FORM OF PRINCIPAL FUNDS, INC. CONTRACTUAL FEE WAIVER AGREEMENT




FORM OF
PRINCIPAL FUNDS, INC.


AGREEMENT made this June 15, 2018 by and between Principal Funds, Inc. (the “Fund”) and Principal Global Investors, LLC (the “Advisor”) (together, the “Parties”).
The Advisor has contractually agreed to limit the Fund’s expenses (excluding interest expense, short sale dividend and interest expense, acquired fund fees and expenses, and other extraordinary expenses) on certain share classes of certain of the Funds. 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 respective class on an annualized basis. The expenses borne by the Advisor are subject to reimbursement by the Funds through the fiscal year end, provided no reimbursement will be made if it would result in the Funds’ exceeding the total operating expense limits. The operating expense limits are attached on Schedule A to this Agreement.
Further, the Advisor has contractually agreed to waive a portion of the management fee it receives from certain Funds through the fiscal year end. The waiver is expressed as a percentage of average daily net assets. The management fee waivers are attached as Schedule B to this Agreement.
The Agreement embodies the entire agreement of the Parties relating to the subject matter hereof. This Agreement supersedes all prior agreement and understandings, and all rights and obligations thereunder are hereby canceled and terminated. No amendment or modification of this Agreement will be valid or binding unless it is in writing by the Parties
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the day and year first written above.
PRINCIPAL FUNDS, INC.
 
PRINCIPAL GLOBAL INVESTORS, LLC
 
 
 
 
 
 
 
 
 
 
By:
/s/ Xxxxxxx X. Beer
 
By:
/s/ Xxxxxxx X. Beer
Name:
Xxxxxxx X. Beer
 
Name:
Xxxxxxx X. Beer
Title:
President and Chief Executive Officer
 
Title:
Executive Director - Funds
 
 
 
 
 
 
 
 
 
 
By:
/s/ Xxxx X. Xxxxxx
 
By:
/s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
 
Name:
Xxxx X. Xxxxxx
Title:
Secretary and Vice President
 
Title:
Assistant General Counsel












1





Series
Class A
Class C
Class J
Institutional
Class
Expiration
California Municipal Fund
N/A
N/A
N/A
0.51%
02/28/2019
Core Plus Bond Fund
0.88%
1.75%
N/A
N/A
02/28/2019
Diversified International Fund
N/A
2.08%
N/A
0.85%
02/28/2019
Equity Income
N/A
N/A
N/A
0.52%
02/28/2019
Finisterre Unconstrained Emerging Markets Bond Fund
1.47%
N/A
N/A
1.12%
02/28/2019
Global Diversified Income Fund
N/A
N/A
N/A
0.75%
02/28/2019
Global Real Estate Securities Fund
N/A
2.20%
N/A
0.94%
02/28/2019
Government & High Quality Bond Fund
0.88%
1.63%
N/A
0.53%
02/28/2019
Government Money Market Fund
N/A
N/A
N/A
0.15%
02/29/2020
High Xxxxx Xxxx
X/X
X/X
X/X
0.61%
02/28/2019
High Yield Fund I
1.05%
N/A
N/A
N/A
02/28/2019
Income Fund
N/A
N/A
N/A
0.58%
02/28/2019
Inflation Protection Fund
0.90%
1.65%
N/A
N/A
02/28/2019
International Emerging Markets Fund
1.61%
2.66%
1.52%
1.29%
02/28/2019
International Fund I
1.45%
N/A
N/A
1.00%
02/28/2019
LargeCap Growth Fund
N/A
N/A
N/A
0.68%
02/28/2019
LargeCap Growth Fund I
1.25%(1)
N/A
N/A
0.69%(2)
02/28/2019
LargeCap S&P 500 Index Fund
N/A
1.30%
N/A
N/A
02/28/2019
LargeCap Value Fund
N/A
1.70%
N/A
0.43%
02/28/2019
XxxXxx Xxxx
X/X
X/X
X/X
0.70%
02/28/2019
XxxXxx Xxxxxx Xxxx
X/X
X/X
X/X
0.75%
02/28/2019
MidCap S&P 400 Index Fund
N/A
N/A
N/A
0.25%
02/28/2019
MidCap Value Fund III
1.30%
N/A
N/A
0.75%
02/28/2019
Money Market Fund
0.50%
1.50%
0.65%
0.50%
02/28/2019
Principal Capital Appreciation Fund
N/A
N/A
N/A
0.47%
02/28/2019
Principal LifeTime 2010 Fund
0.38%
N/A
N/A
N/A
02/28/2019
Principal LifeTime 2020 Fund
0.38%
N/A
N/A
N/A
02/28/2019
Principal LifeTime 2030 Fund
0.38%
N/A
N/A
N/A
02/28/2019
Principal LifeTime 2040 Fund
0.38%
N/A
N/A
N/A
02/28/2019
Principal LifeTime 2050 Fund
0.38%
N/A
N/A
N/A
02/28/2019
Principal LifeTime 2060 Fund
N/A
N/A
0.38%
0.10%
02/28/2019
Principal LifeTime 0000 Xxxx
X/X
X/X
X/X
0.10%
02/28/2019
Principal LifeTime Hybrid 2015 Fund
N/A
N/A
0.30%
0.05%
02/28/2019
Principal LifeTime Hybrid 2020 Fund
N/A
N/A
0.30%
0.05%
02/28/2019
Principal LifeTime Hybrid 2025 Fund
N/A
N/A
0.30%
0.05%
02/28/2019
Principal LifeTime Hybrid 2030 Fund
N/A
N/A
0.30%
0.05%
02/28/2019
Principal LifeTime Hybrid 2035 Fund
N/A
N/A
0.30%
0.05%
02/28/2019
Principal LifeTime Hybrid 2040 Fund
N/A
N/A
0.30%
0.05%
02/28/2019
Principal LifeTime Hybrid 2045 Fund
N/A
N/A
0.30%
0.05%
02/28/2019
Principal LifeTime Hybrid 2050 Fund
N/A
N/A
0.30%
0.05%
02/28/2019
Principal LifeTime Hybrid 2055 Fund
N/A
N/A
0.30%
0.05%
02/28/2019
Principal LifeTime Hybrid 2060 Fund
N/A
N/A
0.30%
0.05%
02/28/2019
Principal LifeTime Hybrid 2065 Fund
N/A
N/A
0.30%
0.05%
02/28/2019
Principal LifeTime Hybrid Income Fund
N/A
N/A
0.30%
0.05%
02/28/2019
Principal LifeTime Strategic Income Fund
0.38%
N/A
N/A
N/A
02/28/2019
Real Estate Securities Fund
N/A
N/A
N/A
0.91%
02/28/2019
XXX Balanced Portfolio*
1.31%
2.05%
1.13%
0.97%
02/28/2019
XXX Conservative Balanced Portfolio*
1.24%
1.99%
1.06%
0.90%
02/28/2019
XXX Conservative Growth Portfolio*
1.32%
2.07%
1.15%
0.98%
02/28/2019
XXX Flexible Income Portfolio*
1.13%
1.88%
0.98%
0.83%
02/28/2019


2




Series
Class A
Class C
Class J
Institutional
Class
Expiration
XXX Strategic Growth Portfolio*
1.34%
2.09%
1.15%
0.97%
02/28/2019
Short-Term Income Fund
N/A
N/A
N/A
0.43%
02/28/2019
SmallCap Fund
N/A
2.08%
N/A
0.85%(3)
02/28/2019
SmallCap Growth Fund I
N/A
N/A
1.50%(1)
1.02%
02/28/2019
SmallCap S&P 600 Index Fund
N/A
N/A
N/A
0.27%
02/28/2019
SmallCap Value Fund II
1.45%
N/A
N/A
0.99%
02/28/2019
Tax-Exempt Bond Fund
N/A
1.60%
N/A
0.52%
02/28/2019
(1)Expense limit expires on 6/30/2018
 
 
 
 
 
(2)For the period from 3/1/2018-6/30/2018 the expense limit is 0.66%. Effective 7/1/2018-2/28/2019 the expense limit is 0.69%.
(3)For the period from 3/1/2018-6/30/2018 the expense limit is 0.80%. Effective 7/1/2018-2/28/2019 the expense limit is 0.85%.
*Includes Acquired Fund Fees and Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Series
 
Class T
Expiration
 
 
Global Diversified Income Fund
 
1.08%
02/28/2019
 
 
High Yield Fund
 
0.90%
02/28/2019
 
 
Short-Term Income Fund
 
0.79%
02/28/2019
 
 


Series
R-1
R-2
R-3
R-4
R-5
Expiration
Government & High Quality Bond Fund
1.29%
1.16%
0.98%
0.79%
0.67%
02/28/2019
Principal LifeTime 2065 Fund
0.93%
0.80%
0.62%
0.43%
0.31%
02/28/2019
XXX Balanced Portfolio*
1.84%
1.71%
1.53%
1.34%
1.22%
02/28/2019
XXX Conservative Balanced Portfolio*
1.77%
1.64%
1.46%
1.27%
1.15%
02/28/2019
XXX Conservative Growth Portfolio*
1.85%
1.72%
1.54%
1.35%
1.23%
02/28/2019
XXX Flexible Income Portfolio*
1.68%
1.55%
1.37%
1.18%
1.06%
02/28/2019
XXX Strategic Growth Portfolio*
1.84%
1.71%
1.53%
1.34%
1.22%
02/28/2019
Short-Term Income Fund
1.30%
1.18%
0.99%
0.79%
0.68%
02/28/2019
SmallCap Growth Fund I
1.88%
1.75%
1.57%
1.38%
1.26%
02/28/2019
 
 
 
 
 
 
 
*Includes Acquired Fund Fees and Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 




3




In addition, PGI has contractually agreed to limit the expenses identified as “Other Expenses” related to certain share classes of certain of the Funds by paying, if necessary, expenses normally payable by the Fund, (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and other extraordinary expenses) to maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) at or below certain limits. The limits are expressed as a percent of average net assets on an annualized basis. The Other Expenses limits and the agreement terms are as follows:
Series
Class R-6
Expiration
Global Diversified Income Fund
0.02%
02/28/2019
Global Real Estate Securities Fund
0.02%
02/28/2019
High Yield Fund
0.02%
02/28/2019
Income Fund
0.01%
02/28/2019
International Emerging Markets Fund
0.04%(1)
02/29/2020
International Fund I
0.04%(1)
02/29/2020
LargeCap Growth Fund I
0.02%
02/28/2019
MidCap Fund
0.02%
02/28/2019
MidCap S&P 400 Index Fund
0.02%
02/28/2019
MidCap Value Fund III
0.02%
02/28/2019
Principal LifeTime Hybrid 2015 Fund
0.02%
02/28/2019
Principal LifeTime Hybrid 2020 Fund
0.02%
02/28/2019
Principal LifeTime Hybrid 2025 Fund
0.02%
02/28/2019
Principal LifeTime Hybrid 2030 Fund
0.02%
02/28/2019
Principal LifeTime Hybrid 2035 Fund
0.02%
02/28/2019
Principal LifeTime Hybrid 2040 Fund
0.02%
02/28/2019
Principal LifeTime Hybrid 2045 Fund
0.02%
02/28/2019
Principal LifeTime Hybrid 2050 Fund
0.02%
02/28/2019
Principal LifeTime Hybrid 2055 Fund
0.02%
02/28/2019
Principal LifeTime Hybrid 2060 Fund
0.02%
02/28/2019
Principal LifeTime Hybrid 2065 Fund
0.02%
02/28/2019
Principal LifeTime Hybrid Income Fund
0.02%
02/28/2019
Real Estate Securities Fund
0.02%
02/28/2019
SmallCap Fund
0.02%
02/28/2019
SmallCap Growth Fund I
0.01%
02/28/2019
SmallCap S&P 600 Index Fund
0.02%
02/28/2019
SmallCap Value Fund II
0.02%
02/28/2019
(1)For the period from 6/15/2018-2/28/2019 the expense limit is 0.02%. Effective 3/1/2019-2/29/2020 the expense limit is 0.04%.
 





4




Series
Class A
Class C
Institutional
Class
Class J
Expiration
Blue Chip Fund
1.35%*
2.10%*
0.81%
N/A
12/30/2019
Bond Market Index Fund
N/A
N/A
0.16%
0.71%
12/30/2019
Diversified Real Asset Fund
1.22%
1.97%
0.85%
N/A
12/30/2019
Dynamic Floating Rate High Income Fund
1.10%
N/A
0.75%
N/A
12/30/2019
EDGE MidCap Fund
N/A
N/A
0.90%
N/A
12/30/2019
Global Multi-Strategy Fund
N/A
2.75%
1.63%
N/A
12/30/2019
Global Opportunities Fund
1.50%
2.25%
0.85%
N/A
12/30/2019
International Equity Index Fund
N/A
N/A
0.31%
N/A
12/30/2019
International Small Company Fund
1.60%
N/A
1.20%
N/A
12/30/2019
Multi-Manager Equity Long/Short Fund
2.02%
N/A
1.67%
N/A
12/30/2019
Opportunistic Municipal Fund
0.90%
1.65%
0.62%
N/A
12/30/2019
Origin Emerging Markets Fund
1.75%
N/A
1.25%
N/A
12/30/2019
Preferred Securities Fund
N/A
N/A
0.81%
N/A
12/30/2019
Real Estate Debt Income Fund
1.00%
N/A
0.70%
N/A
12/30/2019
Small-MidCap Dividend Income Fund
1.13%
1.88%
0.86%
N/A
12/30/2019
SystematEx International Fund
N/A
N/A
0.75%
N/A
12/30/2019
*Expense limit expires on 6/30/2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Series
Class T
Expiration
Blue Chip Fund
1.22%
12/30/2019
Preferred Securities Fund
1.07%
12/30/2019


Series
R-1
R-2
R-3
R-4
R-5
Expiration
Bond Market Index Fund
1.04%
0.91%
0.73%
0.54%
0.42%
12/30/2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 

The SystematEx Large Value Fund’s operating expense limit for Class R-6 shares is 0.42%. This expense limit will continue through December 30, 2019.

For Capital Securities Fund, Principal Global Investors, LLC ("PGI"), the investment advisor, has agreed contractually to limit the Fund’s expenses attributable to Class S shares by paying expenses normally payable by the Fund, (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and other extraordinary expenses) to maintain a total level of operating expenses (expressed as a percent of average net assets on an annualized basis) not to exceed 0.00%. It is expected that the expense limit will continue permanently (and in any event, at least through December 30, 2019); however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit.



5




In addition, PGI has contractually agreed to limit the expenses identified as “Other Expenses” related to certain share classes of certain of the Funds by paying, if necessary, expenses normally payable by the Fund, (excluding interest expense, expenses related to fund investments, acquired fund fees and expenses, and other extraordinary expenses) to maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) at or below certain limits. The limits are expressed as a percent of average net assets on an annualized basis. The Other Expenses limits and the agreement terms are as follows:

Series
Class R-6
Expiration
Blue Chip Fund
0.01%
12/30/2019
Diversified Real Asset Fund
0.02%
12/30/2019
EDGE MidCap Fund
0.02%
12/30/2019
Global Multi-Strategy Fund
0.02%
12/30/2019
International Equity Index Fund
0.04%(1)
12/30/2019
International Small Company Fund
0.04%(1)
12/30/2019
Multi-Manager Equity Long/Short Fund
0.02%
12/30/2019
Origin Emerging Markets Fund
0.04%(1)
12/30/2019
Preferred Securities Fund
0.02%
12/30/2019
Real Estate Debt Income Fund
0.02%
12/30/2019
Small-MidCap Dividend Income Fund
0.02%
12/30/2019
SystematEx International Fund
0.04%(1)
12/30/2019
 
 
 
(1)For the period from 6/15/2018-12/30/2018 the expense limit is 0.02%. Effective 12/31/2018-12/30/2019 the expense limit is 0.04%.
 
 
 
 
 
 
SCHEDULE B
 
 
Series
Waiver
Expiration
Bond Market Index Fund
0.10%
12/30/2019
Core Plus Bond Fund
0.06%
02/28/2019
Diversified Real Asset Fund
0.03%
12/30/2019
Global Diversified Income Fund
0.01%
02/28/2019
Global Multi-Strategy Fund
0.04%
12/30/2019
LargeCap Growth Fund I
0.016%
02/28/2019
LargeCap Value Fund III
0.062%
02/28/2019
MidCap Growth Fund III
0.08%
02/28/2019
MidCap Value Fund I
0.12%
02/28/2019
MidCap Value Fund III
0.014%
02/28/2019
Overseas Fund
0.065%
02/28/2019
SmallCap Growth Fund I
0.092%
02/28/2019
SmallCap Value Fund II
0.04%
02/28/2019
 
 
 





6


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Filed: July 13th, 2018
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