PORTFOLIO OPTIMIZATION CONSERVATIVE PORTFOLIO Quarterly Profile - As of December 31, 2017 INVESTMENT GOAL: Seeks current income and preservation of capital INVESTOR PROFILE: Clients who are looking for a relatively stable investment and do not tolerate short-term market swings RISK CHARACTERISTICS: As a fund-of-funds, the Portfolio is exposed to the same risks as the Underlying Funds in which it invests in direct proportion to its allocations to those Underlying Funds, along with other risks PORTFOLIO MANAGERS: Howard T. Hirakawa 2009 Carleton J. Muench 2009 Max Gokhman 2015 Samuel S. Park 2013 RISK SPECTRUM: Conservative Less Risk <... > More Risk FUND INCEPTION DATE: 5/2/2011 TOTAL ANNUAL OPERATING EXPENSES AFTER FEE WAIVER: 0.88% LIPPER CATEGORY: Mixed-Asset Target Allocation Conservative Funds MORNINGSTAR CATEGORY: Morningstar US VL Sub Allocation - 15% to 30% Equity Variable universal life (VUL) insurance allows policyowners to structure their policy death benefit and premium payments based on their insurance needs and financial objectives. Pacific Life s VUL insurance products currently offer policyowners the ability to allocate their premium payments among more than 90 different investment options, which includes the Portfolio Optimization Conservative Portfolio. The Portfolio is an asset allocation fund-of-funds investment option that aims to provide diversification across major asset classes by investing in certain Underlying Funds of Pacific Select Fund. Pacific Life Fund Advisors LLC (PLFA), a subsidiary of Pacific Life Insurance Company, is the investment adviser and responsible for determining the asset allocation mix for the Portfolio. PLFA manages the Portfolio through a multi-step process that includes: (1) asset allocation/ portfolio construction; (2) manager oversight, and (3) investment risk management. PLFA may modify the underlying funds from time to time. Diversified Bond (Western Asset) 23.2% Short Duration Bond (T. Rowe Price) 20.7% Managed Bond (PIMCO) 12.4% High Yield Bond (Pacific Asset Management) 3.8% Large-Cap Value (ClearBridge) 3.5% Emerging Markets Debt (Ashmore) 3.3% Global Absolute Return (Eaton Vance) 3.0% Equity Long/Short (AQR) 3.0% Currency Strategies (MCG/UBS Global AM) 2.9% Mid-Cap Value (Boston Partners) 2.9% Floating Rate Loan (Eaton Vance) 2.7% Floating Rate Income (Pacific Asset Management) 2.7% Core Income (Pacific Asset Management) 2.5% Inflation Managed (PIMCO) 2.0% Value Advantage (JPMorgan) 1.8% Portfolio Optimization Conservative Portfolio Morningstar US VL Sub Allocation - 15% to 30% Equity* HOLDINGS Comstock (Invesco) 1.5% International Large-Cap (MFS ) 1.4% International Value (Wellington) 1.4% Equity Index (BlackRock) 1.3% Emerging Markets (OppenheimerFunds) 1.0% Inflation Strategy (Barings) 0.8% Main Street Core (OppenheimerFunds) 0.7% Dividend Growth (T. Rowe Price) 0.4% Large-Cap Growth (BlackRock ) 0.4% Growth (MFS) 0.4% Mid-Cap Equity (Scout) 0.2% TARGET ASSET CLASS ALLOCATIONS as of May 1, 2017 Debt 80% Equity 20% Performance Annualized Returns SINCE QTD YTD 1 YR 3 YR 5 YR 10 YR INCEPTION 1.22% 7.37% 7.37% 4.34% 3.89% 4.32% 1.33% 6.52% 6.52% 3.36% 3.59% 3.60% * Morningstar US VL Sub Allocation - 15% to 30% Equity - Funds in allocation categories seek to provide both income and capital appreciation by investing in multiple asset classes, including stocks, bonds, and cash. These portfolios are dominated by domestic holdings and have equity exposures between 15% and 30%. MKT12-101F Page 1 of 4
PORTFOLIO OPTIMIZATION CONSERVATIVE PORTFOLIO The fund performance in this report includes only fund level fees and expenses, reinvestment of dividends, and distributions. Performance does not include any policy charges. Policy charges are deducted monthly. The policy charges may include, but are not limited to, Cost of Insurance charges, administrative charges, mortality and expense risk charges, coverage charges, and any rider charges. Additionally, a premium load is deducted from each premium payment. Policy performance would be significantly lower after all policy fees and expenses are deducted and policy cash values could be less than total premiums paid. You are encouraged to ask your life insurance producer for a personalized illustration since policy charges can vary by product. The illustration includes an analysis of charges report, to help you understand how the policy charges affect your policy cash values. See the applicable product prospectus and underlying fund prospectuses for more information. Variable universal life insurance generally requires additional premium payments after the initial premium. If either no premiums are paid, or subsequent premiums are insufficient to continue coverage, it is possible that coverage will expire. Life insurance is subject to underwriting and approval of the application and will incur monthly policy charges. ABOUT RISKS Every variable investment option has some degree of risk depending on what it invests in and what strategies it uses. While all variable investment options are subject to market risk, some investment options may be subject to greater volatility than others. The variable investment options are not FDIC insured or guaranteed. The risks disclosed below are only intended to illustrate certain principal risks of the variable investment options and are not intended to be complete or exhaustive. Before investing you should carefully read the applicable fund prospectuses. Asset allocation is the process of distributing a fund s investments among varying asset classes of investments (e. g., equity and debt). It does not guarantee diversification, assure a profit, or protect against loss. Convertible securities are generally subject to equity securities risk when the underlying stock price is high relative to the conversion price and to the risks of debt securities when the underlying stock price is low relative to the conversion price. They also tend to be of lower credit quality. Currency exposure subjects a fund to changes in exchange rates between currencies, which may result in increased volatility. The values of Debt Securities are affected by many factors, including prevailing interest rates and the outlook for changes in interest rates, market conditions and market liquidity. Derivatives can be complex instruments that may experience sudden changes in price and liquidity, may be difficult to value, sell or unwind and may be leveraged, which can cause very large swings in value. Privately negotiated derivatives are further subject to the counterparty s ability to satisfy its obligation under the derivatives contract. Commonly-used derivatives include forward commitments and futures contracts - which obligate a purchaser to purchase, and a seller to sell, a specific amount of an asset at a specified future date and price; options where, for a premium payment or fee, the purchaser of the option is given the right but not the obligation to buy (a call option) or sell (a put option) the underlying asset, or settle for cash an amount based on the underlying asset, at a specified price during a period of time or on a specified date; and swap agreements where the parties agree to exchange the returns earned on specific assets, and are subject to risks specific to these derivatives. Emerging market securities tend to be more volatile and less liquid than those in developed countries. Equity Securities tend to go up or down in value, sometimes rapidly and unpredictably, in response to many factors, including for reasons related to the particular issuer, general economic conditions and investor perceptions. Floating rate loans are usually rated below investment grade and thus are subject to greater risk of default than higher rated securities. In addition, their extended trade settlement periods may result in cash not being immediately available to a fund, thus subjecting the fund to greater liquidity risk. Investments in foreign markets are subject to regulatory, political, economic, market and other conditions of those markets, which can make these investments more volatile and less liquid than U. S. investments. Fund-of-funds are subject to risks at the fund-of-funds level and risks of the underlying funds in which they invest in proportion to their allocations to those underlying funds. They are also subject to their own expenses along with the expenses of the underlying funds, which can be higher than expenses incurred when investing directly in an underlying fund. Better returns could be achieved by investing in an individual fund or funds representing a single asset class rather than using asset allocation. High yield/high risk bonds (also known as junk bonds ) have greater risk of default than higher quality bonds that may have a lower yield. Value companies are considered undervalued so there is a risk that the determination that a value company s stock is undervalued is not correct or not recognized in the market. The performance of index funds, whose investments track an index, may vary, sometimes substantially, from the performance of the fund s benchmark index due to imperfect correlation between the fund s investments and the index. An index fund should perform poorly when its index performs poorly, as opposed to an actively managed fund which generally seeks to outperform a benchmark index. Interest rate changes, or expectations about such changes, may cause the value of debt securities to fluctuate. Debt securities with longer durations or fixed interest rates tend to be more sensitive to changes in interest rates, making them generally more volatile than debt securities with shorter durations or floating or adjustable interest rates. Page 2 of 4
PORTFOLIO OPTIMIZATION CONSERVATIVE PORTFOLIO Leverage is investment exposure that exceeds the initial amount invested. Leverage can magnify gains and losses and therefore can increase volatility and market exposure, and may subject a fund to a loss far greater than the initial amount invested. The value of mortgage-related and other asset-backed securities will be affected by factors affecting the housing market or the respective market for the assets underlying these securities. Borrowers or issuers may pay principal later than expected (causing these securities to increase in duration and be more volatile in rising interest rate conditions) or pay principal sooner than expected, causing proceeds to be reinvested at lower prevailing interest rates. Sector and concentrated funds, which invest significantly in an industry or sector, or geographically concentrated funds, which invest significantly in a single or limited number of countries or particular geographic region, may be subject to greater price volatility. Generally, stocks of small-cap and mid-cap companies may be riskier and more volatile than those of larger, more established, or large-cap, companies, though all are subject to equity securities risk. Not all U. S. government securities are backed or guaranteed by the U. S. government and there is a risk that the U. S. government will not make timely payments on its debt or provide financial support to U. S. government agencies, instrumentalities or sponsored enterprises if these entities cannot meet their financial obligations. Although some funds may have names or investment goals/ objectives that resemble retail mutual funds managed by the fund manager, these funds will not have the same underlying holdings or performance as the retail mutual funds. TOTAL ANNUAL OPERATING EXPENSES AFTER FEE WAIVER The annual percentage of fund assets paid as a percentage of your investment for the fund s operating expenses, including management fees and administrative expenses and distribution (12b-1) or service fees, as applicable. These expenses are generally based on each portfolio s average daily net assets for the portfolio s prior fiscal year. The percentage shown reflects the net expenses of the fund. A net expense reflects a deduction from total (gross) expenses. A fund-of-funds may have higher fees and expenses than a fund that invests directly in equity and fixed-income securities. Please see the fund prospectus for more detailed information about a fund s annual operating expenses. MORNINGSTAR CATEGORY A proprietary Morningstar data point that funds are assigned to based on the underlying securities in each fund s portfolio. Page 3 of 4
Pacific Life is a product provider. It is not a fiduciary and therefore does not give advice or make recommendations regarding insurance or investment products. Pacific Life Insurance Company Newport Beach, CA 92660 (800) 800-7681 www.pacificlife.com Pacific Life & Annuity Company Newport Beach, CA 92660 (888) 595-6996 www.pacificlife.com Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues. Insurance products and their guarantees, including optional benefits and any crediting rates, are backed by the financial strength and claims-paying ability of the issuing insurance company, but they do not protect the value of the variable investment options. Look to the strength of the life insurance company with regard to such guarantees as these guarantees are not backed by the broker-dealer, insurance agency, or their affiliates from which products are purchased. Neither these entities nor their representatives make any representation or assurance regarding the claims-paying ability of the life insurance company. Variable insurance products and shares of Pacific Select Fund are distributed by Pacific Select Distributors, LLC (member FINRA & SIPC), a subsidiary of Pacific Life Insurance Company, and an affiliate of Pacific Life & Annuity Company, and are available through licensed third-party broker-dealers. Not all investment options may be available in all VUL products. Please check your prospectus for details. This material must be preceded or accompanied by the variable life insurance product prospectus. Contact your life insurance producer or visit www.pacificlife.com for more information, including product and underlying fund prospectuses that contain more complete information about Pacific Life and a variable life insurance policy s risks, charges, limitations, and expenses, as well as the risks, charges, expenses and investment goals/objectives of the underlying investment options. Read them carefully before investing or sending money. BlackRock is a registered trademark of BlackRock, Inc. All other trademarks are property of their respective owners. MFS is a registered trademark of Massachusetts Financial Services Company. Main Street is a registered trademark of OppenheimerFunds, Inc. Investment and Insurance Products: Not a Deposit Not Insured by any Federal Government Agency Not FDIC Insured No Bank Guarantee May Lose Value MKT12-101F Page 4 of 4 15-40722-24 1/18 E121
PORTFOLIO OPTIMIZATION MODERATE-CONSERVATIVE PORTFOLIO Quarterly Profile - As of December 31, 2017 INVESTMENT GOAL: Seeks current income and moderate growth of capital INVESTOR PROFILE: Clients with a focus on keeping pace with inflation and a tolerance for a moderate level of risk RISK CHARACTERISTICS: As a fund-of-funds, the Portfolio is exposed to the same risks as the Underlying Funds in which it invests in direct proportion to its allocations to those Underlying Funds, along with other risks PORTFOLIO MANAGERS: Howard T. Hirakawa 2009 Carleton J. Muench 2009 Max Gokhman 2015 Samuel S. Park 2013 RISK SPECTRUM: Moderately Conservative Less Risk <... > More Risk FUND INCEPTION DATE: 5/2/2011 TOTAL ANNUAL OPERATING EXPENSES AFTER FEE WAIVER: 0.93% LIPPER CATEGORY: Mixed-Asset Target Allocation Conservative Funds MORNINGSTAR CATEGORY: Morningstar US VL Sub Allocation - 30% to 50% Equity Variable universal life (VUL) insurance allows policyowners to structure their policy death benefit and premium payments based on their insurance needs and financial objectives. Pacific Life s VUL insurance products currently offer policyowners the ability to allocate their premium payments among more than 90 different investment options, which includes the Portfolio Optimization Moderate-Conservative Portfolio. The Portfolio is an asset allocation fund-of-funds investment option that aims to provide diversification across major asset classes by investing in certain Underlying Funds of Pacific Select Fund. Pacific Life Fund Advisors LLC (PLFA), a subsidiary of Pacific Life Insurance Company, is the investment adviser and responsible for determining the asset allocation mix for the Portfolio. PLFA manages the Portfolio through a multi-step process that includes: (1) asset allocation/ portfolio construction; (2) manager oversight, and (3) investment risk management. PLFA may modify the underlying funds from time to time. Diversified Bond (Western Asset) 19.6% Short Duration Bond (T. Rowe Price) 11.5% Managed Bond (PIMCO) 10.5% Mid-Cap Value (Boston Partners) 4.7% Large-Cap Value (ClearBridge) 4.3% Equity Long/Short (AQR) 3.4% Global Absolute Return (Eaton Vance) 3.3% High Yield Bond (Pacific Asset Management) 3.2% Currency Strategies (MCG/UBS Global AM) 3.2% Value Advantage (JPMorgan) 3.1% Emerging Markets (OppenheimerFunds) 3.1% Equity Index (BlackRock) 2.4% Floating Rate Loan (Eaton Vance) 2.3% Floating Rate Income (Pacific Asset Management) 2.3% Main Street Core (OppenheimerFunds) 2.0% International Small-Cap (QS Batterymarch) 1.9% International Value (Wellington) 1.9% International Large-Cap (MFS ) 1.9% Comstock (Invesco) 1.8% Inflation Managed (PIMCO) 1.7% HOLDINGS PERFORMANCE Core Income (Pacific Asset Management) 1.5% Large-Cap Growth (BlackRock ) 1.5% Growth (MFS) 1.5% Emerging Markets Debt (Ashmore) 1.3% Long/Short Large-Cap (JPMorgan) 1.0% Mid-Cap Equity (Scout) 1.0% Dividend Growth (T. Rowe Price) 0.9% Inflation Strategy (Barings) 0.8% Small-Cap Value (AllianceBernstein) 0.7% Small-Cap Growth (Rothschild) 0.6% Small-Cap Equity (BlackRock/Franklin) 0.6% Developing Growth (Lord Abbett) 0.4% Small-Cap Index (BlackRock) 0.2% TARGET ASSET CLASS ALLOCATIONS as of May 1, 2017 Debt 60% Equity 40% Annualized Returns QTD YTD 1 YR 3 YR 5 YR 10 YR SINCE INCEPTION Portfolio Optimization Moderate- 2.14% 10.79% 10.79% 5.62% 5.80% 5.53% Conservative Portfolio Morningstar US VL Sub Allocation - 30% to 50% Equity * 2.37% 10.55% 10.55% 4.73% 5.91% 4.52% * Morningstar US VL Sub Allocation - 30% to 50% Equity - Funds in allocation categories seek to provide both income and capital appreciation by investing in multiple asset classes, including stocks, bonds, and cash. These portfolios are dominated by domestic holdings and have equity exposures between 30% and 50%. MKT12-104F Page 1 of 4
PORTFOLIO OPTIMIZATION MODERATE-CONSERVATIVE PORTFOLIO The fund performance in this report includes only fund level fees and expenses, reinvestment of dividends, and distributions. Performance does not include any policy charges. Policy charges are deducted monthly. The policy charges may include, but are not limited to, Cost of Insurance charges, administrative charges, mortality and expense risk charges, coverage charges, and any rider charges. Additionally, a premium load is deducted from each premium payment. Policy performance would be significantly lower after all policy fees and expenses are deducted and policy cash values could be less than total premiums paid. You are encouraged to ask your life insurance producer for a personalized illustration since policy charges can vary by product. The illustration includes an analysis of charges report, to help you understand how the policy charges affect your policy cash values. See the applicable product prospectus and underlying fund prospectuses for more information. Variable universal life insurance generally requires additional premium payments after the initial premium. If either no premiums are paid, or subsequent premiums are insufficient to continue coverage, it is possible that coverage will expire. Life insurance is subject to underwriting and approval of the application and will incur monthly policy charges. ABOUT RISKS Every variable investment option has some degree of risk depending on what it invests in and what strategies it uses. While all variable investment options are subject to market risk, some investment options may be subject to greater volatility than others. The variable investment options are not FDIC insured or guaranteed. The risks disclosed below are intended only to illustrate certain principal risks of the variable investment options and are not intended to be complete or exhaustive. Before investing you should carefully read the applicable fund prospectuses. Asset allocation is the process of distributing a fund s investments among varying asset classes of investments (e. g., equity and debt). It does not guarantee diversification, assure a profit, or protect against loss. Convertible securities are generally subject to equity securities risk when the underlying stock price is high relative to the conversion price and to the risks of debt securities when the underlying stock price is low relative to the conversion price. They also tend to be of lower credit quality. Currency exposure subjects a fund to changes in exchange rates between currencies, which may result in increased volatility. The values of Debt Securities are affected by many factors, including prevailing interest rates and the outlook for changes in interest rates, market conditions and market liquidity. Derivatives can be complex instruments that may experience sudden changes in price and liquidity, may be difficult to value, sell or unwind and may be leveraged, which can cause very large swings in value. Privately negotiated derivatives are further subject to the counterparty s ability to satisfy its obligation under the derivatives contract. Commonly-used derivatives include forward commitments and futures contracts - which obligate a purchaser to purchase, and a seller to sell, a specific amount of an asset at a specified future date and price; options where, for a premium payment or fee, the purchaser of the option is given the right but not the obligation to buy (a call option) or sell (a put option) the underlying asset, or settle for cash an amount based on the underlying asset, at a specified price during a period of time or on a specified date; and swap agreements where the parties agree to exchange the returns earned on specific assets, and are subject to risks specific to these derivatives. Emerging market securities tend to be more volatile and less liquid than those in developed countries. Equity Securities tend to go up or down in value, sometimes rapidly and unpredictably, in response to many factors, including for reasons related to the particular issuer, general economic conditions and investor perceptions. Floating rate loans are usually rated below investment grade and thus are subject to greater risk of default than higher rated securities. In addition, their extended trade settlement periods may result in cash not being immediately available to a fund, thus subjecting the fund to greater liquidity risk. Investments in foreign markets are subject to regulatory, political, economic, market and other conditions of those markets, which can make these investments more volatile and less liquid than U. S. investments. Fund-of-funds are subject to risks at the fund-of-funds level and risks of the underlying funds in which they invest in proportion to their allocations to those underlying funds. They are also subject to their own expenses along with the expenses of the underlying funds, which can be higher than expenses incurred when investing directly in an underlying fund. Better returns could be achieved by investing in an individual fund or funds representing a single asset class rather than using asset allocation. High yield/high risk bonds (also known as junk bonds ) have greater risk of default than higher quality bonds that may have a lower yield. Growth companies are considered to have potential for aboveaverage or rapid growth but may be subject to greater price volatility than value companies; value companies are considered undervalued so there is a risk that the determination that a value company s stock is undervalued is not correct or not recognized in the market. The performance of index funds, whose investments track an index, may vary, sometimes substantially, from the performance of the fund s benchmark index due to imperfect correlation between the fund s investments and the index. An index fund should perform poorly when its index performs poorly, as opposed to an actively managed fund which generally seeks to outperform a benchmark index. Page 2 of 4
PORTFOLIO OPTIMIZATION MODERATE-CONSERVATIVE PORTFOLIO Interest rate changes, or expectations about such changes, may cause the value of debt securities to fluctuate. Debt securities with longer durations or fixed interest rates tend to be more sensitive to changes in interest rates, making them generally more volatile than debt securities with shorter durations or floating or adjustable interest rates. Leverage is investment exposure that exceeds the initial amount invested. Leverage can magnify gains and losses and therefore can increase volatility and market exposure, and may subject a fund to a loss far greater than the initial amount invested. The value of mortgage-related and other asset-backed securities will be affected by factors affecting the housing market or the respective market for the assets underlying these securities. Borrowers or issuers may pay principal later than expected (causing these securities to increase in duration and be more volatile in rising interest rate conditions) or pay principal sooner than expected, causing proceeds to be reinvested at lower prevailing interest rates. Sector and concentrated funds, which invest significantly in an industry or sector, or geographically concentrated funds, which invest significantly in a single or limited number of countries or particular geographic region, may be subject to greater price volatility. Short positions, whether taken through a derivative instrument or by conducting a short sale, lose value as the security s or reference asset s price increases; therefore, the loss on a short position is theoretically unlimited. Short positions are subject to leverage risk because they may result in investment exposure in an amount exceeding the initial investment. Generally, stocks of small-cap and mid-cap companies may be riskier and more volatile than those of larger, more established, or large-cap, companies, though all are subject to equity securities risk. Socially responsive funds could underperform similar funds that do not have a social policy. Among the reasons for this are: undervalued stocks that do not meet the social criteria could outperform those that do, economic or political changes could make certain companies less attractive for investment, and the social policy could cause the fund to sell or avoid stocks that subsequently perform well. Not all U. S. government securities are backed or guaranteed by the U. S. government and there is a risk that the U. S. government will not make timely payments on its debt or provide financial support to U. S. government agencies, instrumentalities or sponsored enterprises if these entities cannot meet their financial obligations. Although some funds may have names or investment goals/ objectives that resemble retail mutual funds managed by the fund manager, these funds will not have the same underlying holdings or performance as the retail mutual funds. TOTAL ANNUAL OPERATING EXPENSES AFTER FEE WAIVER The annual percentage of fund assets paid as a percentage of your investment for the fund s operating expenses, including management fees and administrative expenses and distribution (12b-1) or service fees, as applicable. These expenses are generally based on each portfolio s average daily net assets for the portfolio s prior fiscal year. The percentage shown reflects the net expenses of the fund. A net expense reflects a deduction from total (gross) expenses. A fund-of-funds may have higher fees and expenses than a fund that invests directly in equity and fixed-income securities. Please see the fund prospectus for more detailed information about a fund s annual operating expenses. MORNINGSTAR CATEGORY A proprietary Morningstar data point that funds are assigned to based on the underlying securities in each fund's portfolio. Page 3 of 4
Pacific Life is a product provider. It is not a fiduciary and therefore does not give advice or make recommendations regarding insurance or investment products. Pacific Life Insurance Company Newport Beach, CA 92660 (800) 800-7681 www.pacificlife.com Pacific Life & Annuity Company Newport Beach, CA 92660 (888) 595-6996 www.pacificlife.com Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues. Insurance products and their guarantees, including optional benefits and any crediting rates, are backed by the financial strength and claimspaying ability of the issuing insurance company, but they do not protect the value of the variable investment options. Look to the strength of the life insurance company with regard to such guarantees as these guarantees are not backed by the broker-dealer, insurance agency, or their affiliates from which products are purchased. Neither these entities nor their representatives make any representation or assurance regarding the claims-paying ability of the life insurance company. Variable insurance products and shares of Pacific Select Fund are distributed by Pacific Select Distributors, LLC (member FINRA & SIPC), a subsidiary of Pacific Life Insurance Company, and an affiliate of Pacific Life & Annuity Company, and are available through licensed third-party broker-dealers. Not all investment options may be available in all VUL products. Please check your prospectus for details. This material must be preceded or accompanied by the variable life insurance product prospectus. Contact your life insurance producer or visit www.pacificlife.com for more information, including product and underlying fund prospectuses that contain more complete information about Pacific Life and a variable life insurance policy s risks, charges, limitations, and expenses, as well as the risks, charges, expenses and investment goals/objectives of the underlying investment options. Read them carefully before investing or sending money. BlackRock is a registered trademark of BlackRock, Inc. All other trademarks are property of their respective owners. MFS is a registered trademark of Massachusetts Financial Services Company. Main Street is a registered trademark of OppenheimerFunds, Inc. The Russell 2000 Index and Russell 2000 Value Index (together, the Indexes ) are calculated by Russell or its agent, are trademarks of Frank Russell Company ( Russell ), and have been licensed for use by Pacific Select Fund ( PSF ). Neither Russell nor the London Stock Exchange Group companies (together the Licensor Parties ) sponsor, endorse, sell or promote any portfolios of PSF, the content of this communication, or make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to (i) the results to be obtained from the use of the Indexes, or (ii) the suitability of the Indexes for the purpose to which they are being put. The Licensor Parties do not and will not provide any financial or investment advice or recommendation in relation to the Index to Pacific Select Fund or its clients. The Licensor Parties do not accept any liability to any person for any errors or omissions in the Russell Indexes and are under no obligation to advise any person of any error therein. Investment and Insurance Products: Not a Deposit Not Insured by any Federal Government Agency Not FDIC Insured No Bank Guarantee May Lose Value MKT12-104F Page 4 of 4 15-40725-23 1/18 E121
PORTFOLIO OPTIMIZATION MODERATE PORTFOLIO Quarterly Profile - As of December 31, 2017 INVESTMENT GOAL: Seeks long-term growth of capital and low to moderate income INVESTOR PROFILE: Clients who want the opportunity for moderate long-term growth RISK CHARACTERISTICS: As a fund-of-funds, the Portfolio is exposed to the same risks as the Underlying Funds in which it invests in direct proportion to its allocations to those Underlying Funds, along with other risks PORTFOLIO MANAGERS: Howard T. Hirakawa 2009 Carleton J. Muench 2009 Max Gokhman 2015 Samuel S. Park 2013 RISK SPECTRUM: Moderate Less Risk <... > More Risk FUND INCEPTION DATE: 5/2/2011 TOTAL ANNUAL OPERATING EXPENSES AFTER FEE WAIVER: 0.99% LIPPER CATEGORY: Mixed-Asset Target Allocation Moderate Funds MORNINGSTAR CATEGORY: Morningstar US VL Sub Allocation - 50% to 70% Equity Variable universal life (VUL) insurance allows policyowners to structure their policy death benefit and premium payments based on their insurance needs and financial objectives. Pacific Life s VUL insurance products currently offer policyowners the ability to allocate their premium payments among more than 90 different investment options, which includes the Portfolio Optimization Moderate Portfolio. The Portfolio is an asset allocation fund-of-funds investment option that aims to provide diversification across major asset classes by investing in certain Underlying Funds of Pacific Select Fund. Pacific Life Fund Advisors LLC (PLFA), a subsidiary of Pacific Life Insurance Company, is the investment adviser and responsible for determining the asset allocation mix for the Portfolio. PLFA manages the Portfolio through a multi-step process that includes: (1) asset allocation/ portfolio construction; (2) manager oversight, and (3) investment risk management. PLFA may modify the underlying funds from time to time. Diversified Bond (Western Asset) 12.9% Managed Bond (PIMCO) 7.2% Short Duration Bond (T. Rowe Price) 6.5% Emerging Markets (OppenheimerFunds) 5.0% Mid-Cap Value (Boston Partners) 5.0% Large-Cap Value (ClearBridge) 4.8% Value Advantage (JPMorgan) 4.1% Global Absolute Return (Eaton Vance) 3.7% Equity Long/Short (AQR) 3.6% Currency Strategies (MCG/UBS Global AM) 3.4% International Value (Wellington) 3.1% International Large-Cap (MFS ) 3.1% Equity Index (BlackRock) 2.9% International Small-Cap (QS Batterymarch) 2.8% Long/Short Large-Cap (JPMorgan) 2.5% Main Street Core (OppenheimerFunds) 2.5% High Yield Bond (Pacific Asset Management) 2.3% Floating Rate Loan (Eaton Vance) 2.3% Floating Rate Income (Pacific Asset Management) 2.3% Comstock (Invesco) 2.1% Portfolio Optimization Moderate Portfolio Morningstar US VL Sub Allocation - 50% to 70% Equity* HOLDINGS PERFORMANCE Large-Cap Growth (BlackRock ) 1.9% Growth (MFS) 1.8% Small-Cap Value (AllianceBernstein) 1.7% Inflation Managed (PIMCO) 1.7% Small-Cap Equity (BlackRock/Franklin) 1.6% Core Income (Pacific Asset Management) 1.5% Dividend Growth (T. Rowe Price) 1.5% Mid-Cap Equity (Scout) 1.3% Emerging Markets Debt (Ashmore) 1.0% Real Estate (Morgan Stanley) 1.0% Small-Cap Index (BlackRock) 1.0% Inflation Strategy (Barings) 0.8% Small-Cap Growth (Rothschild) 0.6% Developing Growth (Lord Abbett) 0.4% Mid-Cap Growth (Ivy) 0.3% TARGET ASSET CLASS ALLOCATIONS as of May 1, 2017 Equity 55% Debt 45% Annualized Returns QTD YTD 1 YR 3 YR 5 YR 10 YR SINCE INCEPTION 2.83% 13.22% 13.22% 6.83% 7.54% 6.55% 3.56% 14.23% 14.23% 6.25% 8.37% 5.46% * Morningstar US VL Sub Allocation - 50% to 70% Equity - Funds in allocation categories seek to provide both income and capital appreciation by investing in multiple asset classes, including stocks, bonds, and cash. These portfolios are dominated by domestic holdings and have equity exposures between 50% and 70%. MKT12-103F Page 1 of 4
PORTFOLIO OPTIMIZATION MODERATE PORTFOLIO The fund performance in this report includes only fund level fees and expenses, reinvestment of dividends, and distributions. Performance does not include any policy charges. Policy charges are deducted monthly. The policy charges may include, but are not limited to, Cost of Insurance charges, administrative charges, mortality and expense risk charges, coverage charges, and any rider charges. Additionally, a premium load is deducted from each premium payment. Policy performance would be significantly lower after all policy fees and expenses are deducted and policy cash values could be less than total premiums paid. You are encouraged to ask your life insurance producer for a personalized illustration since policy charges can vary by product. The illustration includes an analysis of charges report, to help you understand how the policy charges affect your policy cash values. See the applicable product prospectus and underlying fund prospectuses for more information. Variable universal life insurance generally requires additional premium payments after the initial premium. If either no premiums are paid, or subsequent premiums are insufficient to continue coverage, it is possible that coverage will expire. Life insurance is subject to underwriting and approval of the application and will incur monthly policy charges. ABOUT RISKS Every variable investment option has some degree of risk depending on what it invests in and what strategies it uses. While all variable investment options are subject to market risk, some investment options may be subject to greater volatility than others. The variable investment options are not FDIC insured or guaranteed. The risks disclosed below are only intended to illustrate certain principal risks of the variable investment options and are not intended to be complete or exhaustive. Before investing you should carefully read the applicable fund prospectuses. Asset allocation is the process of distributing a fund s investments among varying asset classes of investments (e. g., equity and debt). It does not guarantee diversification, assure a profit, or protect against loss. Convertible securities are generally subject to equity securities risk when the underlying stock price is high relative to the conversion price and to the risks of debt securities when the underlying stock price is low relative to the conversion price. They also tend to be of lower credit quality. Currency exposure subjects a fund to changes in exchange rates between currencies, which may result in increased volatility. The values of Debt Securities are affected by many factors, including prevailing interest rates and the outlook for changes in interest rates, market conditions and market liquidity. Derivatives can be complex instruments that may experience sudden changes in price and liquidity, may be difficult to value, sell or unwind and may be leveraged, which can cause very large swings in value. Privately negotiated derivatives are further subject to the counterparty s ability to satisfy its obligation under the derivatives contract. Commonly-used derivatives include forward commitments and futures contracts - which obligate a purchaser to purchase, and a seller to sell, a specific amount of an asset at a specified future date and price; options where, for a premium payment or fee, the purchaser of the option is given the right but not the obligation to buy (a call option) or sell (a put option) the underlying asset, or settle for cash an amount based on the underlying asset, at a specified price during a period of time or on a specified date; and swap agreements where the parties agree to exchange the returns earned on specific assets, and are subject to risks specific to these derivatives. Emerging market securities tend to be more volatile and less liquid than those in developed countries. Equity Securities tend to go up or down in value, sometimes rapidly and unpredictably, in response to many factors, including for reasons related to the particular issuer, general economic conditions and investor perceptions. Floating rate loans are usually rated below investment grade and thus are subject to greater risk of default than higher rated securities. In addition, their extended trade settlement periods may result in cash not being immediately available to a fund, thus subjecting the fund to greater liquidity risk. Investments in foreign markets are subject to regulatory, political, economic, market and other conditions of those markets, which can make these investments more volatile and less liquid than U. S. investments. Fund-of-funds are subject to risks at the fund-of-funds level and risks of the underlying funds in which they invest in proportion to their allocations to those underlying funds. They are also subject to their own expenses along with the expenses of the underlying funds, which can be higher than expenses incurred when investing directly in an underlying fund. Better returns could be achieved by investing in an individual fund or funds representing a single asset class rather than using asset allocation. High yield/high risk bonds (also known as junk bonds ) have greater risk of default than higher quality bonds that may have a lower yield. Growth companies are considered to have potential for aboveaverage or rapid growth but may be subject to greater price volatility than value companies; value companies are considered undervalued so there is a risk that the determination that a value company s stock is undervalued is not correct or not recognized in the market. The performance of index funds, whose investments track an index, may vary, sometimes substantially, from the performance of the fund s benchmark index due to imperfect correlation between the fund s investments and the index. An index fund should perform poorly when its index performs poorly, as opposed to an actively managed fund which generally seeks to outperform a benchmark index. Page 2 of 4
PORTFOLIO OPTIMIZATION MODERATE PORTFOLIO Interest rate changes, or expectations about such changes, may cause the value of debt securities to fluctuate. Debt securities with longer durations or fixed interest rates tend to be more sensitive to changes in interest rates, making them generally more volatile than debt securities with shorter durations or floating or adjustable interest rates. Leverage is investment exposure that exceeds the initial amount invested. Leverage can magnify gains and losses and therefore can increase volatility and market exposure, and may subject a fund to a loss far greater than the initial amount invested. Sector and concentrated funds, which invest significantly in an industry or sector, or geographically concentrated funds, which invest significantly in a single or limited number of countries or particular geographic region, may be subject to greater price volatility. Short positions, whether taken through a derivative instrument or by conducting a short sale, lose value as the security s or reference asset s price increases; therefore, the loss on a short position is theoretically unlimited. Short positions are subject to leverage risk because they may result in investment exposure in an amount exceeding the initial investment. Generally, stocks of small-cap and mid-cap companies may be riskier and more volatile than those of larger, more established, or large-cap, companies, though all are subject to equity securities risk. Not all U. S. government securities are backed or guaranteed by the U. S. government and there is a risk that the U. S. government will not make timely payments on its debt or provide financial support to U. S. government agencies, instrumentalities or sponsored enterprises if these entities cannot meet their financial obligations. Although some funds may have names or investment goals/ objectives that resemble retail mutual funds managed by the fund manager, these funds will not have the same underlying holdings or performance as the retail mutual funds. TOTAL ANNUAL OPERATING EXPENSES AFTER FEE WAIVER The annual percentage of fund assets paid as a percentage of your investment for the fund s operating expenses, including management fees and administrative expenses and distribution (12b-1) or service fees, as applicable. These expenses are generally based on each portfolio s average daily net assets for the portfolio s prior fiscal year. The percentage shown reflects the net expenses of the fund. A net expense reflects a deduction from total (gross) expenses. A fund-of-funds may have higher fees and expenses than a fund that invests directly in equity and fixed-income securities. Please see the fund prospectus for more detailed information about a fund s annual operating expenses. MORNINGSTAR CATEGORY A proprietary Morningstar data point that funds are assigned to based on the underlying securities in each fund's portfolio. Page 3 of 4
Pacific Life is a product provider. It is not a fiduciary and therefore does not give advice or make recommendations regarding insurance or investment products. Pacific Life Insurance Company Newport Beach, CA 92660 (800) 800-7681 www.pacificlife.com Pacific Life & Annuity Company Newport Beach, CA 92660 (888) 595-6996 www.pacificlife.com Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues. Insurance products and their guarantees, including optional benefits and any crediting rates, are backed by the financial strength and claimspaying ability of the issuing insurance company, but they do not protect the value of the variable investment options. Look to the strength of the life insurance company with regard to such guarantees as these guarantees are not backed by the broker-dealer, insurance agency, or their affiliates from which products are purchased. Neither these entities nor their representatives make any representation or assurance regarding the claims-paying ability of the life insurance company. Variable insurance products and shares of Pacific Select Fund are distributed by Pacific Select Distributors, LLC (member FINRA & SIPC), a subsidiary of Pacific Life Insurance Company, and an affiliate of Pacific Life & Annuity Company, and are available through licensed third-party broker-dealers. Not all investment options may be available in all VUL products. Please check your prospectus for details. This material must be preceded or accompanied by the variable life insurance product prospectus. Contact your life insurance producer or visit www.pacificlife.com for more information, including product and underlying fund prospectuses that contain more complete information about Pacific Life and a variable life insurance policy s risks, charges, limitations, and expenses, as well as the risks, charges, expenses and investment goals/objectives of the underlying investment options. Read them carefully before investing or sending money. BlackRock is a registered trademark of BlackRock, Inc. All other trademarks are property of their respective owners. MFS is a registered trademark of Massachusetts Financial Services Company. Main Street is a registered trademark of OppenheimerFunds, Inc. The Russell 2000 Index and Russell 2000 Value Index (together, the Indexes ) are calculated by Russell or its agent, are trademarks of Frank Russell Company ( Russell ), and have been licensed for use by Pacific Select Fund ( PSF ). Neither Russell nor the London Stock Exchange Group companies (together the Licensor Parties ) sponsor, endorse, sell or promote any portfolios of PSF, the content of this communication, or make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to (i) the results to be obtained from the use of the Indexes, or (ii) the suitability of the Indexes for the purpose to which they are being put. The Licensor Parties do not and will not provide any financial or investment advice or recommendation in relation to the Index to Pacific Select Fund or its clients. The Licensor Parties do not accept any liability to any person for any errors or omissions in the Russell Indexes and are under no obligation to advise any person of any error therein. Investment and Insurance Products: Not a Deposit Not Insured by any Federal Government Agency Not FDIC Insured No Bank Guarantee May Lose Value MKT12-103F Page 4 of 4 15-40724-23 1/18 E121
PORTFOLIO OPTIMIZATION GROWTH PORTFOLIO Quarterly Profile - As of December 31, 2017 INVESTMENT GOAL: Seeks moderately high, long-term capital appreciation with low, current income INVESTOR PROFILE: Clients who want an investment that is geared for growth and are willing to accept above average risk RISK CHARACTERISTICS: As a fund-of-funds, the Portfolio is exposed to the same risks as the Underlying Funds in which it invests in direct proportion to its allocations to those Underlying Funds, along with other risks PORTFOLIO MANAGERS: Howard T. Hirakawa 2009 Carleton J. Muench 2009 Max Gokhman 2015 Samuel S. Park 2013 RISK SPECTRUM: Moderately Aggressive Less Risk <... > More Risk FUND INCEPTION DATE: 5/2/2011 TOTAL ANNUAL OPERATING EXPENSES AFTER FEE WAIVER: 1.03% LIPPER CATEGORY: Mixed-Asset Target Allocation Growth Funds MORNINGSTAR CATEGORY: Morningstar US VL Sub Allocation - 70% to 85% Equity Variable universal life (VUL) insurance allows policyowners to structure their policy death benefit and premium payments based on their insurance needs and financial objectives. Pacific Life s VUL insurance products currently offer policyowners the ability to allocate their premium payments among more than 90 different investment options, which includes the Portfolio Optimization Growth Portfolio. The Portfolio is an asset allocation fund-of-funds investment option that aims to provide diversification across major asset classes by investing in certain Underlying Funds of Pacific Select Fund. Pacific Life Fund Advisors LLC (PLFA), a subsidiary of Pacific Life Insurance Company, is the investment adviser and responsible for determining the asset allocation mix for the Portfolio. PLFA manages the Portfolio through a multi-step process that includes: (1) asset allocation/ portfolio construction; (2) manager oversight, and (3) investment risk management. PLFA may modify the underlying funds from time to time. Diversified Bond (Western Asset) 8.0% Emerging Markets (OppenheimerFunds) 7.2% Large-Cap Value (ClearBridge) 6.9% Mid-Cap Value (Boston Partners) 6.7% Value Advantage (JPMorgan) 5.2% International Value (Wellington) 5.0% International Large-Cap (MFS ) 4.9% Managed Bond (PIMCO) 4.4% International Small-Cap (QS Batterymarch) 3.9% Equity Index (BlackRock) 3.4% Equity Long/Short (AQR) 3.4% Global Absolute Return (Eaton Vance) 3.3% Currency Strategies (MCG/UBS Global AM) 3.1% Main Street Core (OppenheimerFunds) 3.1% Comstock (Invesco) 3.0% Long/Short Large-Cap (JPMorgan) 3.0% Large-Cap Growth (BlackRock ) 2.7% Growth (MFS) 2.7% Mid-Cap Equity (Scout) 2.1% Small-Cap Index (BlackRock) 1.8% Portfolio Optimization Growth Portfolio Morningstar US VL Sub Allocation - 70% to 85% Equity* HOLDINGS PERFORMANCE Dividend Growth (T. Rowe Price) 1.7% Small-Cap Value (AllianceBernstein) 1.7% Short Duration Bond (T. Rowe Price) 1.6% Small-Cap Equity (BlackRock/Franklin) 1.6% Floating Rate Loan (Eaton Vance) 1.5% Floating Rate Income (Pacific Asset Management) 1.4% Real Estate (Morgan Stanley) 1.0% Emerging Markets Debt (Ashmore) 1.0% Core Income (Pacific Asset Management) 1.0% Inflation Managed (PIMCO) 0.8% Mid-Cap Growth (Ivy) 0.8% High Yield Bond (Pacific Asset Management) 0.7% Small-Cap Growth (Rothschild) 0.6% Developing Growth (Lord Abbett) 0.4% Inflation Strategy (Barings) 0.3% TARGET ASSET CLASS ALLOCATIONS as of May 1, 2017 Equity 75% Debt 25% Annualized Returns QTD YTD 1 YR 3 YR 5 YR 10 YR SINCE INCEPTION 3.69% 16.38% 16.38% 8.07% 9.27% 7.54% 3.97% 16.45% 16.45% 6.80% 9.07% 4.96% * Morningstar US VL Sub Allocation - 70% to 85% Equity - Funds in allocation categories seek to provide both income and capital appreciation by investing in multiple asset classes, including stocks, bonds, and cash. These portfolios are dominated by domestic holdings and have equity exposures between 70% and 85%. MKT12-102F Page 1 of 4