parties
to
the
agreement,
may
mutually
agree
to
terminate
the
operating
expense
limits
prior
to
the
end
of
the
period.
The
operating
expense
limits
are
as
follows:
*Prior
to
August
1,
2023,
the
contractual
expense
limit
was
1.54%.
**Prior
to
August
1,
2023,
the
contractual
expense
limit
was
1.04%.
^Prior
to
August
1,
2023,
the
contractual
expense
limit
was
1.24%.
Distribution
Fees.
The
Class
A
shares
of
the
Fund
bear
distribution
fees.
The
fees
are
computed
at
an
annual
rate
of
0.25%
of
the
average
daily
net
assets
attributable
to
Class
A
shares
of
the
Fund.
Distribution
fees
are
paid
to
the
Distributor
of
the
Fund.
A
portion
of
the
distribution
fees
may
be
paid
to
other
selling
dealers
for
providing
certain
services.
Chief
Compliance
Officer
Expenses.
The
Fund
pays
certain
expenses
associated
with
the
Chief
Compliance
Officer
(“CCO”).
This
expense
is
allocated
among
the
registered
investment
companies
managed
by
the
Manager
based
on
the
relative
net
assets
of
each
fund
and
is
shown
on
the
statement
of
operations.
For
the
period
ended
September
30,
2023,
the
Fund’s
CCO
expenses
were
less
than
$500.
Sales
Charges.
The
Distributor
retains
sales
charges
on
certain
sales
of
Class
A
shares
based
on
declining
rates
which
begin
at
5.75%.
For
the
period
ended
September
30,
2023,
sales
charges
retained
by
the
Distributor
were
as
follows:
Affiliated
Ownership
.
As
of
September
30,
2023,
Principal
Financial
Services
Inc.
and
Principal
Life
Insurance
Company
(each
an
affiliate
of
the
Manager)
owned
shares
of
the
Fund
as
follows
(amounts
of
shares
in
thousands):
6.
Investment
Transactions
For
the
year
ended
September
30,
2023,
the
cost
of
investment
securities
purchased
and
proceeds
from
investment
securities
sold
(not
including
short-term
investments,
return
of
capital,
and
mergers)
by
the
Fund
were
as
follows
(amounts
in
thousands):
7.
Repurchase
Offers
The
Fund
has
a
fundamental
policy
to
make
quarterly
repurchase
offers
for
no
less
than
5%
and
not
more
than
25%
of
its
shares
at
a
price
equal
to
net
asset
value
per
share,
unless
suspended
or
postponed
in
accordance
with
regulatory
requirements,
and
that
each
quarterly
repurchase
pricing
share
occur
on
the
Repurchase
Pricing
Date,
the
date
that
will
be
used
to
determine
the
Fund’s
net
asset
value
per
share
applicable
to
the
repurchase.
The
Fund
will
make
quarterly
repurchase
offers
every
three
months,
in
the
following
months:
March,
June,
September,
and
December.
The
Fund
will
repurchase
shares
that
are
tendered
by
a
specific
date
(the
“Repurchase
Request
Deadline”),
which
will
be
established
by
the
Board
in
accordance
with
Rule
23c-3,
as
amended
from
time
to
time.
Rule
23c-3
requires
the
Repurchase
Request
Deadline
to
be
no
less
than
21
and
no
more
than
42
days
after
the
Fund
sends
notification
to
shareholders
of
the
repurchase
offer.
There
will
be
a
maximum
14
calendar
day
period,
or
the
next
business
day
if
the
14th
calendar
day
is
not
a
business
day,
between
the
Repurchase
Request
Deadline
and
the
Repurchase
Pricing
Date.
Share
Class
Operating
Expense
Limit
Expiration
Class
A
1.39%*
July
31,
2024
Class
Y
0.89**
%
July
31,
2024
Institutional
1.09^
%
July
31,
2024
Class
A
Principal
Real
Asset
Fund
$
1
Class
A
Class
Y
Institutional
Principal
Real
Asset
Fund
12
5,519
12
Purchases
Sales
Principal
Real
Asset
Fund
$
20,979
$
21,406
5.
Management
Agreement
and
Transactions
with
Affiliates
(continued)
Notes
to
Financial
Statements
Principal
Real
Asset
Fund
September
30,
2023
(unaudited)
12
If
a
repurchase
offer
by
the
Fund
is
oversubscribed,
the
Fund
may
repurchase,
but
is
not
required
to
repurchase,
additional
shares
up
to
a
maximum
amount
of
2%
of
the
outstanding
shares
of
the
Fund.
If
the
Fund
determines
not
to
repurchase
additional
shares
beyond
the
repurchase
offer
amount,
or
if
shareholders
tender
an
amount
of
shares
greater
than
that
which
the
Fund
is
entitled
to
repurchase,
the
Fund
will
repurchase
the
shares
tendered
on
a
pro
rata
basis.
For
the
period
ended
September
30,
2023,
shares
of
the
Fund
were
repurchased
during
the
repurchase
offer
windows
as
follows
(amounts
in
thousands):
8.
Federal
Tax
Information
Distributions
to
Shareholders.
The
federal
income
tax
character
of
distributions
paid
for
the
period
ended
September
30,
2023
and
year
ended
March
31,
2023,
were
as
follows
(amounts
in
thousands):
*The
Fund
designates
these
distributions
as
long-term
capital
gain
dividends
per
IRC
Sec.
852
(b)(3)(C)
in
the
20-percent
group
(which
may
be
taxed
at
a
20-percent
rate,
a
15-percent
rate,
or
a
0-percent
rate,
depending
on
the
shareholder’s
taxable
income).
For
U.S.
federal
income
tax
purposes,
short-term
capital
gain
distributions
are
considered
ordinary
income
distributions.
Distributable
Earnings.
As
of
March
31,
2023,
the
components
of
distributable
earnings
(accumulated
loss)
on
a
federal
tax
basis
were
as
follows
(amounts
in
thousands):
Capital
Loss
Carryforwards.
For
federal
income
tax
purposes,
capital
loss
carryforwards
are
losses
that
can
be
used
to
offset
future
capital
gains
of
the
Fund.
As
of
March
31,
2023
,
the
Fund
had
no
capital
loss
carryforwards.
For
the
year
ended
March
31,
2023
,
the
Fund
did
not
utilize
capital
loss
carryforwards.
Late-Year
Losses.
A
regulated
investment
company
may
elect
to
treat
any
portion
of
its
qualified
late-year
loss
as
arising
on
the
first
day
of
the
next
taxable
year.
Qualified
late-year
losses
are
certain
capital
and
ordinary
losses
which
occur
during
the
portion
of
the
Fund’s
taxable
year
subsequent
to
October
31
and
December
31,
respectively.
As
of
March
31,
2023
,
the
Fund
does
not
plan
to
defer
any
late-year
losses.
Reclassification
of
Capital
Accounts.
The
Fund
may
record
reclassifications
in
its
capital
accounts.
These
reclassifications
have
no
impact
on
the
total
net
assets
of
the
Fund.
The
reclassifications
are
a
result
of
permanent
differences
between
U.S.
GAAP
and
tax
accounting.
Adjustments
are
made
to
reflect
the
impact
these
items
have
on
current
and
future
distributions
to
shareholders.
Therefore,
the
source
of
the
Fund’s
distributions
may
be
shown
in
the
accompanying
statement
of
changes
in
net
assets
as
from
net
investment
income
and
net
realized
gain
on
investments
or
from
tax
return
of
capital
depending
on
the
type
of
book
and
tax
differences
that
exist.
For
the
year
ended
March
31,
2023,
the
Fund
recorded
reclassifications
as
follows
(amounts
in
thousands):
Repurchase
Offer
#1
Repurchase
Offer
#2
Commencement
Date
March
28,
2023
June
27,
2023
Repurchase
Request
Deadline
April
27,
2023
July
27,
2023
Repurchase
Pricing
Date
April
27,
2023
July
27,
2023
Amount
Repurchased
$
102
$
8,264
Shares
Repurchased
4
322
Ordinary
Income
Long-Term
Capital
Gain
September
30,
2023
March
31,
2023
September
30,
2023
March
31,
2023*
Principal
Real
Asset
Fund
$
1,625
$
2,965
$
—
$
8,349
Undistributed
Ordinary
Income
Undistributed
Long-Term
Capital
Gains
Accumulated
Losses
Net
Unrealized
Appreciation
(Depreciation)
Other
Temporary
Differences
*
Total
Accumulated
Earnings
(Deficit)
Principal
Real
Asset
Fund
$
—
$
777
$
—
$
7,977
$
—
$
8,754
Total
Distributable
Earnings
(Accumulated
Loss)
Capital
Shares
and
Additional
Paid-in-Capital
Principal
Real
Asset
Fund
$
(665)
$
665
7.
Repurchase
Offers
(continued)
Notes
to
Financial
Statements
Principal
Real
Asset
Fund
September
30,
2023
(unaudited)
13
Federal
Income
Tax
Basis.
As
of
September
30,
2023
,
the
net
federal
income
tax
unrealized
appreciation
(depreciation)
and
federal
tax
cost
of
investments
held
by
the
Fund
were
as
follows
(amounts
in
thousands):
9.
Subsequent
Events
Management
has
evaluated
events
and
transactions
that
have
occurred
through
the
date
the
financial
statements
were
issued
that
would
merit
recognition
or
disclosure
in
the
financial
statements.
The
Fund
completed
a
quarterly
repurchase
offer
on
October
26,
2023
which
resulted
in
276,000
shares
being
repurchased
for
$6,797,000.
There
were
no
additional
items
requiring
adjustment
of
the
financial
statements
or
additional
disclosure.
Unrealized
Appreciation
Unrealized
(Depreciation)
Net
Unrealized
Appreciation/
(Depreciation)
Cost
for
Federal
Income
Tax
Purposes
Principal
Real
Asset
Fund
$
11,916
$
(9,676)
$
2,240
$
146,400
8.
Federal
Tax
Information
(continued)
Glossary
to
the
Schedule
of
Investments
September
30,
2023
(unaudited)
See
accompanying
notes.
14
Currency
Abbreviations
USD/$
United
States
Dollar
Schedule
of
Investments
Principal
Real
Asset
Fund
September
30,
2023
(unaudited)
See
accompanying
notes.
15
INVESTMENT
COMPANIES
-
8
.86
%
Shares
Held
Value
(000's)
Exchange-Traded
Funds
-
7
.59
%
iShares
North
American
Natural
Resources
ETF
105,325‌
$
4,381‌
SPDR
S&P
Global
Natural
Resources
ETF
124,017‌
6,910‌
$
11,291‌
Money
Market
Funds
-
1
.27
%
Morgan
Stanley
Institutional
Liquidity
Funds
-
Government
Portfolio
-
Institutional
Class
5.26%
(a)
1,893,712‌
1,894‌
TOTAL
INVESTMENT
COMPANIES
$
13,185‌
PRIVATE
INVESTMENT
FUNDS
-
63
.93
%
Shares
Held
Value
(000's)
Agriculture
-
19
.60
%
Ceres
Farmland
Holdings,
LP
(b),(c)
N/A
$
10,549‌
Hancock
Timberland
and
Farmland
Fund,
LP
(c)
N/A
12,913‌
UBS
AgriVest
Farmland
Fund
(c)
N/A
5,701‌
$
29,163‌
Energy
-
Alternate
Sources
-
12
.64
%
ACIP
Parallel
Fund
A,
LP
(c)
N/A
4,428‌
Brookfield
Super-Core
Infrastructure
Partners
Fund,
LP
(c)
N/A
8,430‌
CBRE
Caledon
Global
Infrastructure
Fund
(International),
LP
(c)
N/A
5,945‌
$
18,803‌
Forest
Products
&
Paper
-
5
.68
%
BTG
Pactual
Open
Ended
Core
US
Timberland
Fund,
LP
(c)
N/A
8,444‌
Private
Equity
-
10
.85
%
GDIF
US
Hedged
Feeder
Fund,
LP
(c)
N/A
6,527‌
HarbourVest
Infrastructure
Income
Delaware
Parallel
Partnership,
LP
(b),(c)
N/A
9,617‌
$
16,144‌
Real
Estate
-
15
.16
%
Brookfield
Senior
Mezzanine
Real
Estate
Finance
Fund,
LP
(c)
N/A
4,003‌
FDR
PELF
SCA,
SICAV-RAIF
(c)
N/A
5,697‌
PGIM
Real
Estate
US
Debt
Fund,
LP
(c)
N/A
5,231‌
UBS
Trumbull
Property
Growth
&
Income
Fund
(c)
N/A
7,616‌
$
22,547‌
TOTAL
PRIVATE
INVESTMENT
FUNDS
$
95,101‌
COMMON
STOCKS
-
23
.55
%
Shares
Held
Value
(000's)
Commercial
Services
-
0
.93
%
Atlas
Arteria
Ltd
137,311‌
$
486‌
CCR
SA
116,757‌
301‌
Transurban
Group
74,266‌
604‌
$
1,391‌
Diversified
Financial
Services
-
0
.03
%
RAM
Essential
Services
Property
Fund
106,090‌
46‌
Electric
-
6
.30
%
Brookfield
Renewable
Corp
14,183‌
340‌
Constellation
Energy
Corp
3,261‌
356‌
CPFL
Energia
SA
39,088‌
263‌
Edison
International
12,480‌
790‌
EDP
-
Energias
de
Portugal
SA
234,345‌
973‌
Enel
SpA
134,956‌
828‌
Entergy
Corp
7,191‌
665‌
Iberdrola
SA
35,344‌
395‌
National
Grid
PLC
73,768‌
882‌
NextEra
Energy
Inc
12,188‌
698‌
OGE
Energy
Corp
21,905‌
730‌
Public
Service
Enterprise
Group
Inc
14,037‌
799‌
Redeia
Corp
SA
24,993‌
393‌
Southern
Co/The
12,455‌
806‌
SSE
PLC
22,901‌
449‌
$
9,367‌
Energy
-
Alternate
Sources
-
0
.31
%
NextEra
Energy
Partners
LP
15,766‌
468‌
Engineering
&
Construction
-
0
.35
%
Ferrovial
SE
16,960‌
518‌
COMMON
STOCKS
(continued)
Shares
Held
Value
(000’s)
Gas
-
1
.11
%
China
Resources
Gas
Group
Ltd
120,658‌
$
353‌
Enagas
SA
22,429‌
371‌
Italgas
SpA
43,149‌
221‌
Snam
SpA
151,576‌
711‌
$
1,656‌
Healthcare
-
Services
-
0
.06
%
Chartwell
Retirement
Residences
10,900‌
83‌
Iron
&
Steel
-
0
.00
%
Novolipetsk
Steel
PJSC
(b)
36,800‌
—‌
Severstal
PAO
(b)
4,878‌
—‌
$
—‌
Mining
-
0
.00
%
Polyus
PJSC
407‌
—‌
Pipelines
-
1
.54
%
APA
Group
131,644‌
700‌
Enbridge
Inc
5,812‌
193‌
Gibson
Energy
Inc
28,695‌
411‌
Pembina
Pipeline
Corp
19,517‌
587‌
TC
Energy
Corp
11,525‌
396‌
$
2,287‌
Private
Equity
-
0
.10
%
CapitaLand
Investment
Ltd/Singapore
63,400‌
143‌
Real
Estate
-
0
.92
%
Castellum
AB
7,035‌
71‌
Mitsui
Fudosan
Co
Ltd
15,900‌
350‌
Qualitas
Ltd
94,959‌
140‌
Sumitomo
Realty
&
Development
Co
Ltd
14,000‌
363‌
Sun
Hung
Kai
Properties
Ltd
15,000‌
160‌
Vonovia
SE
9,119‌
219‌
Wihlborgs
Fastigheter
AB
8,604‌
60‌
$
1,363‌
REITs
-
10
.55
%
Activia
Properties
Inc
39‌
108‌
AIMS
APAC
REIT
121,400‌
115‌
Alexandria
Real
Estate
Equities
Inc
2,639‌
264‌
American
Homes
4
Rent
10,159‌
342‌
American
Tower
Corp
4,534‌
745‌
Arena
REIT
18,497‌
40‌
AvalonBay
Communities
Inc
374‌
64‌
Big
Yellow
Group
PLC
20,141‌
229‌
Broadstone
Net
Lease
Inc
22,940‌
328‌
CapitaLand
Integrated
Commercial
Trust
91,633‌
124‌
Centuria
Industrial
REIT
51,756‌
99‌
CRE
Logistics
REIT
Inc
78‌
86‌
Cromwell
European
Real
Estate
Investment
Trust
39,600‌
54‌
Crown
Castle
Inc
7,245‌
667‌
CubeSmart
4,639‌
177‌
Daiwa
House
REIT
Investment
Corp
107‌
189‌
Digital
Core
REIT
Management
Pte
Ltd
135,100‌
71‌
Digital
Realty
Trust
Inc
6,929‌
838‌
Dream
Industrial
Real
Estate
Investment
Trust
20,400‌
193‌
Equinix
Inc
597‌
434‌
ESR
Kendall
Square
REIT
Co
Ltd
21,914‌
61‌
ESR-LOGOS
REIT
298,388‌
61‌
Extra
Space
Storage
Inc
5,387‌
655‌
First
Industrial
Realty
Trust
Inc
5,625‌
268‌
Gaming
and
Leisure
Properties
Inc
16,530‌
753‌
Goodman
Group
8,321‌
114‌
HealthCo
REIT
11,326‌
11‌
Industrial
&
Infrastructure
Fund
Investment
Corp
77‌
71‌
InterRent
Real
Estate
Investment
Trust
16,100‌
148‌
Invincible
Investment
Corp
469‌
194‌
Invitation
Homes
Inc
14,255‌
452‌
Japan
Hotel
REIT
Investment
Corp
381‌
199‌
Klepierre
SA
7,647‌
187‌
Lendlease
Global
Commercial
REIT
155,261‌
62‌
Link
REIT
92,540‌
452‌
Mercialys
SA
40,674‌
366‌
Schedule
of
Investments
Principal
Real
Asset
Fund
September
30,
2023
(unaudited)
See
accompanying
notes.
16
COMMON
STOCKS
(continued)
Shares
Held
Value
(000’s)
REITs
(continued)
Merlin
Properties
Socimi
SA
21,381‌
$
180‌
Minto
Apartment
Real
Estate
Investment
Trust
(d)
6,200‌
62‌
Mitsubishi
Estate
Logistics
REIT
Investment
Corp
30‌
75‌
National
Health
Investors
Inc
6,012‌
309‌
National
Storage
REIT
61,593‌
86‌
Nexus
Industrial
REIT
47,400‌
251‌
Plymouth
Industrial
REIT
Inc
8,031‌
168‌
Prologis
Inc
6,816‌
765‌
Rexford
Industrial
Realty
Inc
7,279‌
359‌
Sabra
Health
Care
REIT
Inc
33,893‌
472‌
Safestore
Holdings
PLC
13,965‌
125‌
Saul
Centers
Inc
1,964‌
69‌
Scentre
Group
92,933‌
146‌
Segro
PLC
25,204‌
220‌
Sekisui
House
Reit
Inc
384‌
214‌
SF
Real
Estate
Investment
Trust
120,000‌
39‌
Spirit
Realty
Capital
Inc
3,850‌
129‌
Stockland
109,714‌
275‌
Sun
Communities
Inc
3,947‌
467‌
Ventas
Inc
21,481‌
905‌
VICI
Properties
Inc
18,783‌
547‌
Welltower
Inc
7,408‌
607‌
$
15,691‌
Transportation
-
0
.68
%
Union
Pacific
Corp
2,381‌
485‌
West
Japan
Railway
Co
12,903‌
534‌
$
1,019‌
Water
-
0
.67
%
Pennon
Group
PLC
52,448‌
374‌
Severn
Trent
PLC
14,691‌
424‌
United
Utilities
Group
PLC
17,942‌
207‌
$
1,005‌
TOTAL
COMMON
STOCKS
$
35,037‌
CONVERTIBLE
PREFERRED
STOCKS
-
0
.04
%
Shares
Held
Value
(000's)
REITs
-
0
.04
%
RPT
Realty
7.25%
(e)
1,150‌
$
59‌
TOTAL
CONVERTIBLE
PREFERRED
STOCKS
$
59‌
PREFERRED
STOCKS
-
0
.26
%
Shares
Held
Value
(000's)
Electric
-
0
.26
%
Centrais
Eletricas
Brasileiras
SA
1.49%
48,204‌
$
387‌
TOTAL
PREFERRED
STOCKS
$
387‌
BONDS
-
3
.28
%
Principal
Amount
(000's)
Value
(000's)
Commercial
Mortgage
Backed
Securities
-
3
.28
%
BANK
2020-BNK25
3.47%,
01/15/2063
(f)
$
447‌
$
309‌
BBCMS
Mortgage
Trust
2022-C17
4.89%,
09/15/2055
(f)
250‌
206‌
Benchmark
2019-B11
Mortgage
Trust
3.00%,
05/15/2052
(d)
310‌
180‌
3.78%,
05/15/2052
500‌
410‌
Benchmark
2019-B13
Mortgage
Trust
1.14%,
08/15/2057
(d),(f),(g)
1,750‌
77‌
Benchmark
2020-B20
Mortgage
Trust
1.66%,
10/15/2053
(d),(f),(g)
3,250‌
263‌
Benchmark
2021-B23
Mortgage
Trust
1.37%,
02/15/2054
(f),(g)
2,476‌
152‌
Benchmark
2021-B28
Mortgage
Trust
1.49%,
08/15/2054
(d),(f),(g)
4,000‌
324‌
Benchmark
2021-B29
Mortgage
Trust
2.00%,
09/15/2054
(d)
1,000‌
464‌
Freddie
Mac
Multifamily
Structured
Pass
Through
Certificates
2.53%,
03/25/2049
(f),(g)
6,890‌
568‌
GS
Mortgage
Securities
Trust
2013-GCJ14
4.40%,
08/10/2046
(d),(f)
539‌
450‌
BONDS
(continued)
Principal
Amount
(000’s)
Value
(000’s)
Commercial
Mortgage
Backed
Securities
(continued)
Morgan
Stanley
Bank
of
America
Merrill
Lynch
Trust
2015-C25
4.67%,
10/15/2048
(d),(f)
$
1,000‌
$
749‌
Morgan
Stanley
Capital
I
Trust
2019-H7
1.44%,
07/15/2052
(f),(g)
4,999‌
262‌
Morgan
Stanley
Capital
I
Trust
2020-HR8
2.70%,
07/15/2053
189‌
134‌
Wells
Fargo
Commercial
Mortgage
Trust
2020-C56
1.52%,
06/15/2053
(f),(g)
5,515‌
323‌
$
4,871‌
TOTAL
BONDS
$
4,871‌
Total
Investments
$
148,640‌
Other
Assets
and
Liabilities
-  0.08%
115‌
TOTAL
NET
ASSETS
-
100.00%
$
148,755‌
(a)
1-day
yield
shown
is
as
of
period
end.
(b)
Non-income
producing
security
(c)
Private
Investment
Funds
have
quarterly
or
annual
redemption
frequencies
and
are
considered
restricted
securities.
Please
see
Private
Investment
Funds
sub-
schedule
for
additional
information.
(d)
Security
exempt
from
registration
under
Rule
144A
of
the
Securities
Act
of
1933.
These
securities
may
be
resold
in
transactions
exempt
from
registration,
normally
to
qualified
institutional
buyers.
At
the
end
of
the
period,
the
value
of
these
securities
totaled
$2,569
or
1.73%
of
net
assets.
(e)
Perpetual
security.
Perpetual
securities
pay
an
indefinite
stream
of
interest,
but
they
may
be
called
by
the
issuer
at
an
earlier
date.
Date
shown,
if
any,
reflects
the
next
call
date
or
final
legal
maturity
date.
Rate
shown
is
as
of
period
end.
(f)
Certain
variable
rate
securities
are
not
based
on
a
published
reference
rate
and
spread
but
are
determined
by
the
issuer
or
agent
and
are
based
on
current
market
conditions.  These
securities
do
not
indicate
a
reference
rate
and
spread
in
their
description.
Rate
shown
is
the
rate
in
effect
as
of
period
end.
(g)
Security
is
an
Interest
Only
Strip.
Portfolio
Summary
Sector
Percent
Financial
37
.65‌
%
Consumer,
Non-cyclical
20
.59‌
%
Energy
14
.49‌
%
Utilities
8
.34‌
%
Exchange-Traded
Funds
7
.59‌
%
Materials
5
.68‌
%
Mortgage
Securities
3
.28‌
%
Money
Market
Funds
1
.27‌
%
Industrial
1
.03‌
%
Basic
Materials
0
.00‌
%
Other
Assets
and
Liabilities
0
.08‌
%
TOTAL
NET
ASSETS
100.00%
Schedule
of
Investments
Principal
Real
Asset
Fund
September
30,
2023
(unaudited)
See
accompanying
notes.
17
Private
Investment
Funds
Security
Name
Acquisition
Date
Cost
Value
Redemption
Notice
(days)
Percent
of
Net
Assets
ACIP
Parallel
Fund
A,
LP
(a)
11/15/2021
-
09/28/2023
$
4,304‌
$
4,428‌
N/A
2.98%
Brookfield
Senior
Mezzanine
Real
Estate
Finance
Fund,
LP
(b)
03/31/2022
5,000‌
4,003‌
90
2.69%
Brookfield
Super-Core
Infrastructure
Partners
Fund,
LP
(c)
07/01/2021
-
06/27/2022
7,996‌
8,430‌
N/A
5.67%
BTG
Pactual
Open
Ended
Core
US
Timberland
Fund,
LP
(d)
07/01/2019
-
12/30/2021
7,444‌
8,444‌
90
5.68%
CBRE
Caledon
Global
Infrastructure
Fund
(International),
LP
(e)
07/16/2021
-
04/18/2023
5,981‌
5,945‌
N/A
3.99%
Ceres
Farmland
Holdings,
LP
(f)
11/06/2019,
02/05/2021
7,000‌
10,549‌
N/A
7.09%
FDR
PELF
SCA,
SICAV-RAIF
(g)
12/01/2022
6,610‌
5,697‌
90
3.83%
GDIF
US
Hedged
Feeder
Fund,
LP
(h)
04/23/2021
-
08/17/2022
6,115‌
6,527‌
N/A
4.39%
Hancock
Timberland
and
Farmland
Fund,
LP
(i)
08/12/2020
-
04/20/2023
13,000‌
12,913‌
N/A
8.68%
HarbourVest
Infrastructure
Income
Delaware
Parallel
Partnership,
LP
(j)
06/27/2022
8,000‌
9,617‌
90
6.46%
PGIM
Real
Estate
US
Debt
Fund,
LP
(k)
04/30/2021,
06/30/2021
5,315‌
5,231‌
N/A
3.52%
UBS
AgriVest
Farmland
Fund
(l)
07/01/2020
-
01/03/2023
5,147‌
5,701‌
60
3.83%
UBS
Trumbull
Property
Growth
&
Income
Fund
(m)
07/01/2020
-
12/30/2021
7,631‌
7,616‌
60
5.12%
Total
$
95,101‌
63.93%
The
private
investment
funds
listed
in
the
table
do
not
include
any
unfunded
commitments.  Please
see
Note
3
for
details
of
any
unfunded
commitments.
Amounts
in
thousands.
(a)
This
closed-end
fund
focuses
on
the
Climate
Infrastructure
sector
which
includes
value-add
renewable
energy,
resource
and
energy
efficiency,
transmission
and
smart
grids,
vehicle
electrification,
and
energy
storage
and
microgrids.
The
fund
has
a
life
term
of
10
years
during
which,
redemptions
are
not
permitted.
(b)
The
fund
was
established
as
an
open-end
senior
real
estate
debt
fund
focused
on
providing
primarily
floating
rate
financing
secured
by
commercial
property
primarily
located
in
the
U.S.
Redemptions
are
subject
to
a
two-year
holding
period
from
the
acquisition
date.
(c)
This
open-end
fund
will
invest
in
high-quality,
core
infrastructure
assets
principally
throughout
North
America,
Europe
and
Australia
with
a
focus
on
current
yield,
diversification
and
inflation
protection.
Specifically,
the
fund
will
focus
on
regulated
or
contracted
assets
in
the
utilities,
energy,
power
and
transportation
sector
where
Brookfield
has
established
operating
expertise.
Of
those
sectors,
utilities
will
be
a
significant
focus
and
transportation
would
be
a
much
smaller
allocation
in
the
portfolio
given
its
more
cyclical
nature.
Redemptions
are
subject
to
a
three-year
holding
period
from
the
acquisition
date.
(d)
The
fund
was
established
to
invest
and
reinvest
assets
of
the
investors
through
the
REIT,
primarily
in
interests
(including
ownership
or
leasehold
interests)
in
real
property,
which
is
to
be
planted
with
trees,
or
real
property
on
which
trees
are
growing
(timberland),
trees
growing
on
timberland,
or
trees
which
have
been
cut
but
not
removed
from
the
timberland
(timber);
contracts
or
agreements
for
the
cutting
and/or
use
of
timber
on
timberland.
Timber
investments
are
not
intended
to
produce
immediate
revenues.
Redemptions
are
subject
to
a
two-year
holding
period
from
the
acquisition
date.
(e)
The
fund
will
seek
to
invest
in
a
global,
diversified
portfolio
of
high-quality
core
and
core-plus
mid-market
infrastructure
investments
with
stable
returns,
inflation
protection,
low
volatility,
predictable
yield
and
a
low
correlation
with
other
asset
classes
through
an
open-end
structure.
Redemptions
are
subject
to
a
three-year
holding
period
from
the
acquisition
date.
(f)
The
fund
is
an
open-ended
investment
fund
whose
objective
is
to
generate
an
attractive
total
return
through
the
acquisition
and
management
of
farmland
in
the
Midwestern
United
States.
Redemptions
are
subject
to
a
one-year
holding
period
from
the
acquisition
date.
After
the
holding
period
has
expired,
redemptions
are
permitted
with
written
redemption
notice
five
months
prior
to
the
annual
redemption
date,
which
is
the
last
day
of
February.
(g)
This
feeder
fund
represents
an
indirect
ownership
of
the
Prologis
European
Logistics
Fund
which
has
an
investment
objective
of
combining
attractive
current
income
with
long-term
capital
growth
by
investing
in
European
logistics
real
estate
assets.
Redemption
requests
accommodated
quarterly
to
the
extent
of
sufficient
liquid
assets,
with
at
least
90
days
notice.
(h)
This
feeder
fund
offers
hedging
to
protect
against
currency
movements
in
the
Global
Diversified
Infrastructure
Fund
which
invests
in
diversified
infrastructure
investments.
Redemptions
are
subject
to
a
three-year
holding
period
from
the
acquisition
date.
(i)
This
open-end
fund
blends
the
two
asset
classes
of
timberland
and
farmland.
The
geographic
focus
will
be
in
the
U.S.,
Canada,
Australia,
New
Zealand,
Chile,
Brazil,
Uruguay,
and
Western
Europe.
Agriculture
investments
will
be
diversified
among
row
crops
(corn,
soy,
wheat,
etc.),
permanent
crops
(vines/trees),
and
commodity
crops
(cotton,
lettuce,
strawberries,
etc.).
Redemptions
are
subject
to
a
three-year
holding
period
from
the
acquisition
date.
After
the
holding
period
has
expired,
redemptions
are
permitted
with
written
redemption
notice
given
by
April
30th
of
that
year.
(j)
The
fund
will
primarily
invest,
directly
or
indirectly,
in
core
and
core
plus
infrastructure
assets
and
infrastructure
investments
focused
on
the
infrastructure
and
power
sectors.
Redemptions
are
subject
to
a
three-year
holding
period
from
the
acquisition
date.
(k)
This
fund
is
comprised
of
loans
with
strong
fundamentals
and
focused
on
income
return.
Redemptions
are
available
if
inflows
of
capital
offset
the
requested
redemption
amount
and
if
liquidity
is
sufficient.
(l)
This
open-end
fund
invests
primarily
in
U.S.
farmland.
It
is
a
well-diversified
portfolio
across
many
regions
of
the
country
and
diversified
across
row
crops,
vegetable
crops,
and
permanent
crops.
Redemptions
are
permitted
with
written
redemption
notice
60
days
prior
to
the
end
of
the
quarter.
(m)
This
open-end,
commingled
private
real
estate
portfolio
combines
value-add
properties
with
capital
appreciation
potential
and
more
stable
income-generating
properties.
Properties
in
the
portfolio
typically
start
as
development,
renovation,
repositioning,
or
lease-up
stage
investments,
and
transition
toward
stabilized
assets.
Redemptions
are
permitted
with
written
redemption
notice
60
days
prior
to
the
end
of
the
quarter.
Financial
Highlights
(unaudited)
See
accompanying
notes.
18
Net
Asset
Value,
Beginning
of
Period
Net
Investment
Income
(Loss)
(a)
Net
Realized
and
Unrealized
Gain
(Loss)
on
Investments
Total
From
Investment
Operations
Dividends
from
Net
Investment
Income
Distributions
from
Realized
Gains
Tax
Return
of
Capital
Distribution
Total
Dividends
and
Distributions
Net
Asset
Value,
End
of
Period
PRINCIPAL
REAL
ASSET
FUND
(c)
Class
A
shares
September
30,
2023(d)
$
25.40‌
$
0.27‌
(
$
0.86‌)
(
$
0.59‌)
(
$
0.24‌)
$
–‌
$
–‌
(
$
0.24‌)
$
24.57‌
March
31,
2023
28.09‌
0.63‌
(
1.54‌)
(
0.91‌)
(
0.41‌)
(
1.37‌)
–‌
(
1.78‌)
25.40‌
March
31,
2022
26.27‌
0.33‌
3.34‌
3.67‌
(
0.37‌)
(
1.48‌)
–‌
(
1.85‌)
28.09‌
March
31,
2021
19.35‌
0.49‌
7.18‌
7.67‌
(
0.52‌)
(
0.23‌)
–‌
(
0.75‌)
26.27‌
March
31,
2020(l)
25.00‌
0.36‌
(
5.61‌)
(
5.25‌)
(
0.35‌)
–‌
(
0.05‌)
(
0.40‌)
19.35‌
Class
Y
shares
September
30,
2023(d)
25.68‌
0.33‌
(
0.86‌)
(
0.53‌)
(
0.27‌)
–‌
–‌
(
0.27‌)
24.88‌
March
31,
2023
28.31‌
0.76‌
(
1.54‌)
(
0.78‌)
(
0.48‌)
(
1.37‌)
–‌
(
1.85‌)
25.68‌
March
31,
2022
26.42‌
0.47‌
3.36‌
3.83‌
(
0.42‌)
(
1.52‌)
–‌
(
1.94‌)
28.31‌
March
31,
2021
19.39‌
0.62‌
7.20‌
7.82‌
(
0.55‌)
(
0.24‌)
–‌
(
0.79‌)
26.42‌
March
31,
2020(l)
25.00‌
0.47‌
(
5.64‌)
(
5.17‌)
(
0.39‌)
–‌
(
0.05‌)
(
0.44‌)
19.39‌
Institutional
shares
September
30,
2023(d)
25.48‌
0.30‌
(
0.86‌)
(
0.56‌)
(
0.27‌)
–‌
–‌
(
0.27‌)
24.65‌
March
31,
2023
28.15‌
0.64‌
(
1.46‌)
(
0.82‌)
(
0.48‌)
(
1.37‌)
–‌
(
1.85‌)
25.48‌
March
31,
2022
26.33‌
0.42‌
3.33‌
3.75‌
(
0.41‌)
(
1.52‌)
–‌
(
1.93‌)
28.15‌
March
31,
2021
19.36‌
0.56‌
7.20‌
7.76‌
(
0.55‌)
(
0.24‌)
–‌
(
0.79‌)
26.33‌
March
31,
2020(l)
25.00‌
0.41‌
(
5.61‌)
(
5.20‌)
(
0.39‌)
–‌
(
0.05‌)
(
0.44‌)
19.36‌
Financial
Highlights
(Continued)
(unaudited)
See
accompanying
notes.
19
Total
Return
Net
Assets,
End
of
Period
(in
thousands)
Ratio
of
Expenses
to
Average
Net
Assets
Ratio
of
Expenses
to
Average
Net
Assets
(Excluding
Interest
Expense
and
Fees)(b)
Ratio
of
Net
Investment
Income
to
Average
Net
Assets
Portfolio
Turnover
Rate
(1.62‌)
%
(e),(f),(g)
$
828‌
1.53‌
%
(h),(i)
1.49‌
%
(h),(i)
2.11‌
%
(h)
27.6‌
%
(h)
(2.13‌)
(f),(g),(j)
754‌
1.70‌
(i)
1.66‌
(i)
2.41‌
39.8‌
12.58‌
(f),(g),(k)
372‌
1.91‌
(i)
1.88‌
(i)
1.19‌
45.4‌
39.63‌
(f),(g)
276‌
1.67‌
(i)
N/A‌
2.11‌
56.0‌
(21.27‌)
(e),(g)
197‌
1.94‌
(h),(i)
N/A‌
1.87‌
(h)
56.8‌
(h)
(1.36‌)
(e)
137,281‌
1.03‌
(h),(i)
0.99‌
(h),(i)
2.58‌
(h)
27.6‌
(h)
(1.62‌)
(f),(j)
148,223‌
1.24‌
(i)
1.20‌
(i)
2.84‌
39.8‌
13.13‌
(f),(k)
187,063‌
1.41‌
(i)
1.38‌
(i)
1.69‌
45.4‌
40.36‌
(f)
162,855‌
1.17‌
(i)
N/A‌
2.61‌
56.0‌
(20.98‌)
(e)
98,501‌
1.43‌
(h),(i)
N/A‌
2.47‌
(h)
56.8‌
(h)
(1.45‌)
(e)
10,646‌
1.23‌
(h),(i)
1.19‌
(h),(i)
2.40‌
(h)
27.6‌
(h)
(1.82‌)
(f),(j)
10,753‌
1.30‌
(i)
1.26‌
(i)
2.48‌
39.8‌
12.93‌
(f),(k)
627‌
1.63‌
(i)
1.60‌
(i)
1.54‌
45.4‌
40.06‌
(f)
277‌
1.37‌
(i)
N/A‌
2.41‌
56.0‌
(21.10‌)
(e)
197‌
1.64‌
(h),(i)
N/A‌
2.17‌
(h)
56.8‌
(h)
(a)
Calculated
based
on
average
shares
outstanding
during
the
period.
(b)
Excludes
interest
expense
and
commitment
fees
charged
on
borrowings.
See
"Operating
Policies"
in
notes
to
financial
statements.
(c)
Effective
September
1,
2023,
Principal
Diversified
Select
Real
Asset
Fund
changed
its
name
to
Principal
Real
Asset
Fund.
(d)
Six
months
ended
September
30,
2023.
(e)
Total
return
amounts
have
not
been
annualized.
(f)
Total
return
is
calculated
using
the
traded
net
asset
value
which
may
differ
from
the
reported
net
asset
value.
The
traded
net
asset
value
is
the
net
asset
value
which
a
shareholder
would
have
paid
or
received
from
a
subscription
or
redemption.
(g)
Total
return
is
calculated
without
the
front-end
sales
charge
or
contingent
deferred
sales
charge.
(h)
Computed
on
an
annualized
basis.
(
i
)
Reflects
Manager's
contractual
expense
limit.
(j)
Total
returns
calculated
using
the
reported
net
asset
values
as
of
March
31,
2023
are
(3.11)%,
(2.64)%
and
(2.80)%
for
Class
A,
Class
Y
and
Institutional,
respectively.
(k)
Total
returns
calculated
using
the
reported
net
asset
values
as
of
March
31,
2022
are  14.32%,
14.86%,
and
14.62%
for
Class
A,
Class
Y,
and
Institutional,
respectively.
(l)
Period
from
June
25,
2019,
date
operations
commenced,
through
March
31,
2020.
Shareholder
Expense
Example
Principal
Real
Asset
Fund
September
30,
2023
(unaudited)
20
As
a
shareholder
of
Principal
Real
Asset
Fund,
you
incur
two
types
of
costs:
(1)
transaction
costs,
including
sales
charges
on
purchase
payments
and
contingent
deferred
sales
charges;
and
(2)
ongoing
costs,
including
management
fees;
distribution
fees;
and
other
fund
expenses.
In
addition
to
the
expenses
the
Fund
bears
directly,
the
Fund
may
indirectly
bear
its
pro
rata
share
of
the
expenses
incurred
by
the
investment
companies
in
which
the
Fund
invests.
This
Example
is
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
Principal
Diversified
Select
Real
Asset
Fund
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
funds.
The
Example
is
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
entire
period
April
1,
2023
to
September
30,
2023
,
unless
otherwise
noted.
Actual
Expenses
The
first
section
of
the
table
below
provides
information
about
actual
account
values
and
actual
expenses.
You
may
use
the
information
in
this
section,
together
with
the
amount
you
invested,
to
estimate
the
expenses
that
you
paid
over
the
period.
Simply
divide
your
account
value
by
$1,000
(for
example,
an
$8,600
account
value
divided
by
$1,000
=
8.6),
then
multiply
the
result
by
the
number
in
the
first
section
under
the
heading
entitled
“Expenses
Paid
During
Period”
to
estimate
the
expenses
you
paid
on
your
account
during
this
period.
Additional
account
fees
may
apply
to
certain
types
of
investment
products
which
are
not
included
in
the
table
below.
If
they
were,
the
estimate
of
expenses
you
paid
during
the
period
would
be
higher,
and
your
ending
account
value
lower,
by
this
amount.
Hypothetical
Example
for
Comparison
Purposes
The
second
section
of
the
table
below
provides
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
The
hypothetical
account
values
and
expenses
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period.
You
may
use
this
information
to
compare
the
ongoing
costs
of
investing
in
the
Fund
and
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
the
other
funds.
Please
note
that
the
expenses
shown
in
the
table
are
meant
to
highlight
your
ongoing
costs
only
and
do
not
reflect
any
transaction
costs,
such
as
sales
charges
on
purchase
payments,
contingent
deferred
sales
charges,
redemption
fees
or
exchange
fees.
Therefore,
the
second
section
of
the
table
is
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
determine
the
relative
total
costs
of
owning
different
funds.
In
addition,
if
these
transaction
costs
were
included,
your
costs
would
have
been
higher.
Actual
Hypothetical
Beginning
Account
Value
April
1,
2023
Ending
Account
Value
September
30,
2023
Expenses
Paid
During Period
April
1,
2023 to
September
30,
2023
(a)
Beginning
Account
Value
April
1,
2023
Ending
Account
Value
September
30,
2023 
Expenses
Paid
During Period
April
1,
2023 to
September
30,
2023
(a)
Annualized
Expense
Ratio
Principal
Real
Asset
Fund
Class
A
$
1,000.00‌
$
983.81‌
$
7.59‌
$
1,000.00‌
$
1,017.35‌
$
7.72‌
1.53‌
%
Class
Y
1,000.00‌
986.36‌
5.11‌
1,000.00‌
1,019.85‌
5.20‌
1.03‌
Institutional
1,000.00‌
985.45‌
6.11‌
1,000.00‌
1,018.85‌
6.21‌
1.23‌
Principal
Real
Asset
Fund
(Excluding
Interest
Expense
Fees)
Class
A
1,000.00‌
983.81‌
7.39‌
1,000.00‌
1,017.55‌
7.52‌
1.49‌
Class
Y
1,000.00‌
986.36‌
4.92‌
1,000.00‌
1,020.05‌
5.00‌
0.99‌
Institutional
1,000.00‌
985.45‌
5.91‌
1,000.00‌
1,019.05‌
6.01‌
1.19‌
(a)
Expenses
are
equal
to
a
fund's
annualized
expense
ratio
multiplied
by
the
average
account
value
over
the
period,
multiplied
by
183/365
(to
reflect
the
one-half
year
period).
21
BOARD
CONSIDERATION
OF
INVESTMENT
ADVISORY
CONTRACTS
During
the
period
covered
by
this
report,
the
Board
of
Trustees
of
Principal
Real
Asset
Fund
(“PRA”
or
the
“Fund”)
considered
the
renewal
of
the
Management
Agreement
and
various
sub-advisory
agreements
for
the
Fund.
Annual
Review
and
Renewal
of
Management
Agreement
and
Sub-Advisory
Agreements
At
its
September
13,
2023
meeting,
the
Board
performed
its
annual
review
and
renewal
process
relating
to
the
Management
Agreement
and
the
Sub-Advisory
Agreements
for
the
Fund.
Section
15(c)
of
the
Investment
Company
Act
of
1940
(the
“1940
Act”)
requires
the
Board,
including
a
majority
of
the
Trustees
who
have
no
direct
or
indirect
interest
in
the
investment
advisory
agreements
and
who
are
not
“interested
persons”
of
PFI,
as
defined
in
the
1940
Act
(the
“Board”),
annually
to
review
and
to
consider
the
continuation
of:
(1)
the
Management
Agreement
between
Principal
Global
Investors,
LLC
(the
“Manager”)
and
PRA;
and
(2)
the
Sub-Advisory
Agreements
between
the
Manager
and
each
of
ClearBridge
Investments
(North
America)
Pty
Limited
and
Principal
Real
Estate
Investors,
LLC
(collectively,
the
“Sub-Advisors”).
The
Management
Agreement
and
the
Sub-Advisory
Agreements
are
collectively
referred
to
as
the
“Advisory
Agreements.”
The
Board
considered
the
factors
and
reached
the
conclusions
described
below
relating
to
the
continuation
of
the
Advisory
Agreements.
In
evaluating
the
Advisory
Agreements,
the
Board
reviewed
a
broad
range
of
information
requested
for
this
purpose,
including,
among
other
information,
information
regarding
performance,
advisory
fees,
total
expenses,
profitability
from
the
Advisory
Agreements
to
the
Manager
and
information
about
economies
of
scale.
The
Board
reviewed
the
materials
provided
and
concluded
that
it
was
provided
all
information
reasonably
necessary
to
evaluate
the
Advisory
Agreements.
Management
Agreement
The
Board
considered,
among
other
factors,
that
the
Manager
and
its
affiliates
have
demonstrated
a
long-term
commitment
to
support
the
Fund,
including
undertakings
to
cap
Fund
expenses
and/or
waive
management
fees
for
the
Fund.
The
Board
concluded
that
a
relationship
with
a
capable
and
conscientious
investment
adviser
is
in
the
best
interest
of
the
Fund.
In
addition,
the
Board
considered
the
following
factors
for
the
Fund.
Nature,
Quality
and
Extent
of
Services
The
Board
considered
the
nature,
quality
and
extent
of
the
services
provided
under
the
Management
Agreement,
including
accounting
and
administrative
services,
as
applicable.
The
Board
considered
the
experience
and
skills
of
senior
management
leading
Fund
operations,
the
experience
and
skills
of
the
personnel
performing
the
functions
under
the
Management
Agreement
and
the
resources
made
available
to
such
personnel,
the
ability
of
the
Manager
to
attract
and
retain
high-quality
personnel
and
the
organizational
depth
and
stability
of
the
Manager.
The
Board
concluded
that
appropriate
resources
were
provided
under
the
Management
Agreement.
The
Board
also
considered
that
for
the
Fund,
during
the
periods
reviewed,
the
Manager
had
delegated
day-to-day
portfolio
management
responsibility
to
the
sub-advisors.
The
Board
noted
that
the
Manager’s
process
for
the
selection
of
Sub-Advisors
emphasizes
the
selection
of
Principal-affiliated
sub-advisors
that
are
determined
to
be
qualified
under
the
Manager’s
due
diligence
process,
but
that
the
Manager
will
select
an
unaffiliated
sub-advisor
to
manage
all
or
a
portion
of
the
Fund’s
investment
portfolio
when
deemed
necessary
or
appropriate
based
upon
a
consideration
of
the
Fund’s
investment
mandate
and
available
expertise
and
resources
within
the
Principal
organization.
The
Board
considered
the
due
diligence
process
developed
by
the
Manager
for
purposes
of
selecting
a
qualified
unaffiliated
sub-advisor
for
the
Fund.
The
Board
considered
the
Manager’s
due
diligence
process
for
monitoring
and
replacing
Sub-Advisors
and
for
monitoring
the
investment
performance
of
the
Manager.
The
Board
also
considered
the
compliance
program
established
by
the
Manager
for
the
Fund,
the
quality
of
that
program
and
the
level
of
compliance
attained
by
the
Fund.
The
Board
noted
that
they
had
reviewed
annual
best
execution
and
soft
dollar
reports
and
information
regarding
the
research
payment
accounts
for
the
Fund
and
included
this
information
in
their
consideration
of
the
renewal
of
the
Advisory
Agreements.
Based
upon
all
relevant
factors,
the
Board
concluded
that
the
nature,
quality
and
extent
of
the
services
provided
by
the
Manager
to
the
Fund
under
the
Management
Agreement
was
satisfactory.
Investment
Performance
The
Board
reviewed
the
Fund’s
investment
performance
for
a
period
starting
at
the
Fund’s
inception
and
ending
on
March
31,
2023
and
compared
performance
information
based
upon
data
provided
by
Refinitiv.
The
Board
also
considered
whether
investment
results
were
consistent
with
a
Fund’s
investment
objective
and
policies.
For
the
Fund,
the
Board
concluded
that
the
Fund’s
investment
returns
met
acceptable
levels
of
investment
performance.
The
Board
considered
the
Manager’s
due
diligence
process
for
evaluating
the
performance
of
the
Fund
and
the
Sub-
Advisors,
for
which
they
receive
regular
reporting,
and
concluded
that
the
Manager
has
in
place
an
effective
due
diligence
process
to
monitor
investment
performance,
to
encourage
remedial
action
and
to
make
changes
in
the
Sub-Advisors
at
the
appropriate
time,
if
necessary,
subject
to
Board
oversight.
22
Investment
Management
Fees
The
Board
considered
the
Fund’s
contractual
and
effective
management
fee
rate.
For
the
Fund,
the
Board
received
certain
information
from
Broadridge.
The
Board
received
information
comparing
the
Fund’s
(1) contractual
management
fee
rate
at
current
asset
levels
and
at
theoretical
asset
levels,
(2) effective
net
management
fee
rate
(after
any
fee
waivers)
at
average
fiscal-year
asset
levels,
(3) actual
non-management
expense
rate
at
average
fiscal-year
asset
levels
and
(4) total
net
expense
ratio
(including,
as
applicable,
acquired
fund
fees
and
expenses
and
after
any
expense
caps
or
fee
waivers)
at
average
fiscal-year
asset
levels
for
Institutional
Class
shares
for
PRA,
to
investment
advisory
fee
rates,
non-
management
expense
rates
and
expense
ratios
of
funds
in
a
peer
group
selected
by
Broadridge
(“Expense
Group”)
and
a
broad-based,
industry
category
defined
by
Broadridge
(“Expense
Universe”).
In
evaluating
the
management
fee
rates,
the
Board
considered
a
variety
of
factors,
including
the
contractual
and
effective
fee
rates,
breakpoints,
comparisons
to
fee
rates
of
peer
group
funds
and
other
funds
and
nonfund
accounts
managed
by
the
Manager,
sub-advisory
fee
rates
paid,
services
provided,
investment
performance,
total
net
expense
ratios,
profitability,
the
existence
and
sharing
of
economies
of
scale,
indirect
benefits
and
expense
caps
and
fee
waivers.
The
Board
considered
the
impact
of
changes
in
sub-advisory
fee
rates
put
into
effect
since
September
2022.
Profitability
The
Board
reviewed
detailed
information
regarding
revenues
the
Manager
received
under
the
Management
Agreement
and
the
estimated
direct
and
indirect
costs
incurred
in
providing
to
the
Fund
the
services
described
in
the
Management
Agreement
for
the
year
ended
December
31,
2022.
The
Board
also
considered
the
returns
on
revenue
generated
in
connection
with
the
payment
of
sub-advisory
fees
to
an
affiliated
Sub-Advisor
(Principal
Real
Estate
Investors
LLC)
and
the
aggregated
return
on
revenue
to
the
Manager
and
its
affiliates
for
the
year
ended
December
31,
2022.
The
Board
noted
that
the
Manager
compensates
each
Sub-Advisor
from
its
own
management
fee
and
considered
the
pro
forma
impact
on
the
Manager's
returns
on
revenue
from
the
reductions
of
the
Fund’s
effective
management
fee
rates
described
above
and
the
reductions
of
the
Fund’s
effective
sub-advisory
fee
rates
described
below.
The
Board
concluded
that
the
profitability
to
the
Manager
under
the
management
agreement
was
not
unreasonable.
Economies
of
Scale
The
Board
considered
whether
there
are
economies
of
scale
with
respect
to
the
management
of
the
Fund
and
whether
the
Fund
benefits
from
any
such
economies
of
scale.
The
Board
considered
the
Manager’s
biennial
breakpoint
study
that
was
received
by
the
Board
in
March
2022
and
the
Manager’s
representation
that
the
Fund
is
initially
priced
as
though
the
Fund
had
reached
scale,
reflecting
a
sharing
of
economies
of
scale.
The
Board
then
reviewed
the
levels
at
which
breakpoints
occur,
the
incremental
declines
in
management
fee
rates
at
each
breakpoint
and
the
amount
of
fee
reductions
that
had
been
provided
to
shareholders
as
a
result
of
these
breakpoints.
The
Board
considered
cost
saving
passed
along
to
the
Fund
as
a
result
of
certain
expense
caps
and
fee
waivers.
The
Board
considered
whether
the
effective
management
fee
rate
for
the
Fund
under
the
Management
Agreement
is
reasonable
in
relation
to
the
asset
size
of
the
Fund.
The
Board
also
noted
management’s
explanation
of
efficiencies
in
the
Manager’s
cost
structure.
The
Board
concluded
that
the
fee
schedule
for
the
Fund
reflects
an
appropriate
level
of
sharing
of
any
economies
of
scale.
Other
Benefits
to
Manager
The
Board
also
considered
the
character
and
amount
of
other
incidental
benefits
received
by
the
Manager
and
its
affiliates
from
their
relationships
with
the
Fund.
The
Board
noted
that
the
Manager
uses
fund
commissions
to
buy
Section
28(e)
eligible
products
and
services.
The
Board
concluded
that
the
incidental
benefits
received
by
the
Manager
and
its
affiliates
were
appropriate.
Sub-Advisory
Agreements
Nature,
Quality
and
Extent
of
Services
The
Board
considered
the
nature,
quality
and
extent
of
the
services
provided
under
each
Sub-Advisory
Agreement.
The
Board
considered
the
reputation,
qualifications
and
background
of
the
Sub-Advisor,
the
investment
approach
of
the
Sub-Advisor,
the
experience
and
skills
of
investment
personnel
responsible
for
the
day-to-day
management
of
the
Fund
and
the
resources
made
available
to
such
personnel.
The
Board
also
considered
the
Sub-Advisors’
compliance
with
investment
policies
and
general
legal
compliance.
Based
upon
all
relevant
factors,
the
Board
concluded
that
the
nature,
quality
and
extent
of
the
services
provided
by
the
Sub-Advisors
to
the
Fund
under
the
Sub-Advisory
Agreements
are
satisfactory.
Investment
Performance
The
Manager
had
advised
the
Board
that
the
investment
services
delivered
by
each
Sub-Advisor
to
the
Fund
were
reasonable.
Based
upon
all
relevant
factors,
the
Board
concluded
that
each
Sub-Advisor
is
qualified
and
that
either:
(1)
the
investment
performance
of
the
Sub-Advisor
met
acceptable
levels
of
investment
performance;
or
(2)
although
the
Fund
experienced
underperformance
from
the
applicable
Sub-Advisor,
based
upon
the
Fund’s
particular
circumstances
or
in
light
of
remedial
efforts
being
taken
to
improve
performance,
as
applicable,
it
was
in
the
best
interests
of
the
Fund
to
continue
to
closely
monitor
performance
and
to
renew
the
Sub-Advisory
Agreement.
In
each
case
involving
underperformance,
the
Board
concluded
that
the
Manager
was
providing
effective
monitoring.
23
Fees,
Economies
of
Scale
and
Profitability
The
Board
considered
the
sub-advisory
fee
rates,
noting
that
the
Manager
compensates
each
Sub-Advisor
from
its
own
management
fee,
so
that
shareholders
pay
only
the
management
fee.
For
the
Fund,
the
Board
received
certain
information
from
Broadridge
comparing
the
Fund’s
sub-
advisory
fee
rate
at
current
asset
levels
and
at
theoretical
asset
levels
to
sub-advisory
fee
rates
of
sub-advised
funds
in
the
Expense
Group
and,
if
available,
the
Expense
Universe.
The
Board
considered
whether
there
are
economies
of
scale
with
respect
to
the
sub-advisory
services
provided
to
the
Fund
and,
if
so,
whether
the
sub-advisory
fees
reflect
such
economies
of
scale
through
breakpoints
in
fee
schedules
or
whether
the
sub-advisory
fee
schedule
is
otherwise
appropriate
at
current
asset
levels.
In
addition,
in
evaluating
the
sub-advisory
fee
rates
and
the
factor
of
profitability,
with
respect
to
unaffiliated
Sub-Advisors,
the
Board
considered
that
the
sub-advisory
fee
rate
was
negotiated
at
arm’s
length
between
the
Manager
and
the
Sub-Advisor.
The
Board
considered
the
profitability
of
the
affiliated
Sub-Advisors
in
conjunction
with
their
review
of
the
profitability
of
the
Manager.
Other
Benefits
to
Sub-Advisors
The
Board
also
considered
the
character
and
amount
of
other
incidental
benefits
received
by
each
Sub-Advisor
when
evaluating
the
sub-advisory
fees.
The
Board
considered
as
a
part
of
this
analysis
each
Sub-Advisor’s
brokerage
practices,
soft
dollar
practices
and
use
of
research
payment
accounts.
The
Board
concluded
that
the
incidental
benefits
received
by
each
Sub-Advisor
were
appropriate.
Overall
Conclusions
Based
upon
all
of
the
information
considered
and
the
conclusions
reached,
the
Board
determined
that
the
terms
of
each
Advisory
Agreement,
including
the
fee
rate
payable
thereunder,
continue
to
be
fair
and
reasonable
and
that
the
continuation
of
each
Advisory
Agreement,
with
the
actions
proposed
by
the
Manager,
is
in
the
best
interests
of
the
Fund.
24
FUND
BOARD
OF
TRUSTEES
AND
OFFICERS
The
Board
of
Trustees
(the
“Board”)
has
overall
responsibility
for
overseeing
the
Fund’s
operations
in
accordance
with
the
Investment
Act
of
1940,
as
amended
(the
“1940
Act”),
other
applicable
laws,
and
the
Fund’s
charter.
Each
member
of
the
Board
(“Board
Member”)
serves
on
the
Boards
of
the
following
investment
companies:
Principal
Funds,
Inc.,
Principal
Variable
Contracts
Funds,
Inc.,
Principal
Exchange-Traded
Funds,
and
Principal
Real
Asset
Fund
which
are
collectively
referred
to
as
the
“Fund
Complex”.
Board
Members
that
are
affiliated
persons
of
any
investment
advisor,
the
principal
distributor,
or
the
principal
underwriter
of
the
Fund
Complex
are
considered
“interested
persons”
of
the
Fund
(as
defined
in
the
1940
Act)
and
are
referred
to
as
“Interested
Board
Members”.
Board
Members
who
are
not
Interested
Board
Members
are
referred
to
as
“Independent
Board
Members”.
Each
Board
Member
generally
serves
until
the
next
annual
meeting
of
shareholders
or
until
such
Board
Member’s
earlier
death,
resignation,
or
removal.
Independent
Board
Members
have
a
72-year
age
limit
and,
for
Independent
Board
Members
elected
on
or
after
September
14,
2021,
a
72-year
age
limit
or
a
15-year
term
limit,
whichever
occurs
first.
The
Board
may
waive
the
age
or
term
limits
in
the
Board’s
discretion.
The
Board
elects
officers
to
supervise
the
day-to-day
operations
of
the
Fund
Complex.
Officers
serve
at
the
pleasure
of
the
Board,
and
each
officer
has
the
same
position
with
each
investment
company
in
the
Fund
Complex.
INDEPENDENT
BOARD
MEMBERS
Name,
Position
Held
with
the
Fund
Complex,
Year
of
Birth
Principal
Occupation(s)
During
past
5
years
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member
Other
Directorships
Held
by
Board
Member
During
Past
5
Years
Leroy
T.
Barnes,
Jr.
Board
Member
since
2012
Member,
Audit
Committee
1951
Retired
126
McClatchy
Newspapers,
Inc.
(2000-
2020);
Frontier
Communications,
Inc.
(2005-2019)
Craig
Damos
Lead
Independent
Board
Member
since
2020
Board
Member
since
2008
Member,
Nominating
and
Governance
Committee
Member,
Operations
Committee
Member,
Executive
Committee
1954
President,
C.P.
Damos
Consulting
LLC
(consulting
services)
126
None
Katharin
S.
Dyer
Board
Member
since
2023
Member,
Operations
Committee
1957
Founder
and
Chief
Executive
Officer,
PivotWise
(consulting
services)
Global
Partner,
IBM
(technology
company)
from
2016-2018
126
Liquidity
Services,
Inc.
(2020-present)
Frances
P.
Grieb
Board
Member
since
2023
Member,
Audit
Committee
1960
Retired
126
First
Interstate
BancSystems,
Inc.
(2022-present);
Great
Western
Bancorp,
Inc.
and
Great
Western
Bank
(2014-2022)
Fritz
S.
Hirsch
Board
Member
since
2005
Member,
Nominating
and
Governance
Committee
Member,
15(c)
Committee
1951
Interim
CEO,
MAM
USA
(manufacturer
of
infant
and
juvenile
products)
from
February
2020
to
October
2020
126
MAM
USA
(2011-present)
Victor
Hymes
Board
Member
since
2020
Chair,
Audit
Committee
Member,
Nominating
and
Governance
Committee
1957
Founder,
CEO,
CIO,
Legato
Capital
Management,
LLC
(investment
management
company)
126
None
Padelford
L.
Lattimer
Board
Member
since
2020
Chair,
Operations
Committee
Member,
15(c)
Committee
1961
Managing
Partner,
TBA
Management
Consulting
LLC
(management
consulting
and
staffing
company)
126
None
Karen
McMillan
Board
Member
since
2014
Member,
Operations
Committee
Chair,
15(c)
Committee
1961
Founder/Owner,
Tyche
Consulting
LLC
(consulting
services)
Managing
Director,
Patomak
Global
Partners,
LLC
(financial
services
consulting)
from
2014-2021
126
None
25
INTERESTED
BOARD
MEMBERS
Name,
Position
Held
with
the
Fund
Complex,
Year
of
Birth
Principal
Occupation(s)
During
past
5
years
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member
Other
Directorships
Held
by
Board
Member
During
Past
5
Years
Elizabeth
A.
Nickels
Board
Member
since
2015
Member,
Audit
Committee
Chair,
Nominating
and
Governance
Committee
1962
Retired
126
SpartanNash
(2000-2022)
Mary
M.
VanDeWeghe
Board
Member
since
2018
Member,
Audit
Committee
Member,
15(c)
Committee
1959
CEO
and
President,
Forte
Consulting,
Inc.
(financial
and
management
consulting)
126
Helmerich
&
Payne
(2019-present);
Denbury
Resources
Inc.
(2019-2020)
Name,
Position
Held
with
the
Fund
Complex,
Year
of
Birth
Principal
Occupation(s)
During
past
5
years
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member
Other
Directorships
Held
by
Board
Member
During
Past
5
Years
Kamal
Bhatia
Principal
Global
Investors,
LLC
(“PGI”)
126
None
Chair
and
Board
Member
since
2023
Chair,
Executive
Committee
Chief
Executive
Officer
and
President
1972
Director
since
2019
President-Principal
Funds
since
2019
Principal
Funds
Distributor,
Inc.
(“PFD”)
Director
since
2019
Principal
Financial
Group,
Inc.
(“PFGI”),
Principal
Financial
Services,
Inc.
(“PFSI”),
and
Principal
Life
Insurance
Company
(“PLIC”)
Senior
Executive
Managing
Director
–
Global
Head
of
Investments
–
Principal
Asset
Management
(“PAM”)
since
2023
Senior
Executive
Director
and
Chief
Operating
Officer
-
PAM
(2022-2023)
Senior
Executive
Director
and
Chief
Operating
Officer
-
PGI
(2020-2022)
President-Principal
Funds
(2019-2020)
Post
Advisory
Group,
LLC
(“Post”)
Director
since
2020
Principal
Real
Estate
Investors,
LLC
(“PREI”)
Senior
Executive
Director
and
Chief
Operating
Officer
-
PGI
since
2022
Director
since
2020
Principal
Shareholder
Services,
Inc.
(“PSS”)
Executive
Vice
President
since
2019
Director
and
Chair
(2019-2022)
Spectrum
Asset
Management
(“Spectrum”)
Director
since
2021
Origin
Asset
Management
(“Origin”)
Additional
Director
since
2022
OppenheimerFunds
Senior
Vice
President
(2011-2019)
26
Correspondence
intended
for
each
Board
Member
who
is
other
than
an
Interested
Board
Member
may
be
sent
to
655
9th
Street,
Des
Moines,
IA
50392.
Name,
Position
Held
with
the
Fund
Complex,
Year
of
Birth
Principal
Occupation(s)
During
past
5
years
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member
Other
Directorships
Held
by
Board
Member
During
Past
5
Years
Patrick
G.
Halter
PGI
126
None
Board
Member
since
2017
Member,
Executive
Committee
1959
Chair
since
2018
Chief
Executive
Officer
and
President
since
2018
Director
since
2003
PFGI,
PFSI,
and
PLIC
President
and
Chief
Executive
Officer
–
PAM)
since
2022
President
–
Principal
Global
Asset
Management
(“PGAM”)
(2020-2022)
Post
Director
since
2017
Chair
(2017-2020)
PREI
President
-
PGAM
since
2022
Director
and
Chair
since
2004
Chief
Executive
Officer
and
President
(2018-2021)
Origin
Director
(2018-2019)
Kenneth
A.
McCullum
PGI
126
Board
Member
since
2023
1964
Director
since
2020
PFGI,
PFSI,
and
PLIC
Executive
Vice
President
and
Chief
Risk
Officer
since
2023
Senior
Vice
President
and
Chief
Risk
Officer
(2020-
2023)
Vice
President
and
Chief
Actuary
(2015-2020)
Principal
Securities,
Inc.
(“PSI”)
Director
since
2020
PSS
Director
since
2020
27
FUND
COMPLEX
OFFICERS
Name,
Position
Held
with
the
Fund
Complex,
Address,
and
Year
of
Birth
Principal
Occupation(s)
During
past
5
years
Randy
D.
Bolin
Assistant
Tax
Counsel
Des
Moines,
IA
50392
1961
Vice
President/Associate
General
Counsel,
PGI
since
2016
Vice
President/Associate
General
Counsel,
PFSI
since
2013
Vice
President/Associate
General
Counsel,
PLIC
since
2013
George
Djurasovic
General
Counsel
Des
Moines,
IA
50392
1971
Vice
President/General
Counsel
PAM,
PGI
since
2022
Vice
President/General
Counsel
PAM,
PFGI
since
2022
Vice
President/General
Counsel
PAM,
PFSI
since
2022
Vice
President/General
Counsel
PAM,
PLIC
since
2022
Global
Chief
Compliance
Officer,
Artisan
Partners
Limited
Partnership
(2013-2022)
Beth
Graff
Vice
President
and
Assistant
Controller
Des
Moines,
IA
50392
1968
Director
–
Fund
Accounting,
PLIC
since
2016
Gina
L.
Graham
Treasurer
Des
Moines,
IA
50392
1965
Vice
President
and
Treasurer,
PGI
since
2016
Vice
President
and
Treasurer,
Business
Owner
Ecosystem,
Inc.
(“BOE
-
formerly,
RobustWealth,
Inc.”)
since
2018
Vice
President
and
Treasurer,
PFD
since
2016
Vice
President
and
Treasurer,
PFGI
since
2016
Vice
President
and
Treasurer,
PFSI
since
2016
Vice
President
and
Treasurer,
PLIC
since
2016
Vice
President
and
Treasurer,
PREI
since
2017
Vice
President
and
Treasurer,
PSI
since
2016
Vice
President
and
Treasurer,
PSS
since
2016
Megan
Hoffmann
Vice
President
and
Controller
Des
Moines,
IA
50392
1979
Director
–
Accounting,
PLIC
since
2020
Assistant
Director
–
Accounting,
PLIC
(2017-2020)
Laura
B.
Latham
Counsel
and
Assistant
Secretary
Des
Moines,
IA
50392
1986
Assistant
Counsel
and
Assistant
Secretary
–
Fund
Complex
(2018-2023)
Counsel,
PGI
since
2018
Counsel,
PLIC
since
2018
Diane
K.
Nelson
AML
Officer
Des
Moines,
IA
50392
1965
Chief
Compliance
Officer/AML
Officer,
PSS
since
2015
Tara
Parks
Vice
President
and
Assistant
Controller
Des
Moines,
IA
50392
1983
Director
–
Accounting,
PLIC
since
2019
Tax
Manager
–
ALPS
Fund
Services
(2011-2019)
Deanna
Y.
Pellack
Counsel
and
Assistant
Secretary
Des
Moines,
IA
50392
1987
Assistant
Counsel
and
Assistant
Secretary
–
Fund
Complex
(2022-2023)
Counsel,
PLIC
since
2022
Vice
President,
The
Northern
Trust
Company
(2019-
2022)
Second
Vice
President,
The
Northern
Trust
Company
(2014-2019)
28
The
15(c)
Committee’s
primary
purpose
is
to
assist
the
Board
in
performing
the
annual
review
of
the
Fund’s
advisory
and
sub-advisory
agreements
pursuant
to
Section
15(c)
of
the
1940
Act.
The
Committee
is
responsible
for
requesting
and
reviewing
related
materials.
The
Audit
Committee’s
primary
purpose
is
to
assist
the
Board
by
serving
as
an
independent
and
objective
party
to
monitor
the
Fund
Complex’s
accounting
policies,
financial
reporting
and
internal
control
system,
as
well
as
the
work
of
the
independent
registered
public
accountants.
The
Audit
Committee
assists
Board
oversight
of
1)
the
integrity
of
the
Fund
Complex’s
financial
statements;
2)
the
Fund
Complex’s
compliance
with
certain
legal
and
regulatory
requirements;
3)
the
independent
registered
public
accountants’
qualifications
and
independence;
and
4)
the
performance
of
the
Fund
Complex’s
independent
registered
public
accountants.
The
Audit
Committee
also
provides
an
open
avenue
of
communication
among
the
independent
registered
public
accountants,
the
Manager’s
internal
auditors,
Fund
Complex
management,
and
the
Board.
The
Executive
Committee’s
primary
purpose
is
to
exercise
certain
powers
of
the
Board
when
the
Board
is
not
in
session.
When
the
Board
is
not
in
session,
the
Committee
may
exercise
all
powers
of
the
Board
in
the
management
of
the
Fund
Complex's
business
except
the
power
to
1)
issue
stock,
except
as
permitted
by
law;
2)
recommend
to
the
shareholders
any
action
that
requires
shareholder
approval;
3)
amend
the
bylaws;
or
4)
approve
any
merger
or
share
exchange
that
does
not
require
shareholder
approval.
The
Nominating
and
Governance
Committee’s
primary
purpose
is
to
oversee
the
structure
and
efficiency
of
the
Board
and
the
committees.
The
Committee
is
responsible
for
evaluating
Board
membership
and
functions,
committee
membership
and
functions,
insurance
coverage,
and
legal
matters.
The
Committee's
nominating
functions
include
selecting
and
nominating
Independent
Board
Member
candidates
for
election
to
the
Board.
Generally,
the
Committee
requests
nominee
suggestions
from
Board
Members
and
management.
In
addition,
the
Committee
considers
candidates
recommended
by
shareholders
of
the
Fund
Complex.
Recommendations
should
be
submitted
in
writing
to
the
Principal
Name,
Position
Held
with
the
Fund
Complex,
Address,
and
Year
of
Birth
Principal
Occupation(s)
During
past
5
years
Sara
L.
Reece
Vice
President
and
Chief
Operating
Officer
Des
Moines,
IA
50392
1975
Vice
President
and
Controller
–
Fund
Complex
(2016-2021)
Managing
Director
–
Global
Funds
Ops,
PLIC
since
2021
Managing
Director
–
Financial
Analysis/
Planning,
PLIC
(2021)
Director
-
Accounting,
PLIC
(2015-2021)
Teri
R.
Root
Chief
Compliance
Officer
Des
Moines,
IA
50392
1979
Interim
Chief
Compliance
Officer
–
Fund
Complex
(2018)
Vice
President,
PSS
since
2015
Michael
Scholten
Chief
Financial
Officer
Des
Moines,
IA
50392
1979
Chief
Operations
Officer,
PFD
since
2022
Chief
Financial
Officer
–
PFD
(2016-2022)
Assistant
Vice
President
and
Actuary,
PLIC
since
2021
Chief
Financial
Officer
–
Funds/Platforms,
PLIC
since
2015
Chief
Financial
Officer,
PSS
since
2015
Adam
U.
Shaikh
Assistant
General
Counsel
and
Assistant
Secretary
Des
Moines,
IA
50392
1972
Assistant
Counsel
–
Fund
Complex
(2006-2023)
Assistant
General
Counsel,
PGI
since
2018
Counsel,
PLIC
since
2006
John
L.
Sullivan
Counsel
and
Assistant
Secretary
Des
Moines,
IA
50392
1970
Assistant
Counsel
and
Assistant
Secretary
–
Fund
Complex
(2019-2023)
Counsel,
PGI
since
2020
Counsel,
PLIC
since
2019
Prior
thereto,
Attorney
in
Private
Practice
Dan
L.
Westholm
Assistant
Treasurer
Des
Moines,
IA
50392
1966
Assistant
Vice
President-Treasury,
PGI
since
2013
Assistant
Vice
President-Treasury,
PFD
since
2013
Assistant
Vice
President-Treasury,
PLIC
since
2014
Assistant
Vice
President-Treasury,
PSI
since
2013
Assistant
Vice
President-Treasury,
PSS
since
2013
Beth
C.
Wilson
Vice
President
and
Secretary
Des
Moines,
IA
50392
1956
Director
and
Secretary
–
Funds,
PLIC
since
2007
Jared
A.
Yepsen
Assistant
Tax
Counsel
Des
Moines,
IA
50392
1981
Counsel,
PGI
(2017-2019)
Counsel,
PLIC
since
2015
29
Funds
Complex
Secretary,
in
care
of
the
Principal
Funds
Complex,
711
High
Street,
Des
Moines,
IA
50392.
Such
recommendations
must
include
all
information
specified
in
the
Committee’s
charter
and
must
conform
with
the
procedures
set
forth
in
Appendix
A
thereto,
which
can
be
found
at
https://secure02.principal.com/publicvsupply/GetFile?fm=MM13013&ty=VOP&EXT=.VOP.
Examples
of
such
information
include
the
nominee’s
biographical
information;
relevant
educational
and
professional
background
of
the
nominee;
the
number
of
shares
of
each
Fund
owned
of
record
and
beneficially
by
the
nominee
and
by
the
recommending
shareholder;
any
other
information
regarding
the
nominee
that
would
be
required
to
be
disclosed
in
a
proxy
statement
or
other
filing
required
to
be
made
in
connection
with
the
solicitation
of
proxies
for
the
election
of
board
members;
whether
the
nominee
is
an
“interested
person”
of
the
Fund
as
defined
in
the
1940
Act;
and
the
written
consent
of
the
nominee
to
be
named
as
a
nominee
and
serve
as
a
board
member
if
elected.
When
evaluating
a
potential
nominee
for
Independent
Board
Member,
the
Committee
may
consider,
among
other
factors:
educational
background;
relevant
business
and
industry
experience;
whether
the
person
is
an
"interested
person"
of
the
Fund
as
defined
in
the
1940
Act;
and
whether
the
person
is
willing
to
serve,
and
willing
and
able
to
commit
the
time
necessary
to
attend
meetings
and
perform
the
duties
of
an
Independent
Board
Member. In
addition,
the
Committee
may
consider
whether
a
candidate’s
background,
experience,
skills
and
views
would
complement
the
background,
experience,
skills
and
views
of
other
Board
Members
and
would
contribute
to
the
diversity
of
the
Board. The
final
decision
is
based
on
a
combination
of
factors,
including
the
strengths
and
the
experience
an
individual
may
bring
to
the
Board. 
The
Board
does
not
regularly
use
the
services
of
professional
search
firms
to
identify
or
evaluate
potential
candidates
or
nominees.
The
Operations
Committee’s
primary
purpose
is
to
review
and
oversee
the
provision
of
administrative
and
distribution
services
to
the
Fund
Complex,
communications
with
the
Fund
Complex’s
shareholders,
and
the
Fund
Complex’s
operations.
Additional
information
about
the
Fund
is
available
in
the
Prospectuses
and
the
Statement
of
Additional
Information
dated
August
1,
2023
(and
as
supplemented).
These
documents
may
be
obtained
free
of
charge
by
writing
Principal
Real
Asset
Fund,
P.O.
Box
219971,
Kansas
City,
MO
64121-9971
or
telephoning
1-800-222-5852.
The
prospectus
may
be
viewed
at
www.PrincipalAM.com
/
IntervalP
rospectuses
.
PROXY
VOTING
POLICIES
A
description
of
the
policies
and
procedures
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities
and
the
results
of
the
proxy
votes
for
the
most
recent
twelve
months
ended
June
30
may
be
obtained
free
of
charge
by
telephoning
1-800-222-5852,
or
on
the
SEC
website
at
www.sec.gov.
SCHEDULES
OF
INVESTMENTS
The
Fund
files
complete
schedules
of
investments
with
the
Securities
and
Exchange
Commission
for
the
first
and
third
quarters
of
each
fiscal
year
as
an
exhibit
to
its
reports
on
Form
N-PORT.
The
Fund’s
Form
N-PORT
reports
are
available
on
the
Commission’s
website
at
www.sec.gov.
Principal
Funds
Distributor,
Inc.
711
High
Street
Des
Moines,
IA
50392-6370
Do
not
use
this
address
for
business
correspondence
PrincipalAM.com
Investing
involves
risk,
including
possible
loss
of
principal.
This
shareholder
report
is
published
as
general
information
for
the
shareholders
of
Principal
Real
Asset
Fund.
This
material
is
not
authorized
for
distribution
unless
preceded
or
accompanied
by
a
current
prospectus
or
a
summary
prospectus
that
includes
more
information
regarding
the
risk
factors,
expenses,
policies,
and
objectives
of
the
funds.
Investors
should
read
the
prospectus
or
summary
prospectus
carefully
before
investing.
To
obtain
a
prospectus
or
summary
prospectus,
please
contact
your
financial
professional
or
call
800-222-5852.
Principal
Funds
are
distributed
by
Principal
Funds
Distributor,
Inc.
Principal
®
,
Principal
Financial
Group
®
,
and
Principal
and
the
logomark
design
are
registered
trademarks
of
Principal
Financial
Services,
Inc.,
a
Principal
Financial
Group
company,
in
the
United
States
and
are
trademarks
and
services
marks
of
Principal
Financial
Services,
Inc.,
in
various
countries
around
the
world.
©
2023
Principal
Financial
Services,
Inc.
|
INF100SAR-04
|
11/2023
|
3171802

ITEM 2 – CODE OF ETHICS

 
Not applicable to semi-annual reports.
 

ITEM 3 – AUDIT COMMITTEE FINANCIAL EXPERT

 
Not applicable to semi-annual reports.
 

ITEM 4 – PRINCIPAL ACCOUNTANT FEES AND SERVICES

 
Not applicable to semi-annual reports.
 

ITEM 5 – AUDIT COMMITTEE OF LISTED REGISTRANTS

 
Not applicable.
 

ITEM 6 – SCHEDULE OF INVESTMENTS

 
Schedule of Investments is included as part of the Report to Shareholders filed under Item 1 of this form.
 
ITEM 7 – DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES
 
Not applicable to semi-annual reports.
 
ITEM 8 – PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
 
Not applicable to semi-annual reports.
 
ITEM 9 – PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS
 
Not applicable.
 

ITEM 10 – SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

 
None.
 

ITEM 11 – CONTROLS AND PROCEDURES

 
a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing).
 
(b) There have been no changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
 
 

ITEM 12 – DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES

 
Not applicable.
 
ITEM 13 – EXHIBITS
 
(a)(1) Code of Ethics - Not applicable to semi-annual reports.
 
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940 are attached hereto as
Exhibit 99.CERT
.
 
(b) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(b) under the Investment Company Act of 1940 is attached hereto as
Exhibit 99.906CERT
.

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
(Registrant)
Principal Real Asset Fund
 
 
 
By
/s/ Kamal Bhatia
              Kamal Bhatia, President and CEO
 
Date
11/15/2023
 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
By
/s/ Kamal Bhatia
              Kamal Bhatia, President and CEO
 
Date
11/15/2023
 
 
 
By
/s/ Michael Scholten
              Michael Scholten, Chief Financial Officer
 
Date
11/15/2023