PRINCIPAL FUNDS, INC. AMENDED AND RESTATED SUB-ADVISORY AGREEMENT AMERICAN CENTURY SUB-ADVISED FUNDS


PRINCIPAL FUNDS, INC.
AMENDED AND RESTATED SUB-ADVISORY AGREEMENT
AMERICAN CENTURY SUB-ADVISED FUNDS


AGREEMENT executed as of the 1st day of January, 2010 by and between PRINCIPAL MANAGEMENT
CORPORATION, an Iowa corporation (hereinafter called "the Manager"), and AMERICAN CENTURY
INVESTMENT MANAGEMENT, INC., a Delaware corporation (hereinafter called "the Sub-Advisor").

W I T N E S S E T H:

WHEREAS, the Manager is the manager and investment adviser to each Series of Principal Investors Fund, Inc.,
(the "Fund"), an open-end management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"); and

WHEREAS, the Manager desires to retain the Sub-Advisor to furnish it with portfolio selection and related
research and statistical services in connection with the investment advisory services for each of the Series of the
Fund identified in Appendix A hereto (each hereinafter called “the Series”), which the Manager has agreed to
provide to the Fund, and the Sub-Advisor desires to furnish such services; and

WHEREAS, The Manager has furnished the Sub-Advisor with copies properly certified or authenticated of each of
the following and will promptly provide the Sub-Advisor with copies properly certified or authenticated of any
amendment or supplement thereto:

(a) Management Agreement (the "Management Agreement") with the Fund;

(b) The Fund's registration statement and financial statements as filed with the Securities and Exchange
	Commission;

(c)	The Fund's Articles of Incorporation and By-laws;


(d)	Policies, procedures or instructions adopted or approved by the Board of Directors of the Fund relating
	to obligations and services provided by the Sub-Advisor.

NOW, THEREFORE, in consideration of the premises and the terms and conditions hereinafter set forth, the
parties agree as follows:

1.	Appointment of Sub-Advisor

	In accordance with and subject to the Management Agreement, the Manager hereby appoints the
	Sub-Advisor to perform the services described in Section 2 below for investment and reinvestment of the
	securities and other assets of the Series, subject to the control and direction of the Manager and the
	Fund's Board of Directors, for the period and on the terms hereinafter set forth. The Sub-Advisor accepts
	such appointment and agrees to furnish the services hereinafter set forth for the compensation herein
	provided. The Sub-Advisor shall for all purposes herein be deemed to be an independent contractor and
	shall, except as expressly provided or authorized, have no authority to act for or represent the Fund or the
	Manager in any way or otherwise be deemed an agent of the Fund or the Manager.

2.	Obligations of and Services to be Provided by the Sub-Advisor

	(a) Provide investment advisory services, including but not limited to research, advice and
	supervision for the Series.


(b)	Furnish to the Board of Directors of the Fund for approval (or any appropriate committee of such
	Board) a description of its LargeCap Growth and LargeCap Value investment strategies, with the
	understanding that the strategies are similar or identical to those used for other funds managed by
	the Sub-Advisor. The Manager shall ensure that the strategy is consistent with the Series’
	investment objective and policies prior to presenting the recommendation to the Board of Directors.

(c)	Implement the approved investment strategy by placing orders for the purchase and sale of securities
	without prior consultation with the Manager and without regard to the length of time the securities
	have been held, the resulting rate of portfolio turnover or any tax considerations, subject always to
	the provisions of the Fund's Certificate of Incorporation and Bylaws and the requirements of the 1940
	Act, as each of the same shall be from time to time in effect.

(d)	Advise and assist the officers of the Fund, as reasonably requested by the officers, in taking such
	steps as are necessary or appropriate to carry out the decisions of its Board of Directors, and any
	appropriate committees of such Board, regarding the general conduct of the investment business of
	the Series.

(e)	Report to the Board of Directors of the Fund at such times and in such detail as the Board of
	Directors may reasonably deem appropriate and as agreed by the Sub-Advisor in order to enable the
	Board to determine that the investment policies, procedures and approved investment program of the
	Series are being observed. It is generally expected that such reports will be made on a quarterly
	basis, in a format used with the level of detail agreed upon by the parties.

(f)	Upon request, provide assistance and recommendations for the determination of the fair value of
	certain securities when reliable market quotations are not readily available for purposes of calculating
	net asset value in accordance with procedures and methods established by the Fund's Board of
	Directors.

(g)	Furnish, at its own expense, (i) all necessary investment and management facilities, including
	salaries of clerical and other personnel required for it to execute its duties faithfully, and (ii)
	administrative facilities, including bookkeeping, clerical personnel and equipment necessary for the
	efficient conduct of the investment advisory affairs of the Series.

(h)	Open accounts with broker-dealers and future commission merchants (“broker-dealers”), select
	broker-dealers to effect all transactions for the Series, place all necessary orders with broker-dealers
	or issuers (including affiliated broker-dealers), and negotiate commissions, if applicable. To the
	extent consistent with applicable law, purchase or sell orders for the Series may be aggregated or, if
	appropriate, crossed with contemporaneous purchase or sell orders of other clients of the Sub-
	Advisor. If any trades are crossed, Sub-Advisor may charge the Fund for reasonable expenses
	incurred in such cross-trade, excluding brokerage commissions, fees (other than customary transfer
	fees) or other remuneration paid in connection with the transaction. A transaction fee charged by a
	custodial bank will be considered a customary transfer fee for purposes of this agreement. In such
	event, allocation of securities so sold or purchased, as well as the expenses incurred in the
	transaction, will be made by the Sub-Advisor in a manner consistent with the Sub-Advisor’s allocation
	policy and its fiduciary obligations to the Fund and to other clients. The Sub-Advisor will report on
	such allocations at the request of the Manager, the Fund or the Fund’s Board of Directors providing
	such information as the number of aggregated trades to which the Series was a party, the broker-
	dealers to whom such trades were directed and the basis for the allocation for the aggregated trades.
	The Sub-Advisor shall use its best efforts to obtain execution of transactions for the Series at prices
	which are advantageous to the Series and at commission rates that are reasonable in relation to the
	benefits received. However, the Sub-Advisor may select brokers or dealers on the basis that they
	provide brokerage, research or other services or products to the Sub-Advisor. To the extent
	consistent with applicable law, the Sub-Advisor may pay a broker or dealer an amount of commission
	for effecting a securities transaction in excess of the amount of commission or dealer spread another


	broker or dealer would have charged for effecting that transaction if the Sub-Advisor determines in
	good faith that such amount of commission is reasonable in relation to the value of the brokerage
	and research products and/or services provided by such broker or dealer. This determination, with
	respect to brokerage and research products and/or services, may be viewed in terms of either that
	particular transaction or the overall responsibilities which the Sub-Advisor and its affiliates have with
	respect to the Series as well as to accounts over which they exercise investment discretion. Not all
	such services or products need be used by the Sub-Advisor in managing the Series.
	Notwithstanding the foregoing, nothing in this Agreement shall be construed to require the Sub-
	Advisor to use any broker or dealer that provides brokerage, research or other services, nor to use
	any broker or dealer that the Manager may recommend. In addition, joint repurchase or other
	accounts may not be utilized by the Series except to the extent permitted under any exemptive order
	obtained by the Sub-Advisor provided that all conditions of such order are complied with.

(i)	Maintain all accounts, books and records with respect to the Series as are required of an investment
	advisor of a registered investment company pursuant to the 1940 Act and Investment Adviser’s Act
	of 1940 (the “Investment Adviser’s Act”), and the rules thereunder, and furnish the Fund and the
	Manager with such quarterly and special reports as the Fund or Manager may reasonably request.
	In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Sub-Advisor hereby
	agrees that all records that it maintains for the Series are the property of the Fund, agrees to
	preserve for the periods described by Rule 31a-2 under the 1940 Act any records that it maintains for
	the Account and that are required to be maintained by Rule 31a-1 under the 1940 Act, and further
	agrees to surrender promptly to the Fund any records that it maintains for the Series upon request by
	the Fund or the Manager. The Sub-Advisor has no responsibility for the maintenance of Fund
	records except insofar as is directly related to the services provided to the Series.

(j)	Observe and comply with Rule 17j-1 under the 1940 Act and the Sub-Advisor’s Code of Ethics
	adopted pursuant to that Rule as the same may be amended from time to time. The Manager
	acknowledges receipt of a copy of Sub-Advisor’s current Code of Ethics. Sub-Advisor shall promptly
	forward to the Manager a copy of any material amendment to the Sub-Advisor’s Code of Ethics.

(k)	From time to time as the Manager or the Fund may request, furnish the requesting party reports on
	portfolio transactions and reports on investments held by the Series, all in such detail as the Manager
	or the Fund and the Sub-Advisor shall agree. The Sub-Advisor will make available appropriate
	representatives to meet with the Fund’s Board of Directors at the Fund’s principal place of business
	on due notice to review the investments of the Series once a year.

(l)	Provide such information as is customarily provided by a sub-advisor and may be required for the
	Fund or the Manager to comply with their respective obligations under applicable laws, including,
	without limitation, the Internal Revenue Code of 1986, as amended (the “Code”), the 1940 Act, the
	Investment Advisers Act, the Securities Act of 1933, as amended (the “Securities Act”), and any state
	securities laws, and any rule or regulation thereunder.

(m)	Perform quarterly and annual tax compliance tests to monitor the Series’ compliance with Subchapter
	M of the Code. The Sub-Advisor shall notify the Manager immediately upon having a reasonable
	basis for believing that the Series has ceased to be in compliance or that it might not be in
	compliance in the future. If it is determined that the Series is not in compliance with the requirements
	noted above, the Sub-Advisor, in consultation with the Manager, will take prompt action to bring the
	Series back into compliance (to the extent possible) within the time permitted under the Code.

(n)	Maintain, in connection with the Sub-Advisor’s investment advisory services obligations, compliance
	with the 1940 Act and the regulations adopted by the Securities and Exchange Commission
	thereunder and the Series’ investment strategy and restrictions as stated in the Fund’s prospectus
	and statement of additional information.


	(o) Notify the Manager of the filing of any amendments to the Sub-Advisor’s Form ADV
	contemporaneously with filing of such documents with the Securities and Exchange Commission or
	other regulator agency.

3.	Prohibited Conduct

	In providing the services described in this agreement, the Sub-Advisor will not consult with any other
	investment advisory firm that provides investment advisory services to any investment company
	sponsored by Principal Life Insurance Company regarding transactions for the Fund in securities or other
	assets.

4.	Compensation

	As full compensation for all services rendered and obligations assumed by the Sub-Advisor hereunder
	with respect to the Series, the Manager shall pay the compensation specified in Appendix A to this
	Agreement.

5.	Liability of Sub-Advisor

	Neither the Sub-Advisor nor any of its directors, officers, employees, agents or affiliates shall be liable to
	the Manager, the Fund or its shareholders for any loss suffered by the Manager or the Fund resulting from
	any error of judgment made in the good faith exercise of the Sub-Advisor's investment discretion in
	connection with selecting investments for the Series or as a result of the failure by the Manager or any of
	its affiliates to comply with the terms of this Agreement and/or any insurance, securities or other laws and
	rules applicable to the management and marketing of the Fund, except for losses resulting from willful
	misfeasance, bad faith or gross negligence of, or from reckless disregard of, the duties of the Sub-Advisor
	or any of its directors, officers, employees, agents, or affiliates.

	The Manager agrees that subject to the investment objective, investment policies and investment
	restrictions of the Series as set forth in the Fund’s registration statement as in effect from time to time, the
	Sub-Advisor’s adherence to a LargeCap Growth or LargeCap Value investment style generally used by
	the Sub-Advisor in managing its other LargeCap Growth or LargeCap Value Funds, shall not be
	considered a failure by Sub-Advisor to use its best judgment, efforts and advice under this Agreement.

6.	Supplemental Arrangements

	The Sub-Advisor may enter into arrangements with other persons affiliated with the Sub-Advisor or with
	unaffiliated third parties to better enable the Sub-Advisor to fulfill its obligations under this Agreement for
	the provision of certain personnel and facilities to the Sub-Advisor, subject to written notification to and
	approval of the Manager and, where required by applicable law, the Board of Directors of the Fund.

7.	Regulation

	The Sub-Advisor shall submit to all regulatory and administrative bodies having jurisdiction over the
	services provided pursuant to this Agreement any information, reports or other material which any such
	body may request or require pursuant to applicable laws and regulations.

8.	Manager’s Representations

	The Manager represents and warrants that (i) it is registered as an investment adviser under the
	Investment Advisers Act and will continue to be so registered for so long as this Agreement remains in
	effect; (ii) it is not prohibited by the 1940 Act or the Investment Advisers Act from performing the services
	contemplated by this Agreement; (iii) it has met, and will continue to meet for so long as this Agreement
	remains in effect, any applicable federal or state requirements, or the applicable requirements of any


	regulatory or industry self-regulatory agency, necessary to be met in order to perform the services
	contemplated by this Agreement; (iv) it has the authority to enter into and perform the services
	contemplated by this Agreement, and (v) it will immediately notify the Sub-Advisor of the occurrence of
	any event that would disqualify the Manager from serving as an investment advisor of an investment
	company pursuant to Section 9(a) of the 1940 Act or otherwise.

9.	Duration and Termination of This Agreement

	This Agreement shall become effective on the latest of (i) the date of its execution, (ii) the date of its
	approval by a majority of the Board of Directors of the Fund, including approval by the vote of a majority of
	the Board of Directors of the Fund who are not interested persons of the Manager, the Sub-Advisor,
	Principal Life Insurance Company or the Fund cast in person at a meeting called for the purpose of voting
	on such approval or (iii) if required by the 1940 Act, the date of its approval by a majority of the
	outstanding voting securities of the Series. It shall continue in effect thereafter from year to year provided
	that the continuance is specifically approved at least annually either by the Board of Directors of the Fund
	or by a vote of a majority of the outstanding voting securities of the Fund and in either event by a vote of a
	majority of the Board of Directors of the Fund who are not interested persons of the Manager, Principal
	Life Insurance Company, the Sub-Advisor or the Fund cast in person at a meeting called for the purpose
	of voting on such approval.

	If the shareholders of the Series fail to approve the Agreement or any continuance of the Agreement in
	accordance with the requirements of the 1940 Act, the Sub-Advisor will continue to act as Sub-Advisor
	with respect to the Series pending the required approval of the Agreement or its continuance or of any
	contract with the Sub-Advisor or a different manager or sub-advisor or other definitive action; provided,
	that the compensation received by the Sub-Advisor in respect to the Series during such period is in
	compliance with Rule 15a-4 under the 1940 Act.

	This Agreement may be terminated at any time without the payment of any penalty by the Board of
	Directors of the Fund or by the Sub-Advisor, the Manager or by vote of a majority of the outstanding voting
	securities of the Series on sixty days written notice. This Agreement shall automatically terminate in the
	event of its assignment or upon termination of the Management Agreement, provided the Sub-Advisor has
	received prior written notice of such termination. In interpreting the provisions of this Section 9, the
	definitions contained in Section 2(a) of the 1940 Act (particularly the definitions of "interested person,"
	"assignment" and "voting security") shall be applied.

10. Indemnification

	(a) The Sub-Advisor agrees to indemnify and hold harmless the Manager, any affiliated person within the
	meaning of Section 2(a)(3) of the 1940 Act (“affiliated person”) of the Manager and each person, if
	any who, within the meaning of Section 15 of the Securities Act controls (“controlling persons”) the
	Manager, against any and all losses, claims, damages, liabilities or litigation, including reasonable
	legal expenses (collectively “Losses”) to which the Manager or such affiliated person or controlling
	person of the Manager may become subject under the Securities Act, the 1940 Act, the Investment
	Advisers Act, under any other statute, law, rule or regulation at common law or otherwise, arising out
	of the Sub-Advisor’s responsibilities hereunder (1) to the extent of and as a result of the willful
	misconduct, bad faith, or gross negligence by the Sub-Advisor, any of the Sub-Advisor’s employees
	or representatives or any affiliate of or any person acting on behalf of the Sub-Advisor; or (2) as a
	result of any untrue statement of a material fact contained in the Registration Statement, including
	any amendment thereof or any supplement thereto, or the omission to state therein a material fact
	required to be stated therein or necessary to make the statement therein not misleading, if such a
	statement or omission was made in reliance upon and in conformity with written information furnished
	by the Sub-Advisor to the Manager specifically for use therein; provided, however, that in no case is
	the Sub-Advisor’s indemnity in favor of the Manager or any affiliated person or controlling person of
	the Manager deemed to protect such person against any liability to which any such person would

otherwise be subject by reason of willful misconduct, bad faith or gross negligence in the

performance of its duties or by reason of its reckless disregard of its obligations and duties under this

Agreement.

(b) The Manager agrees to indemnify and hold harmless the Sub-Advisor, any affiliated person and any

controlling person of the Sub-Advisor, if any, against any and all Losses to which the Sub-Advisor or

such affiliated person or controlling person of the Sub-Advisor may become subject under the

Securities Act, the 1940 Act, the Investment Advisers Act, under any other statute, law, rule or

regulation, at common law or otherwise, arising out of the Manager’s responsibilities as investment

manager of the Fund (1) to the extent of and as a result of the willful misconduct, bad faith, or gross

negligence by the Manager, any of the Manager’s employees or representatives or any affiliate of or

any person acting on behalf of the Manager, or (2) as a result of any untrue statement of a material

fact contained in the Registration Statement, including any amendment thereof or any supplement

thereto, or the omission to state therein a material fact required to be stated therein or necessary to

make the statement therein not misleading; provided, however, that in no case is the Manager’s

indemnity in favor of the Sub-Advisor or any affiliated person or controlling person of the Sub-Advisor

deemed to protect such person against any liability to which any such person would otherwise be

subject by reason of willful misconduct, bad faith or gross negligence in the performance of its duties

or by reason of its reckless disregard of its obligations and duties under this Agreement. It is agreed

that the Manager’s indemnification obligations under this Section will extend to expenses and costs

(including reasonable attorneys fees) incurred by the Sub-Advisor as a result of any litigation brought

by the Manager alleging the Sub-Advisor’s failure to perform its obligations and duties in the manner

required under this Agreement unless judgement is rendered for the Manager.

11. Amendment of this Agreement

No material amendment of this Agreement shall be effective until approved, if required by the 1940

Act or the rules, regulations, interpretations or orders issued thereunder, by vote of the holders of a

majority of the outstanding voting securities of the Series and by vote of a majority of the Board of

Directors of the Fund who are not interested persons of the Manager, the Sub-Advisor, Principal Life

Insurance Company or the Fund cast in person at a meeting called for the purpose of voting on such

approval.

12. General Provisions

(a) Each party agrees to perform such further acts and execute such further documents as are

necessary to effectuate the purposes hereof. The captions in this Agreement are included for

convenience only and in no way define or delimit any of the provisions hereof or otherwise affect

their construction or effect.

(b) Any notice under this Agreement shall be in writing, addressed and delivered or mailed postage

pre-paid to the other party at such address as such other party may designate for the receipt of

such notices. Until further notice to the other party, it is agreed that the address of the Manager for

this purpose shall be Principal Financial Group, Xxx Xxxxxx, Xxxx 00000-0000, and the address

of the Sub-Advisor shall be 0000 Xxxx Xxxxxx, Xxxxxx Xxxx, XX 00000, Attention: General

Counsel.

following events:

(1) the Sub-Advisor fails to be registered as an investment adviser under the Investment Advisers

Act or under the laws of any jurisdiction in which the Sub-Advisor is required to be registered

as an investment advisor in order to perform its obligations under this Agreement.

(2) the Sub-Advisor is served or otherwise receives notice of any action, suit, proceeding, inquiry

or investigation, at law or in equity, before or by any court, public board or body, involving the

affairs of the Series.

(d) The Manager shall provide (or cause the Series custodian to provide) timely information to the

Sub-Advisor regarding such matters as the composition of the assets of the Series, cash

requirements and cash available for investment in the Series, any applicable investment

restrictions imposed by state insurance laws and regulations, and all other reasonable information

as may be necessary for the Sub-Advisor to perform its duties and responsibilities hereunder.

(e) The Manager will provide Sub-Advisor promptly with any changes to the Fund’s Articles of

Incorporation, By-laws, registration statement, policies, procedures, instructions, and any other

document relevant to the Sub-Advisor’s management of the Series. The parties agree that the

Sub-Advisor is not responsible for compliance with any such changes until notified and provided

with a written copy of such change.

(f) The Sub-Advisor agrees that neither it nor any of its affiliates will in any way refer directly or

indirectly to its relationship with the Fund, the Series, or the Manager or any of their respective

affiliates in offering, marketing or other promotional materials without the express written consent

of the Manager.

(g) The Sub-Advisor represents that it will not enter into any agreement, oral or written, or other

understanding under which the Fund directs or is expected to direct portfolio securities transactions, or

any remuneration, to a broker or dealer in consideration for the promotion or sale of Fund shares or

shares issued by any other registered investment company. Sub-advisor further represents that it is

contrary to the Sub-advisor’s policies to permit those who select brokers or dealers for execution of

fund portfolio securities transactions to take into account the broker or dealer’s promotion or sale of

Fund shares or shares issued by any other registered investment company.

(h) This Agreement contains the entire understanding and agreement of the parties.

IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date first above written.

PRINCIPAL MANAGEMENT CORPORATION

/s/ Xxxxxxx X. Beer

Xxxxxxx J Beer, Executive Vice President

AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.

/s/ Xxxxx X. Xxxxxxxxxx

Xxxxx X. Xxxxxxxxxx, Vice President


APPENDIX A


The Sub-Advisor shall serve as investment sub-advisor for the LargeCap Growth Fund II of the Fund. The
Manager will pay the Sub-Advisor, as full compensation for all services provided under this Agreement, a fee
computed at an annual rate as follows (the "Sub-Advisor Percentage Fee"):


	Sub-Advisor Fee as a
Series	Percentage of Daily Net Assets

LargeCap Growth Fund II	First $50,000,000	0.450%
	Next $200,000,000	0.400%
	Next $500,000,000	0.350%
	Above $750,000,000	0.300%



In calculating the fee for a Series, assets of any existing unregistered separate account of Principal Life
Insurance Company and any existing investment company sponsored by Principal Life Insurance Company to
which the Sub-Advisor provides investment advisory services and which have the same investment mandate as
the Series, will be combined (together, the “Aggregated Assets”). The fee charged for the assets in the Series
shall be determined by calculating a fee on the value of the Aggregated Assets using the above fee schedule and
multiplying the aggregate fee by a fraction, the numerator of which is the amount of assets in the Series and the
denominator of which is the amount of the Aggregated Assets.


The Sub-Advisor Percentage Fee shall be accrued for each calendar day and the sum of the daily fee accruals
shall be wired monthly to the Sub-Advisor, and shall be accompanied or supplemented by such supportive
documentation as the Sub-Advisor may reasonably request. The daily fee accruals will be computed by
multiplying the fraction of one over the number of calendar days in the year by the applicable annual rate
described above and multiplying this product by the net assets of the Series as determined in accordance with the
Series’ prospectus and statement of additional information as of the close of business on the previous business
day on which the Series was open for business. Cash and cash equivalents shall be included in the Series net assets
calculation up to a maximum of 1.00% of the Series net assets. If the Manager requests the Sub-Advisor to raise cash in
the Series portfolio in excess of 1.00% of the Series net assets for the purpose of funding redemptions from the Series,
such amount requested shall be included in the Series net assets calculation.


If this Agreement becomes effective or terminates before the end of any month, the fee (if any) for the period
from the effective date to the end of such month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated according to the proportion which such period bears to the full month in which
such effectiveness or termination occurs.

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PRINCIPAL FUNDS, INC. AMENDED AND RESTATED SUB-ADVISORY AGREEMENT AMERICAN CENTURY SUB-ADVISED FUNDS

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