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| BY EDGAR TRANSMISSION |
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| July 18, 2011 |
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| Mr. Howie Hallock |
| Division of Investment Management |
| Securities and Exchange Commission |
| 100 F Street, N.E. |
| Washington, D.C. 20549 |
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| Re: | Principal Funds, Inc. |
| | Response to SEC Staff Comments on: |
| | Proxy Statement on Schedule 14A |
| | Pursuant to Securities Exchange Act of 1934 |
| | Registration No: 811-07572 |
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| Dear Mr. Hallock: |
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| This letter responds, on behalf of Principal Funds, Inc. (the “Registrant”), to the comments of the |
| staff of the Securities and Exchange Commission which you communicated to me by telephone on |
| July 14, 2011. Changes in response to staff comments will be made by the Registrant in a |
| Definitive 14A filing for the Proxy Statement. |
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| Comment 1.Revise the disclosures made in Proposal 1 and Proposal 3 related to the potential |
| improved marketability of the Funds to make clearer. |
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| | Response.The requested disclosure has been revised as follows: |
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| “PMC’s recommendation to replace Invesco with PGI was based on the past performance of |
| Invesco as well as the potential for improved marketability of the Tax-Exempt Bond Fund |
| [California Municipal Fund]. PMC believes it will have greater success marketing and selling Fund |
| shares, which are sold primarily to retail clients, if the Fund is managed by a sub-advisor affiliated |
| with the Principal Financial Group rather than one who is unaffiliated.” |
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| Comment 2.Include disclosure in Proposal 1 and Proposal 3 related to what the Board concluded |
| in regards to the nature, quality and extent of services expected under the proposed sub-advisory |
| agreement. |
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| | Response.The requested disclosure has been revised as follows: |
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| The Board concluded that the nature, quality and extent of services, including the investment |
| performance, are expected to be satisfactory. |
