Principal Scuttles Large-Cap Fund

Aug. 19, 2002 -- Principal Financial Grp (PFG) is eliminating the Principal Partners Large Cap Growth Fund/A (PLCAX) by merging it into the larger Principal Growth Fund/A (PRGWX).

The Large-Cap Growth fund has performed worse than similar funds, Principal Financial said in a regulatory filing. The company added that the fund's strategy of buying a relatively small number of companies exhibiting accelerating earnings has become "unpopular with many investors" because it is relatively risky and volatile.

The Large-Cap Growth fund lost 33.6% for the year ended in July. The portfolio is too new to be ranked by Standard & Poor's.

The Principal Growth fund, classified as a large-cap growth offering by Standard & Poor's, lost 29.1% as of the end of July, compared to a loss of 28.8% by its peers. The fund carries a rank of 1 Star.

The merger is subject to shareholder approval.

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