Fund Evaluator:
Principal Short-Term Income R3 (PSIOX)
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Fund Details
Principal Short-Term Income R3 Overview
Principal Short-Term Income R3 (PSIOX) is an actively managed Taxable Bond Short-Term Bond fund. Principal Funds launched the fund in 2010.
The investment seeks as high a level of current income as is consistent with prudent investment management and stability of principal. The fund invests primarily in high quality short-term bonds and other fixed-income securities that, at the time of purchase, are rated BBB- or higher by S&P Global or Baa3 or higher by Moody's. It maintains an effective maturity of five years or less and an average portfolio duration that is within ±30% of the duration of the Bloomberg Credit 1-3 Year Index.
About Principal Short-Term Income R3 (PSIOX)
There are 3 members of the management team with an average tenure of 1.38 years: Zach Gassmann (2026), Jeff Callahan (2025), Michael Goosay (2023). Management tenure is more important for actively managed funds than passive index funds.
The fund has 2 primary benchmarks: Bloomberg Credit 1-3 Yr TR USD index with a weighting of 100% and Bloomberg US Agg Bond TR USD index with a weighting of 100%. Principal Short-Term Income R3 has 455 securities in its portfolio. The top 10 holdings constitute 19.4% 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 Short-Term Income R3 is part of the Fixed Income global asset class and is within the Taxable Bond fund group. Principal Short-Term Income R3 has 13.6% 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 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 99.1% (85.5% domestic bond, 13.6% foreign bond and 0.0% convertible bond). Principal Short-Term Income R3 has 0.9% of the portfolio in cash.
Assets Under Management
The fund has $5 million in total assets, which is below the $893 million average for the Short-Term Bond 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.
PSIOX 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 Short-Term Income R3 expense ratio is high compared to funds in the Short-Term Bond category. Principal Short-Term Income R3 has an expense ratio of 0.92%, which is 39% higher than its category average, making the fund expense ratio grade a D. 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 Short-Term Income R3 has a portfolio turnover rate of 42%, indicating that holds its assets around 0.0 years. By way of comparison, the average portfolio turnover is 134% for the Short-Term Bond category.
Recently, in the month of June 2026, Principal Short-Term Income R3 returned 0.1%, which earned it a grade of C, as the Short-Term Bond category had an average return of 0.1%. 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 Short-Term Income R3 has a trailing yield of 3.46%, which is below the 4.15% 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 Short-Term Income R3 Grades
Year to date, the fund has returned 1.0%, 0.1 percentage points better than the category, which translates into a grade of C. The fund has returned 3.1% over the past year (grade of D), 4.7% over the past three years (grade of D) and 2.1% per year over the past five years (grade of D) and 2.0% per year over the past 10 years (grade of D).
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PSIOX Trailing NAV Total Returns Data as of 6/30/26
| Last Month |
Last Quarter |
Ann'l. 1Yr |
Ann'l. 3Yr |
Ann'l. 5Yr |
Ann'l. 10Yr |
|
| PSIOX Return (NAV) | 0.1% | 0.6% | 3.1% | 4.7% | 2.1% | 2.0% |
| PSIOX Grade | C | D | D | D | D | D |
| +/- Category | 0.0% | -0.1% | -0.5% | -0.5% | -0.2% | -0.3% |
| Short-Term Bond Avg | 0.1% | 0.8% | 3.5% | 5.2% | 2.3% | 2.3% |
| PSIOX Tax Cost Ratio | na | na | 1.4% | 1.3% | 1.0% | 0.8% |
PSIOX Annual NAV Total ReturnsData as of 6/30/26
| 2026 | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |
| PSIOX Return (NAV) | 1.0% | 5.0% | 4.6% | 5.4% | -4.3% | -1.3% | 3.4% | 4.3% | 0.6% | 1.5% | 2.0% |
| PSIOX Grade | C | F | D | C | B | F | D | D | D | C | C |
| +/- Category | 0.1% | -0.9% | -0.4% | -0.2% | 0.8% | -1.2% | -0.8% | -0.5% | -0.1% | -0.4% | -0.6% |
| Short-Term Bond Avg | 0.9% | 5.9% | 4.9% | 5.6% | -5.0% | -0.0% | 4.2% | 4.8% | 0.7% | 1.8% | 2.5% |
| Risk Measures | |
| Standard Deviation: | 1.6% |
| Total Risk Index: | 0.13 - Low |
| Category Risk Index: | 0.83 - Below Average |
| Category Risk Grade: | B (37% Rank) |
| Beta: | 0.27 |
| R-Squared: | 87% |
| Leveraged Fund: | No |
| Inverse Fund: | No |
| Portfolio Characteristics | |
| Equity Investment Style: | na |
| Bond Investment Style: | High Quality Limited Sensitivity |
| Yield: | 3.5% |
| Dividend Distribution: | Monthly |
| Cap Gains Distribution: | Annually |
| Total Assets: | $3490 Mil |
| Fund Total Assets: | $ 6 Mil |
| Share Class Type: | Retirement |
| Portfolio Turnover: | 42% |
Management Team
| Number of Managers: 3 | |||
| Longest Tenure: 2.9 years | |||
| Average Tenure: 1.4 years | |||
| Managers (Year): Goosay Michael (2023), Callahan Jeff (2025), Gassmann Zach (2026) | |||
Portfolio Composition (as of 5/31/26)
| # of Holdings: | 455 |
| % in Top 10 Holdings: | 19.4% |
| Fund is Non-Diversified: | No |
| % in Foreign Issues: | 13.6% |
Portfolio Allocation |
|
| Domestic Stock: | 0.0% |
| Foreign Stock: | 0.0% |
| Preferred Stock: | 0.0% |
| Domestic Bond: | 85.5% |
| Foreign Bond: | 13.6% |
| Convertible Bond: | 0.0% |
| Other: | 0.0% |
| Cash: | 0.9% |
Purchase Information
| Fund Family: | Principal Funds |
| Phone Number: | 800-222-5852 |
| Website: | www.principalfunds.com |
| Status: | Open |
| Inception Date: | July 12, 2010 |
| Min. Initial Purchase: | $ 0 |
| Min. Initial IRA Purchase: | $ 0 |
| True No-Load: | Yes |
| Front Load Maximum: | 0.00% |
| Deferred Charge Maximum: | 0.00% |
| Redemption Charge Maximum: | 0.00% |
| 12b-1 Fee: | 0.25% |
Expenses and Fees | |
| Expense Ratio (%): | 0.92% ( Rating : High ) |
| Category Average Expense Ratio (%): | 0.66% |
| Share Class: | Principal Short-Term Income A |
| Min. Subsequent Purchase: | $ 0 |
| Min. Subsequent IRA Purchase: | $ 0 |
