Annual Report March 31, 2013

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Annual Report March 31, 2013 Your Global Investment Authority PIMCO Funds Asset Allocation Funds Share Classes Institutional P Administrative D A B C R PIMCO All Asset Fund PIMCO All Asset All Authority Fund PIMCO RealRetirement 2015 Fund PIMCO RealRetirement 2020 Fund PIMCO RealRetirement 2025 Fund PIMCO RealRetirement 2030 Fund PIMCO RealRetirement 2035 Fund PIMCO RealRetirement 2040 Fund PIMCO RealRetirement 2045 Fund PIMCO RealRetirement 2050 Fund PIMCO RealRetirement Income and Distribution Fund PIMCO Global Multi-Asset Fund

Table of Contents Page Chairman s Letter 2 Important Information About the Funds 4 Expense Examples 18 Benchmark Descriptions 21 Financial Highlights 24 Statements of Assets and Liabilities 40 Consolidated Statement of Assets and Liabilities 44 Statements of Operations 46 Consolidated Statement of Operations 48 Statements of Changes in Net Assets 49 Consolidated Statements of Changes in Net Assets 52 Statement of Cash Flows 53 Notes to Financial Statements 112 Report of Independent Registered Public Accounting Firm 145 Glossary 146 Federal Income Tax Information 147 Management of the Trust 148 Privacy Policy 150 Fund Fund Summary Schedule of Investments PIMCO All Asset Fund 6 54 PIMCO All Asset All Authority Fund 7 56 PIMCO RealRetirement 2015 Fund 8 58 PIMCO RealRetirement 2020 Fund 9 62 PIMCO RealRetirement 2025 Fund 10 67 PIMCO RealRetirement 2030 Fund 11 71 PIMCO RealRetirement 2035 Fund 12 76 PIMCO RealRetirement 2040 Fund 13 80 PIMCO RealRetirement 2045 Fund 14 85 PIMCO RealRetirement 2050 Fund 15 89 PIMCO RealRetirement Income and Distribution Fund 16 94 PIMCO Global Multi-Asset Fund 17 98 This material is authorized for use only when preceded or accompanied by the current PIMCO Funds prospectuses. The Shareholder Reports for the other series of the PIMCO Funds are printed separately.

Chairman s Letter Dear Shareholder, Over the reporting period, the major Western central banks resorted to an unprecedented commitment to support asset prices and drive down interest rates through various monetary policy measures. As a result, low yields in perceived safe assets 1 (such as U.S. Treasuries and German Bunds) encouraged investors to move further out the risk spectrum. The availability of easy money and asset purchases, derived from central bank quantitative easing policies and near-zero interest rates, helped to inflate most risk assets by encouraging greater risk taking as investors searched for higher returns and yields. Equity indices in the U.S. rallied and reached new highs, while yields on U.S. Treasuries and most developed market sovereign bonds remained low. Signs of an improving U.S. housing market and positive U.S. economic data also contributed to increased investor risk appetite, despite a period marked by ongoing geopolitical uncertainty and growing concerns about global economic growth. In particular, the unresolved banking crisis in Cyprus (and potentially more broadly across peripheral European countries), the continuing social unrest in the Middle East, and the unsettling situation with North Korea kept investors on edge. The Federal Reserve ( Fed ) initiated a third round of quantitative easing, or QE3, expanding the Fed s purchases beyond U.S. Treasuries to Agency mortgage-backed securities. In addition, the Fed announced that it would tie forward policy guidance to unemployment and inflation targets as well as maintain its $85 billion monthly asset purchase program. The U.S. Congress largely averted going over the fiscal cliff at year-end by passing the American Taxpayers Relief Act, but set the stage for potential fiscal uncertainty into 2013 due to its failure to reach a deal on the sequestration. Within Europe, the imperfect rescue of the Cypriot financial system set new precedents on the eurozone s four year old debt crisis, by forcing losses on uninsured Cypriot bank depositors and undermining public confidence in financial institutions. In mid-december 2012, Standard & Poor s upgraded Greece s sovereign debt rating from selective default to B-/B (the highest debt rating Greece has received since June 2011) due to the country s debt buyback (financed by its European partners) and confidence that other eurozone members were committed to keeping Greece within the union. Furthermore, the European Central Bank ( ECB ) and other major European central banks reiterated their commitment to keep interest rates low for as long as necessary to help facilitate implementation of structural economic reforms in the region. Included below are highlights of the financial markets during our twelve-month reporting period: U.S. Treasury yields ended the period lower, with prices on these securities therefore higher. The yield on the benchmark ten-year U.S. Treasury note was 1.85%, or 0.36% lower than on March 31, 2012, but above its record low of 1.39% in July 2012. The Fed kept the Federal Funds Rate anchored within a range of zero to 0.25%. The Bank of England held its key lending rate at 0.50% and the ECB maintained its main policy rate at 0.75% during the reporting period, but lowered the rate to 0.50% in early May. The Bank of Japan announced an expanded monetary stimulus policy that includes plans for direct purchases of Japanese government bonds. The Barclays U.S. Aggregate Index, a widely used index of U.S. investment-grade bonds, returned 3.77% for the reporting period. U.S. Treasury Inflation-Protected Securities ( TIPS ) returned 5.68%, as represented by the Barclays U.S. TIPS Index, outperforming nominal U.S. Treasuries. Lower real yields, which declined across the maturity spectrum on the back of continued policy action by the Fed, drove the majority of U.S. TIPS returns. Breakeven inflation levels (or the difference between nominal and real yields and a proxy for inflation expectations) widened as the market priced in higher longer-term inflation given the Fed s expanded scope of accommodative monetary policies. Diversified commodities posted negative returns, as represented by the Dow Jones-UBS Commodity Index Total Return, which declined 3.03%. 1 All investments contain risk and may lose value. 2 PIMCO ASSET ALLOCATION FUNDS

Agency mortgage-backed securities ( MBS ) underperformed like-duration U.S. Treasuries generally due to positive economic data in the U.S. and investor concern that the Fed might curtail its purchases of Agency MBS sooner than anticipated. While the mortgage sector as a whole underperformed, volatility in relative valuations between coupons remained as higher coupons benefited from positive supply technicals (or ongoing demand but no new issuance) and demand for lower duration assets. Non-Agency MBS, however, outperformed U.S. Treasuries amid investor appetite for higher yielding assets, limited new issue supply, and growing optimism regarding the recovery in the U.S. housing market. Commercial MBS ( CMBS ) also outperformed U.S. Treasuries, with lower credit quality securities exhibiting the strongest performance. The investment grade and high yield corporate bond sectors outperformed like-duration U.S. Treasuries, driven by improving U.S. corporate growth prospects and investors search for yield. The financial sector, in particular, outperformed due to generally strong earnings and continued strengthening in corporate balance sheets. Municipal bonds, both tax-exempt and taxable Build America Bonds, posted positive absolute returns as yields moved lower across the municipal yield curve. Select lower quality municipal sectors outperformed higher quality sectors as investors looked for yield by extending out the yield curve and down the credit spectrum. Emerging market ( EM ) fixed income assets outperformed U.S. Treasuries as improved risk sentiment and global central bank quantitative easing policies reduced credit spreads and drove interest rates lower, fueling gains in both external and local EM bonds. U.S. equities, as measured by the S&P 500 Index, returned 13.96% as investors embraced riskier assets in their search for higher returns. Global equities, as represented by the MSCI World Index, returned 11.85% despite concern over the Cypriot banking crisis and potential contagion to other peripheral eurozone countries. Emerging market equities, as measured by the MSCI Emerging Markets Index, returned 1.95%, underperforming developed market equities largely due to weaker EM corporate earnings. On the following pages of this PIMCO Funds Annual Report, please find specific details of each Fund s investment performance and a discussion of factors that most affected performance. Thank you for the trust you have placed in us. We value your trust, and will continue to work diligently to meet your broad investment needs. If you have questions regarding any of your PIMCO Funds investments, please contact your account manager, or call one of our shareholder associates at 888.87.PIMCO (888.877.4626). We also invite you to visit our website at www.pimco.com/investments to learn more about our views and global thought leadership. Sincerely, Brent R. Harris Chairman of the Board and President PIMCO Funds May 22, 2013 Past performance is no guarantee of future results. Unless otherwise noted, index returns reflect the reinvestment of income dividends and capital gains, if any, but do not reflect fees, brokerage commissions or other expenses of investing. It is not possible to invest directly in an unmanaged index. ANNUAL REPORT MARCH 31, 2013 3

Important Information About the Funds We believe that bond funds have an important role to play in a welldiversified investment portfolio. It is important to note, however, that in an environment where interest rates may trend upward, rising rates would negatively impact the performance of most bond funds, and fixed-income securities held by a Fund are likely to decrease in value. The price volatility of fixed-income securities can also increase during periods of rising interest rates resulting in increased losses to a Fund. Bond funds and individual bonds with a longer duration (a measure of the sensitivity of a security s price to changes in interest rates) tend to be more sensitive to changes in interest rates, usually making them more volatile than securities or funds with shorter durations. The Funds may be subject to various risks in addition to those described above. Some of these risks may include, but are not limited to, the following: allocation risk, acquired fund risk, Underlying PIMCO Fund risk, interest rate risk, credit risk, high yield risk, distressed company risk, market risk, issuer risk, liquidity risk, derivatives risk, commodity risk, equity risk, mortgage-related and other asset-backed risk, foreign (non-u.s.) investment risk, real estate risk, emerging markets risk, currency risk, issuer non-diversification risk, leveraging risk, smaller company risk, management risk, short sale risk, tax risk, subsidiary risk, value investing risk, arbitrage risk and convertible securities risk. A complete description of these and other risks is contained in each Fund s prospectus. The use of derivatives may subject the Funds to greater volatility than investments in traditional securities. The Funds may use derivative instruments for hedging purposes or as part of an investment strategy. Use of these instruments may involve certain costs and risks such as liquidity risk, interest rate risk, market risk, credit risk, management risk and the risk that a fund could not close out a position when it would be most advantageous to do so. Certain derivative transactions may have a leveraging effect on a Fund. For example, a small investment in a derivative instrument may have a significant impact on a Fund s exposure to interest rates, currency exchange rates or other investments. As a result, a relatively small price movement in a derivative instrument may cause an immediate and substantial loss or gain. A Fund may engage in such transactions regardless of whether the Fund owns the asset, instrument or components of the index underlying the derivative instrument. A Fund may invest a significant portion of its assets in these types of instruments. If it does, a Fund s investment exposure could far exceed the value of its portfolio securities and its investment performance could be primarily dependent upon securities it does not own. Investing in foreign (non- U.S.) securities may entail risk due to non-u.s. economic and political developments; this risk may be increased when investing in emerging markets. High-yield bonds typically have a lower credit rating than other bonds. Lower-rated bonds generally involve a greater risk to principal than higher-rated bonds. The credit quality of a particular security or group of securities does not ensure the stability or safety of the overall portfolio. Smaller companies may be more volatile than larger companies and may entail more risk. Concentrating investments in individual sectors may add additional risk and volatility compared to a diversified fund. The PIMCO All Asset Fund, PIMCO All Asset All Authority Fund and PIMCO Global Multi-Asset Fund ( PIMCO Fund of Funds ) may invest their respective assets in Underlying PIMCO Funds. The cost of investing in these Funds will generally be higher than the cost of investing in a mutual fund that invests directly in individual stocks and bonds. The PIMCO RealRetirement Funds are intended for investors who prefer to have their asset allocation decisions made by professional money managers and are designed to offer individual investors comprehensive asset allocation strategies tailored to the time when they expect to retire or to begin withdrawing assets. Each PIMCO RealRetirement Fund is designed for investors expecting to retire or to begin withdrawing portions of their investments around the year indicated in the Fund s name. The retirement year included in the PIMCO RealRetirement Fund s name does not necessarily represent the specific year you expect to begin withdrawing your assets. It is intended only as a general guide. The PIMCO RealRetirement Funds are designed to provide investors with a comprehensive retirement solution tailored to the time when they expect to retire and plan to start withdrawing money (the target date ). Each PIMCO RealRetirement Fund follows a target asset allocation schedule that changes over time to help reduce portfolio risk, increasing its exposure to conservative investments as the target date approaches. The principal value of a Fund is not guaranteed at any time, including the target date. A Fund s shareholders may experience losses, including losses near, at, or after the target year indicated in the PIMCO RealRetirement Fund s name. On each individual Fund Summary page in this Annual Report ( Shareholder Report ), the Average Annual Total Return table and Cumulative Returns chart measure performance assuming that all dividend and capital gain distributions were reinvested. Returns do not reflect the deduction of taxes that a shareholder would pay on (i) Fund distributions or (ii) the redemption of Fund shares. The Cumulative Returns chart and Average Annual Total Return table reflects any sales load that would have applied at the time of purchase or any Contingent Deferred Sales Charge ( CDSC ) that would have applied if a full redemption occurred on the last business day of the period shown in the Cumulative Returns chart. Class A shares are subject to an initial sales charge. Class B shares are subject to a CDSC, which declines from 3.5% (or 5% for certain Funds) in the first year to 0% at 4 PIMCO ASSET ALLOCATION FUNDS

the end of the fifth year (or sixth year for certain Funds). As of November 1, 2009, Class B shares of PIMCO Funds are no longer available for purchase, except through exchanges and dividend reinvestments. Class C shares are subject to a 1% CDSC, which may apply in the first year. A CDSC may be imposed in certain circumstances on Class A shares that are purchased without an initial sales charge and then redeemed during the first 18 months after purchase. The Cumulative Returns Chart reflects only Institutional Class performance. Performance for Class P, Administrative Class, Class D, Class A, Class B, Class C and Class R shares is typically lower than Institutional Class performance due to the lower expenses paid by Institutional Class shares. Performance shown is net of fees and expenses. The Fund s total annual operating expense ratios on each individual Fund Summary page are as of the currently effective prospectus, as supplemented to date. The figures in the line graph are calculated at net asset value and assume the investment of $1,000,000 at the end of the month that the Institutional Class of the Fund commenced operations. The minimum initial investment amount for Institutional Class, Class P, or Administrative Class shares is $1,000,000. The minimum initial investment amount for Class A, Class C, and Class D shares is $1,000. There is no minimum initial investment for Class R shares. Each Fund measures its performance against a broad-based securities market index ( benchmark index ) and a Lipper Average, which is calculated by Lipper, Inc. ( Lipper ), a Thomson Reuters company, and represents the total return performance averages of funds that are tracked by Lipper that have the same Fund Classification. Each benchmark index and Lipper Average does not take into account fees, expenses or taxes. The following table discloses the inception dates of each Fund and its respective share classes: Fund Name Fund Inception Institutional Class Class P Administrative Class Class D Class A Class B Class C Class R PIMCO All Asset Fund 07/31/02 07/31/02 04/30/08 12/31/02 04/30/03 04/30/03 04/30/03 04/30/03 01/31/06 PIMCO All Asset All Authority Fund 10/31/03 10/31/03 07/10/08 07/29/05 07/29/05 07/29/05 PIMCO RealRetirement 2015 Fund 06/30/11 06/30/11 10/31/11 06/30/11 06/30/11 06/30/11 06/30/11 06/30/11 PIMCO RealRetirement 2020 Fund 03/31/08 03/31/08 10/31/11 06/30/08 03/31/08 03/31/08 07/31/08 07/31/08 PIMCO RealRetirement 2025 Fund 06/30/11 06/30/11 10/31/11 06/30/11 06/30/11 06/30/11 06/30/11 06/30/11 PIMCO RealRetirement 2030 Fund 03/31/08 03/31/08 10/31/11 06/30/08 03/31/08 03/31/08 07/31/08 07/31/08 PIMCO RealRetirement 2035 Fund 06/30/11 06/30/11 10/31/11 06/30/11 06/30/11 06/30/11 06/30/11 06/30/11 PIMCO RealRetirement 2040 Fund 03/31/08 03/31/08 10/31/11 06/30/08 03/31/08 03/31/08 07/31/08 07/31/08 PIMCO RealRetirement 2045 Fund 02/29/12 02/29/12 02/29/12 02/29/12 02/29/12 02/29/12 02/29/12 02/29/12 PIMCO RealRetirement 2050 Fund 03/31/08 03/31/08 10/31/11 06/30/08 03/31/08 03/31/08 07/31/08 07/31/08 PIMCO RealRetirement Income and Distribution Fund 03/31/08 03/31/08 10/31/11 06/30/08 03/31/08 03/31/08 07/31/08 07/31/08 PIMCO Global Multi-Asset Fund 10/29/08 10/29/08 10/29/08 10/14/11 10/29/08 10/29/08 10/29/08 10/29/08 For periods prior to the inception date of the Class P, Administrative Class, Class D, Class A, Class B, Class C and Class R shares (if applicable), performance information shown is based on the performance of the Fund s Institutional Class shares. The prior Institutional Class performance has been adjusted to reflect the distribution and/or service fees and other expenses paid by the Class P, Administrative Class, Class D, Class A, Class B, Class C and Class R shares, respectively. An investment in a Fund is not a deposit of a bank and is not guaranteed or insured by the Federal Deposit Insurance Corporation or any other government agency. It is possible to lose money on investments in the Funds. PIMCO has adopted written proxy voting policies and procedures ( Proxy Policy ) as required by Rule 206(4)-6 under the Investment Advisers Act of 1940. The Proxy Policy has been adopted by PIMCO Funds as the policies and procedures that PIMCO will use when voting proxies on behalf of the Funds. A description of the policies and procedures that PIMCO uses to vote proxies relating to portfolio securities of each Fund, and information about how each Fund voted proxies relating to portfolio securities held during the most recent twelve-month period ended June 30, are available without charge, upon request, by calling the Trust at (888) 87-PIMCO, on the Funds website at www.pimco.com/investments, and on the Securities and Exchange Commission s ( SEC ) website at http://www.sec.gov. PIMCO Funds files a complete schedule of each Fund s portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. A copy of the Funds Form N-Q is available on the SEC s website at http://www.sec.gov and may be reviewed and copied at the SEC s Public Reference Room in Washington, D.C., and is available without charge, upon request by calling the Trust at (888) 87-PIMCO and on the Funds website at www.pimco.com/investments. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. ANNUAL REPORT MARCH 31, 2013 5

PIMCO All Asset Fund Cumulative Returns Through March 31, 2013 (in millions) $3.0 2.0 1.0 0 07/02 11/07 03/13 INSTITUTIONAL CLASS $2,494,242 SECONDARY INDEX $2,146,177 INDEX $1,842,888 Average Annual Total Return for the period ended March 31, 2013 Allocation Breakdown PIMCO Income Fund 10.0% PIMCO EM Fundamental IndexPLUS AR Strategy Fund 8.9% PIMCO Emerging Local Bond Fund 7.0% PIMCO Emerging Markets Currency Fund 6.6% PIMCO Floating Income Fund 6.3% PIMCO High Yield Fund 6.0% PIMCO Unconstrained Bond Fund 5.3% PIMCO International Fundamental IndexPLUS AR Strategy Fund 5.1% Other 44.8% % of Total Investments as of 03/31/13 1 Year 5 Years 10 Years Fund Inception (07/31/02) PIMCO All Asset Fund Institutional Class 9.65% 7.04% 8.04% 8.95% PIMCO All Asset Fund Class P 9.54% 6.96% 7.95% 8.85% PIMCO All Asset Fund Administrative Class 9.38% 6.78% 7.78% 8.68% PIMCO All Asset Fund Class D 9.21% 6.59% 7.49% 8.38% PIMCO All Asset Fund Class A 9.08% 6.44% 7.41% 8.30% PIMCO All Asset Fund Class A (adjusted) 4.99% 5.63% 7.00% 7.92% PIMCO All Asset Fund Class B 8.21% 5.63% 6.76% 7.70% PIMCO All Asset Fund Class B (adjusted) 4.71% 5.55% 6.76% 7.70% PIMCO All Asset Fund Class C 8.31% 5.65% 6.61% 7.50% PIMCO All Asset Fund Class C (adjusted) 7.31% 5.65% 6.61% 7.50% PIMCO All Asset Fund Class R 8.81% 6.15% 7.11% 8.01% Barclays U.S. TIPS: 1-10 Year Index 3.89% 4.55% 5.40% 5.89% Consumer Price Index + 500 Basis Points 6.48% 6.71% 7.37% 7.42% Lipper Flexible Portfolio Funds Average 5.49% 4.32% 7.85% 7.13% All Fund returns are net of fees and expenses. 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 than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. For performance current to most recent month-end, visit www.pimco.com/investments or call (888) 87-PIMCO. The adjusted returns take into account the maximum sales charge of 3.75% on Class A shares, 3.50% CDSC on Class B shares one- and five-year returns, and 1.00% CDSC on Class C shares. The Fund s total annual operating expense ratio as stated in the Fund s current prospectus, which includes the Acquired Fund Fees and Expenses (Underlying PIMCO Fund Expenses), as supplemented to date, are 0.965% for Institutional Class 1.065% for Class P shares, 1.215% for Administrative Class shares, 1.365% for Class D shares, 1.465% for Class A shares, 2.215% for Class B shares, 2.215% for Class C shares, and 1.715% for Class R shares. Institutional Class - PAAIX Class P - PALPX Administrative Class - PAALX Class D - PASDX Portfolio Insights Class A - PASAX Class B - PASBX Class C - PASCX Class R - PATRX» The PIMCO All Asset Fund seeks maximum real return, consistent with preservation of real capital and prudent investment management, by investing under normal circumstances substantially all of its assets in Institutional Class or Class M shares of any funds of the Trust or PIMCO Equity Series, an affiliated open-end investment company, except other funds of funds, or shares of any actively-managed funds of the PIMCO ETF Trust, an affiliated investment company (collectively, Underlying PIMCO Funds ). The Fund invests its assets in shares of the Underlying PIMCO Funds and does not invest directly in stocks or bonds of other issuers. Research Affiliates, LLC, the Fund s asset allocation sub-adviser, determines how the Fund allocates and reallocates its assets among the Underlying PIMCO Funds. In doing so, the asset allocation sub-adviser seeks concurrent exposure to a broad spectrum of asset classes.» Exposure to local currency-denominated and U.S. dollar-denominated emerging market bonds, achieved through the PIMCO Emerging Local Bond Fund and PIMCO Emerging Markets Bond Fund, added to returns as locally-denominated and U.S. dollar-denominated emerging market bonds gained in value during the reporting period.» Holdings in real estate investment trusts ( REITs ), achieved through the PIMCO RealEstateRealReturn Strategy Fund, benefited returns as REITs gained in value during the reporting period.» Exposure to credit strategies, primarily through the PIMCO High Yield Fund and PIMCO Income Fund, added to returns as high yield and corporate bonds posted positive returns during the reporting period.» Exposure to long maturity U.S. TIPS, achieved through the PIMCO Real Return Asset Fund, benefited returns as yields on U.S. TIPS fell during the reporting period.» Exposure to the PIMCO International Fundamental IndexPLUS AR Strategy Fund and PIMCO EM Fundamental IndexPLUS AR Strategy Fund added to returns as these Underlying PIMCO Funds posted positive performance during the reporting period.» Allocation made during the second half of the reporting period to long-maturity fixed income strategies, achieved through the PIMCO Long Duration Total Return Fund and PIMCO Long- Term U.S. Government Fund, detracted from performance as these Underlying PIMCO Funds posted negative returns. 6 PIMCO ASSET ALLOCATION FUNDS

PIMCO All Asset All Authority Fund Institutional Class - PAUIX Class P - PAUPX Class D - PAUDX Class A - PAUAX Class C - PAUCX Cumulative Returns Through March 31, 2013 Allocation Breakdown Portfolio Insights (in millions) $3.0 2.0 1.0 0 10/03 06/08 03/13 SECONDARY INDEX $2,242,632 INSTITUTIONAL CLASS $2,100,021 INDEX $1,812,128 Average Annual Total Return for the period ended March 31, 2013 PIMCO StocksPLUS AR Short Strategy Fund 12.6% PIMCO Total Return Fund 6.4% PIMCO High Yield Fund 6.3% PIMCO Emerging Markets Currency Fund 6.2% PIMCO Emerging Local Bond Fund 5.5% PIMCO Income Fund 5.4% PIMCO Unconstrained Bond Fund 5.2% Other 52.4% % of Total Investments as of 03/31/13 1 Year 5 Years Fund Inception (10/31/03) PIMCO All Asset All Authority Fund Institutional Class 9.40% 7.44% 8.20% PIMCO All Asset All Authority Fund Class P 9.35% 7.35% 8.03% PIMCO All Asset All Authority Fund Class D 8.98% 7.01% 7.64% PIMCO All Asset All Authority Fund Class A 9.01% 6.88% 7.59% PIMCO All Asset All Authority Fund Class A (adjusted) 3.01% 6.06% 7.15% PIMCO All Asset All Authority Fund Class C 8.11% 6.07% 6.78% PIMCO All Asset All Authority Fund Class C (adjusted) 7.11% 6.07% 6.78% S&P 500 Index 13.96% 5.81% 6.51% Consumer Price Index + 650 Basis Points 7.98% 8.21% 8.95% Lipper Flexible Portfolio Funds Average 5.49% 4.32% 6.17% All Fund returns are net of fees and expenses. 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 than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. For performance current to most recent month-end, visit www.pimco.com/investments or call (888) 87-PIMCO. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares and 1.00% CDSC on Class C shares. The Fund s total annual operating expense ratio as stated in the Fund s current prospectus, which includes the Acquired Fund Fees and Expenses (Underlying PIMCO Fund Expenses), as supplemented to date, are 1.68% for Institutional Class shares, 1.78% for Class P shares, 2.08% for Class D shares, 2.13% for Class A shares, and 2.88% for Class C shares.» The PIMCO All Asset All Authority Fund seeks maximum real return, consistent with preservation of real capital and prudent investment management, by investing under normal circumstances substantially all of its assets in Institutional Class or Class M shares of any funds of the Trust or PIMCO Equity Series, an affiliated open-end investment company, except other funds of funds, or shares of any actively-managed funds of the PIMCO ETF Trust, an affiliated investment company (collectively, Underlying PIMCO Funds ). The Fund invests its assets in shares of the Underlying PIMCO Funds and does not invest directly in stocks or bonds of other issuers. Research Affiliates, LLC, the Fund s asset allocation sub-adviser, determines how the Fund allocates and reallocates its assets among the Underlying PIMCO Funds. In doing so, the asset allocation sub-adviser seeks concurrent exposure to a broad spectrum of asset classes.» Exposure to local currency-denominated and U.S. dollar-denominated emerging market bonds, achieved through the PIMCO Emerging Local Bond Fund and PIMCO Emerging Markets Bond Fund, added to returns as locally-denominated and U.S. dollar-denominated emerging market bonds gained in value during the reporting period.» Holdings in real estate investment trusts ( REITs ), achieved through the PIMCO RealEstateRealReturn Strategy Fund, benefited returns as REITs gained in value during the reporting period.» Exposure to credit strategies, primarily through the PIMCO High Yield Fund and PIMCO Income Fund, added to returns as high yield and corporate bonds posted positive returns during the reporting period.» Exposure to long maturity U.S. TIPS, achieved through the PIMCO Real Return Asset Fund, benefited returns as yields on U.S. TIPS fell during the reporting period.» Exposure to the PIMCO International Fundamental IndexPLUS AR Strategy Fund and PIMCO EM Fundamental IndexPLUS AR Strategy Fund added to returns as these Underlying PIMCO Funds posted positive performance during the reporting period.» Exposure to the inverse of the S&P 500 Index, achieved through the PIMCO StocksPLUS AR Short Strategy Fund, was a significant detractor from performance as this Underlying PIMCO Fund posted negative returns during the reporting period. ANNUAL REPORT MARCH 31, 2013 7

PIMCO RealRetirement 2015 Fund Cumulative Returns Through March 31, 2013 (in millions) $2.0 1.0 0 06/11 04/12 03/13 INDEX $1,116,863 INSTITUTIONAL CLASS $1,106,731 Average Annual Total Return for the period ended March 31, 2013 Allocation Breakdown PIMCO Total Return Fund 24.6% PIMCO Real Return Fund 17.3% PIMCO StocksPLUS Fund 10.1% PIMCO Low Duration Fund 9.8% PIMCO Short-Term Floating NAV Portfolio 5.0% Other 33.2% % of Total Investments as of 03/31/13 1 Year Fund Inception (06/30/11) PIMCO RealRetirement 2015 Fund Institutional Class 8.77% 5.95% PIMCO RealRetirement 2015 Fund Class P 8.67% 5.86% PIMCO RealRetirement 2015 Fund Administrative Class 8.51% 5.66% PIMCO RealRetirement 2015 Fund Class D 8.15% 5.43% PIMCO RealRetirement 2015 Fund Class A 8.24% 5.50% PIMCO RealRetirement 2015 Fund Class A (adjusted) 2.29% 2.16% PIMCO RealRetirement 2015 Fund Class C 7.35% 4.65% PIMCO RealRetirement 2015 Fund Class C (adjusted) 6.35% 4.65% PIMCO RealRetirement 2015 Fund Class R 7.96% 5.16% Dow Jones Real Return 2015 Index SM 6.57% 6.51% Lipper Mixed-Asset Target 2015 Funds Average 7.80% 5.68% All Fund returns are net of fees and expenses. 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 than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. For performance current to most recent month-end, visit www.pimco.com/investments or call (888) 87-PIMCO. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares and 1.00% CDSC on Class C shares. The Fund s total annual operating expense ratio as stated in the Fund s current prospectus, which includes the Acquired Fund Fees and Expenses (Underlying PIMCO Fund Expenses), as supplemented to date, are 1.19% for Institutional Class shares, 1.29% for Class P shares, 1.44% for Administrative Class shares, 1.69% for Class D shares, 1.69% for Class A shares, 2.44% for Class C shares, and 1.94% for Class R shares. Institutional Class - PTNIX Class P - PTNQX Administrative Class - PTNNX Class D - PTNUX Portfolio Insights Class A - PTNYX Class C - PTNWX Class R - PTNSX» The PIMCO RealRetirement 2015 Fund seeks to maximize real return, consistent with preservation of real capital and prudent investment management, by investing under normal circumstances in a combination of affiliated and unaffiliated funds, which may or may not be registered under the Investment Company Act of 1940, Fixed Income Instruments of varying maturities, equity securities, forwards and derivatives. Fixed Income Instruments include bonds, debt securities and other similar instruments issued by various U.S. and non-u.s. public- or private-sector entities. The primary difference between the PIMCO RealRetirement Funds is their asset allocation, which varies depending on the number of years left until the self-elected year of retirement indicated in the PIMCO RealRetirement Fund s name.» The Fund s target allocation is based on a glide path developed by PIMCO, meaning PIMCO may vary the Fund s actual asset allocation exposures based on PIMCO s realtime views of perceived risks and opportunities. The target allocations change over time, generally becoming more conservative as the Fund approaches the target date and beyond.» An overweight to global equities during most of the reporting period benefited relative performance as the returns of this market were positive.» An underweight to emerging market equities detracted from relative performance as the returns of this market were positive during the reporting period.» Exposure to real estate investment trusts ( REITs ) benefited absolute returns as the asset class posted positive returns during the reporting period.» Exposure to U.S. fixed income, especially within the mortgage-backed securities sector, benefited absolute performance as the asset class posted positive returns during the reporting period.» An underweight to U.S. Treasury Inflation- Protected Securities ( TIPS ) detracted from relative performance as the asset class posted positive returns during the reporting period. However, an overweight to longer-maturity U.S. TIPS (10+ years) added to relative performance as longer-maturity inflationlinked bonds posted strong returns. 8 PIMCO ASSET ALLOCATION FUNDS

PIMCO RealRetirement 2020 Fund Cumulative Returns Through March 31, 2013 (in millions) $2.0 1.0 0 03/08 09/10 03/13 INSTITUTIONAL CLASS $1,265,545 INDEX $1,263,301 Average Annual Total Return for the period ended March 31, 2013 Allocation Breakdown PIMCO Total Return Fund 23.8% PIMCO Real Return Fund 16.1% PIMCO StocksPLUS Fund 14.7% PIMCO CommoditiesPLUS Strategy Fund 6.8% PIMCO RealEstateRealReturn Strategy Fund 4.1% Other 34.5% % of Total Investments as of 03/31/13 1 Year 5 Years Fund Inception (03/31/08) PIMCO RealRetirement 2020 Fund Institutional Class 9.03% 4.82% 4.82% PIMCO RealRetirement 2020 Fund Class P 8.80% 4.73% 4.73% PIMCO RealRetirement 2020 Fund Administrative Class 8.74% 4.58% 4.58% PIMCO RealRetirement 2020 Fund Class D 8.51% 4.27% 4.27% PIMCO RealRetirement 2020 Fund Class A 8.47% 4.23% 4.23% PIMCO RealRetirement 2020 Fund Class A (adjusted) 2.54% 3.06% 3.06% PIMCO RealRetirement 2020 Fund Class C 7.66% 3.49% 3.49% PIMCO RealRetirement 2020 Fund Class C (adjusted) 6.66% 3.49% 3.49% PIMCO RealRetirement 2020 Fund Class R 8.27% 4.01% 4.01% Dow Jones Real Return 2020 Index SM 6.66% 4.79% 4.79% Lipper Mixed-Asset Target 2020 Funds Average 8.32% 4.11% 4.11% All Fund returns are net of fees and expenses. 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 than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. For performance current to most recent month-end, visit www.pimco.com/investments or call (888) 87-PIMCO. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares and 1.00% CDSC on Class C shares. The Fund s total annual operating expense ratio as stated in the Fund s current prospectus, which includes the Acquired Fund Fees and Expenses (Underlying PIMCO Fund Expenses), as supplemented to date, are 1.20% for Institutional Class shares, 1.30% for Class P shares, 1.45% for Administrative Class shares, 1.70% for Class D shares, 1.70% for Class A shares, 2.45% for Class C shares, and 1.95% for Class R shares. Institutional Class - PRWIX Class P - PTYPX Administrative Class - PFNAX Class D - PTYDX Portfolio Insights Class A - PTYAX Class C - PTYCX Class R - PTYRX» The PIMCO RealRetirement 2020 Fund seeks to maximize real return, consistent with preservation of real capital and prudent investment management, by investing under normal circumstances in a combination of affiliated and unaffiliated funds, which may or may not be registered under the Investment Company Act of 1940, Fixed Income Instruments of varying maturities, equity securities, forwards and derivatives. Fixed Income Instruments include bonds, debt securities and other similar instruments issued by various U.S. and non-u.s. public- or private-sector entities. The primary difference between the PIMCO RealRetirement Funds is their asset allocation, which varies depending on the number of years left until the self-elected year of retirement indicated in the PIMCO RealRetirement Fund s name.» The Fund s target allocation is based on a glide path developed by PIMCO, meaning PIMCO may vary the Fund s actual asset allocation exposures based on PIMCO s realtime views of perceived risks and opportunities. The target allocations change over time, generally becoming more conservative as the Fund approaches the target date and beyond.» An overweight to global equities during most of the reporting period benefited relative performance as the returns of this market were positive.» An underweight to emerging market equities detracted from relative performance as the returns of this market were positive during the reporting period.» Exposure to real estate investment trusts ( REITs ) benefited absolute returns as the asset class posted positive returns during the reporting period.» Exposure to U.S. fixed income, especially within the mortgage-backed securities sector, benefited absolute performance as the asset class posted positive returns during the reporting period.» An underweight to U.S. Treasury Inflation- Protected Securities ( TIPS ) detracted from relative performance as the asset class posted positive returns during the reporting period. However, an overweight to longer-maturity U.S. TIPS (10+ years) added to relative performance as longer-maturity inflationlinked bonds posted strong returns. ANNUAL REPORT MARCH 31, 2013 9

PIMCO RealRetirement 2025 Fund Cumulative Returns Through March 31, 2013 (in millions) $2.0 1.0 0 06/11 04/12 03/13 INSTITUTIONAL CLASS $1,109,166 INDEX $1,105,424 Average Annual Total Return for the period ended March 31, 2013 Allocation Breakdown PIMCO StocksPLUS Fund 16.7% PIMCO Total Return Fund 14.8% PIMCO Real Return Fund 12.9% PIMCO CommoditiesPLUS Strategy Fund 11.2% PIMCO International StocksPLUS AR Strategy Fund (U.S. Dollar-Hedged) 6.3% PIMCO RealEstateRealReturn Strategy Fund 6.1% Other 32.0% % of Total Investments as of 03/31/13 1 Year Fund Inception (06/30/11) PIMCO RealRetirement 2025 Fund Institutional Class 9.60% 6.09% PIMCO RealRetirement 2025 Fund Class P 9.49% 5.98% PIMCO RealRetirement 2025 Fund Administrative Class 9.36% 5.81% PIMCO RealRetirement 2025 Fund Class D 9.15% 5.57% PIMCO RealRetirement 2025 Fund Class A 9.12% 5.59% PIMCO RealRetirement 2025 Fund Class A (adjusted) 3.15% 2.25% PIMCO RealRetirement 2025 Fund Class C 8.28% 4.78% PIMCO RealRetirement 2025 Fund Class C (adjusted) 7.28% 4.78% PIMCO RealRetirement 2025 Fund Class R 8.75% 5.26% Dow Jones Real Return 2025 Index SM 6.84% 5.88% Lipper Mixed-Asset Target 2025 Funds Average 9.27% 6.54% All Fund returns are net of fees and expenses. 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 than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. For performance current to most recent month-end, visit www.pimco.com/investments or call (888) 87-PIMCO. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares and 1.00% CDSC on Class C shares. The Fund s total annual operating expense ratio as stated in the Fund s current prospectus, which includes the Acquired Fund Fees and Expenses (Underlying PIMCO Fund Expenses), as supplemented to date, are 1.25% for Institutional Class shares, 1.35% for Class P shares, 1.50% for Administrative Class shares, 1.75% for Class D shares, 1.75% for Class A shares, 2.50% for Class C shares, and 2.00% for Class R shares. Institutional Class - PENTX Class P - PENPX Administrative Class - PENMX Class D - PENDX Portfolio Insights Class A - PENZX Class C - PENWX Class R - PENRX» The PIMCO RealRetirement 2025 Fund seeks to maximize real return, consistent with preservation of real capital and prudent investment management, by investing under normal circumstances in a combination of affiliated and unaffiliated funds, which may or may not be registered under the Investment Company Act of 1940, Fixed Income Instruments of varying maturities, equity securities, forwards and derivatives. Fixed Income Instruments include bonds, debt securities and other similar instruments issued by various U.S. and non-u.s. public- or private-sector entities. The primary difference between the PIMCO RealRetirement Funds is their asset allocation, which varies depending on the number of years left until the self-elected year of retirement indicated in the PIMCO RealRetirement Fund s name.» The Fund s target allocation is based on a glide path developed by PIMCO, meaning PIMCO may vary the Fund s actual asset allocation exposures based on PIMCO s realtime views of perceived risks and opportunities. The target allocations change over time, generally becoming more conservative as the Fund approaches the target date and beyond.» An overweight to global equities during most of the reporting period benefited relative performance as the returns of this market were positive.» An underweight to emerging market equities detracted from relative performance as the returns of this market were positive during the reporting period.» Exposure to real estate investment trusts ( REITs ) benefited absolute returns as the asset class posted positive returns during the reporting period.» Exposure to U.S. fixed income, especially within the mortgage-backed securities sector, benefited absolute performance as the asset class posted positive returns during the reporting period.» An underweight to U.S. Treasury Inflation- Protected Securities ( TIPS ) detracted from relative performance as the asset class posted positive returns during the reporting period. However, an overweight to longer-maturity U.S. TIPS (10+ years) added to relative performance as longer-maturity inflationlinked bonds posted strong returns. 10 PIMCO ASSET ALLOCATION FUNDS

PIMCO RealRetirement 2030 Fund Cumulative Returns Through March 31, 2013 (in millions) $2.0 1.0 0 03/08 09/10 03/13 INSTITUTIONAL CLASS $1,238,389 INDEX $1,207,952 Average Annual Total Return for the period ended March 31, 2013 Allocation Breakdown PIMCO StocksPLUS Fund 20.3% PIMCO CommoditiesPLUS Strategy Fund 12.1% PIMCO Total Return Fund 11.1% PIMCO International StocksPLUS AR Strategy Fund (U.S. Dollar-Hedged) 8.5% PIMCO Real Return Fund 8.3% PIMCO Small Cap StocksPLUS AR Fund 6.8% PIMCO RealEstateRealReturn Strategy Fund 6.6% Other 26.3% % of Total Investments as of 03/31/13 1 Year 5 Years Fund Inception (03/31/08) PIMCO RealRetirement 2030 Fund Institutional Class 10.83% 4.37% 4.37% PIMCO RealRetirement 2030 Fund Class P 10.72% 4.28% 4.28% PIMCO RealRetirement 2030 Fund Administrative Class 10.49% 4.12% 4.12% PIMCO RealRetirement 2030 Fund Class D 10.26% 3.77% 3.77% PIMCO RealRetirement 2030 Fund Class A 10.28% 3.77% 3.77% PIMCO RealRetirement 2030 Fund Class A (adjusted) 4.26% 2.61% 2.61% PIMCO RealRetirement 2030 Fund Class C 9.36% 3.02% 3.02% PIMCO RealRetirement 2030 Fund Class C (adjusted) 8.36% 3.02% 3.02% PIMCO RealRetirement 2030 Fund Class R 9.97% 3.52% 3.52% Dow Jones Real Return 2030 Index SM 7.13% 3.85% 3.85% Lipper Mixed-Asset Target 2030 Funds Average 9.68% 3.95% 3.95% All Fund returns are net of fees and expenses. 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 than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. For performance current to most recent month-end, visit www.pimco.com/investments or call (888) 87-PIMCO. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares and 1.00% CDSC on Class C shares. The Fund s total annual operating expense ratio as stated in the Fund s current prospectus, which includes the Acquired Fund Fees and Expenses (Underlying PIMCO Fund Expenses), as supplemented to date, are 1.26% for Institutional Class shares, 1.36% for Class P shares, 1.51% for Administrative Class shares, 1.76% for Class D shares, 1.76% for Class A shares, 2.51% for Class C shares, and 2.01% for Class R shares. Institutional Class - PRLIX Class P - PEHPX Administrative Class - PNLAX Class D - PEHDX Portfolio Insights Class A - PEHAX Class C - PEHCX Class R - PEHRX» The PIMCO RealRetirement 2030 Fund seeks to maximize real return, consistent with preservation of real capital and prudent investment management, by investing under normal circumstances in a combination of affiliated and unaffiliated funds, which may or may not be registered under the Investment Company Act of 1940, Fixed Income Instruments of varying maturities, equity securities, forwards and derivatives. Fixed Income Instruments include bonds, debt securities and other similar instruments issued by various U.S. and non-u.s. public- or private-sector entities. The primary difference between the PIMCO RealRetirement Funds is their asset allocation, which varies depending on the number of years left until the self-elected year of retirement indicated in the PIMCO RealRetirement Fund s name.» The Fund s target allocation is based on a glide path developed by PIMCO, meaning PIMCO may vary the Fund s actual asset allocation exposures based on PIMCO s realtime views of perceived risks and opportunities. The target allocations change over time, generally becoming more conservative as the Fund approaches the target date and beyond.» An overweight to global equities during most of the reporting period benefited relative performance as the returns of this market were positive.» An underweight to emerging market equities detracted from relative performance as the returns of this market were positive during the reporting period.» Exposure to real estate investment trusts ( REITs ) benefited absolute returns as the asset class posted positive returns during the reporting period.» Exposure to U.S. fixed income, especially within the mortgage-backed securities sector, benefited absolute performance as the asset class posted positive returns during the reporting period.» An underweight to U.S. Treasury Inflation- Protected Securities ( TIPS ) detracted from relative performance as the asset class posted positive returns during the reporting period. However, an overweight to longer-maturity U.S. TIPS (10+ years) added to relative performance as longer-maturity inflationlinked bonds posted strong returns. ANNUAL REPORT MARCH 31, 2013 11

PIMCO RealRetirement 2035 Fund Cumulative Returns Through March 31, 2013 (in millions) $2.0 1.0 0 06/11 04/12 03/13 INSTITUTIONAL CLASS $1,120,550 INDEX $1,079,030 Average Annual Total Return for the period ended March 31, 2013 Allocation Breakdown PIMCO StocksPLUS Fund 23.0% PIMCO CommoditiesPLUS Strategy Fund 12.4% PIMCO International StocksPLUS AR Strategy Fund (U.S. Dollar-Hedged) 9.9% PIMCO Small Cap StocksPLUS AR Fund 9.6% PIMCO RealEstateRealReturn Strategy Fund 8.2% PIMCO Total Return Fund 6.0% PIMCO Real Return Fund 5.7% Other 25.2% % of Total Investments as of 03/31/13 1 Year Fund Inception (06/30/11) PIMCO RealRetirement 2035 Fund Institutional Class 11.81% 6.71% PIMCO RealRetirement 2035 Fund Class P 11.70% 6.60% PIMCO RealRetirement 2035 Fund Administrative Class 11.45% 6.42% PIMCO RealRetirement 2035 Fund Class D 11.36% 6.22% PIMCO RealRetirement 2035 Fund Class A 11.30% 6.24% PIMCO RealRetirement 2035 Fund Class A (adjusted) 5.20% 2.88% PIMCO RealRetirement 2035 Fund Class C 10.45% 5.41% PIMCO RealRetirement 2035 Fund Class C (adjusted) 9.45% 5.41% PIMCO RealRetirement 2035 Fund Class R 10.93% 5.96% Dow Jones Real Return 2035 Index SM 7.54% 4.43% Lipper Mixed-Asset Target 2035 Funds Average 10.29% 6.89% All Fund returns are net of fees and expenses. 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 than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. For performance current to most recent month-end, visit www.pimco.com/investments or call (888) 87-PIMCO. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares and 1.00% CDSC on Class C shares. The Fund s total annual operating expense ratio as stated in the Fund s current prospectus, which includes the Acquired Fund Fees and Expenses (Underlying PIMCO Fund Expenses), as supplemented to date, are 1.31% for Institutional Class shares, 1.41% for Class P shares, 1.56% for Administrative Class shares, 1.81% for Class D shares, 1.81% for Class A shares, 2.56% for Class C shares, and 2.06% for Class R shares. Institutional Class - PIVIX Class P - PIVPX Administrative Class - PIVNX Class D - PIVDX Portfolio Insights Class A - PIVAX Class C - PIVWX Class R - PIVSX» The PIMCO RealRetirement 2035 Fund seeks to maximize real return, consistent with preservation of real capital and prudent investment management, by investing under normal circumstances in a combination of affiliated and unaffiliated funds, which may or may not be registered under the Investment Company Act of 1940, Fixed Income Instruments of varying maturities, equity securities, forwards and derivatives. Fixed Income Instruments include bonds, debt securities and other similar instruments issued by various U.S. and non-u.s. public- or private-sector entities. The primary difference between the PIMCO RealRetirement Funds is their asset allocation, which varies depending on the number of years left until the self-elected year of retirement indicated in the PIMCO RealRetirement Fund s name.» The Fund s target allocation is based on a glide path developed by PIMCO, meaning PIMCO may vary the Fund s actual asset allocation exposures based on PIMCO s realtime views of perceived risks and opportunities. The target allocations change over time, generally becoming more conservative as the Fund approaches the target date and beyond.» An overweight to global equities during most of the reporting period benefited relative performance as the returns of this market were positive.» An underweight to emerging market equities detracted from relative performance as the returns of this market were positive during the reporting period.» Exposure to real estate investment trusts ( REITs ) benefited absolute returns as the asset class posted positive returns during the reporting period.» Exposure to U.S. fixed income, especially within the mortgage-backed securities sector, benefited absolute performance as the asset class posted positive returns during the reporting period.» An underweight to U.S. Treasury Inflation- Protected Securities ( TIPS ) detracted from relative performance as the asset class posted positive returns during the reporting period. However, an overweight to longer-maturity U.S. TIPS (10+ years) added to relative performance as longer-maturity inflationlinked bonds posted strong returns. 12 PIMCO ASSET ALLOCATION FUNDS