Edge Asset Management

Principal Global Investors offers specialized expertise in managing equities, fixed income and asset allocation portfolios through our affiliate, Edge Asset Management. Edge (formerly WM advisors) has been a pioneer in the field of actively managed asset allocation funds and is a leading manager of value equities and taxable fixed-income securities. Edge has $15.0 billion in equity and fixed income assets, including $12.4 billion in asset allocation products/accounts,* as of June 30, 2008. Edge is an affiliate of Principal Global Investors, and a member of the Principal Financial Group.

Based in Seattle, Edge has a long history of investment management expertise dating back to 1939. Edge manages the Strategic Asset Management (SAM) Portfolios, a target-risk investment option for lifecycle funds.

The firm's investment philosophy is rooted in risk management, with the view that:

• Returns are a function of risk
• Managing risk is not the same as simply limiting it
• Risk management disciplines should maximize returns

Edge offers investors expertise in asset allocation and diversification through either individual funds or actively managed portfolios.

Using a "best companies" approach to investment research, Edge seeks superior firms based on:

• Management depth
• Financial strength
• Earnings potential
• Competitive advantage
• Business model sustainability

Best companies become portfolio holdings when their valuations provide opportunity over the long term. These securities must reach the right price before investing. Edge minimizes portfolio turnover by retaining positions until rising valuations provide a means to maximize shareholder value.