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Principal Capital Appreciation R5 PCAQX Sustainability

| Quantitative rating as of | See Principal Investment Hub

Sustainability Analysis

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Sustainable Summary

Principal Capital Appreciation Fund may not appeal to sustainability-conscious investors.

Principal Capital Appreciation Fund's holdings are exposed to average levels of ESG risk relative to those of its peers in the US Equity Large Cap Blend category, thus earning it an average Morningstar Sustainability Rating of 3 globes. Competing funds in the category with ratings of 4 or 5 globes have less ESG risk in their holdings. Unlike impact, which measures positive environmental and societal outcomes attributable to an investment, ESG risk reflects the degree to which investments could be affected by material ESG issues like climate change and inequalities.

Principal Capital Appreciation Fund has a Carbon Risk Score of 8.37, indicating portfolio companies face low carbon-related risks in the transition to a low-carbon economy.

One potential issue for a sustainability-focused investor is that Principal Capital Appreciation Fund doesn’t have an ESG-focused mandate. A fund with an ESG-focused mandate would have a higher probability to drive positive ESG outcomes. The fund's current involvement in fossil fuels reaches 9.59%, surpassing 7.77% for its average category peer. Companies are considered involved in fossil fuels if they derive some revenue from thermal coal, oil, and gas.

The fund has a modest level of exposure (3.88%) to companies with high or severe controversies. Companies with high or severe controversies are involved in incidents such as corruption, employee abuses, environmental incidents, and corporate scandals that pose serious business risks to the company.

ESG Commitment Level Asset Manager

An ESG Commitment Level Asset Manager rating is not assigned to this investment.

Morningstar analysts award an ESG Commitment Level Asset Manager ratings to investments that also receive Morningstar Analyst Ratings. Not all investments currently have Asset Manager rating. Morningstar is expanding its coverage, prioritizing investments that are most relevant to investors.