PIMCO Short-Term Strategies

Transcription

1 1 Strategy Solution PIMCO Short-Term Strategies Morningstar 2015 U.S. Fixed Income Fund Manager of the Year Winner: Jerome Schneider and team for the PIMCO Short-Term Fund (PTSHX) For investment professional use only

2 Enhanced cash investments will be more volatile than money market funds and their value will fluctuate, as the investments are not managed to maintain a stable value of $1 per share. The investments may also invest a portion of their total assets in junk bonds. Short-term strategies are not federally guaranteed and may lose value.

3 3 Short-Term Strategies Overview Money market funds have traditionally been the investment choice for cash management programs. These funds typically offer daily liquidity and a stable net asset value (NAV)*. However, several factors have prompted many cash investors to look beyond money market funds to enhanced cash strategies. In today s low-yield environment, many investors are searching for new approaches to cash management in an effort to generate positive returns without reducing the liquidity profiles of their portfolio. *This applies for government money market funds and retail prime money market funds (since prime institutional funds have floating NAVs).

4 4 PIMCO Short-Term Strategies Strategy Solution Why PIMCO PIMCO is a global investment solutions provider with more than 2,200 dedicated professionals in 11 countries seeking to manage risk and add consistent value for our clients over time. Our focus on broad top-down macroeconomic views, combined with rigorous bottom-up research and analysis, has defined our investment process for over 40 years. PIMCO continues to evolve as an investment solution provider across all asset classes and strategies, including short-duration and cash management strategies. HYPOTHETICAL GROWTH OF $10,000 $11,600 PIMCO Short-Term Fund (after fees) Citigroup 3-Month Treasury Bill $11,600 $11,400 Growth of $10,000 (31 Dec '09 = $10,000) 11,200 11,000 10,800 10,600 10,400 10,200 10, Source: Citigroup, PIMCO NET OF FEE PERFORMANCE INSTITUTIONAL CLASS Net of fee performance (%) 1 year 5 years 10 years Since inception (10/07/87) PIMCO Short-Term Fund Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Current performance may be lower or higher than performance shown. Differences in the fund s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the fund and the index. For performance current to the most recent month-end, visit or call PIMCO. There is no assurance that any fund, including any fund that has experienced high or unusual performance for one or more periods, will experience similar levels of performance in the future. High performance is defined as a significant increase in either 1) a fund s total return in excess of that of the fund s benchmark between reporting periods or 2) a fund s total return in excess of the fund s historical returns between reporting periods. Unusual performance is defined as a significant change in a fund s performance as compared to one or more previous reporting periods.

5 PIMCO Short-Term Strategies Strategy Solution 5 PIMCO manages over $100 billion in dedicated money market, short-term, and low duration strategies, as well as over $200 billion in cashequivalent securities across the firm. We are a large and active investor in short-term markets from money-market to low duration strategies with a focus on providing clients the benefit of liquidity and capital preservation, even in times of stress. As the landscape for cash investing evolves, investors will likely face a limited supply of attractive assets. Now more than ever, investors need a partnership offering expertise in liquidity management and capital preservation/appreciation to evaluate opportunities beyond less-effective traditional approaches. PIMCO believes an active approach to cash management may reveal relatively attractive opportunities while maintaining portfolio liquidity and potentially achieving returns beyond the near-zero percent yields offered by many alternatives. We feel short-term strategies at PIMCO benefit from our unique macro and microeconomic forecasting and expertise in fixed income analysis. Combining an appreciation for the global macro environment with constant monitoring of regulatory changes and structural market forces helps us to identify underappreciated asset classes, both from a liquidity and return perspective. PIMCO does not rely on one method alone in this uncertain and low-yield environment. Our short-term desk utilizes a complete and dynamic approach to liquidity management, actively using our expansive resources to assess and evaluate opportunities globally across a variety of risk factors including duration, credit and FX. An experienced and dedicated team of portfolio managers comprise a key desk at PIMCO by managing liquidity and forming the firm s overall short-term strategy. We partner with prominent institutional investors to address their unique and changing cash management needs via strategies designed to enhance returns on a risk-adjusted basis and minimize the negative effect of a near-zero rate environment. In an economy that is reflating due to secular pressures, positive risk-adjusted real returns may provide investors another tool for preserving principal while maintaining liquidity. PIMCO s short-term expertise can be accessed via mutual funds, ETFs, and customized separate accounts that are designed to fit your investment needs. PORTFOLIO MANAGERS Jerome Schneider 9 years at PIMCO, 22 years total industry experience Anthony Crescenzi 8 years at PIMCO, 34 years total industry experience David L. Braun 8 years at PIMCO, 24 years total industry experience Scott Berman 8 years at PIMCO, 17 years total industry experience Andrew Wittkop 14 years at PIMCO, 17 years total industry experience Bill Martinez 4 years at PIMCO, 17 years total industry experience Nathan Chiaverini 5 years at PIMCO, 14 years total industry experience Hozef Arif 9 years at PIMCO 13 years total industry experience Kichul Kim 1 year at PIMCO, 6 years total industry experience PRODUCT MANAGERS Paul Reisz 17 years at PIMCO, 33 years total industry experience Brian Leach 4 years at PIMCO, 8 years total industry experience PIMCO SHORT-TERM SUITE: NORMAL DURATION RANGE AND CURRENT DURATION Normal duration range (years) Duration as of 31 December 2017 Short Asset Investment Fund 0.16 Enhanced Short Maturity ETF 0.51 Short-Term Fund 0.01 Enhanced Low Duration Active ETF 1.41 Low Duration Fund year 0 1 year 2 years 3 years 4 years

6 6 PIMCO Short-Term Strategies Strategy Solution PIMCO Short Asset Investment Fund Overview: The PIMCO Short Asset Investment Fund is designed for those who seek to outperform money markets while maintaining greater liquidity and principal stability than longer duration bond funds. The fund is an actively managed enhanced cash strategy that invests in both high quality money market instruments and a wide range of non-money market securities. PORTFOLIO MANAGER Liquidity: You may make a withdrawal with one day s advanced notice; note the actual timing of the cash receipt is dependent on the custodian bank. MARKET VALUE WEIGHTED SECTOR BREAKDOWN Government Mortgages Investment Grade Credit High Yield Credit Emerging Markets Other 1 Net Other Short Duration Instruments Duration: 0.16 years 30-day SEC Yield: 1.69% 30-day SEC Yield (Unsubsidized) 3 : 1.62% NET OF FEE PERFORMANCE INSTITUTIONAL CLASS 3.00% Fund Citigroup 3-Month Treasury Bill Index Jerome Schneider Allocation: May be suitable for non-immediate cash requirements Unique Features: Designed for conservative investors by limiting sector exposure as compared to the PIMCO Short-Term Fund, with no foreign currency exposure and limits on corporate and assetbacked security (ABS) allocation. The fund does not intend to invest in high yield securities or securities denominated in foreign currencies Added derivative constraints limit use of interest rate swaps and credit default swaps Non-money market securities tend to be less liquid, more volatile, and carry greater risk than money market securities. The fund will be more volatile than a money market fund and its net asset value (NAV) will fluctuate, as the fund is not managed to maintain a stable NAV year 3 years 5 years Since Inception 05/31/12 Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Current performance may be lower or higher than performance shown. Differences in the fund s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the fund and the index. For performance current to the most recent month-end, visit or call PIMCO. There is no assurance that any fund, including any fund that has experienced high or unusual performance for one or more periods, will experience similar levels of performance in the future. High performance is defined as a significant increase in either 1) a fund s total return in excess of that of the fund s benchmark between reporting periods or 2) a fund s total return in excess of the fund s historical returns between reporting periods. Unusual performance is defined as a significant change in a fund s performance as compared to one or more previous reporting periods. 1 May include pooled cash vehicles, municipal, convertible, preferred, and Euro/Yankee securities. 2 Net Other Short Duration Instruments includes securities and other instruments (except those instruments tied to emerging markets by country of risk) with an effective duration less than one year and rated investment grade or higher or, if unrated, determined by PIMCO to be of comparable quality, commingled liquidity funds, uninvested cash, interest receivables, net unsettled trades, broker money, short duration derivatives and derivatives offsets. With respect to certain categories of short duration securities, the Adviser reserves the discretion to require a minimum credit rating higher than investment grade for inclusion in this category. Derivatives Offsets includes offsets associated with investments in futures, swaps and other derivatives. Such offsets may be taken at the notional value of the derivative position. 3 Does not include fee waivers and/or reimbursements.

7 PIMCO Short-Term Strategies Strategy Solution 7 PIMCO Enhanced Short Maturity Active Exchange-Traded Fund (MINT) Overview: (MINT) is an actively managed exchange-traded fund (ETF) that seeks greater income and total return potential than money market funds, and may be appropriate for intermediate cash allocations. The fund is one of the largest actively managed fixed income ETFs with over $8 billion in assets. MINT primarily invests in short duration investment grade debt securities. The average portfolio duration of MINT will vary based on PIMCO s economic forecasts and active investment process decisions, and will not normally exceed one year. MINT discloses all portfolio holdings on a daily basis, and does not use options, futures, or swaps. Liquidity: Settlement usually occurs 3 days after trade date. MARKET VALUE WEIGHTED SECTOR BREAKDOWN Government Mortgages Investment Grade Credit Emerging Markets Other¹ Net Other Short Duration Instruments² Duration: 0.51 years 30-day SEC Yield: 1.66% NET OF FEE PERFORMANCE 2.00% % MINT (NAV) MINT (MOP) Citigroup 3-Month Treasury Bill Index PORTFOLIO MANAGER Jerome Schneider Allocation: May be suitable for immediate cash requirements Unique Features: Benefits of the ETF vehicle, including intraday trading, daily holdings disclosure, and single share class structure with the same expense ratio for all investors MINT primarily invests in U.S. dollar-denominated investment grade debt securities MINT will not use options, futures, or swaps year 3 years 5 years Since Inception 11/16/ Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher that performance shown. Investment return and principal value will fluctuate, so that fund shares may be worth more or less than their original cost when sold. Differences in the fund s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the fund and the index. Performance data current to the most recent month-end is available at or call ETF. There is no assurance that any fund, including any fund that has experienced high or unusual performance for one or more periods, will experience similar levels of performance in the future. High performance is defined as a significant increase in either 1) a fund s total return in excess of that of the fund s benchmark between reporting periods or 2) a fund s total return in excess of the fund s historical returns between reporting periods. Unusual performance is defined as a significant change in a fund s performance as compared to one or more previous reporting periods. The Citigroup 3-Month Treasury Bill Index is an unmanaged index representing monthly return equivalents of yield averages of the last 3 month Treasury Bill issues. It is not possible to invest directly in an unmanaged index. 1 May include pooled cash vehicles, municipal, convertible, preferred, and Euro/Yankee securities. 2 Net Other Short Duration Instruments includes securities and other instruments (except those instruments tied to emerging markets by country of risk) with an effective duration less than one year and rated investment grade or higher or, if unrated, determined by PIMCO to be of comparable quality, commingled liquidity funds, uninvested cash, interest receivables, net unsettled trades, broker money, short duration derivatives and derivatives offsets. With respect to certain categories of short duration securities, the Adviser reserves the discretion to require a minimum credit rating higher than investment grade for inclusion in this category. Derivatives Offsets includes offsets associated with investments in futures, swaps and other derivatives. Such offsets may be taken at the notional value of the derivative position.

8 8 PIMCO Short-Term Strategies Strategy Solution PIMCO Short-Term Fund Overview: The PIMCO Short-Term Fund is an actively managed mutual fund that seeks greater income and total return potential than money market funds, and may be appropriate for intermediate cash allocations. With over $14 billion in assets, the Short-Term Fund primarily invests in short duration investment grade debt securities and has a maximum allowable allocation to high yield and emerging markets of 10% and 5% respectively. The average portfolio duration of the Short-Term Fund will not normally exceed one year. Liquidity: You may make a withdrawal with one day s advanced notice; note the actual timing of the cash receipt is dependent on the custodian bank. MARKET VALUE WEIGHTED SECTOR BREAKDOWN Government Mortgages Investment Grade Credit High Yield Credit Non-USD Developed Emerging Markets Other¹ Net Other Short Duration Instruments² % Duration: 0.01 years 30-day SEC Yield: 1.80% PORTFOLIO MANAGER Jerome Schneider Allocation: May be suitable for immediate cash requirements Unique Features: Short duration focus managed with added sector flexibility over PIMCO Short Asset Investment Fund Derivative use designed for efficient management and added alpha Limited foreign currency exposure may act as an additional source of return potential NET OF FEE PERFORMANCE INSTITUTIONAL CLASS 5.00% Fund 1.63 BofA Merril Lynch 1-3 Year U.S. Treasury Index year 3 years 5 years 10 years Since Inception 10/07/ Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Current performance may be lower or higher than performance shown. Differences in the fund s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the fund and the index. For performance current to the most recent month-end, visit or call PIMCO. There is no assurance that any fund, including any fund that has experienced high or unusual performance for one or more periods, will experience similar levels of performance in the future. High performance is defined as a significant increase in either 1) a fund s total return in excess of that of the fund s benchmark between reporting periods or 2) a fund s total return in excess of the fund s historical returns between reporting periods. Unusual performance is defined as a significant change in a fund s performance as compared to one or more previous reporting periods. 1 May include pooled cash vehicles, municipal, convertible, preferred, and Euro/Yankee securities. 2 Net Other Short Duration Instruments includes securities and other instruments (except those instruments tied to emerging markets by country of risk) with an effective duration less than one year and rated investment grade or higher or, if unrated, determined by PIMCO to be of comparable quality, commingled liquidity funds, uninvested cash, interest receivables, net unsettled trades, broker money, short duration derivatives and derivatives offsets. With respect to certain categories of short duration securities, the Adviser reserves the discretion to require a minimum credit rating higher than investment grade for inclusion in this category. Derivatives Offsets includes offsets associated with investments in futures, swaps and other derivatives. Such offsets may be taken at the notional value of the derivative position.

9 PIMCO Short-Term Strategies Strategy Solution 9 Enhanced Low Duration Active Exchange Traded Fund (LDUR) Overview: (LDUR) is an actively managed exchange-traded fund (ETF) that is designed to invest across a diverse set of high quality fixed income sectors. The Enhanced Low Duration Active ETF is the newest member of the well-established Low Duration suite, allowing investors to access PIMCO s Low Duration strategy in an ETF vehicle. LDUR has the ability to target core fixed income holdings, but do so with a low sensitivity to interest rates. The duration range of LDUR will vary based on our economic outlook and will normally vary between 1 3 years. Liquidity: Settlement usually occurs 3 days after trade date. MARKET VALUE WEIGHTED SECTOR BREAKDOWN PORTFOLIO MANAGERS Jerome Schneider Government Mortgages Investment Grade Credit High Yield Credit Emerging Markets Other¹ Net Other Short Duration Instruments² % Duration: 1.41 years 30-day SEC Yield: 2.09% 30-day SEC Yield (Unsubsidized) 3 : 1.91% NET OF FEE PERFORMANCE LDUR (NAV) LDUR (MOP) BofA Merrill Lynch 1-3 Year U.S. Treasury Index year 3 year Since Inception 01/11/ David L. Braun Hozef Arif Allocation: May be suitable for longer term cash requirements Unique Features: Similar strategy as PIMCO s Low Duration Fund, with the benefits of an ETF vehicle, including intraday trading, daily holdings disclosure, and single share class structure with the same expense ratio for all investors LDUR offers a potential yield advantage over liquidity strategies while also serving as a lower duration option to traditional core fixed income allocations. Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher that performance shown. Investment return and principal value will fluctuate, so that fund shares may be worth more or less than their original cost when sold. Differences in the fund s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the fund and the index. Performance data current to the most recent month-end is available at or call ETF. There is no assurance that any fund, including any fund that has experienced high or unusual performance for one or more periods, will experience similar levels of performance in the future. High performance is defined as a significant increase in either 1) a fund s total return in excess of that of the fund s benchmark between reporting periods or 2) a fund s total return in excess of the fund s historical returns between reporting periods. Unusual performance is defined as a significant change in a fund s performance as compared to one or more previous reporting periods. 1 May include pooled cash vehicles, municipal, convertible, preferred, and Euro/Yankee securities. 2 Net Other Short Duration Instruments includes securities and other instruments (except those instruments tied to emerging markets by country of risk) with an effective duration less than one year and rated investment grade or higher or, if unrated, determined by PIMCO to be of comparable quality, commingled liquidity funds, uninvested cash, interest receivables, net unsettled trades, broker money, short duration derivatives and derivatives offsets. With respect to certain categories of short duration securities, the Adviser reserves the discretion to require a minimum credit rating higher than investment grade for inclusion in this category. Derivatives Offsets includes offsets associated with investments in futures, swaps and other derivatives. Such offsets may be taken at the notional value of the derivative position. 3 Does not include fee waivers and/or reimbursements.

10 10 PIMCO Short-Term Strategies Strategy Solution Low Duration Fund Overview: The Low Duration Fund is designed to be a diverse portfolio of high quality bonds across a variety of fixed income sectors. The oldest of our enhanced cash managed strategies, this fund is an expression of PIMCO s total return views, but with a shorter duration (normally between 1 3 years). PORTFOLIO MANAGERS Liquidity: You may make a withdrawal with one day s advanced notice; note the actual timing of the cash receipt is dependent on the custodian bank. MARKET VALUE WEIGHTED SECTOR BREAKDOWN Government Mortgages Investment Grade Credit High Yield Credit Non-USD Developed Emerging Markets Other¹ Net Other Short Duration Instruments² % Duration: 1.03 years 30-day SEC Yield: 1.45% NET OF FEE PERFORMANCE INSTITUTIONAL CLASS 6.00% Fund BofA Merrill Lynch 1-3 Year Treasury Index Scott Mather Jerome Schneider Allocation: May be appropiate for longer term cash requirements Unique Features: Positive results over every 2-year period since its inception Core fixed income strategy targeting low interest rate sensitivity year 3 years 5 years 10 years Since Inception 05/11/ Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Current performance may be lower or higher than performance shown. Differences in the fund s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the fund and the index. For performance current to the most recent month-end, visit or call PIMCO. There is no assurance that any fund, including any fund that has experienced high or unusual performance for one or more periods, will experience similar levels of performance in the future. High performance is defined as a significant increase in either 1) a fund s total return in excess of that of the fund s benchmark between reporting periods or 2) a fund s total return in excess of the fund s historical returns between reporting periods. Unusual performance is defined as a significant change in a fund s performance as compared to one or more previous reporting periods. It is important to note that differences exist between the fund s daily internal accounting records, the fund s financial statements prepared in accordance with U.S. GAAP, and recordkeeping practices under income tax regulations. It is possible that the fund may not issue a Section 19 Notice in situations where the fund s financial statements prepared later and in accordance with U.S. GAAP or the final tax character of those distributions might later report that the sources of those distributions included capital gains and/or a return of capital. Please see the fund s most recent shareholder report for more details. Although the fund may seek to maintain stable distributions, the fund s distribution rates may be affected by numerous factors, including but not limited to changes in realized and projected market returns, fluctuations in market interest rates, fund performance, and other factors. There can be no assurance that a change in market conditions or other factors will not result in a change in the fund s distribution rate or that the rate will be sustainable in the future. For instance, during periods of low or declining interest rates, the fund s distributable income and dividend levels may decline for many reasons. For example, the fund may have to deploy uninvested assets (whether from purchases of fund shares, proceeds from matured, traded or called debt obligations or other sources) in new, lower yielding instruments. Additionally, payments from certain instruments that may be held by the fund (such as variable and floating rate securities) may be negatively impacted by declining interest rates, which may also lead to a decline in the fund s distributable income and dividend levels. 1 May include pooled cash vehicles, municipal, convertible, preferred, and Euro/Yankee securities. 2 Net Other Short Duration Instruments includes securities and other instruments (except those instruments tied to emerging markets by country of risk) with an effective duration less than one year and rated investment grade or higher or, if unrated, determined by PIMCO to be of comparable quality, commingled liquidity funds, uninvested cash, interest receivables, net unsettled trades, broker money, short duration derivatives and derivatives offsets. With respect to certain categories of short duration securities, the Adviser reserves the discretion to require a minimum credit rating higher than investment grade for inclusion in this category. Derivatives Offsets includes offsets associated with investments in futures, swaps and other derivatives. Such offsets may be taken at the notional value of the derivative position. The BofA Merrill Lynch 1-3 Year Treasury Index is an unmanaged index that tracks the performance of the direct sovereign debt of the U.S. Government having a maturity of at least one year and less than three years. It is not possible to invest directly in an unmanaged index.

11 PIMCO Short-Term Strategies Strategy Solution 11 Macro Short Asset Investment Fund (PAIDX) PIMCO Enhanced Short Maturity Active ETF (MINT) Short-Term Fund (PTSHX) Enhanced Low Duration Active ETF (LDUR) Duration years 0 1 year 0 1 year 1 3 years 1 3 years Max Sector Guidelines Low Duration Fund (PTLDX) Government Related Allowed - no limit Allowed - no limit Allowed - no limit Allowed - no limit Allowed - no limit Corporates 60% Allowed - no limit Allowed - no limit Allowed - no limit Allowed - no limit Developed Non-USD 0% 0% 10% 0% 30% Asset-Backed Securities 20% Allowed - no limit Allowed - no limit Allowed - no limit Allowed - no limit High Yield 0% 1 0% 1 10% 15% 2 10% Emerging Markets 10% 5% 1 5% 10% 10% Derivatives Interest Rate Swaps - Max 10% Credit Default Swaps - Max 5% Forwards only - including TBAs Allowed - no limit Allowed - no limit Allowed - no limit Currency Exposure 0% 0% 20% 5% 20% Issue/Issuer Limit 3% / 5% 5% / 10% 5% / 10% 5% / 10% 5% / 10% Equity Related Not allowed No preferred / 2% convertible 1 No common / up to 10% preferred, convertible and other equity-related securities No common / de minimis preferred and convertible 3 No common / up to 10% preferred, convertible and other equity-related securities Fees (Institutional) Total Annual Fund Operating Expenses 0.36% 0.35% 0.53% 0.67% 0.53 Net Operating Expenses 0.29% 0.60% 3,4 1 The limits shown are not specified in the prospectus and should be considered only as general investment guidelines under normal and non-defensive portfolio operating conditions. 2 Effective September 25, Includes interest expense of 0.20%. Interest expense is borne by the Fund separately from the management fees paid to PIMCO. Excluding interest expense, Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement are 0.40%. 4 The net expense ratio reflects a contractual expense reduction agreement through 31 October 2018.

12 Investors should consider the investment objectives, risks, charges and expenses of the funds carefully before investing. This and other information are contained in the fund s prospectus and summary prospectus, if available, which may be obtained by contacting your investment professional or PIMCO representative or by visiting Please read them carefully before you invest or send money. Investments made by a fund and the results achieved by a fund are not expected to be the same as those made by any other PIMCO-advised fund, including those with a similar name, investment objective or policies. A new or smaller fund s performance may not represent how the fund is expected to or may perform in the long-term. New funds have limited operating histories for investors to evaluate and new and smaller funds may not attract sufficient assets to achieve investment and trading efficiencies. A fund may be forced to sell a comparatively large portion of its portfolio to meet significant shareholder redemptions for cash, or hold a comparatively large portion of its portfolio in cash due to significant share purchases for cash, in each case when the fund otherwise would not seek to do so, which may adversely affect performance. The performance figures presented reflect the total return performance for fund type or fund share classes stated. These figures reflect changes in share price, reinvestment of dividends, and capital gain distributions. All periods longer than one year are annualized. Different fund types (e.g., ETFs, open-ended investment companies) and fund share classes are subject to different fees and expenses (which may affect performance). They may also have different minimum investment requirements and be entitled to different services. The minimum initial investment for Institutional class shares is $1 million; however, it may be modified for certain financial intermediaries who submit trades on behalf of eligible investors. The SEC yield is an annualized yield based on the most recent 30 day period. A word about risk: Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and the current low interest rate environment increases this risk. Current reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets. High-yield, lower-rated, securities involve greater risk than higher-rated securities; portfolios that invest in them may be subject to greater levels of credit and liquidity risk than portfolios that do not. Mortgage and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and their value may fluctuate in response to the market s perception of issuer creditworthiness; while generally supported by some form of government or private guarantee there is no assurance that private guarantors will meet their obligations. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested. Exchange Traded Funds ( ETF ) are afforded certain exemptions from the Investment Company Act. The exemptions allow, among other things, for individual shares to trade on the secondary market. Individual shares cannot be directly purchased from or redeemed by the ETF. Purchases and redemptions directly with ETFs are only accomplished through creation unit aggregations or baskets of shares. Shares of an ETF are bought and sold at market price (not NAV). Brokerage commissions will reduce returns. Investment policies, management fees and other information can be found in the individual ETF s prospectus. Buying or selling ETF shares on an exchange may require the payment of brokerage commissions. Due to the costs inherent in buying or selling Fund shares, frequent trading may detract significantly from investment returns. Investment in Fund shares may not be advisable for investors who expect to engage in frequent trading. Current holdings are subject to risk. Holdings are subject to change at any time. An investment in an ETF involves risk, including the loss of principal. Investment return, price, yield and Net Asset Value (NAV) will fluctuate with changes in market conditions. Investments may be worth more or less than the original cost when redeemed. Net Asset Value (NAV) represents an ETF s per-share value. The per-share value of an ETF is calculated by dividing the total value of the securities in its portfolio, less any liabilities, by the number of ETF shares outstanding. ETF shares are valued as of the close of regular trading on the NYSE Arca (normally 4:00 P.M. Eastern Time) (The NYSE Close ) on each business day. The Fund s Net Asset Value, shares outstanding and total net assets are calculated as of the close of regular trading on each day that the NYSE Arca is open, and do not reflect security transactions or Fund shares created or redeemed on the date stated. Such transactions are recorded on the next business day and reported on the website the following business day. Returns are average annualized total returns, except for those periods of less than one year, which are cumulative. Market returns are based upon the midpoint of the bid/ask spread at 4:00 pm Eastern time (when NAV is normally determined for most ETFs), and do not represent the returns you would receive if you traded shares at other times. Premiums (when market price is above NAV) or discounts (when market price is below NAV) reflect the differences (expressed as a percentage) between the NAV and the Market Price of the Fund on a given day, generally at the time the NAV is calculated. A discount or premium could be significant. Data in chart format displaying the frequency distribution of discounts and premiums of the Market Price against the NAV can be found for each Fund at ETFs are subject to secondary market trading risks. Shares of an ETF will be listed for trading on an exchange, however, there can be no guarantee that an active trading market for such shares will develop or continue. There can be no guarantee that an ETF s exchange listing or ability to trade its shares will continue or remain unchanged. Shares of an ETF may trade on an exchange at prices at, above or below their most recent NAV. The per share NAV of an ETF is calculated at the end of each business day, and fluctuates with changes in the market value of the Fund s holdings. The trading prices of an ETF s shares fluctuate continuously throughout the trading day based on market supply and demand, which may not correlate to NAV. The trading prices of an ETF s shares may differ significantly from NAV during periods of market volatility, which may, among other factors, lead to the Fund s shares trading at a premium or discount to NAV.The Morningstar Fixed-Income Fund Manager of the Year award is based on the strength of the manager, performance, strategy and firm s stewardship. Morningstar Awards Morningstar, Inc. All Rights Reserved. Awarded to Jerome Schneider and Team (PIMCO Short-Term Fund) for U.S. Fixed-Income Fund Manager of the Year. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this publication may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America L.P. in the United States and throughout the world. PIMCO Investments LLC, distributor, 1633 Broadway, New York, NY, is a company of PIMCO PIMCO Newport Beach Headquarters 650 Newport Center Drive Newport Beach, CA Hong Kong London Milan Munich New York Rio de Janeiro Singapore Sydney Tokyo Toronto Zurich pimco.com For investment professional use only CMR PB068_ Q17