PRINCIPAL FUNDS, INC. CONTRACTUAL FEE WAIVER AGREEMENT
PRINCIPAL FUNDS, INC.
AGREEMENT made this January 1, 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: | Counsel |
Series | Class A | Class C | Class J | Institutional Class | Expiration |
California Municipal Fund | N/A | N/A | N/A | 0.51% | 06/30/2018 |
Core Plus Bond Fund | 0.88% | 1.75% | N/A | N/A | 02/28/2018 |
Diversified International Fund | N/A | 2.08% | N/A | 0.85% | 06/30/2018 |
Equity Income | N/A | N/A | N/A | 0.52% | 06/30/2018 |
Finisterre Unconstrained Emerging Markets Bond Fund | 1.47% | N/A | N/A | 1.12% | 06/30/2018 |
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% | 06/30/2018 |
Government & High Quality Bond Fund | 0.88% | 1.63% | N/A | 0.53% | 06/30/2018 |
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% | 06/30/2018 |
High Yield Fund I | 1.05% | N/A | N/A | N/A | 02/28/2018 |
Income Fund | N/A | N/A | N/A | 0.58% | 06/30/2018 |
Inflation Protection Fund | 0.90% | 1.65% | 1.15% | N/A | 02/28/2018 |
International Emerging Markets Fund | 1.61% | 2.66% | 1.52% | 1.34% | 06/30/2018 |
International Fund I | 1.45% | N/A | N/A | 1.00% | 06/30/2018 |
LargeCap Growth Fund | N/A | N/A | N/A | 0.68% | 06/30/2018 |
LargeCap Growth Fund I | 1.25% | N/A | N/A | 0.66% | 06/30/2018 |
LargeCap S&P 500 Index Fund | N/A | 1.30% | N/A | N/A | 02/28/2018 |
LargeCap Value Fund | N/A | 1.70% | N/A | 0.43% | 06/30/2018 |
XxxXxx Xxxx | X/X | X/X | X/X | 0.70% | 06/30/2018 |
XxxXxx Xxxxxx Xxxx | X/X | X/X | X/X | 0.75% | 02/28/2018 |
MidCap S&P 400 Index Fund | N/A | N/A | N/A | 0.25% | 06/30/2018 |
MidCap Value Fund III | 1.30% | N/A | N/A | 0.75% | 06/30/2018 |
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% | 06/30/2018 |
Principal LifeTime 2010 Fund | 0.38% | N/A | N/A | N/A | 02/28/2018 |
Principal LifeTime 2020 Fund | 0.38% | N/A | N/A | N/A | 02/28/2018 |
Principal LifeTime 2030 Fund | 0.38% | N/A | N/A | N/A | 02/28/2018 |
Principal LifeTime 2040 Fund | 0.38% | N/A | N/A | N/A | 02/28/2018 |
Principal LifeTime 2050 Fund | 0.38% | N/A | N/A | N/A | 02/28/2018 |
Principal LifeTime 2060 Fund | N/A | N/A | 0.38% | 0.10% | 02/28/2018 |
Principal LifeTime 0000 Xxxx | X/X | X/X | X/X | 0.10% | 02/28/2019 |
Principal LifeTime Hybrid 0000 Xxxx | X/X | X/X | X/X | 0.05% | 06/30/2018 |
Principal LifeTime Hybrid 0000 Xxxx | X/X | X/X | X/X | 0.05% | 06/30/2018 |
Principal LifeTime Hybrid 0000 Xxxx | X/X | X/X | X/X | 0.05% | 06/30/2018 |
Principal LifeTime Hybrid 0000 Xxxx | X/X | X/X | X/X | 0.05% | 06/30/2018 |
Principal LifeTime Hybrid 0000 Xxxx | X/X | X/X | X/X | 0.05% | 06/30/2018 |
Principal LifeTime Hybrid 0000 Xxxx | X/X | X/X | X/X | 0.05% | 06/30/2018 |
Principal LifeTime Hybrid 0000 Xxxx | X/X | X/X | X/X | 0.05% | 06/30/2018 |
Principal LifeTime Hybrid 0000 Xxxx | X/X | X/X | X/X | 0.05% | 06/30/2018 |
Principal LifeTime Hybrid 0000 Xxxx | X/X | X/X | X/X | 0.05% | 06/30/2018 |
Principal LifeTime Hybrid 0000 Xxxx | X/X | X/X | X/X | 0.05% | 06/30/2018 |
Principal LifeTime Hybrid 0000 Xxxx | X/X | X/X | X/X | 0.05% | 02/28/2019 |
Principal LifeTime Hybrid Income Fund | N/A | N/A | N/A | 0.05% | 06/30/2018 |
Principal LifeTime Strategic Income Fund | 0.38% | N/A | N/A | N/A | 02/28/2018 |
Real Estate Securities Fund | N/A | N/A | N/A | 0.91% | 06/30/2018 |
XXX Balanced Portfolio* | 1.31% | 2.05% | 1.13% | 0.97% | 02/28/2019 |
XXX Conservative Balanced Portfolio* | 1.24% | 1.99% | 1.06% | 0.9% | 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 |
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% | 06/30/2018 |
SmallCap Fund (f/k/a SmallCap Blend Fund) | N/A | 2.08% | N/A | 0.80% | 06/30/2018 |
SmallCap Growth Fund I | N/A | N/A | 1.50% | 1.02% | 06/30/2018 |
SmallCap S&P 600 Index Fund | N/A | N/A | N/A | 0.27% | 06/30/2018 |
SmallCap Value Fund II | 1.45% | N/A | N/A | 1.01% | 06/30/2018 |
Tax-Exempt Bond Fund | N/A | 1.60% | N/A | 0.52% | 06/30/2018 |
*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% | 06/30/2018 |
Principal LifeTime 2060 Fund | 0.93% | 0.80% | 0.62% | 0.43% | 0.31% | 02/28/2018 |
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% | 06/30/2018 |
SmallCap Growth Fund I | 1.88% | 1.75% | 1.57% | 1.38% | 1.26% | 06/30/2018 |
*Includes Acquired Fund Fees and Expenses |
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% | 06/30/2018 |
Global Real Estate Securities Fund | 0.02% | 06/30/2018 |
High Yield Fund | 0.02% | 06/30/2018 |
Income Fund | 0.01% | 06/30/2018 |
International Emerging Markets Fund | 0.02% | 06/30/2018 |
International Fund I | 0.02% | 06/30/2018 |
LargeCap Growth Fund I | 0.02% | 06/30/2018 |
MidCap Fund | 0.02% | 06/30/2018 |
MidCap S&P 400 Index Fund | 0.02% | 06/30/2018 |
MidCap Value Fund III | 0.02% | 06/30/2018 |
Principal LifeTime Hybrid 2015 Fund | 0.02% | 06/30/2018 |
Principal LifeTime Hybrid 2020 Fund | 0.02% | 06/30/2018 |
Principal LifeTime Hybrid 2025 Fund | 0.02% | 06/30/2018 |
Principal LifeTime Hybrid 2030 Fund | 0.02% | 06/30/2018 |
Principal LifeTime Hybrid 2035 Fund | 0.02% | 06/30/2018 |
Principal LifeTime Hybrid 2040 Fund | 0.02% | 06/30/2018 |
Principal LifeTime Hybrid 2045 Fund | 0.02% | 06/30/2018 |
Principal LifeTime Hybrid 2050 Fund | 0.02% | 06/30/2018 |
Principal LifeTime Hybrid 2055 Fund | 0.02% | 06/30/2018 |
Principal LifeTime Hybrid 2060 Fund | 0.02% | 06/30/2018 |
Principal LifeTime Hybrid 2065 Fund | 0.02% | 02/28/2019 |
Principal LifeTime Hybrid Income Fund | 0.02% | 06/30/2018 |
Real Estate Securities Fund | 0.02% | 06/30/2018 |
SmallCap Fund (f/k/a SmallCap Blend Fund) | 0.02% | 06/30/2018 |
SmallCap Growth Fund I | 0.01% | 06/30/2018 |
SmallCap S&P 600 Index Fund | 0.02% | 06/30/2018 |
SmallCap Value Fund II | 0.02% | 06/30/2018 |
Series | Class A | Class C | Institutional Class | Class J | Expiration |
Blue Chip Fund | 1.35% | 2.10% | 0.81% | N/A | 06/30/2018* |
Bond Market Index Fund | N/A | N/A | 0.16% | 0.71% | 12/30/2018 |
Diversified Real Asset Fund | 1.22% | 1.97% | 0.85% | N/A | 12/30/2018 |
Dynamic Floating Rate High Income Fund | 1.10% | N/A | 0.75% | N/A | 12/30/2018 |
EDGE MidCap Fund | N/A | N/A | 0.90% | N/A | 12/30/2018 |
Global Multi-Strategy Fund | N/A | 2.75% | 1.63% | N/A | 12/30/2018 |
Global Opportunities Fund | 1.5% | 2.25% | 0.85% | N/A | 12/30/2018 |
International Equity Index Fund | N/A | N/A | 0.31% | N/A | 12/30/2018 |
International Small Company Fund | 1.6% | N/A | 1.20% | N/A | 12/30/2018 |
Multi-Manager Equity Long/Short Fund | 2.02% | N/A | 1.67% | N/A | 12/30/2018 |
Opportunistic Municipal Fund | 0.90% | 1.65% | 0.62% | N/A | 12/30/2018 |
Origin Emerging Markets Fund | 1.75% | N/A | 1.25% | N/A | 12/30/2018 |
Preferred Securities Fund | N/A | N/A | 0.81% | N/A | 12/30/2018 |
Real Estate Allocation Fund | 0.50% | N/A | 0.15% | N/A | 12/30/2018 |
Real Estate Debt Income Fund | 1.00% | N/A | 0.70% | N/A | 12/30/2018 |
Small-MidCap Dividend Income Fund | 1.13% | 1.88% | 0.86% | N/A | 12/30/2018 |
SystematEx International Fund | N/A | N/A | 0.75% | N/A | 12/30/2018 |
*Blue Chip Institutional Class expiration is 12/30/2018 |
Series | Class T | Expiration |
Blue Chip Fund | 1.22% | 12/30/2018 |
Preferred Securities Fund | 1.07% | 12/30/2018 |
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% | 12/30/2018 |
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, 2018.
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, 2018); however, Principal Funds, Inc. and PGI, the parties to the agreement, may mutually agree to terminate the expense limit.
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% | 12/30/2018 |
Diversified Real Asset Fund | 0.02% | 12/30/2018 |
EDGE MidCap Fund | 0.02% | 12/30/2018 |
Global Multi-Strategy Fund | 0.02% | 12/30/2018 |
International Equity Index Fund | 0.02% | 12/30/2018 |
International Small Company Fund | 0.02% | 12/30/2018 |
Multi-Manager Equity Long/Short Fund | 0.02% | 12/30/2018 |
Origin Emerging Markets Fund | 0.02% | 12/30/2018 |
Preferred Securities Fund | 0.02% | 12/30/2018 |
Real Estate Debt Income Fund | 0.02% | 12/30/2018 |
Small-MidCap Dividend Income Fund | 0.02% | 12/30/2018 |
SystematEx International Fund | 0.02% | 12/30/2018 |
SCHEDULE B | ||
Series | Waiver | Expiration |
Bond Market Index Fund | 0.10% | 12/30/2018 |
Core Plus Bond Fund | 0.06% | 02/28/2019 |
Diversified Real Asset Fund | 0.03% | 12/30/2018 |
Global Diversified Income Fund | 0.01% | 02/28/2019 |
Global Multi-Strategy Fund | 0.04% | 12/30/2018 |
LargeCap Growth Fund I | 0.016% | 06/30/2018 |
LargeCap Value Fund III | 0.062% | 02/28/2019 |
MidCap Growth Fund III | 0.08% | 06/30/2018 |
MidCap Value Fund I | 0.12% | 02/28/2018 |
MidCap Value Fund III | 0.014% | 06/30/2018 |
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 |