Fund Evaluator:

Principal Spectrum Pref&Cptl Scs IncR5 Overview

Principal Spectrum Pref&Cptl Scs IncR5 (PPARX) is an actively managed Taxable Bond Preferred Stock fund. Principal Funds launched the fund in 2004.

The investment seeks to provide current income. The fund invests at least 80% of its net assets, plus any borrowing for investment purposes, in preferred securities and capital securities. Preferred securities typically include preferred stock and various types of junior subordinated debt and trust preferred securities. It also invests up to 55% of its assets in below-investment-grade preferred securities and bonds (sometimes called “high yield bonds” or “junk bonds”), which are rated at the time of purchase Ba1 or lower by Moody’s and BB+ or lower by S&P Global.

About Principal Spectrum Pref&Cptl Scs IncR5 (PPARX)

There are 7 members of the management team with an average tenure of 14.97 years: Manu Krishnan (2010), Roberto Giangregorio (2010), Kevin Nugent (2014), Fernando Diaz (2010), Satomi Yarnell (2021), Mark Lieb (2009), L. Phillip Jacoby (2002). Management tenure is more important for actively managed funds than passive index funds.

The fund has 2 primary benchmarks: ICE BofA US All Captl TR USD index with a weighting of 100% and Bloomberg Global Aggregate TR USD index with a weighting of 100%. Principal Spectrum Pref&Cptl Scs IncR5 has 331 securities in its portfolio. The top 10 holdings constitute 16.5% of the fund’s assets. The fund meets the SEC requirement of being classified as a diversified fund. The fund is not considered to have an ESG focus with its investment selection and management.

Principal Spectrum Pref&Cptl Scs IncR5 is part of the Hybrid Securities global asset class and is within the Taxable Bond fund group. Principal Spectrum Pref&Cptl Scs IncR5 has 41.1% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 0.0%. There is 0.0% allocated to foreign stock, and 42.7% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 55.1% (14.0% domestic bond, 41.1% foreign bond and 2.1% convertible bond). Principal Spectrum Pref&Cptl Scs IncR5 has 0.1% of the portfolio in cash.

Assets Under Management

The fund has $3 million in total assets, which is below the $549 million average for the Preferred Stock category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.

PPARX Performance and Fees

The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The Principal Spectrum Pref&Cptl Scs IncR5 expense ratio is high compared to funds in the Preferred Stock category. Principal Spectrum Pref&Cptl Scs IncR5 has an expense ratio of 0.97%, which is 13% lower than its category average, making the fund expense ratio grade a B. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.

High portfolio turnover can translate to higher expenses and lower aftertax returns. Principal Spectrum Pref&Cptl Scs IncR5 has a portfolio turnover rate of 24%, indicating that holds its assets around 0.0 years. By way of comparison, the average portfolio turnover is 37% for the Preferred Stock category.

Recently, in the month of July 2026, Principal Spectrum Pref&Cptl Scs IncR5 returned -0.7%, which earned it a grade of F, as the Preferred Stock category had an average return of -0.3%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all funds in that category.

Principal Spectrum Pref&Cptl Scs IncR5 has a trailing yield of 5.76%, which is above the 5.56% category average. The fund normally distributes its income monthly and its capital gains annually.

It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.

Principal Spectrum Pref&Cptl Scs IncR5 Grades

Year to date, the fund has returned 1.0%, 0.5 percentage points worse than the category, which translates into a grade of D. The fund has returned 4.1% over the past year (grade of F), 7.5% over the past three years (grade of D) and 2.4% per year over the past five years (grade of D) and 4.0% per year over the past 10 years (grade of D).

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