Principal Real Asset Fund (PDSRX) N-CSRS Certified semi-annual shareholder report (management investment company)

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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If

your

shares

are

not

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Principal

Funds

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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