PSSMX vs. PTEAX

Last updated Jun 24, 2026

PSSMX (Principal SmallCap S&P 600 Index Fund) and PTEAX (Principal Tax-Exempt Bond Fund) are both mutual funds - PSSMX is a Small Cap Blend Equities fund managed by Principal, while PTEAX is a Municipal Bonds fund managed by Principal. Over the past 10 years, PSSMX returned 11.42%/yr vs 1.89%/yr for PTEAX. At a correlation of -0.10, they often move in opposite directions. Both charge a 0.73% expense ratio.

Performance

PSSMX vs. PTEAX - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Principal SmallCap S&P 600 Index Fund (PSSMX) and Principal Tax-Exempt Bond Fund (PTEAX). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, PSSMX achieves a 19.34% return, which is significantly higher than PTEAX's 1.38% return. Over the past 10 years, PSSMX has outperformed PTEAX with an annualized return of 11.42%, while PTEAX has yielded a comparatively lower 1.89% annualized return.

PSSMX

• 1D: 0.03%
• 1M: 4.50%
• YTD: 19.34%
• 6M: 16.91%
• 1Y: 34.25%
• 3Y*: 18.57%
• 5Y*: 7.59%
• 10Y*: 11.42%

PTEAX

• 1D: -0.15%
• 1M: 1.53%
• YTD: 1.38%
• 6M: 1.86%
• 1Y: 6.32%
• 3Y*: 3.73%
• 5Y*: 0.31%
• 10Y*: 1.89%

*Multi-year figures are annualized to reflect compound growth (CAGR)

PSSMX vs. PTEAX - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
PSSMX Principal SmallCap S&P 600 Index Fund	19.34%	5.34%	16.60%	15.18%	-16.69%	25.39%	10.65%	21.99%	-9.42%	12.46%
PTEAX Principal Tax-Exempt Bond Fund	1.38%	4.68%	2.10%	6.35%	-12.18%	2.71%	4.80%	9.05%	0.44%	6.44%

Correlation

The correlation between PSSMX and PTEAX is 0.14, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.14
Correlation (3Y) Calculated over the trailing 3-year period	0.14
Correlation (5Y) Calculated over the trailing 5-year period	0.09
Correlation (10Y) Calculated over the trailing 10-year period	0.00
Correlation (All Time) Calculated using the full available price history since Jan 2, 2001	-0.10

The correlation between PSSMX and PTEAX shifts across timeframes, from -0.10 (all time) to 0.14 (3 years), reflecting how their relationship changes across market environments.

Return for Risk

PSSMX vs. PTEAX — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

PSSMX

PSSMX Risk / Return Rank: 66
PSSMX Sharpe Ratio Rank: 56
PSSMX Sortino Ratio Rank: 59
PSSMX Omega Ratio Rank: 48
PSSMX Calmar Ratio Rank: 88
PSSMX Martin Ratio Rank: 80

PTEAX

PTEAX Risk / Return Rank: 62
PTEAX Sharpe Ratio Rank: 70
PTEAX Sortino Ratio Rank: 83
PTEAX Omega Ratio Rank: 88
PTEAX Calmar Ratio Rank: 35
PTEAX Martin Ratio Rank: 32

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

PSSMX vs. PTEAX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Principal SmallCap S&P 600 Index Fund (PSSMX) and Principal Tax-Exempt Bond Fund (PTEAX). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	PSSMX	PTEAX	Difference
Sharpe ratio: Return per unit of total volatility	2.04	2.24	-0.20
Sortino ratio: Return per unit of downside risk	2.96	3.63	-0.67
Omega ratio: Gain probability vs. loss probability	1.35	1.58	-0.23
Calmar ratio: Return relative to maximum drawdown	4.12	2.10	+2.02
Martin ratio: Return relative to average drawdown	13.86	7.01	+6.85

PSSMX vs. PTEAX - Sharpe Ratio Comparison

The current PSSMX Sharpe Ratio is 2.04, which is comparable to the PTEAX Sharpe Ratio of 2.24. The chart below compares the historical Sharpe Ratios of PSSMX and PTEAX, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

PSSMX vs. PTEAX - Drawdown Comparison

The maximum PSSMX drawdown since its inception was -58.43%, which is greater than PTEAX's maximum drawdown of -38.72%. Use the drawdown chart below to compare losses from any high point for PSSMX and PTEAX.

Drawdown Indicators

	PSSMX	PTEAX	Difference
Max Drawdown Largest peak-to-trough decline	-58.43%	-38.72%	-19.71%
Max Drawdown (1Y) Largest decline over 1 year	-8.76%	-3.10%	-5.66%
Max Drawdown (3Y) Largest decline over 3 years	-24.30%	-5.31%	-18.99%
Max Drawdown (5Y) Largest decline over 5 years	-27.01%	-17.37%	-9.64%
Max Drawdown (10Y) Largest decline over 10 years	-44.85%	-17.37%	-27.48%
Current Drawdown Current decline from peak	-0.03%	-0.55%	+0.52%
Average Drawdown Average peak-to-trough decline	-9.50%	-5.92%	-3.58%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.60%	0.93%	+1.67%

Volatility

PSSMX vs. PTEAX - Volatility Comparison

Principal SmallCap S&P 600 Index Fund (PSSMX) has a higher volatility of 4.88% compared to Principal Tax-Exempt Bond Fund (PTEAX) at 0.75%. This indicates that PSSMX's price experiences larger fluctuations and is considered to be riskier than PTEAX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	PSSMX	PTEAX	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.88%	0.75%	+4.13%
Volatility (6M) Calculated over the trailing 6-month period	12.10%	2.08%	+10.02%
Volatility (1Y) Calculated over the trailing 1-year period	17.72%	2.92%	+14.80%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	21.76%	4.00%	+17.76%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	22.94%	4.40%	+18.54%

PSSMX vs. PTEAX - Expense Ratio Comparison

Both PSSMX and PTEAX have an expense ratio of 0.73%.

Dividends

PSSMX vs. PTEAX - Dividend Comparison

PSSMX's dividend yield for the trailing twelve months is around 8.36%, more than PTEAX's 3.82% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
PSSMX Principal SmallCap S&P 600 Index Fund	8.36%	9.98%	15.91%	3.75%	10.45%	8.23%	1.67%	6.56%	13.08%	6.03%	6.15%	8.07%
PTEAX Principal Tax-Exempt Bond Fund	3.82%	4.66%	3.73%	2.81%	2.27%	2.15%	2.23%	3.09%	3.68%	3.69%	3.91%	3.75%

Frequently Asked Questions

Can I hold both PSSMX and PTEAX in my portfolio?

PSSMX and PTEAX have a correlation of 0.14, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, PSSMX or PTEAX?

PSSMX has higher volatility (4.88%) compared to PTEAX (0.75%). In terms of maximum drawdown, PSSMX dropped -58.43% vs PTEAX's -38.72%.

Which has better risk-adjusted returns?

PTEAX currently has the higher Sharpe Ratio (2.24 vs 2.04), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.