Published: January 26, 2012
Principal Funds Adds New Strategies to Global Diversified Income Fund
DES MOINES, Iowa - (BUSINESS WIRE) - In order to further increase income-generating potential and provide
additional diversification benefits, Principal
Funds recently made a series of changes to the Principal
Global Diversified Income Fund (PGBAX).
Changes to the fund include:
-
Adding a global public infrastructure allocation, offering
exposure to assets that have historically provided predictable and
steady cash flows with strong yield potential (sub-advised by W.H.
Reaves & Co., Inc.)
-
Adding call option overwriting strategy to reduce the
volatility of the underlying equity strategies and enhance the return
potential (sub-advised by Guggenheim Partners Asset Management, LLC)
-
Redefining the role of commercial mortgage-backed securities (CMBS)
in the fund, moving it from an opportunistic strategy within the
Global Real Estate allocation to a separate, more strategic allocation
(sub-advised by Principal Real Estate Investors)
"We continuously monitor new asset classes and managers and seek to
identify ways to improve the fund's risk profile," said Mike Finnegan,
portfolio advisor and Principal Funds chief investment officer. "We
believe the recent additions serve this exact purpose."
The Principal Global Diversified Income Fund seeks to provide consistent
cash income through a diversified, yield-focused investment approach.
Multiple specialist managers use tailored investment strategies that
seek different alternative sources of income within a single fund.
Past changes to the fund include the adding master limited partnerships
(MLPs) in 2009.
Five-Star Overall Morningstar Rating
Additionally, Morningstar has recognized the Principal Global
Diversified Income Fund (Class A-World Allocation Funds) with an Overall
Morningstar RatingTM of five stars* as of Dec. 31, 20111.
"We view the five-star rating as a testament to the successful execution
of our yield-oriented strategy with specialist management teams and
ongoing monitoring," said Dave Reichart, portfolio advisor.
With total assets nearing $3 billion2 in just three years,
the Principal Global Diversified Income Fund was Principal Funds'
highest-selling fund of 2011. "We believe the asset growth of the fund
demonstrates the appeal of our outcome-based style of investing, which
seeks to manage many of the risks investors face. The approach is
resonating with financial professionals and their clients," Reichart
said.
A video commentary on the fund and its structure is available here.
Launched December 15, 2008, the Principal Global Diversified Income Fund
is the first in a series of funds designed to provide outcome-oriented
solutions for financial professionals and their clients. The Principal
Diversified Real Asset Fund (PRDAX), launched March 16, 2010, seeks
to help manage the impact of inflation on purchasing power. And launched
October 24, 2011, the Principal
Global Multi-Strategy Fund (PMSAX) seeks to reduce portfolio
volatility. For more information on these funds, visit the Principal
Funds Specialty Funds page.
Asset allocation/diversification does not guarantee a profit or
protect against a loss.
*Past performance is no guarantee of future results.
Morningstar proprietary ratings reflect historical risk-adjusted
performance for funds with at least a 3-year performance history and are
subject to change each month. Morningstar Ratings are calculated from a
fund's three-, five-, and ten-year average annual returns in excess of
the 90-day U.S. Treasury bill returns, with appropriate fee adjustments,
and a risk factor that reflects performance below the 90-day Treasury
bill return. Within each asset class the top 10% of funds receive 5
stars (Highest); the next 22.5% receive 4 stars (Above Average); the
middle 35% earn 3 stars (Average); the next 22.5% receive 2 stars (Below
Average); and the bottom 10% receive 1 star (Lowest). The Overall
Morningstar Rating for a fund is derived from a weighted average of the
performance figures associated with its three-, five-, and ten-year (if
applicable) Morningstar Rating metrics. Copyright 2012 Morningstar, Inc.
All rights reserved.
3 yr: out of 232, 5 yr: NA, 10 yr: NA: The Fund shown may have recent
negative performance. Please see principalfunds.com, or call
800-222-5852, for current performance information.
About Principal Funds
Principal Funds is a leading provider
of mutual funds, with $62.9 billion in assets under management.3
Principal Funds brings expertise in global investment management, asset
allocation and retirement leadership to financial professionals and
investors. Including its target-risk and target-date offerings,
Principal Funds is the fifth largest manager of lifecycle funds in the
industry.4 The companies that make up Principal Funds are
members of the Principal Financial Group. For more
information, visit www.principalfunds.com.
About the Principal Financial Group
The Principal Financial
Group (The Principal )5 is a global
investment management leader including retirement services, insurance
solutions and asset management. The Principal offers businesses,
individuals and institutional clients a wide range of financial products
and services, including retirement, asset management and insurance
through its diverse family of financial services companies. Founded in
1879 and a member of the FORTUNE 500, the Principal
Financial Group has $320.8 billion in assets under management6 and
serves some 17.8 million customers worldwide from offices in Asia,
Australia, Europe, Latin America and the United States. Principal
Financial Group, Inc. is traded on the New York Stock Exchange under the
ticker symbol PFG. For more information, visit www.principal.com.
Investors should carefully consider a fund's investment objectives,
risks, charges, and expenses prior to investing. A prospectus, or
summary prospectus if available, containing this and other information
can be obtained by contacting a financial professional, visiting
principalfunds.com, or calling 800-222-5852. Read the prospectus
carefully before investing.
A mutual fund's share price and investment return will vary with
market conditions, and the principal value of an investment when you
sell your shares may be more or less than the original cost.
Fixed-income investment options are subject to interest rate risk,
and their value will decline as interest rates rise. Lower-rated
securities are subject to additional credit and default risks. Risks
associated with preferred securities differ from risks inherent with
other investments. In particular, in the event of bankruptcy, a
company's preferred securities are senior to common stock but
subordinated to all other types of corporate debt. International
investing involves increased risks due to currency fluctuations,
political or social instability, and differences in accounting
standards. These risks are magnified in emerging markets. REIT
securities are subject to risk factors associated with the real estate
industry and tax factors of REIT registration.
An MLP that invests in a particular industry (e.g., oil and gas) may
be harmed by detrimental economic events within that industry. As
partnerships, MLPs may be subject to less regulation (and less
protection for investors) under state laws than corporations. In
addition, MLPs may be subject to state taxation in certain
jurisdictions, which may reduce the amount of income paid by an MLP to
its investors. Investing in derivatives entails specific risks relating
to liquidity, leverage, and credit that may reduce returns and/or
increase volatility. REIT securities are subject to risk factors
associated with the real estate industry and tax factors of REIT
registration.
The call writing option was implemented in an attempt to dampen
volatility by writing covered calls on index strategies that closely
reflect certain equities held in the portfolio. The strategy may dampen
volatility, however it may also limit upside potential due to the nature
of the strategies utilized. Fixed-income investment options that invest
in mortgage securities are subject to increased risk due to real estate
exposure.
Principal Funds, Inc. is distributed by Principal Funds Distributor,
Inc., member of the Principal Financial Group.
Principal Funds Distributor, Principal Shareholder Services, Principal
Management Corporation and its affiliates and Principal Funds, Inc. are
collectively referred to as Principal Funds.
1 Rating based on Maximum Offering Price.
2 Total assets under management of $2,830,579,200.95 as of
Dec. 31, 2011.
3 As of Sept. 30, 2011. Includes all share classes of the
Principal Funds, Inc. and Principal Variable Contracts Funds, Inc.
4 FRC Mutual Fund Lifecycle Report Q311.
5 "The Principal Financial Group" and "The Principal" are
registered service marks of Principal Financial Services, Inc., a member
of the Principal Financial Group.
6 As of Sept. 30, 2011.
Principal Financial Group
Jaime Naig, 515-247-0798
naig.jaime@principal.com
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