DES MOINES, Iowa--(BUSINESS WIRE)--With markets remaining volatile and fixed-income yields remaining historically low, the ability to generate both income and capital appreciation is top-of-mind for many investors.
Designed to generate and grow an income stream, Principal Funds has launched the Principal Small-MidCap Dividend Income Fund (PMDAX). The fund invests in companies that have the capacity and commitment to deliver and consistently grow dividends over time for shareholders.
“Small- and mid-sized companies, which represent 40 percent of the overall domestic market, are typically overlooked by Wall Street and may provide higher dividend yields than their large-cap counterparts,” said Dan Coleman, portfolio manager and head of equities for Edge Asset Management, a Principal Funds subadvisor and wholly owned subsidiary of the Principal Financial Group®. “They also offer attractive capital appreciation opportunities as these companies grow from small-cap to large-cap.”
The fund, launched June 6, 2011, offers exposure to small- and mid-cap dividend paying companies and provides a complement to a diversified portfolio. “The dividend-paying strategies of these companies have historically offered diversification with higher income potential and better performance than large-cap companies,” Coleman said.
A recent white paper from Principal Funds outlines the income and capital appreciation potential that dividend-producing stocks can provide. The paper takes a historic look at how stocks that pay dividends have outperformed non-dividend payers through both up and down markets. In fact, dividend-producing stocks in the S&P 500 outperform non-payers 66 percent of the time.1 It concludes that dividend investing is a solid strategy because of significant market forces supporting the attractiveness of an equity income stream.
About Principal Funds
Principal Funds is a leading provider
of mutual funds, with $71.2 billion in assets under management.2
Principal Funds brings expertise in global investment management, asset
allocation and retirement leadership to financial professionals and
investors. Including its target-risk and target-date offerings,
Principal Funds is the fifth largest manager of lifecycle funds in the
industry.3 The companies that make up Principal Funds are
members of the Principal Financial Group®. For more
information, visit www.principalfunds.com.
About Edge Asset Management
Edge Asset Management
(Edge) has been a pioneer in the field of actively managed asset
allocation funds and is a leading fundamental manager delivering equity
and fixed income products focused on total return and income. Edge has
$20.6 billion in assets under management4 across all its
investment strategies. Based in Seattle, the firm has a heritage dating
back to 1939 when it launched one of the first 50 mutual funds in the
United States. Edge is an affiliate of Principal Global Investors, the
asset management arm of the Principal Financial Group®.
About the Principal Financial Group
The Principal Financial
Group® (The Principal®)5 is a
retirement and global asset management leader. The Principal offers
businesses, individuals and institutional clients a wide range of
financial products and services, including retirement, investment
services and insurance through its diverse family of financial services
companies. A member of the FORTUNE 500®, the Principal
Financial Group has $335.8 billion in assets under management6
and serves some 16.5 million customers worldwide from offices in Asia,
Australia, Europe, Latin America and the United States. Principal
Financial Group, Inc. is traded on the New York Stock Exchange under the
ticker symbol PFG. For more information, visit www.principal.com.
Diversification does not guarantee a profit or protect against a loss. Small-cap stocks may have additional risks, including greater price volatility.
Investors should carefully consider a fund’s investment objectives, risks, charges, and expenses prior to investing. A prospectus, or summary prospectus if available, containing this and other information can be obtained by contacting a financial professional, visiting principalfunds.com, or calling 800-222-5852. Read the prospectus carefully before investing.
A mutual fund's share price and investment return will vary with market conditions, and the principal value of an investment when you sell your shares may be more or less than the original cost.
Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc., member of the Principal Financial Group®. Principal Funds Distributor, Principal Shareholder Services, Principal Management Corporation and its affiliates, and Principal Funds, Inc. are collectively referred to as Principal Funds.
1 Ned Davis Research, Inc. (as of December 31, 2010)
2
As of June 30, 2011. Includes all share classes of the Principal Funds,
Inc. and Principal Variable Contracts Funds, Inc.
3 FRC
Mutual Fund Lifecycle Report 2Q11.
4 As of June 30, 2011.
5
“The Principal Financial Group” and “The Principal” are registered
service marks of Principal Financial Services, Inc., a member of the
Principal Financial Group.
6 As of June 30, 2011.