1933 Act Registration No. 33-12
1940 Act File No. 811-4401
Rule 497(e)
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
CASH RESERVE PORTFOLIO
SUPPLEMENT DATED SEPTEMBER 29, 2000
TO PROSPECTUS DATED MAY 1, 2000
EXCHANGES INVOLVING CLASS X SHARES OF CASH RESERVE PORTFOLIO
Management of Principal Preservation Portfolios, Inc. has made it easier to
exchange Class X shares of the Cash Reserve Portfolio for Class B or Class C
shares of any other mutual fund in the Principal Preservation family, and vice
versa. These holders are now able to use a single form (available from the
Distributor or Transfer Agent) to purchase Class B or Class C shares of any
mutual fund in the Principal Preservation family using proceeds from the sale of
their Class X shares of the Cash Reserve Portfolio. Previously, holders of
Class X shares of the Cash Reserve Portfolio could only be exchanged for Class A
shares of other Principal Preservation funds. Investors should bear in mind
that an exchange is treated as a redemption of the shares surrendered in the
exchange and a purchase of the shares received in the exchange and thus subject
to applicable sales charges. In addition, the Class B or Class C shares of a
Principal Preservation mutual fund that are received in an exchange of Class X
shares of the Cash Reserve Portfolio will remain subject to a contingent
deferred sales charge based on the period of time the Class B or Class C shares
are held, not from the time the Class X shares being exchanged were first
acquired.