[LOGO]
THE PRINCOR MUTUAL FUNDS


August 11, 1997





Dear Shareholder

Proxy material for the Princor Funds' Special Meeting of Shareholders to be held
on September 16, 1997 was mailed to you recently. According to our records, your
completed proxy ballot for this meeting has not yet been received.  Enclosed for
your convenience is a duplicate proxy ballot and a postage-paid return envelope.

For the  reasons set forth in the proxy  statement  dated July 7, 1997 which was
included in the initial mailing, your Directors believe passage of the proposals
on the  agenda is in the best  interest  of the Funds and its  shareholders  and
recommends a vote FOR the proposals.

Regardless  of the number of shares you may own,  it is  important  that they be
represented.  We urge you to sign,  date,  and mail the  enclosed  proxy  ballot
promptly.  Shareholders may vote by phone by calling our proxy  solicitor,  D.F.
King & Co., Inc. at 1-800-659-5550.

If you have recently  mailed your proxy ballot,  you may disregard this mailing.
We appreciate  your support as a shareholder and for selecting the Princor Funds
to help reach your financial goals.



Sincerely


/s/ STEPHAN L. JONES

Stephan L. Jones
President